Forced Labor: Passé or Probable?

Posted by Gary M. Barraco on Fri, Oct, 21 2016 @ 9:30 AM

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Forced Labor 2.jpgAsk any social compliance or corporate governance executive about forced or slave labor and the response is always the same: “It is unacceptable in my supply chain.”  Yet the reality is most supply chains lack the transparency to identify and take action against suppliers who violate this policy. Even with increased regulations and growing pressure from consumers and NGOs, industries struggle to maintain compliance

“Slavery” in the modern era isn’t what we envision from early world history.  Today it includes human trafficking, forced labor, bonded labor, and child forced labor – which can be as inconspicuous as factory owners “holding onto” workers’ documents so they aren’t stolen or misplaced in large, substandard dormitories. And no region is innocent of bearing its share of forced labor, which is found in key manufacturing hubs throughout the world.

In fact, a number of recent reports show some of the strongest, most appealing supply chains have child labor issues. 

  • Swedish retail giant Hennes & Maurtiz (H&M) was outed in a book titled Modeslavar, or “Slave Fashion” in English. The publication reveals that teenagers as young as 14 years old were working more than 12 hours a day in Myanmar factories. While official statements from H&M reiterate the legal working age in that region is 14, the two suppliers in Myanmar “have had ‘problems’ with ID-cards and overtime” in the past. To its defense, like most retailers, H&M said it is of "utmost importance" that its products are made under good working conditions and with consideration to safety, health and the environment – and action has been taken with those factories. 
  • Another incident occurred in Sao Paulo, Brazil’s main garment production hub, where 11 adults and nine children were rescued from an apparel factory. The workers, trafficked from neighboring Bolivia, were forced to work excessive hours and lived in slave-like conditions.
  • According to the Child Labour Index 2016 from risk analytics company Verisk Maplecroft, child labor in the cotton industry continues in some of the world's leading cotton-producing countries, including India, China, Pakistan, Uzbekistan and Burkina Faso.
  • The US Department of Labor has added apparel and footwear exports from Vietnam to its list of countries with a high propensity for child or forced labor conditions. According to a survey by the Vietnamese government and the International Labour Organization (ILO), an estimated 6,049 child laborers work in textile production and another 1,426 in the leather industry. 

These figures, unfortunately, aren’t unique. The International Labour Organization (ILO) puts the number of people living in similar circumstances at 21 million.  A report from global non-profit group Business for Social Responsibility (BSR) suggested child labor in Myanmar "is unsurprisingly a common option for families in need of additional income.” Yet most of these scenarios are not evident to retailers and manufacturers where visibility into the deep, lower tiers of the supply chain is not available. 

Governments are enacting and enforcing transparency legislation as a way to pressure companies into doing more to prevent child and/or forced labor. In July 2016, two US senators wrote aggressive letters to Customs and Border Protection encouraging the agency to implement steps to prevent any goods made with forced labor from coming into the country.

Importers have to demonstrate leadership in responsible business practices to maintain a more resilient and transparent supply chain. One option is to look to data. By assessing multiple data points collected from their supplier base, they can prioritize and mitigate risk. Business can also sharpen their focus by strengthening their supplier relationships and finding new ways to define and share responsibility throughout the supply chain.

To ensure compliance and reduce human trafficking and slavery risks, companies need to develop policies, actions and processes that address these social concerns and communicate them regularly to their suppliers, partners and consumers.

Collaborative technology solutions are the key to alleviating risk and preserving the trust of valued consumers.  Amber Road’s solutions for social compliance,audit management, product traceability, and restricted party screening can help companies increase supplier collaboration and visibility, ensure supplier accountability, and provide a conduit for broader, more proactive supplier management activities. 

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Topics: Supplier Management, Supply Chain Visibility, Supplier Compliance Questionnaires, Global Supply Chain, Supply Chain Risk Management, Product Development