Working in partnership with business: Improving monitoring for forced labour

Anti-Slavery’s work with SustainAbility resulted in the identification of a number of obstacles to businesses’ role in the eradication of slavery. By recognising these obstacles, businesses can begin working to overcome them and improve their monitoring mechanisms, the first step in identifying and eradicating forced labour.
 

Why do we need to improve supply chain monitoring?

Despite the scale of forced labour around the world, very little is reported by companies. Currently, most reported cases are exposed by the media. Major scandals around forced labour have tarnished corporate reputations. Proactively identifying and addressing forced labour can help to alleviate some of these reputational risks.

Many companies are committed to not using forced labour, as set out in their codes of conduct. However, this commitment needs to be translated into action as companies can only begin to be certain that there is no forced labour in their supply chains if they are properly equipped to look for it

There is a strong business case for identifying forced labour. Improving identification translates into improving risk management strategies and being better equipped to answer investors’ and consumers’ concerns. Investors are looking for companies with strong, sustainable and secure supply chains, a high degree of transparency and low risk of litigation. Labour violations can result in major costs from legal fines, costs or lost productivity.

Why is forced labour underreported?

As well as the disincentive that reputational damage presents, improved monitoring is more likely to uncover cases. This brings concerns about being able to effectively remediate workers found to be in forced labour conditions.

Existing monitoring mechanisms tend to identify and address specific violations without seeing forced labour. Companies often report the symptoms of forced labour as lesser violations such as delayed payment of wages or working long hours.

Risk management tools often segment risk by geography only. Many companies rely upon country-based risk management tools, which are not sufficiently sophisticated to identify forced labour, a global problem.

Audits are the main monitoring mechanism for most companies. However they have limitations. The quality and scope of auditing may be questionable, or there may be practical difficulties such as auditors being unable to speak with workers in their own language. However, even when auditing is of high quality, audits by necessity are merely a snapshot of a particular moment in a particular part of the production system. The auditing mindset tends to be linear and mechanistic and may compartmentalise symptoms, preventing observers from seeing the whole complex picture which might together constitute forced labour.

Forced labour is often hidden. For example, it is often found in the informal sector, in the early stages of production, often some steps down the supply chain. Alternatively it might be a result of recruitment practices, particularly where a company relies upon a number of agents to provide workers. Subcontracting can also hide forced labour as it adds layers between the company and the worker. These areas are out of the scope of many audits.

How can monitoring mechanisms be improved?

Rather than focusing solely on auditing, compliance and penalties, companies should work with their suppliers and take a genuine approach to partnership, for example making it clear that suppliers understand that they will not be dropped if forced labour is identified at their sites, but rather that the company will work with them to build their skills in identifying and addressing forced labour.

Remediation is too often a one-off solution – lasting change comes from suppliers who are empowered to act in a way that considers the business pressures they face. For example, how will they meet any costs incurred in eradicating forced labour? How can they change their recruitment practices to meet their needs but ensure that there is no debt bondage?

A good starting point is to acknowledge the existence of vulnerable workers in supply chains and increase vigilance of monitoring accordingly. This list is not exhaustive.

• Migrants: particularly, but not exclusively, those who are reliant on their employer for leave to remain but also internal migrants. Also workers not directly recruited by the labour user but by an agent.  
• Minorities: including indigenous groups, and those that may be discriminated against (for example Dalits in India, many of whom are in bonded labour).
• Illiterate labourers: who may not be able to read about their rights or check the accuracy of their payslips.
• Homeworkers: who often work outside the formal system and its safety measures and can therefore be vulnerable to exploitation.
• Temporary workers: those on temporary contracts who find it difficult to get union representation.
• Poor workers: more broadly, those who are low-paid and therefore more vulnerable to exploitation.
• Women: women tend to be more prone to poverty, likely to be less educated, and therefore more vulnerable.

All workers need to know their rights, not just management. Consider illiterate workers, those who speak different languages, whether workers have the opportunity to read the notice board etc. It is essential that auditors speak to workers, as they are key to ensuring that positive change in labour practices is sustainable.

Make both auditors and your commercial buying and supplier development teams aware of “red flags” and encourage them to raise concerns. Having considered who the vulnerable workers in your supply chain are, “red flags” might include:

• Excessive overtime
• Migrant workers who paid a fee and may be at risk of debt bondage
• Workers paid cash in hand, no clear record of hours worked or pay rate
• Lack of grievance mechanisms
• Absence of unions
• Workers dependent on employer or agent for basic living needs
• Workers living and working in poor conditions
• Prison labour used in the production of goods

For more guidance please see Why is forced labour my business.

Companies should consider linking up with local partners for example non-governmental organisations (NGOs), unions and local government to improve their understanding of the local context and particular practices or vulnerable workers that should be carefully checked. NGOs can help both identify and remediate.

With a growing demand for an increasingly flexible workforce, the risk that workers are tied into debt bondage through unscrupulous agents will only increase. It is therefore important that companies carefully monitor how workers are recruited.

Consider, also, linking up with other retailers or other sectors in the same supply chain to develop a cohesive approach to resolving issues such as forced labour.

Companies have a particular role in joining efforts with other relevant actors to eradicate forced labour. It is important that the private sector does not take the lack of reported forced labour for granted, but rather to ensure that monitoring mechanisms are sufficiently developed to identify forced labour where it does occur.