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The Global Business of Forced Labour: Report of Findings 2018 / CERTIFICATION ‘MAKING NO DIFFERENCE’ TO SUPPLY CHAIN LABOUR ABUSES

The Global Business of Forced Labour: Report of Findings 2018 / CERTIFICATION ‘MAKING NO DIFFERENCE’ TO SUPPLY CHAIN LABOUR ABUSES
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http://www.globalbusinessofforcedlabour.ac.uk/

Executive Summary

About

The era of glob­al­i­sa­tion has been char­ac­terised by a growth of the world’s biggest retail and brand com­pa­nies, cou­pled with a deep­ened con­cern regard­ing the pres­ence of forced labour in glob­al sup­ply chains. Indeed, one of the gravest and grow­ing risks that brand com­pa­nies face is the use of forced labour, human traf­fick­ing, or oth­er ille­gal labour prac­tices with­in their sup­ply chain. Research on this top­ic has focused almost entire­ly on the big brand busi­ness­es at the top of the sup­ply chain, rather than the work­sites that actu­al­ly deploy and man­age forced labour and exploita­tion, which usu­al­ly involve much small­er and more infor­mal busi­ness actors. How­ev­er, the over­whelm­ing and sin­gu­lar focus on mul­ti-nation­al cor­po­ra­tions (MNCs) at the top of sup­ply chains has hin­dered our under­stand­ing of some of the broad­er pat­terns sur­round­ing the busi­ness dynam­ics of forced labour in the glob­al econ­o­my. Designed to address this gap, the Glob­al Busi­ness of Forced Labour project is a first-of-its kind inter­na­tion­al research study inves­ti­gat­ing the busi­ness mod­els of forced labour in glob­al agri­cul­tur­al sup­ply chains. The project has sys­tem­at­i­cal­ly mapped the busi­ness of forced labour, focus­ing on case stud­ies of cocoa and tea sup­ply chains. Through exten­sive pri­ma­ry research in the cocoa indus­try in Ghana and the tea indus­try in India and with domes­tic and inter­na­tion­al busi­ness actors, the project gen­er­at­ed an orig­i­nal dataset that sheds light on the dri­vers and pat­terns of forced labour in agri­cul­tur­al sup­ply chains feed­ing UK mar­kets. This dataset includes in-depth inter­views with over 120 tea and cocoa work­ers, a sur­vey of over 1000 tea and cocoa work­ers, and over 100 inter­views with busi­ness and gov­ern­ment actors.

Summary of Findings

Business of Forced Labour

  • There is a coher­ent pat­tern of labour exploita­tion includ­ing forced labour at the base of glob­al tea and cocoa sup­ply chains.
  • Tea and cocoa busi­ness­es prof­it from forced labour and exploita­tion in two main ways: 
    • Employ­ers use forced labour to reduce their costs of doing business. 
        • Our research uncov­ers that employ­ers sys­tem­at­i­cal­ly under-pay wages and under-pro­vide legal­ly-man­dat­ed essen­tial ser­vices for work­ers. Employ­ers are legal­ly required to pro­vide basic ser­vices for tea work­ers on per­ma­nent con­tracts and their fam­i­lies. How­ev­er, our study found that 47% of tea work­ers do not have access to potable water and 26% do not have access to a toi­let. Work­ers also report­ed being charged by employ­ers for ser­vices like elec­tric­i­ty but not receiv­ing these.
        • In the cocoa indus­try, employ­ers seek to cut costs through a com­plex sys­tem of finan­cial cal­cu­la­tions, includ­ing fines (e.g. for fail­ing to car­ry out manda­to­ry unpaid labour), fees (e.g. for obtain­ing a job on a cocoa farm), and deduc­tions (e.g. for costs of inputs like pes­ti­cides and safe­ty equip­ment) to sys­tem­at­i­cal­ly under-pay work­ers and cre­ate sit­u­a­tions of debt bondage.
        • In both indus­tries, these wide­spread forms of exploita­tion are also some­times accom­pa­nied by phys­i­cal vio­lence, threats, ver­bal abuse, and/or sex­u­al violence.
    • Employ­ers use forced labour to gen­er­ate revenue. 
      • In the tea indus­try, employ­ers seek to gen­er­ate rev­enue by lend­ing mon­ey or pro­vid­ing ser­vices to work­ers and charg­ing high inter­est on debts, thus engen­der­ing sit­u­a­tions of debt bondage. Sit­u­a­tions of debt bondage are close­ly linked to the under-pro­vi­sion of ser­vices; most tea work­ers report­ed bor­row­ing mon­ey to pay for food or med­ical care (which employ­ers are legal­ly required to provide).
      • In the cocoa indus­try, employ­ers seek to prof­it by forc­ing work­ers to car­ry out addi­tion­al labour beyond the agreed terms and con­di­tions of the work, such as work­ing for free on the employer’s oth­er farm­lands for peri­ods as long as three months. Fail­ure to per­form this invol­un­tary labour results in deduc­tions from the worker’s wages, fines, threats, or even dismissal.
      • In both indus­tries, these wide­spread forms of exploita­tion are also some­times accom­pa­nied by phys­i­cal vio­lence, threats, ver­bal abuse, and/or sex­u­al violence.
  • Work­ers face severe con­straints on their abil­i­ty to exit exploita­tive tea plan­ta­tions and cocoa farms.
  • Although choco­late and tea com­pa­nies are high­ly prof­itable, the tea and cocoa work­ers at the base of their sup­ply chains are liv­ing far below the pover­ty line and are rou­tine­ly sub­ject­ed to abuse. Accord­ing to the World Bank, the pover­ty line for low­er mid­dle-income coun­tries such as Ghana and India is $3.20 (£2.35) per day. Tea work­ers’ wages in India are as low as 25% of the pover­ty line amount and cocoa work­ers’ wages are around 30% of the pover­ty line amount.
  • Pro­duc­ers – tea plan­ta­tion own­ers and cocoa farm­ers – claim they do not receive enough pay­ment for their prod­ucts to obey labour laws and pay the min­i­mum wage.

Gaps in Global Supply Chain Governance

  • Tea and cocoa sup­ply chains are already cov­ered by sev­er­al pre­vail­ing gov­ern­ment and indus­try ini­tia­tives to address and pre­vent forced labour in glob­al sup­ply chains. Our research con­firmed that these solu­tions are falling short of their goals.
  • Eth­i­cal cer­ti­fi­ca­tion schemes are large­ly inef­fec­tive in com­bat­ting labour exploita­tion and forced labour in tea and cocoa sup­ply chains. 
    • Our study includ­ed tea plan­ta­tions cer­ti­fied by Fair­trade, Rain­for­est Alliance, Eth­i­cal Trade Part­ner­ship, and Trustea, and cocoa pro­duc­ers who are mem­bers of the Fair­trade and UTZ cer­ti­fied co-oper­a­tive, Kua­pa Kokoo. These schemes set stan­dards around basic ser­vices, fair treat­ment, wages and debt, health and safe­ty, and work­ers’ rights. How­ev­er, we found that these stan­dards are rou­tine­ly vio­lat­ed by employers.
    • Over­all, we found that cer­ti­fi­ca­tion had lit­tle to no impact on labour stan­dards with­in the tea indus­try. Some of the worst cas­es of exploita­tion doc­u­ment­ed with­in our research occurred on eth­i­cal­ly cer­ti­fied plantations.
    • Work­ers told us that they are instruct­ed to alter their work­ing prac­tices (e.g. in rela­tion to safe­ty equip­ment) to meet stan­dards dur­ing annu­al audits by cer­ti­fiers, but are then asked to revert to break­ing stan­dards the fol­low­ing day, sug­gest­ing that pro­duc­ers are cheat­ing audits and inspections.
    • Most work­ers in our study did not know whether or not they worked on cer­ti­fied work­sites. In cocoa, 95% of work­ers did not know whether their work­site was cer­ti­fied or not. We also found exten­sive con­fu­sion amongst pro­duc­ers about how cer­ti­fi­ca­tion oper­ates and whether or not they were cer­ti­fied. One pro­duc­er report­ed that the labour stan­dards for his farm’s cer­ti­fied and non-cer­ti­fied bags of cocoa are the same.
    • Eth­i­cal cer­ti­fi­ca­tion schemes tend to con­tain loop­holes that cre­ate excep­tions relat­ed to the most vul­ner­a­ble work­ers with­in each indus­try. For exam­ple, in cocoa, some cer­ti­fiers do not include hired labour in their assess­ment stan­dards, that is, work­ers employed by farm own­ers to work on a sea­son­al, con­tract, or dai­ly basis. As one cer­ti­fi­er explained, hired labour in cocoa is ‘an area where I would say no stan­dard can real­ly reach as of now’.
    • When inter­viewed about these gaps and chal­lenges, cer­ti­fiers repeat­ed­ly claimed that their stan­dards do not pro­vide a guar­an­tee that they are being met. Accord­ing to one cer­ti­fi­er, ‘there is no guar­an­tee. We don’t use the word guar­an­tee’. In this light, the way eth­i­cal cer­ti­fi­ca­tion schemes are por­trayed to con­sumers needs to be revisited.

Recommendations

  • Pol­i­cy­mak­ers, busi­ness actors, and civ­il soci­ety should recog­nise that the busi­ness dynam­ics of forced labour can­not be under­stood through a crim­i­nal jus­tice lens. Rather than result­ing from a few ‘bad apple’ employ­ers, the busi­ness of forced labour is wide­spread at the base of glob­al sup­ply chains and is bound up with broad­er struc­tur­al dynam­ics that cre­ate a busi­ness demand for labour exploitation.
  • Pol­i­cy­mak­ers, busi­ness actors, and civ­il soci­ety should appre­ci­ate that the busi­ness of forced labour is dri­ven by uneven val­ue dis­tri­b­u­tion along sup­ply chains, includ­ing the low prices that pro­duc­ers receive for their prod­ucts com­pared to the high prof­its of retail and brand firms, as well as irre­spon­si­ble pur­chas­ing prac­tices. Unless these core dri­vers of forced labour are tack­led, efforts to address forced labour in sup­ply chains are like­ly to fall short.
  • At present, promi­nent ini­tia­tives to address forced labour in sup­ply chains are falling short of their claims and objec­tives. Most are not tack­ling the root caus­es of forced labour. Gov­ern­ment, indus­try, and work­ers’ organ­i­sa­tions should take stock of these fail­ings and col­lab­o­rate towards stronger state and work­er-led reg­u­la­to­ry ini­tia­tives that address the root caus­es of forced labour in glob­al agri­cul­tur­al pro­duc­tion. These should cen­tre around: 
    • Ensur­ing liv­ing wages for work­ers across all tiers of the sup­ply chains;
    • Work­er-dri­ven cor­po­rate social respon­si­bil­i­ty pro­grams that give work­ers a cen­tral and mean­ing­ful role in solu­tions to the prob­lem of forced labour in sup­ply chains;
    • Stronger state-based enforce­ment of labour standards;
    • Redis­tri­b­u­tion of val­ue along the sup­ply chain.

Tar­get­ed rec­om­men­da­tions for pol­i­cy­mak­ers, busi­ness, and cer­ti­fi­ca­tion organ­i­sa­tions are laid out in a pol­i­cy briefs series that accom­pa­nies this report.

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