Slavery in its modern forms like forced labor and debt servitude persist despite efforts to stamp them out. Despite a ban by the Universal Declaration of Human Rights in 1948, inadequate laws around the world fail to protect millions of citizens.
It’s in the hardest to reach sources of raw materials for Western products — Ivory Coast cocoa farms, Sierra Leone gold mines, Thai fishing boats. And in sex trades around the world.
More than two decades ago the world’s largest chocolate makers — including Nestle S.A., Hershey Co. and Mars Inc. — promised to get child labor out of their production chain within five years. Yet when pressed on those promises earlier this year by a Washington Post reporter, an unidentified executive at one of the large chocolate companies was unable to say if those goals were reached: “I’m not going to make those claims.”
Globalization is said to be boosting the number of child laborers, indentured laborers and the trafficking that accompanies them in manufacturing supply chains. Some facts to illustrate the scale of the problem:
- The International Labor Organization, a U.N. agency, estimates that 152 million children are forced to work in deplorable conditions in farms or factories at the far reaches of supply chains.
- The State Department in its just-released Trafficking in Persons report estimates that 24.9 million people are held by human traffickers.
- The U.N.’s ILO also says 16 million are exploited in the private sector in areas such as manufacturing, domestic work, construction or agriculture. About 4.8 million are in forced sexual exploitation, and 4 million are in state-imposed forced labor — think North Korea.
Ferreting these atrocities out of global supply chains is proving difficult; often, the most abusive practices take place in poorly regulated and corrupt corners of the developing world (the cotton sector of Tajikistan, for instance, or leather tanneries in Bangladesh).
ESG investors who would like to take forced labor into consideration face a familiar problem: the lack of reliable information. In many cases worldwide, data on how workers are treated in the supply chain are voluntary rather than mandatory. And even the best apparel brands as rated by the 2018 Fashion Transparency Index fall far short of perfect.
Companies in the vanguard of releasing supply chain data — like Patagonia, Adidas and Reebok — have won praise for tackling the issue of forced labor. Yet even they struggle to look beyond their direct suppliers abroad and into the murky world of subcontractors and sub-subcontractors. That, say experts, is where the abuses are most prevalent.
Without significant penalties and enforcement actions from global governments, manufacturers may decide to take a calculated risk to their reputations for the cheapest possible form of labor.
Progress, and Promises Unkept
Six years ago, more than a thousand garment workers in Bangladesh died in the collapse of the Rana Plaza factory complex, a tragedy that helped expose the problems of modern slavery. Many global brands began internal campaigns directed at understanding the problem, and some have made progress on remediation, too.
Yet the Clean Clothing Campaign, a nonprofit that pressures fashion brands over supply chain abuses, reported this month that not one of the world’s major apparel brands has made good on pledges made in the wake of the Rana Plaza tragedy to pay their workers a living wage.
Despite the challenges and apparent lack of progress, efforts continue to eradicate slavery. Recent highlights include:
- Dutch Child Labor Law: The Netherlands in June enacted legislation requiring a duty of care to help prevent the sale of goods produced using child labor. The legislation applies to all companies selling goods within the Netherlands regardless of whether are not registered in the country.
- Preventing Worker Entrapment: On the human trafficking front, the ILO this month published a new set of general principles and operational guidelines for fair recruitment, one of the weak links in global rules that provides an opening to unsavory employers to “trap” workers by seizing passports, operating prison-like company housing or simply charging placement fees in excess of what the worker can possibly earn.
Climate and environmental issues often steal the headlines when it comes to impact investments and ESG strategies, but nothing among the issues tracked as sustainable investment metrics has the impact on human lives like slavery.