Unveiling the Chains of Forced Labor: Ensuring More Transparency in Transnational Business

In 2015, various US food stores including Whole Foods, Wal-Mart, and Olive Garden, were implicated in a scandal. An AP investigation revealed that these retailers were selling shrimp that had been peeled by slaves in Thailand; many of these major retailers admitted they did not know the source of all of the goods they were selling. Because of globalization and the scale of international integration within our economy, it is often difficult for corporations to track their supply chains and implement surveillance techniques to safeguard human rights. Given the difficulty and high cost of monitoring each discrete stage of the supply chain, it’s hardly surprising that self-enforcement is uncommon. Ideally, foreign governments would step in to protect their citizens, but there are still ways for the United States to ameliorate this problem. Laws such as the California Transparency in Supply Chains Act ensure that companies investigate and publicize where and how their products are produced, making corporations accountable for their production processes and empowering consumers to make more informed purchases. While enacting supply-chain transparency acts is a step down the morally responsible path, implementing these laws is only the beginning of the fight to eliminate human trafficking.

Supply chains can be highly intricate, particularly within industries that have many steps built into the production of their goods. One example is the complex supply chain of coffee, which demonstrates the difficulties associated with monitoring a company’s manufacturing process. The production of coffee generally contains seven levels – growing, harvesting, hulling, drying and packing, bulking, blending, and roasting – in addition to intermediaries, including transporters, exporters, and retailers. The coffee beans are processed and roasted in factories hundreds of miles away from where they are grown. The coffee is then transported and exported to consumers all around the world. The beans rarely stay in one place for long; they can be transported at multiple junctions in the supply chain, including from harvesting to drying, or from farmers to processors and roasters.

Because there are so many steps involved in the supply chain process, discreet cost-cutting opportunities are abundant. It is no surprise, then, that forced labor is a hidden component of many supply chains. Forced labor trails only sex work as the largest sector of global human trafficking, comprising 18 percent of all trafficking. While estimates can vary widely due to the clandestine nature of the trade, approximately 20.9 million people are in some form of forced labor across the world, producing profits estimated by the International Labor Organization at $44.3 billion. The exact nature of this forced labor takes on many different forms, but there is no doubt that in many cases it’s closer to home than many Americans realize.

As of September 30, 2016, the United States Department of Labor’s List of Goods Produced by Child Labor or Forced Labor includes 139 goods from 75 different countries. Despite the 2002 enactment of the Trafficking Victims Protection Act, the products of coerced, child, and slave labor are still sold in American markets – even at seemingly reputable retailers such as Whole Foods and Wal-Mart. Major corporations that operate in the United States should be held accountable for how their products are produced. This is where supply chain transparency laws come into play: By removing the profit motivation of forced labor, supply chain transparency laws could improve the lives of the millions of victims of slave labor worldwide.

One of the most important of these laws, the California Transparency in Supply Chains Act, was signed in 2010 and went into effect on January 1, 2012. The act requires corporations with over $100 million in gross annual revenue that do business in California to publically disclose their efforts to eradicate slavery from their supply chains. The act seeks to increase consumer awareness of forced labor, so that consumers can make ethical choices about which goods they buy. The ultimate goal is to end complicit involvement in forced labor. If consumers responded to this information by avoiding or even boycotting goods produced with slave labor, foreign countries and US corporations would bleed revenue until they addressed these blatant human rights violations.

In 2015, Know the Chain published an insights brief based on the introduction and enactment of the law in California. As of September 30, 2015, only 31 percent of affected companies had a disclosure statement available that met all of the requirements of the law, which includes verification, auditing, certification, internal accountability, and training. The findings suggest that in addition to enacting laws such as the California Transparency in Supply Chains Act, proper enforcement must exist to ensure accurate compliance with all aspects of the law.

Another shortcoming of the law is that names of corporations that are affected by this law are not required to be made public. Know the Chain was only able to identify 19 percent of the companies required to comply with the new law in California. This obscurity leaves consumers and corporations almost entirely unaware of which businesses are subject to the law, obviously failing to meet any goals of market transparency.

While the California Transparency in Supply Chains Act represents a necessary and important first step toward addressing and eradicating human trafficking by increasing transparency, there is still more to be done. The government needs to provide adequate guidance to companies so that they fully comply with the new laws. In order to make transparency acts actually transparent and ensure consumers have the relevant information necessary to make educated decisions, the names of corporations affected by such laws should be publically disclosed. Finally, laws must ensure that disclosure statements are updated frequently enough to accurately reflect changes in supply chains and in the global economy.

Of course, California is just one state. True progress would require federal legislation – one that hopefully takes into account the findings from California. A bill comparable to the California Transparency in Supply Chains Act was introduced in the United States House of Representatives by congresswoman Carolyn B. Maloney of New York in July 2015. The Business Supply Chain Transparency on Trafficking and Slavery Act of 2015 stated that “legislation is necessary to provide consumers information on products that are free of child labor, forced labor, slavery, and human trafficking” so that producers and consumers “can avoid inadvertently promoting or sanctioning these crimes through production and purchase of raw materials, goods, and finished products that have been tainted in the supply chains.” The bill was introduced and then referred to the House Committee on Financial Services. Unfortunately, no actions have been taken in Congress since the bill was introduced and referred to committee on July 27, 2015.

Even if a transparency act were passed and effectively implemented at the federal level, the ultimate responsibility lies with consumers. In the words of Richard M. Locke, Provost and Professor of Political Science and International and Public Affairs at Brown University, “greater transparency is a necessary but not sufficient condition to improve labor/health and safety/environmental standards in global supply chains. It’s what global buyers do with this greater transparency that really matters. Do they use this information to change their purchasing practices, to develop more long-term, strategic partnerships with their suppliers and thus encourage these suppliers to invest in improved working conditions?” Increased information is not enough to affect change in global supply chains. At the end of the day, it is up to consumers to use the information available to them to make decisions. Oftentimes the ethical decision is more expensive.

It is morally impermissible for consumers to engage in and quietly support markets that are built on the basis of slave labor. Yet without supply chain transparency laws, consumers are left unaware of the human rights abuses involved in the making of goods they buy and use every day. Increasing awareness of modern-day slavery lets consumers make informed decisions. While it’s easy to lend support to supply chain transparency laws, the decision that truly matters happens at the checkout line.

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