2023 Food & Beverage Benchmark Findings Report

Our key takeaway: The food and beverage sector is integral to the global economy, making up almost two-thirds of all jobs. Yet a significant percentage of workers in the sector are in situations of exploitation and abuse. According to the International Labour Organisation, “there are currently 27.6 million people in situations of forced labour in the world, with 13% of adult forced labour exploitation occurring in agriculture.” Why is this the case? The report highlights the nature of work in the food and beverage sector in the context of intersecting polycrises such as the climate and humanitarian crises as drivers of forced labour throughout supply chains. The sector employs primarily migrant and seasonal workers in upstream supply chains due to the labour-intensive and low-skilled nature of work. Migrant workers are already vulnerable due to the lack of labour and social protections in receiving countries and they are more often than not subjected to exploitative practices such as recruitment fees, long hours and low wages. Polycrises compound these existing vulnerabilities to put already vulnerable workers in even more dire situations. For instance, the climate crisis will reduce crop yields in certain regions of the world which forces workers to work longer hours to make up the shortfall in wages. What can companies do? They can implement robust human rights due diligence (HRDD) processes as expected under the UN Guiding Principles. This encompasses centring worker voice at all stages of HRDD, including in the identification of forced labour risks and the development of remedial actions; reporting on the outcomes of efforts to tackle forced labour; and assessing how polycrises will exacerbate forced labour risks and impacts now and in the future.‍

KnowTheChain has published 2023 Food & beverage Benchmark Findings Report (July 2023):

• Forced labour is prevalent in global food and beverage supply chains: Drawing on data reported by the ILO, the report states that “there are currently 27.6 million people in situations of forced labour in the world, with 13% of adult forced labour exploitation occurring in agriculture.” This number is expected to increase given the collision between the nature of the food and beverage supply chain characterised by high-risk commodities and the use of migrant labour, and escalating polycrises such as the climate crisis, geopolitical instability, and cost-of-living crisis. The sector is prone to forced labour due to the nature of work: “Crop growing is labour-intensive, and food processing often involves low-skilled, manual labour” which means that “[v]ulnerable groups such as minorities and migrant workers, whose job choices are too often limited by circumstance, are over-represented in the sector.” Intersecting polycrises will only compound existing vulnerabilities in the sector which leaves those who are already vulnerable in heightened situations of exploitation. For instance, the climate crisis “is hampering production of tea in India, leading to poor wages for workers.” The Russian invasion of Ukraine increased global food prices which led to “almost 200 million people facing acute food insecurity globally in 2022 compared with pre-pandemic levels.” The cost-of-living crisis pushes more people into poverty which makes them more susceptible to exploitation and forced labour.
  

• Three key findings: The report finds that most companies publish policy commitments to address forced labour in supply chains, but few demonstrate outcomes for workers in practice, including the effectiveness of remedies provided. They also “consistently overlook the power of preventative measures including supporting freedom of association and access to effective grievances mechanisms” to address the risk of forced labour in their supply chains. This demonstrates that “the existence of policies alone is insufficient to materially address forced labour risks and improve outcomes for workers.” The report also finds that critical worker vulnerabilities are left unaddressed: “[O]nly 28% of companies disclosed a policy prohibiting worker-paid recruitment fees specifically” and “only 12% disclosed processes for actually implementing their policy requirements to prevent fees.” In addition, most companies fail to disclose how they include worker voice in the identification and remediation of forced labour. Furthermore, the report finds that progress on addressing forced labour has stagnated with “almost a third of companies (29%) assessed in both the 2020 and 2023 benchmarks disclosed no improvements at all over that period.” However, the report also states that this is likely to change given regulatory developments mandating human rights and environmental due diligence in the EU and forced labour import bans in countries like the US.
  

• What can companies do?: The report outlines actions companies in the food and beverage sector can take to reduce the risk of forced labour in their supply chains. This includes: 1) “Adopt a worker-centric approach to due diligence by ensuring workers and other key stakeholders, such as unions and civil society organisations, play a central role in the design, implementation, and monitoring of key due diligence processes.” Key due diligence processes include risk assessments which encompasses “safe engagement with workers affected or potentially affected”, grievance mechanisms and supplier monitoring; 2) “Address risks to migrant workers, who may be subject to exploitative recruitment practices.” This could include: a) “Adopting and disclosing a policy that aligns with the Employer Pays Principle, specifying that the employer must bear the costs of recruitment rather than the worker”; b) “Implement the Employer Pays Principle by ensuring employers pay recruitment fees and related costs in accordance with the ILO definition, and preventing fees and costs being charged to workers, including obtaining verifiable proof that employers are paying fees”; and c) “Take steps to ensure the effective, timely and transparent remediation of worker-paid fees across supply chains”; and 3) “Ensure supply chain workers receive remediation for harm, including supporting reimbursement of recruitment fees.”