Corporate performance on tackling forced labour in supply chains for the food and fashion sectors

‍Our key takeaway: KnowTheChain has released two benchmarks comparing companies’ performance on tackling forced labour risks and impacts in the food and beverage, and apparel and footwear sectors. The results are a mixed bag, with overall scores indicating that companies are stagnating or moving very slowly towards ensuring meaningful outcomes for workers in the context of tackling forced labour in global supply chains. In particular, companies are failing to identify and address how their procurement practices are contributing to an environment conducive to low wages and exploitative working conditions; failing to engage workers, trade unions and civil society organisations in the design, development, implementation, and monitoring of measures taken to address forced labour; and failing to provide concrete and effective remedy for workers. What can companies do? KnowTheChain recommends that companies start by (1) adopting a worker-centric approach to due diligence; (2) providing access to remedies that will secure meaningful outcomes for workers; and (3) proactively seek to lift up worker voice in the workplace.

KnowTheChain released its 2023 Food & Beverage Benchmark and 2023 Apparel & Footwear Benchmark (January 2024):

• Key cross-cutting themes: The benchmarks reveal that companies in the food and beverage and apparel and footwear sectors are making slow progress towards tackling forced labour in their supply chains in a way that is meaningful to workers. For instance, company purchasing practices and remedy were two of the lowest scoring themes across both benchmarks. The report highlights that this is “a concerning combination which undermines even the most effective human rights due diligence programmes.” Companies are also failing to adopt preventative measures to tackle forced labour risks. For example, less than 25% of apparel and footwear companies “disclosed engaging with local or global unions to improve freedom of association in supply chains.” Ensuring strong worker voice and rights holder engagement “is a critical preventative measure” for companies to address forced labour issues in their supply chains. Despite the slow progress, there are some companies who have demonstrated leading practices in their industry. Lululemon and Puma were the top scorers in the fashion sector and Woolworths Group and Tesco were the top scorers in the food and beverage sector. The top scorers show that robust human rights due diligence can coexist with strong financial performance: “[S]trong commitment to stakeholder engagement, human rights and environmental due diligence, and provision of remedy is entirely compatible with a healthy bottom line.”
  

• What can food and beverage companies do? The benchmark recommends that companies: (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”; (2) “Address risks to migrant workers, who may be subject to exploitative recruitment practices.” This includes adopting, and implementing, a policy that aligns with the Employer Pays Principle; and (3) “Ensure supply chain workers receive remediation for harm, including supporting reimbursement of recruitment fees.”
  

• What can apparel and footwear companies do? The benchmark recommends that companies: (1) “Ensure workers are remediated for harm.” Companies could engage with workers on an ongoing basis and disclose concrete remedy outcomes for affected workers; (2) “Support collective worker empowerment.” Companies could proactively seek the reinstatement of union leaders and members who have been unfairly dismissed; (3) “Anticipate regulation and adopt a worker-centric approach to due diligence”; and (4) “Adopt and disclose responsible purchasing practices, including in relation to planning, forecasting and ring fencing of labour costs which deliver a living wage.”