Forced Labour in IT Supply Chains

While technology may be bringing us ever closer to our friends, family and colleagues, some 80% of electronics companies don’t know which countries the raw materials they source originate from.

A further symptom of this ironic lack of connectivity with the value chain is that vulnerable workers are at risk of exploitation.

The latest KnowTheChain report – which measures IT companies’ progress towards eradicating forced labor against where they were two years ago – reveals that while most firms have taken steps to improve since 2016, the sector as a whole needs to pull its weight when it comes to protecting vulnerable workers.

KnowTheChain ranks 40 global IT companies – representing a market capitalisation of $4.7 trillion – on how they address forced labour in their supply chains, with a possible 100 points.

So, how is the sector doing?

For those companies assessed both in 2016 and 2018, the ranking has increased slightly from 39/100 to 40/100 – methodological changes making it more difficult to get a higher score this time around – but it’s still much slower progress than stakeholders would have hoped, the report finds.

Companies are assessed over seven areas key to eradicating forced labour from the supply chain: commitment; traceability and risk assessment; purchasing practices; recruitment; worker voice; monitoring; and remedy.

The average score was 32, and Intel’s top score of 75 points was juxtaposed with Largan Precision’s 0.

Giants Intel, HP, Apple, and Hewlett Packard Enterprise are leading the charge when it comes to protecting vulnerable workers, all scoring above 70 points. But not all the big names are following suit. Notably, Amazon (32/100) is failing to take sufficient action, while Broadcom’s score reduced by 81% thanks to cutting its public disclosure dramatically.

Intel, for example, has leap-frogged others to the top spot for 2018 by disclosing a supplier list, introducing unannounced audits and disclosing evidence of reimbursement of recruitment fees to suppliers’ workers, according to the report. The top four demonstrate strong leadership when it comes to recruitment, and generally have strong practices in place regarding their first-tier suppliers.

The average company (32/100) is likely to disclose a supplier code of conduct, employee training and an audit process to assess suppliers for incidences of forced labour, among other processes.

What then remain the big barriers? Assessing forced labour risks across supply chains, providing relevant training to suppliers and empowering workers’ voices are all areas of contention, according to the report.

Worker voice and recruitment – areas that have the most impact on workers’ lives, KnowTheChain says – are amongst the bottom of the pile for all companies. The report advises that companies engage with workers, give them access to effective grievance mechanisms, implement ethical recruitment practices and repay workers for recruitment fees they may have paid.

The challenge is extending efforts further down the chain. After all, if some of the world’s biggest suppliers – Amphenol, Keyence, Microchip Technology, Corning, Broadcom, and BOE – supplying corporate giants in the benchmark are scoring below 10/100, this is limiting companies’ impact in tackling forced labour.

As Felicitas Weber at the Business and Human Rights Resource Centre says, “Companies need to take much stronger action and use their means and leverage to ensure workers’ voices are heard and that responsible recruitment practices are in place across their supply chains”.

There is also some disconnect between the talking and the walking. The majority of firms (35 out of 40) have published a commitment to address forced labour in their supply chains, but for example, 16 out of 40 companies say they have a grievance mechanism available to suppliers’ workers, yet only three publish data on how those mechanisms are used.

If firms are really going to stamp out worker exploitation, they are going to need to look beyond their immediate spheres of influence and genuinely follow through on the mechanisms they have in place.