Slavery: Businesses Risk Complicity In Forced Labour Overseas

Businesses Risk Complicity In Forced Labour Overseas

Forced labour is still widespread in emerging economies that are vital to the supply chains of major multinational businesses, according to analysis from the forecasting company Maplecroft.

There are millions of victims of forced labour in India and China, the report said, working across industrial and agricultural sectors.

In China, the Laogai – a network of forced labour camps for prisoners – are used for manufacturing goods for the private sector, the report warns. Migrant workers, who often leave the countryside without permits in order to find work in the country’s booming factory towns, face slave-like conditions in many industries, according to Maplecroft.

In India, most forced labour occurs in agriculture, the report said, but the garment industry, construction materials and food processing are also heavily affected. Child labour in the country is also a systemic problem.

Both countries are increasingly important to multinational businesses headquartered in Britain. The UK is the largest European investor in India, and trade between the countries has been growing. Imports from India grew 27 per cent last year.

Chinese factories are increasingly employed in the manufacture of high tech goods. Foxconn, a large technology company that assembles Apple products, has faced considerable criticism over poor conditions in its factories, which reportedly led to a number of suicides amongst workers.

Other emerging investment destinations, including the Philippines, Malaysia, Bangladesh, Vietnam and Mexico are also considered “extreme risk” by Maplecroft. Failed and pariah states, including North Korea, Myanmar, Somalia and Sudan.

The International Labour Organisation of the UN estimates that 12.3 million people in the world are currently trapped in forced labour.

The consultancy and anti-slavery groups said that businesses themselves are responsible for making sure that they do not support forced labour.

“The United Nations guideline principles on business and human rights spell out that businesses have a responsibility to protect human rights across their operation and from their own self-interest businesses should avoid becoming implicated in human rights abuses,” Dr Aidan McQuade, director of Anti-Slavery International, said.

“To ensure businesses are not supporting slavery they should start by ceasing the outsourcing of their ethical responsibilities to dubious social auditors or certification schemes which too frequently fail to identify forced labour. They should also commit to investing at least 0.7 per cent of their pre-tax profits in programmes that focus on reducing the risks and manifestations of forced labour in their supply chain, establishing long-term partnerships with civil society and trade unions to ensure sustained improvement in working conditions.”

Weak supply chain management can significantly increase the risk of forced labour, Maplecroft said. Countries where there are embedded social practices prejudicing against genders or social groups are also prone to forced labour. Economic processing zones, which are increasingly common as part of industrial policies adopted in developing nations, can also be complicit in the use of forced labour, as they often exist outside of national legal frameworks.

Businesses will be held accountable if they are found to be directly or indirectly complicit in forced labour, Professor Alyson Warhurst, Maplecroft’s CEO warned.

“The ongoing use of forced labour in emerging economies indicates an unwillingness or a critical lack of capacity to address both the symptoms and causes, leaving business to police the problem itself,” she said.

“Responsible organisations must ensure that they and their business partners are fully compliant with international labour standards or they risk damaged reputations, litigation, investor alienation and reduced profits from consumer backlash and hidden costs relating to reduced productivity linked to adverse working conditions.”

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