The apparel industry faces numerous supply chain-related challenges, ranging from warding against cargo theft to vigilantly combating counterfeiting. However, few challenges are more salient than ensuring a supply chain devoid of labor exploitation. Corporate social responsibility is critical to any business’ reputation and brand. Given the ongoing linkages of human trafficking, mass migration, and labor exploitation, companies must continue to be vigilant in vetting suppliers in their supply chain, examining legal protections for labor in the countries they do business, and ensuring that any risk of forced labor or child labor is identified and rooted out.
Our recent annual report, Supply Chain Risk Insights, highlights the ongoing risks posed by mass migration to global supply chains, primarily labor exploitation. Approximately half of all corporate social responsibility (CSR) incidents recorded by BSI last year involved migrants. As we discuss in the report, BSI noted several geographical factors that can be used to assess the risk that migrant labor exploitation will be used in legitimate supply chains. The obvious factor is whether a country has a large population of migrants or lies along one of the primary migration routes (see below). BSI has determined that economic and civil unrest in neighboring regions is frequently associated with informal or unlicensed recruitment and employment of migrants.
Another influential factor is the absence of legal protections and official citizenship status for migrants in host countries, which can prevent victims from lodging complaints through official channels. As we discuss in Supply Chain Risk Insights, some countries around the world have taken note of these increasing risks to migrants, and labor exploitation generally, and have either enacted or are formulating new legislation to combat the issue. The Qatari government, for example, lifted a provision that previously required migrant laborers to obtain permission from their employers before being allowed to leave the country. Elsewhere, Australia passed its own Modern Slavery Act while Canada iterated a commitment to creating similar legislation. Other countries, however, are regressing in their ability to address labor exploitation. Brazil is one such country, where budget cuts are jeopardizing significant progress in combatting issues like forced labor by resulting in less resources available to carry out inspections. The Brazilian government also attempted to change the legal definition of forced labor to a more generalized statement that would have likely prevented authorities from rescuing some victims as they were no longer in situations legally classified.
The agriculture and garment industries are especially vulnerable to employing exploited labor. In the first few months of 2019, numerous rescues occurred globally, liberating workers on farms and in textile factories. In February, South African officials rescued 100 workers, originating in Swaziland and Lesotho, from a small unventilated room allegedly acting as a textile factory. Also, in Vietnam, police rescued several children who worked in local garment factories while their parents labored in agriculture; recruiters reportedly paid the parents a fee in exchange for hiring their children. In Brazil, officials report rescuing over 1,900 women from forced labor over the past 15 years, many of which were involved in the global fashion industry.
Mapping and understanding the risks associated with the geography of a supply chain, although no simple undertaking, is a critical step in managing the risk of labor exploitation. Other methods such as supplier training and transitioning business partners into a recruitment model in which an employer pays fees associated with immigration can also help combat the risk of labor exploitation, an issue that BSI believes will likely remain a key issue for supply chains in 2019.