When Indra Nooyi, chairman and CEO of PepsiCo, was speaking at the World Economic Forum in Davos in January this year, she called on business leaders and industry captains to change the dialogue from “what we do with the money we make” to “how we make the money”. The idea was that companies can run in an ethical way and be profitable at the same time. Even better, we think, if companies tightly focus their energies to concentrate on areas where genuine change can be made.
This may sound like old wine packaged in a new bottle – after all, many organisations have been practising corporate social responsibility (CSR) for a long time, with very little real impact. This is not that surprising. Such efforts are often a response to external pressure and are designed to enhance a company’s reputation, rather than re-orient a firm to make social benefits a part of business decisions. The CSR departments get a budget, but it is not being put to good enough use.
Businesses that truly care about wider society should be taking aim at particular examples of social injustice and using their corporate muscle to eradicate it. Sadly, there is a lot of social injustice to choose from. Here, we would like to pinpoint one of the biggest ones: human trafficking and forced labour. Most of us associate trafficking with human trafficking for sexual exploitation. Yet, according to the latest UN report, there is more forced labour than any other form of human exploitation in Africa, the Middle East, South and East Asia as well as the Pacific.
Out of sight
Human trafficking is an issue that we don’t see and therefore it is remote to many of us – so far removed from our daily lives that we are mostly unconcerned with it. Nevertheless, we are all implicated. We all have mobile phones that contain an ingredient called coltan. Coltan is only available from mines in Democratic Republic of the Congo rife with slavery and child labour. While we may be surprised to read this, there is a good chance that products that fill our shops in the developed world are the result of forced labour.
Human trafficking happens everywhere, even in supposedly well-developed countries. Take, for example, Singapore. The US State Department points out that many foreign workers in the country have assumed debt associated with their employment to the recruitment agencies, making them vulnerable to forced labour, including debt bondage. There were also reports of confiscation of passports, restrictions on their movement, illegal withholding of their pay, threats of forced repatriation without pay as well as physical abuse.
Certainly, NGOs have called for tougher penalties against errant companies and governments. However, legislation against human trafficking still varies widely from country to country. In addition, many politicians may prefer to look away from the issue, fearing that they would upset businesses. Indeed, even when the political will exists, NGOs and governments are often unable to turn it into action. Therefore, we would urge companies and consumers alike to take the initiative themselves.
The financial crisis has shown us that our brand of shareholder capitalism can be detrimental to our societies. Of course, the argument runs that businesses pay a lot of taxes, keep people employed and make new investments; companies are already making significant contributions to society. However, this view effectively assumes that anything that is outside the scope of the firm is not the firm’s responsibility. Companies cannot, and should not, be responsible for taking care of society as a whole, but they should do their utmost to eliminate and prevent social harms and problems linked to their activities. Sadly, while many firms have been addressing human trafficking, many more have not.
The Rana Plaza Tragedy in Savar, Bangladesh in May 2013 provided a tragic illustration of the problem. The products for many world-famous brands were manufactured under the roof of the collapsed factory. One would imagine that that these companies would have sufficient processes in place to preclude labour exploitation. Yet, in addition to being paid only €38 a month, labourers had to work in dire conditions. Poverty drove them into situations where they couldn’t say “no” for fear of losing their jobs. Young people and children effectively work in forced labour conditions – these young “helpers” earned 12 cents an hour, while “junior operators” took home 22 cents an hour or $10.56 a week and senior sewers received 24 cents an hour or $12.48 a week.
Perhaps more incredibly, it was reported that at least one famous brand was unsure whether or not its products were made there. Companies may pride themselves on their ability to manage complex supply chains and outsourcing. However, very often, they lack the necessary processes and routines to check whether their contractors are exploiting labour.
Responsible companies would be asking what steps they are taking to ensure that their entire supply chain is free from unfair and unethical labour practises, especially those outsourced abroad. But it is an open question of how far brands go to monitor suppliers and whether they take full responsibility for the conditions in which those employed by third-party contractors are working? This needs to be discussed publicly. Otherwise, companies that believe they are working for the good of society may have inadvertently supported some forms of exploitation in distant parts of their value chains.
And of course, we, as consumers, should start to question our ceaseless demand for dirt cheap products. We are feeding companies’ drive to source as cheaply as possible. The extra pound, dollar or euro in our pocket could easily come at the expense of someone’s suffering, or as the disaster in Savar shows, someone’s life.
Human trafficking of any sort, and not just forced labour, is modern-day slavery. We should not allow it to perpetuate any further. A good first step is to not shut up about it. Speak up. Because in the end, we, companies and consumers alike, are responsible for everything we do – and everything we don’t.