Major technology companies ‘negligent’ on forced labour practices

Most of the world’s largest information technology companies continue to leave supply chain workers at serious risk of forced labour, according to a new report that highlights the sector’s inaction

The majority of technology companies remain “negligent in their efforts to address forced labour”, lacking the essential processes and tools needed to tackle, let alone eliminate, abuses in their supply chains, according to analysis of the ICT sector’s international employment practices.  

In its third benchmark report, KnowTheChain (KTC), an organisation attempting to drive awareness and corporate action on the issue, assessed the world’s largest technology companies on their efforts to combat forced labour in their supply chains, scoring each company out of 100.

According to the International Labour Organisation (ILO), forced labour can be understood as “all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily”.

In the case of technology companies, the report noted a number of poor practices which increase the risk of forced labour taking place.

This includes companies not conducting human rights impact assessments on their supply chains, the absence of a supplier code of conduct, and a lack of grievance mechanisms for workers.

It also noted the Covid-19 coronavirus pandemic is exacerbating the issue of forced labour, with increases in “excessive overtime, poor and hazardous working and living conditions, wage withholding, and the abuse of workers who lack alternative livelihood options – all indicators of forced labour.”

Of the 49 firms evaluated, more than three quarters (76%) of the cohort received scores lower than 50, with the average score being 30 out of 100.

Lacking processes

On top of this, although 36 firms have policies prohibiting recruitment fees for workers, none of them have set out a comprehensive process to prevent these fees from being charged to workers in the first place, and only 13 could prove workers had been reimbursed for any costs they did incur.

This is despite the ILO clarifying in 2019 that workers should not be charged recruitment fees or related costs, a practice which particularly effects migrant workers, according to Felicitas Weber, project director at KTC and author of the report.

“No company has a detailed process that starts with identifying what channels migrant workers come through when they go to work at a factory in their supply chain, how are they recruited, which recruitment agencies they use, what fees are paid, and then there’s undertaking in depth monitoring on whether and what charges have been paid, checks of worker visas, recruitment relationships, and contracts et cetera,” she said.

“It’s obviously a great start to have this policy in place because I think the policy itself is a big signal already, but to the workers, policy without implementation really doesn’t make any difference.”

At the top of the benchmark is Hewlett Packard Enterprise, with 70/100, closely followed by HP (69), Samsung (69), Intel (68), Apple (68), Dell (63) and Microsoft (59). Those scoring below 50 include Walmart (46), Nokia (45), Amazon (43) and Sony (36), with some of the lowest scorers being Nintendo (23), Panasonic (13) and Broadcom (10), with Xiaomi Corp scoring zero.

A failure to protect workers’ rights

Every company benchmarked, even those at the top, failed to show how they protected the rights of workers and unions.

“All companies in our assessments scored zero when it came to ensuring that workers in their supply chains can organise, meaning none of these companies are working with global or local unions to support freedom of association, none are working to train suppliers on the topic, and none are ensuring that union members don't get harassed,” said Weber.

When asked why this was the case, Weber told Computer Weekly: “Companies want to keep costs low, which means paying suppliers less. In the short term it may not be particularly profitable for companies and suppliers to address the power imbalances that exist between themselves and workers.

“I think freedom of association could prevent the worst abuses, but certainly unions and organised workers would likely also call for, for example, wages that are higher than just minimum wage, better working conditions or shorter hours,” she said, adding that when KTC engages with companies and industry associations in other sectors, there is generally a much stronger acknowledgement that workers are part of the solution.

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According to Weber, worker voice is so important because it helps drive solutions from below and ensures the change is meaningful for those on the ground, rather than it simply being good public relations for the companies involved.

However, IT companies and their supply chains are also locked in a state of institutional inertia in which drastic action seems impossible.

“What we’re hearing from companies is ‘well, we can’t really do anything because our supply chains are so complicated’, or ‘how could we possibly do anything about it’, or, particularly in this sector, we’ve heard from companies that say ‘our first-tier suppliers just don’t tell us who they are sourcing from, [so] they don’t tell us what can I do about it’,” said Weber.

“These are the are sourcing decisions the companies made, but that doesn’t mean it’s the right decision or that other ways of working aren’t possible.”

Delivering change

Although Weber noted there has been some progress on KTC’s previous two IT benchmark reports from 2016 and 2018, for example, from HP and Intel on issues like recruitment fees and supplier management, she said that “overall, we are disappointed that we’re not seeing stronger movement”.

To instigate the change needed, Weber said companies must be pressured into changing their behaviours through a range of activities, including industry initiatives, investor action and new legislation.

“Given it’s such a systemic issue, I think we need action from every single actor,” she said.

“It is quite an odd predicament that forced labour is prohibited by laws all over the world, yet there isn’t any particular legal implication at the moment. There’s some reporting legislation, but even if you don’t report under the UK Modern Slavery Act, for example, not much is going to happen to you.”

Giving examples of what different actors can do, Weber said industry initiatives such as the Responsible Business Alliance (RBA) can play a major role by strengthening membership requirements to ensure companies publicly report on their performance; policymakers can push for mandatory human rights due diligence legislation as is being done in Europe, and investors can simply threaten to divest from unethical companies.

She added that, although it was slowly starting to change, companies in the tech sector rely too much on auditing as a solution, despite the obvious limitation that they only provide a snapshot in time as opposed to continuous oversight of a situation.

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