Firms failing to tackle endemic workers’ human rights violations in Asia

Violations of workers’ human rights are endemic across most Asian countries and initiatives to tackle the issue at source, and within supply chains, are not fit for purpose, warns UK-based consultant Verisk Maplecroft. In its Human Rights Outlook 2017, the firm stresses that risks are particularly acute down the Asian supply chain, where modern slavery is rife and migrant workers are at particular risk of abuse. Supply chain blind spots are most prevalent where modern slavery risks are high, it add Maplecroft advises companies and their risk managers doing business on the continent to liaise with workers directly and give them a voice to help solve some of these issues and reduce human right violations throughout the supply chain. Discussing Maplecroft’s recently published report, the firm’s supply chain analyst Hannah Broscombe pulled no punches in her assessment of poor human rights conditions for Asian workers. “Rampant and systematic labour rights violations are endemic across many industries in most Asian countries,” she told Commercial Risk Asia. Ms Broscombe explained that China, Myanmar, India, Bangladesh and Vietnam are some of the highest risk countries for human and labour rights violations, specifically in labour intensive sectors such as manufacturing, agriculture, fishing, domestic work and construction. Migrant workers are particularly at risk of human rights abuses in Asian supply chains, said Ms Broscombe. “They generally have little opportunity for redress given their limited labour rights,” she said. Maplecroft identifies modern slavery as a key risk for businesses with supply chains in India, China, Thailand and Bangladesh. “Modern slavery can be particularly difficult for companies to detect as complex supply chains and the prevalence of sub-contracting often obscures transparency,” said Ms Broscombe. The Maplecroft report warns that at the global level measures to assess and manage human rights supply chain risk are not up to scratch, with companies not carrying out appropriate due diligence or acting on audits. “The ability of business to conduct effective human rights due diligence is fundamentally flawed because safeguards designed to identify and prevent violations in supply chains are too weak,” the report warns. “Our number one issue across the board in 2017 is the limitations of the social audit. We highlight an initiative led by major auditing firms to improve trust in audits by accrediting auditors; but since many companies do not analyse or act on their audits, brands are highly exposed to violations, even among the suppliers they assess.” Lack of supply chain due diligence to track and mitigate human right violations is rife within Asian companies and, as a result, is a big risk for their supply chain partners. “Human rights due diligence as a concept is relatively new in Asian business circles and remains a work-in-progress,” said Ms Broscombe. “As many of the worst human rights abuses happen deep down the supply chain in primary industries where large multinationals have little oversight, thorough human rights due diligence should be part and parcel of any company doing business in Asia,” she added. Ms Broscombe explained that while new laws, such as the UK’s Modern Slavery Act, are requiring companies around the world to report on efforts to eradicate modern slavery from their direct operations and supply chains, there is not the same push from Asian governments. Voluntary corporate social responsibility initiatives, such as those promoted by Association of Southeast Asian Nations institutions, are “insufficient”, she added. Companies face huge problems in promoting social dialogue among suppliers. According to Verisk Maplecroft data, workers cannot join or form independent unions in at least 84 countries around the world The problem is acute in garment-exporting countries that are heavily concentrated in Asia. China, Pakistan, Bangladesh and Indonesia, all leading garment producing nations, are classed as ‘extreme’ or ‘high’ risk in Maplecroft's index that measures freedom of association and collective bargaining globally. Workers and trade unions officials calling for better working conditions in countries where the right to organise is restricted often face harassment and abuse. The Bangladesh garment sector is a key example, where 35 trade unionists have been arrested and jailed since December 2016 for participating in wage protests and work stoppages. Maplecroft believes that strengthening the ability of workers to unionise and voice their concerns is key to improving working conditions in Asia, reducing workers’ rights violations and mitigating the risk of nasty surprises in the supply chain. “A key dilemma facing multinational companies with supply chains in Asia is how to promote the voice of workers in order to improve working conditions in countries where restrictions on freedom of association and unionisation apply,” said Ms Broscombe. A collaborative approach between workers and multinational companies to put pressure on manufacturers to respect trade unions is needed, she continued. “Improving ‘worker voice’, by finding ways for workers to talk directly to brands, will keep moving up the agenda in 2017 as companies seek ways to prevent labour violations deep in their supply chains,” said Maplecroft. The International Labour Organization (ILO) and non-governmental organsiations (NGOs) argue that had workers been better protected without fear of retaliation and communication with workers been better, brands might have had early warning of such supply chain risks. Adam Lee, organising and campaigns director at global trade union Industriall, told Maplecroft that if companies really want to know what is going on in their supply chain – violations of wages, working hours, child labour and forced labour – they need to work with an organisation that represents workers. “You can’t just send in an auditor every three months. If companies want to clean up their supply chains they need more transparency – workers need a role in the process,” he advised. Some companies are tackling the problem by using technology to enable workers to raise concerns discreetly and anonymously, explained Maplecroft. “Technology offers innovative ways to communicate with individual workers direct, allowing brands to hear in real-time what is happening on the shop floor. Platforms that allow workers to report if wages are being withheld, for example, are a safety-check on the validity of audits and give workers a voice when unions are restricted. However, virtual dialogue leaves workers highly vulnerable to retaliation if their confidentiality is compromised. And to respond to virtual complaints and address violations, brands need independent unions and suppliers to work together,” said the firm.

Firms failing to tackle endemic workers’ human rights violations in Asia

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