As an example of the complexity of the area, Nestle UK (granted, not a textiles company) has identified 11 risks in its Modern Slavery assessment. At the farm level these include freedom of association and collective bargaining, working time, workers’ accommodation and access to basic services, health and safety, living wage, child labour, forced labour, land acquisition, access to water and sanitation, access to grievance mechanisms, and data protection and privacy. These are also problems found in cotton.
The company partners with Danish Institute for Human Rights for its Human Rights Impact Assessment, which the company describes as “a process for identifying, predicting and responding to the potential human rights impacts”. Responses include remediation (e.g., helping families send children back to school).
The Labour Rights Consultancy Ergon Associates has scrutinised 100 voluntary statements made so far under the act, and “found the early statements to be often lacking in meaningful detail and with few references to actual modern slavery risks. … In a separate analysis, the UK Corporate Responsibility Coalition (CORE) and the Business & Human Rights Resource Centre observed that some of the statements were not compliant with the requirements of the legislation.”
The non-profit membership body SEDEX use ILO guidelines as a starting point, and at three levels:
1. Employer-led exploitation
2. Intermediary-led exploitation
3. Hidden third party labour exploitation (e.g., gangmasters masquerading as agents).
So as we did for environmental questions, we should take an example here. Human Rights is useful, as it touches many relevant areas. Many of these are potential red flags in the 5 step process. The UN Guiding Principles on Business and Human Rights also have something to say on due diligence in this area “to identify, prevent, mitigate and account for how they address their impacts on human rights” and “Processes to enable the remediation of any adverse human rights impacts”.
The UN The Guiding Principles on Business and Human Rights offer a Protect – Respect – Remedy framework and suggest that “Business enterprises should respect human rights. This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved. Understood, at a minimum, as those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work.”
Red flags, according to the OECD guidance include locations which may be affected by or at risk of conflict, with weak governance, or poor enforcement of regulations, and where there are reports of human rights and labour standard violations, or where land tenure and rights are poorly defined, and communities vulnerable.
In all of the above there also have to be ways for grievances to be raised, safely and if need be anonymously or with legal protection. Cotton supply chains are particularly risky as there are so many layers, so many suppliers, so many small farmers, and so much seasonal, migrant and female labour. However, there are nodes where it is possible to gather more data – ginning mills, harvest collection points, village cooperatives, local government, traders, transporters, schools, and where they exist, unions or civil society organisations involved in looking at labour, children’s rights or women’s empowerment and rights. With no or few organisations representing workers, weak governments, and little capacity to regulate existing legislation, it is risky, and the US survey of countries with child labour includes several cotton growing countries. However, switching production is not the answer. Improving the situation and livelihoods is. Due Diligence needs to identify remedies, and the victims as well to protect the reputation of the business.
But of course tracking problems is tough. As an example, a few years ago a colleague and I were in a distant tribal area of India, a hilly region between Tamil Nadu and Kerala. Here we found children who had worked on the hand fertilisation of cotton for seed production in India, ultimately linked to well-known seed companies. Moneylenders visit the parents, offer loans they know can never be repaid, and then ask for the children’s labour when the parents can’t pay – children’s hands being deemed smaller and nimble for the work. The children are forced to work, cook their own meals, and watch kids movies in the evening to keep them happy. How do companies get this far back? Who is responsible? The global seed supplier or the garment retailer?
Of course, if you take due diligence to the extreme, there may never be investment outside of wealthy, developed economies, but care must be taken. Well managed foreign direct investment can create jobs and wealth in the target countries and communities, but equally, it can fuel conflict and corruption, as well as authoritarian or dictatorial regimes.
