Roel Nieuwenkamp on how firms can use the OECD’s guidelines on responsible business conduct to tackle abuse in their supply chains

The recent migrant crisis paired with shocking exposés of labour issues in global supply chains has heightened public attention to modern slavery, forced labour and human trafficking. Children working in cobalt mines for the Apple and Samsung supply chains; Syrian refugees working under terrible circumstances for garment supply chains in Turkey (see Brands slammed over Syrian refugees in Turkey’s garment trade) ; Rohingya refugees working as slaves in the Thai fishing industry; and North African migrants working in agriculture in Italy and Spain.

The OECD Guidelines for Multinationals on Responsible Business Conduct are recommendations to companies, agreed by 46 adhering governments, that recommend companies carry out supply chain due diligence to identify, prevent, mitigate and account for all adverse impacts that they cover, including child labour and forced labour. The OECD has developed more detailed guidance on how these expectations can be responded to in specific sectors, including conflict minerals. This week the governments reached a global agreement on a guidance for the garment and footwear sector. It was developed after a multi-stakeholder process comprising garment brands, producers, governments, NGOs and trade unions. In February 2017 it will be launched.

Although the OECD Guidelines are non-binding, they are accompanied by a unique grievance mechanism, the National Contact Points (NCPs). NCPs in the 46 countries that adhere to the guidelines facilitate dialogue and mediation with companies that allegedly do not observe their recommendations. Several issues regarding forced or child labour in supply chains have been brought to the NCP mechanism and some have resulted in successful outcomes.

For example, in 2011 complaints were submitted to the NCP mechanism regarding sourcing of cotton from Uzbekistan cultivated using child labour. NCP mediation led to several agreements with companies involved in sourcing the products as well as heightened industry attention to this issue. In a follow-up to the NCP processes several years later, the European Center for Constitutional and Human Rights (ECCHR) concluded that the submission of the cases had encouraged traders to take steps to pressure the Uzbek government to end forced labour, although company commitment and media attention around the issue diminished over time. Nevertheless, the report also noted that the NCP cases triggered investment banks to monitor forced labour issues in Uzbekistan in the context of their investments.

Other NCP cases, while not resulting in agreements between the parties, have led to statements determining that certain companies were not observing the recommendations of the OECD Guidelines in the context of forced labour impacts, resulting in reputational harm to those enterprises (see the case of France’s DEVCOT). Currently the Swiss national contact point is overseeing mediation between the Building and Wood Worker’s International (WWI) and Fifa regarding forced labour issues in Qatar. The results will have important implications for global sporting events and for managing risks of forced labour in large scale infrastructure projects.

Companies themselves have been proactive in addressing these issues. For example, Nestlé, despite currently being subject to a lawsuit related to slave labour in its supply chain, participated in and released a report developed with the non-profit organization Verité that identified labour abuses in its supply chain with regard to Thai-sourced seafood. Within the report the company outlined plans to tackle the problem, and notes that other companies that do business in this sector likely face the same risks.

In February this year, H&M asked all of its suppliers to sign an agreement prohibiting the use of cotton from Turkmenistan and Syria, on pain of termination in order to avoid sourcing of cotton from Isis controlled territories, produced through forced labour. H&M also terminated a sourcing relationship with a Turkish supplier after discovering a Syrian migrant child working in its factory, responding to documented abuses against Syrian refugees in the Turkish textile industry.

Protest over Rohingya refugees (credit: paintings)

Labour issues in global supply chains present a serious and pressing problem, therefore it is encouraging to see they are being taken seriously. In addition to regulatory approaches, non-binding mechanisms such as the OECD Guidelines, accompanied by the NCP system, and industry initiatives, have resulted in important progress and provide alternative models for managing forced labour risks throughout global supply chains. While litigating these issues can be a forceful tactic in bringing companies to account, non-judicial grievance mechanisms can provide a more affordable and accessible platform for tackling forced labour issues.

In the context of modern slavery, all stakeholders must step up their efforts. Governments should promote due diligence in global supply chains among their companies as outlined in the OECD Guidelines and its related industry-specific instruments. Civil society can continue to be instrumental in reporting upon and exposing these issues and furthermore should rely on the NCP platform for reaching resolutions on supply chain issues with multinational companies. Finally, as the current migrant crisis will last many years, companies should conduct heightened due diligence to ensure that they are not linked to forced labour throughout their supply chains, particularly in contexts with large migrant populations.

Roel Nieuwenkamp is chair of the OECD Working Party on Responsible Business Conduct. @nieuwenkamp_csr

Main image by Lizette Potgeieter