By Sean Christopher Lees, Business and Human Rights Specialist at the United Nations Development Programme (UNDP).
Do you struggle when people ask you, “Where are you from?”
I was born in Cincinnati but raised in New York, San Juan, Tokyo, Los Angeles and Honolulu. I’m never sure if I’m really from any once place at all. The same can be said of most of the products we buy today: Designed in a co-working space in Los Angeles, financed by a bank in Hong Kong, produced with minerals sourced in Mozambique, forged in a factory in Thailand, assembled with other components in Malaysia, then packaged in China, bound for a retail department store in the UK. These products come to life under varying circumstances. Are they truly from any one place? How are they made and who are the people behind them?
I recently had an opportunity to address the some of the tradeoffs of our complex and tightly woven global supply chains with a group of concerned Americans at the National Underground Railroad Freedom Center in Cincinnati, Ohio. This award-winning Museum celebrates the heroes who created the Underground Railroad, the secret network through which enslaved African-Americans could escape to freedom. Recently, the Museum launched an exhibit on modern slavery to national acclaim. It served as the perfect backdrop to my talk on modern slavery in global supply chains in Asia.
Global supply chains (GSCs) involve the fragmentation of production among countries with differing advantages in wages, workforce supply and capacities, structures, consumer market size, and access to natural resources, among other considerations. Due to their technical and operational demands, GSCs can also make strong contributions to rates of productivity, and technological and management innovation, in addition to other multiplier effects. GSCs are credited with increasing international trade, boosting economic development, and contributing to reduced inequalities globally.
By some estimates, value-added trade linked to GSCs contribute approximately 30% to the GDP of developing economies.
Despite these benefits, GSCs also involve considerable costs and risks for some low and middle-income countries. Some countries can remain embedded in permanently low value-added activities, with little hope of enjoying the promised multiplier effects for their people and economies. Low value-added activities may even have costly negative impacts for a country, including irreversible soil and water contamination, public health emergencies, hazardous workplace conditions leading to disabilities, sexual harassment and exploitation, and modern forms of slavery, forced labor and child labour.
My talk at the Freedom Center focused on the much-discussed seafood slavery scandal that erupted in 2014 and uncovered by journalists from the Associated Press (AP) working in Southeast Asia. The audience was shocked by some of the revelations including how people were being held captive in shrimp peeling sheds and forced to work for months and years at a time. They learned how seafood from these sheds made their way to large supermarket chains, into brand name pet food products and all-you-can-eat shrimp buffets.
When my presentation came to a close, questions from the audience poured forth, “How can we ensure we don’t contribute to these abuses? Where else is this happening?” and, “Who is being held accountable?”
Human rights abuses in GSCs happen for a number of different reasons, many of them structural in nature. Companies seek the best bargains, as they must, on production costs. Competition between suppliers ensures wage costs and other inputs are minimized. In countries where labour is becoming increasingly scarce and the rule of law is weak, suppliers might turn to migrant labour from neighboring countries such as Bangladesh, Cambodia, Laos and Myanmar. Their vulnerabilities are then exploited and human rights abuses, including forced labour, are the result.
Luckily for the migrants in the shrimp-peeling sheds, labour rights activists and journalists got their story out and in time: over 2,000 slaves have been freed from a number of different fishing and seafood production facilities. Importantly, businesses were quickly put on notice, suddenly facing millions of dollars of reputational, operational and litigation-related consequences. Some businesses launched investigations, others switched suppliers, and still others began sourcing products from completely different countries altogether. None denied the facts of the AP story.
But the risks posed by GSC extend beyond modern slavery and implicate other human rights abuses too. Some third-party suppliers have been accused of violating land and communities’ rights, using illegal land appropriation and forced relocations in order to secure land for production and manufacturing facilities. Others have damaged water supplies with chemicals or devastated large tracts of carbon-trapping forests.
Given the risks to all stakeholders, it is imperative that the private sector prevent, mitigate and wherever necessary, remedy human rights violations in GSCs, to enhance the benefits of GSC to addressing global poverty.
There is an growing call from shareholders, consumers, and employees of companies of all shapes and sizes, to ensure that corporate social responsibility contributions are predicated on efforts to address human rights risks, with due attention to the UN Guiding Principles on Business and Human Rights and the 2030 Agenda for Sustainable Development.
Current Solutions and Innovations
A number of industry surveys demonstrate that private sector firms and state-owned enterprises increasingly recognize that their operations and supplier relationships can have profound, positive impacts on communities, the environment and even company profits. These companies have realized that even small changes to their supply chain management policies can empower women in the workforce, reduce greenhouse gas emissions, clean their operations of human rights violations, and help eliminate poverty. They realize that these efforts make their GSCs stronger and more sustainable, while impacting positively on efforts to reach globally agreed, Sustainable Development Goals (SDGs).
For example, by ensuring that global value chains respect and embed international labour standards in their operations, companies can help to contribute towards a world without poverty and reduced inequalities (SDG 1 and 10).
The introduction of anti-discrimination policies and women’s empowerment programmes by multinational corporations across the value chain can work towards the achievement of gender equality (SDG 5). A rights-based approach to value chain management can lead to decent work, economic growth, and innovation (SDG 8 and 9) . Finally, when GSCs conduct environmental impact assessments and mitigate their risks to the environment, they can work towards climate action and preserve life on land and below water (SDGs 13, 14, and 15).
While many businesses have strengthened their engagement with responsible business practices, many more have yet to signal their commitment to maintaining sustainable GSCs. A key factor in this has been a distinct lack of awareness of the benefits that can come from driving sustainability across their value chains.
Innovation represents a key challenge in driving sustainability across geographically-diverse GSCs. UNDP encourages and supports the application of innovative solutions to increase sustainability, including respect for human rights in GSCs in Asia. Innovative methodologies, such as positive deviance and the use of behavioral psychology, can help address issues such as workers’ rights or women’s empowerment. The use of Big Data, real-time imaging, and the use of new technologies can contribute to reducing environmental footprints, while preventing environmental degradation from a company’s business operations. Distributed ledger technologies (DLTs) such as Blockchain can prevent the violation of land rights and mitigate forced labour.
There is a wealth of solutions at the ready to ensure human rights are protected, respected, and remedied. Some businesses are taking things even further to ensure that human rights are strengthened in their supply chains. No doubt, their market studies are picking up on the concern of the Cincinnati folks at the Freedom Center. They would be well-served to ensure these and other consumers that they are taking the subject seriously.
Sean Lees is a Business and Human Rights Specialist at the United Nations Development Programme (UNDP), Bangkok Regional Hub. Prior to his work at UNDP, Sean worked on Asia-Pacific trade and investment policy at the Pacific Basin Economic Council and later at the East-West Center. After obtaining a law degree at Boston College Law School, Lees served as an attorney for the U.S. Department of Justice. Following this, Lees joined UNDP and worked on rule of law issues in Afghanistan, Fiji, Iraq, Sudan, Thailand and in the Executive Office of the UN Secretary-General in New York.