Human rights violations come in many forms, ranging from human trafficking to inhumane labour practices. Much of this exploitation is driven by personal or commercial gain. As a result, the ways in which governments and companies conduct business, as well as the spending choices made by consumers, have profound human rights consequences. Greater consumer awareness and legislation mandating increased corporate transparency, particularly along supply chains, are key to ameliorating these injustices.
THE COMPLEXITY OF GLOBAL SUPPLY CHAINS
From breakfast cereal to shoes and batteries, all commodities we purchase go through a supply chain, a process that involves the production and distribution of goods from source to destination. Due to the interdependence of world economies and the international nature of business, supply chains are more complex, global, and opaque than ever before, thus creating countless opportunities for human rights violations. In fact, many kinds of abuses, namely unsafe work conditions, excessive working hours, and worse, can be found at numerous points along the supply chain.
As businesses seek to maximise profits, meet stringent deadlines, and respond to ever-rising demands for lower-cost goods, operations are increasingly sent offshore to places where the labour is not only cheaper, but where the rule of law is weaker, and where there is little protection and enforcement of human rights . This can result in an abusive workplace environment, including sweatshops and child labour, as well as other mistreatment and illegality, such as involuntary servitude. According to global estimates from the International Labour Organization, 25 million people are in forced labour, including over four million children, many of which work in extreme and dangerous conditions.
There is often little insight into working conditions when business is outsourced, and goods are produced far from where they are purchased. Modern global supply chains are convoluted and difficult to monitor and therefore further increase humanitarian risks. Although the repercussions of such business practices may be unintended or unforeseen, they are nonetheless devastating, reaching some of the farthest areas of the globe and severely impacting populations that are already desperately impoverished. These marginalised groups are either physically forced into slavery or have no other choice but to comply with various cruel and exploitative practices. Moreover, the COVID-19 pandemic, which upended economies and continues to cause disruption and uncertainty, has only worsened the situation by enabling the further exploitation of old vulnerabilities in supply chains, as well as creating new threats.
THE ROLE OF BUSINESSES, GOVERNMENTS, AND CONSUMERS
No longer can businesses, governments, and consumers turn a blind eye to these injustices. The solution inevitably requires responsible and sustainable business practices, which includes transparency in global supply chains. Corporations need to do more than merely give the illusion of being socially and ethically responsible. Businesses and governments need to promote fair and equitable labour standards, and protect workers from the exploitation and abuse that is inextricably linked with global supply chains.
Just over a decade ago, the United Nations adopted the Guiding Principles on Business and Human Rights (UNGPs). This seminal document articulates the distinct but complementary roles of governments and corporations in preventing and addressing business-related human rights impacts and provides an internationally accepted framework for the promotion of corporate responsibility and sustainable business. Although non-binding, the UNGPs represent the global standard for responding to risks related to business activity. However, although several countries have agreed to the implementation of the UN’s guidelines, substantial progress has yet to be made.
The Biden Administration’s pledge to tackle corruption presents another opportunity for the US to prioritise human rights and implement practical policies and practices that effectively mitigate human rights abuses, rather than simply voicing its commitment to the issue. As a major player on the world stage, the US government is an influential customer with the ability to effectuate significant and meaningful change through the adoption of robust rules, standards, and oversight mechanisms. In fact, the NYU Stern Center for Business and Human Rights published a report in September of 2020 detailing how the US government can use federal procurement to uphold human rights, including through the adoption of responsible US sourcing practices meant to ensure that US supply chains are free of forced labour and other abuses. Without clear guidance and strong protocols from the government regarding how to prevent and mitigate risks, companies may unknowingly continue to engage in conduct that harms basic human rights.
Consumers also play a critical part in helping to combat human rights abuses. Consumer views and their corresponding expectations and behaviours regarding socially responsible business have evolved significantly in recent years. Greater numbers of people are making purchasing decisions based on values and ethical concerns. Advances in technology, which allow for greater transparency and access to information, have led to increased consumer awareness. But more can be done. Much of the information available to consumers relates to what companies say they do, not necessarily what they do in practice. Furthermore, transparency into supply chain practices varies widely among companies, and a lot of due diligence remains focused on a corporation’s direct suppliers, with little, if any, known information about what takes place further down the chain.
THE WAY FORWARD
The ways in which business is conducted around the world is slowly changing and pressure is mounting for companies to take responsibility for the ethical and sustainable management of their supply chains from beginning to end. In line with growing consumer trends, integrating socially and ethically responsible practices into corporate operations will ultimately benefit companies’ bottom lines. In the meantime, the lack of scrutiny into supply chains allows human rights violations to occur unabated. Not only must the government lead by example when it comes to its own procurement practices globally, but it also needs to set clear requirements for corporate transparency and accountability.
Ola M. Tucker is an attorney and compliance professional, as well as the founder of Compliance Notes. She also teaches classes in the Graduate, International, Compliance, and Legal Studies Department at Widener University Delaware Law School. Her first book titled, “The Flow of Illicit Funds: A Case Study Approach to Anti–Money Laundering Compliance,” will be published by Georgetown University Press in Spring 2022.