Ending Supply-Chain Slavery: Is Asia Ready?
February 27, 2019
More than 40 million people are victims of modern-day slavery. Two-thirds of them are in Asia, and most of them toil in industries deeply embedded in global supply chains. But a growing international movement is calling businesses to account for human rights, and supply-chain transparency is the new frontline in this ongoing battle.
Supply-chain slavery—consumers will demand its end
Speaking at a recent conference, Michael Fletcher, chief commercial officer of supermarket giant the Co-op, said that concern for the plight of supply-chain workers may be nearing a tipping point where consumers will demand corporate action to end slavery, just as educated consumers began to push for a phase-out of plastics.
We’ve come a long way since 2010, when the voluntary UN Guiding Principles on Business and Human Rights (UNGPs) ended years of international stalemate over corporate responsibility. We’re entering uncharted territory, as one national government after another mandates corporate transparency on human rights in their supply chains. As of 2018, eight G20 countries had passed legislation to fight supply-chain slavery.
First came the UK’s groundbreaking Modern Slavery Act 2015, requiring companies with annual revenues of more than £36 million to annually report the steps they have taken to eliminate slavery and trafficking from their supply chains. It was a first in Europe and the second globally after the California Transparency in Supply Chains Act 2010.
A year later, France passed its Duty of Vigilance Law—one of the broadest measures to date. Australia passed its own bill last November, the Modern Slavery Act 2018, effective in 2019, that covers an estimated 3,000 entities in Australia.
Similar laws are already in place in the Netherlands, the United States, and the European Union, and Canada and Hong Kong may soon join the international fraternity as well. The latter has renewed its push for a law that includes civil and criminal liabilities for individuals as well as their corporate entities.
Will Asia be next?
This movement is still largely confined to the West, but Asia could be next.
“It is likely to happen. Something is already taking place,” says Professor Surya Deva, Asia-Pacific representative of the United Nations Working Group on Business and Human Rights. “For instance, Indonesia has already issued some regulations in the fishing sector. Thailand is another example.”
Indeed, Thailand this month released for public comment the final draft of its National Action Plan on Business and Human Rights (NAP), begun after allegations of slavery in its fishing industry first swept the nation in 2013. Slated for launch in late 2019, and led by the Ministry of Justice, the NAP will focus on the priority areas of labor; land, the environment, and natural resources; empowering human rights defenders; and cross-border investment and multinational enterprises. Following closely behind is India, with the zero draft of its NAP out this month, and Indonesia is starting its own NAP process.
“What is happening in Thailand and also in India regarding national guidelines on responsible business conduct, I think, are the two biggest policy movements that may pave the way for this type of legislation,” says Livio Sarandrea, business and human rights advisor from UNDP, who is leading the international team helping various governments with their NAPs. “I don’t think it’s impossible that this might happen. But if it does happen, what’s even more important is that they are serious about it and implement it.”
Negotiations for a binding treaty
At the United Nations, negotiations are under way for a binding treaty requiring governments to regulate the activities of businesses under human rights law. The zero draft, released in July 2018, calls for states to make human-rights compliance a precondition for doing business, regardless of the business case for doing so. Interestingly, discussions have included removing the distinction between parent companies and subsidiaries, addressing the perennial difficulty of applying national laws to prevent corporate malfeasance that is often extraterritorial.
Unlike previous attempts by the UN, Professor Deva believes this treaty has a chance for success.
First, the UNGPs are now widely accepted, providing a springboard for other initiatives. Second, states now realize that corporate misdeeds lead to negative outcomes—whether it’s tax evasion, interference in the democratic process, or long, drawn-out lawsuits. Third, an unprecedented civil society mobilization continues to put pressure on states to stop corporate misconduct.
A growing civil society movement
Over the last few years, there has been an observable increase in civil society activism in Asia targeting corporate human rights performance, and more actors have joined the clarion call for greater corporate accountability.
“The growing civil society momentum on business and human rights is difficult to miss,” says Ismail Wolff, cofounder and executive director of ASEAN Parliamentarians for Human Rights, which recently expanded its programs to cover business and human rights issues.
The Business and Human Rights Resource Centre, an established research institute and a keen observer in this space, has noted a similar trend. “There is a growing business and human rights movement in Asia, and we can see this in the growing interest in forming groups to look at business and human rights issues in the region,” says Golda Benjamin, their Southeast Asia researcher. “This growth in the movement is necessary precisely because Asia’s economic role is ever growing in the world. Asian countries’ investments outside and inside the region are expanding significantly.”
High-profile cases of corporate human rights abuses, from catastrophic dam collapses in Laos to forced evictions in Cambodia, factory fires in Bangladesh, and murders of human rights defenders in India, continue to fuel public outcry in Asia. Companies are feeling the pressure to be transparent—and not just after the fact. In this environment, companies in Asia will do well to be proactive about human rights, particularly in their supply chains, keeping an eye on possible regulations coming their way.
This article previously appeared, in slightly different form, on the blog of Corporate Citizenship, and is reposted here by permission.
Melissa Chong, a 2018 Asia Foundation Development Fellow, is a consultant at Corporate Citizenship, a management consultancy specializing in sustainability and corporate responsibility, where she is an advocate for human rights in Southeast Asian businesses. She can be reached at [email protected]. The views and opinions expressed here are those of the author, not those of The Asia Foundation.
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