Investors Urged to Address Migrant Abuse in Global Supply Chains
Fresh figures from the BHRRC provide a “concerning snapshot” of how workers continue to be mistreated, highlighting the need for engagement and action.
New data from the Business & Human Rights Resource Centre (BHRRC) has revealed the extent of migrant worker abuse across companies’ global supply chains, evidencing ongoing lack of engagement on the issue.
Between 1 January and 18 June 2024, the NGO recorded 324 allegations of human rights abuse against migrant workers globally, linked to 224 identifiable companies – including several well-known brands. Companies most frequently named in the cases were Giorgio Armani (4), as well as Jiangsu Delong, Uber Eats and Deliveroo – all with three cases respectively.
“In 2023, our data revealed migrant workers endured illegal and exploitative recruitment fee-charging and debt, wage theft, employers taking advantage of precarious immigration statuses, as well as threats and physical abuse,” said Isobel Archer, Senior Migrant Rights Researcher at the BHRRC. “We hoped this wouldn’t persist into 2024, but figures from the first quarter of the year are already raising concerns as companies continue business-as-usual, allowing abuse to go unchecked.”
The BHRRC described the figures as a “concerning snapshot” of how migrant workers continue to be treated – accompanied by companies’ ongoing widespread failure to investigate and remedy uncovered abuse.
“These disturbing allegations are sadly unsurprising [and] serve as a stark reminder of the ongoing human rights crisis in global supply chains,” said Namit Agarwal, Social Transformation Lead at the World Benchmarking Alliance. “Our 2023 Corporate Human Rights Benchmark revealed a systemic failure to address forced labour and wage theft. While there’s been incremental progress, the pace of change is far too slow. Until companies face real consequences for these abuses, we won’t see the necessary transformation.”
The BHRRC’s latest analysis follows similar findings previously reported by the resource centre, which showed the UK was rife with migrant worker abuse, revealed some of the biggest corporations linked to more than 600 cases last year – including FIFA, Meta and Tesco – and exposed businesses’ generalised inertia on the subject.
“Migrant workers are often the invisible glue holding the global economy together,” said Archer. “Yet, instead of being recognised for their value, they are subjected to a range of human rights abuses – often facilitated by government regulations and permitted to continue by multinationals at the top of supply chains, who are failing to monitor, investigate and remedy abuse sufficiently.”
Ramping up engagement
Although incoming regulations such as Europe’s Corporate Sustainability Due Diligence Directive may eventually change the narrative, many agree more action is needed in the near future – including from investors.
“Considering the systemic, wide-ranging, and cross-sectoral nature of migrant worker abuse captured in our database, investors have a clear responsibility to ensure they conduct due diligence on business models and supply chains dependent on a migrant workforce,” said Archer. “If they fail to do so, they may well find themselves directly linked to human rights abuse, and exposed to financial risks associated with harm of a vulnerable and vital workforce.”
Though progress has been slow, some investors are starting to look at social and human rights issues with more energy – including through the UN Principles for Responsible Investment’s (PRI) flagship Advance engagement initiative, now supported by 265 institutional investors with US$35 trillion in AUM.
“Investors have a vital role in active engagement with companies exposed to these risks, and can have a meaningful impact on mitigating it when they come together,” said Matt Crossman, Stewardship Director at Rathbones. “It might not be as obvious as climate change, but social risks are just as material to a company’s long-term prospects.”
BHRRC’s migrant worker allegations database records details of publicly reported allegations of human rights abuse committed by, or linked to, businesses around the world – including against migrant workers. It relies on allegations documented by credible largely English-language media outlets, international and local human rights NGOs, national and regional governments, and intergovernmental organisations – breaking down datasets by geography, sector and type of abuse.
“Low-wage, temporary or undocumented workers are particularly vulnerable to labour rights abuse, while gender and nationality also shape the form and extent of abuse experienced by migrant workers,” said Archer. “Companies and investors must realise it’s simply not enough to publish general labour rights policies. They must recognise specific vulnerabilities and urgently respond to them by adopting tailored and migrant worker-centric risk assessment, due diligence and remedy processes.”
Repeat offenders
The agriculture and fishing sector is where most abuse occured, with 73 cases – mostly related to occupational health and safety violations (26), followed by barriers to accessing remedy (23) and wage theft (21).
This was shortly followed by construction and engineering (59 case), manufacturing (42) and hotels, restaurants and leisure (31).
“The construction sector has the second-highest rate of forced labour after the domestic work sector,” said Chavi Keeney Nana, Director of Equitable Global Supply Chains at the Interfaith Center on Corporate Responsibility (ICCR). “Construction projects are often large and sprawling, involving numerous subcontractors. Subcontractors often don’t pay workers until they are themselves compensated by prime contractors – leaving many in a situation of debt bondage.”
Allegations were most commonly linked to companies headquartered in the US (66 cases), followed by the UK (35), Saudi Arabia (16), New Zealand (12), Australia (9), China (9), India (8), and Singapore (8). The UK was also the most common destination country of abuse, with 41 cases.
In contrast, exploited migrant migrants were most likely to come from the Global South, with India topping the list (49 cases), followed by the Philippines (38), Bangladesh (30) and China (21).
“Worker exploitation is a feature of the current global economic system, not a bug, so neither the fact that workers are routinely abused and underpaid, nor that the companies reaping enormous profits off their undercompensated labour are in the global north, should come as a surprise,” said Keeney Nana.
Widespread harm
Pointing to a recent shareholder proposal filed by ICCR members Domini Impact Investments, Trillium Asset Management, SHARE and CCLA at Nike ahead of the company’s September AGM, Keeney Nana said the apparel industry was also “rife” with abuse.
“Nike’s case is one of many in which workers do not receive the wages or other benefits they are owed,” she explained. “It illustrates the need for continuous monitoring of policies and procedures to promote responsible business conduct – as well as the duty of buyer companies to routinely engage with suppliers to ensure workers’ rights are protected further down the supply chain.”
Keeney Nana also recommended investors regularly review the policies of portfolio companies to ensure they are not just relying on third-party supplier audits – the deficiencies of which are “well-documented”. Instead, investees should be encouraged to adopt more robust approaches to supplier engagement and remediation.
“One model for comprehensive supplier engagement is represented in the shared responsibility model developed by the Responsible Contracting Project (RCP),” she said. “Investors may find useful the Investor Guidance on Responsible Contracting, which ICCR drafted together with the RCP.”
ICCR’s Equitable Global Supply Chain programme is also working with members to engage companies across a range of industries to promote the use of worker-driven social responsibility models, responsible purchasing and contracting principles.
“These are tools that can be used to begin to reshape the exploitative nature of global supply chains and protect portfolio companies from financial, reputational, and legal risk,” Keeney Nana added.
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