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Thursday, June 20, 2024

Forced Labor: A Persistent Issue in Corporate America

Forced labor remains a persistent issue that corporations in the United States must grapple with, particularly in their global supply chains. While outright forced labor is rare within companies’ direct operations, more subtle forms of coercion and exploitation can occur further down the supply chain, often enabled by poverty, inequality, and lack of worker protections.

Key Points on Forced Labor in Corporate Supply Chains

  • Companies face reputational risks and potential legal liabilities if forced labor is found in their supply chains, as it violates international labor standards and most national laws. However, detecting forced labor can be challenging as it often takes more subtle forms like debt bondage, confiscation of documents, or withholding of wages.
  • Global supply chains create economic pressures that can foster forced labor, as companies seek low-cost suppliers and producers. Aggressive pricing, short lead times, and delayed payments to suppliers can incentivize the use of exploited labor, including forced labor.
  • Current corporate initiatives like auditing and codes of conduct fail to address the root causes enabling forced labor, such as poverty, inequality, and the dynamics of labor subcontracting. These initiatives leave the underlying business models and power imbalances intact.
  • Effective solutions require systemic changes that redistribute value and economic security along supply chains and in society. Measures like paying suppliers more fairly, challenging the role of labor intermediaries, and exploring ideas like universal basic income could help reduce reliance on forced labor.

While prosecutions and services for survivors have increased, the U.S. government’s response has primarily focused on identifying violations rather than transforming the economic conditions that enable forced labor’s persistence in corporate supply chains. Truly combating this issue will require corporations to reevaluate their business practices and embrace more fundamental reforms.

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