Vulnerability, Exploitation and Migrants

Insecure Work in a Globalised Economy

Gary Craig, Louise Waite, Hannah Lewis, Klara Skrivankova, Gary Craig, Louise Waite, Hannah Lewis, Klara Skrivankova

• Publisher: Palgrave Macmillan
• Year: 2015
• Print ISBN:
  9781137460400
• eBook ISBN:
  9781137460417
• Topic: Social Sciences
• Subtopic: Human Resource Management
• Index: Social Sciences

Globalization, the economic crisis and related policies of austerity have led to a growth in extreme exploitation at work, with migrants particularly vulnerable. This book explores the lives of the growing numbers of severely exploited labourers in the world today, questioning how we can respond to such globalized patterns of extreme inequality.

Part I

The Globalisation of Vulnerability

1

Private Governance and the Problem of Trafficking and Slavery in Global Supply Chains

Nicola Phillips

On 1 January 2012, innovative legislation came into force in the US state of California. The Transparency in Supply Chains (TISC) Act focuses attention on the problem of human trafficking in global supply chains,¹ seeking to encourage large firms doing business in California to take the issue of trafficking seriously and obliging them to report on the steps that they are taking in this direction. The focus on supply chains was also central to US President Barack Obama’s major statement on trafficking in September 2012, in which he announced a series of measures which aimed to ‘eradicate’ these worst forms of labour exploitation from the global economy, both by encouraging action on the part of firms and by putting in place rules relating to government procurement processes. In 2014, a Bill which aimed to transpose the substance of this legislation to the federal level was introduced in Congress.²

Interestingly, this initiative has generated momentum across the Atlantic, spurring parallel activity in the UK. In October 2011, Prime Minister Cameron stated in Parliament his ambition for the UK to ‘lead the world in eradicating modern-day slavery’.³ Introduced as a Private Members’ Bill first by Fiona McTaggart MP in February 2012, and then by Michael Connarty MP in June 2012, the Transparency in UK Company Supply Chains (Eradication of Slavery) Bill effectively constituted a replica of the California TISC legislation. It began to attract attention and support from a variety of quarters, but ultimately it was blocked by government before the end of the 2012–13 session of Parliament and consequently was not passed. The Home Secretary’s Modern Slavery Bill – elaborated over the course of 2013 and 2014 and gaining Royal Assent in March 2015 – was equivocal on the subject of provisions on supply chains, but latterly it came to include disclosure provisions modelled on the California legislation. These were much more minimalist than many had hoped, but their inclusion was broadly welcomed as an important step in integrating supply chains into anti-slavery strategies.

It is striking that in debates about this issue in the UK, reference has often been made to ‘successful’ legislation in California, and indeed the case for a UK equivalent has usually been made in those terms. Given that it came into force only in early 2012, it is still difficult to know whether the California legislation has been successful or not, if success is defined as achieving concrete outcomes relating to a reduction in the incidence of slavery and trafficking in firms’ supply chains, or improvements in the conditions in which millions of people work in the global economy. Indeed, there is no attempt contained within the legislation or any of the emerging corporate responses to it to measure or document outcomes of that nature. What reference to the ‘successful’ California legislation can only mean, then, is that it was successfully passed, and that some companies are ostensibly engaging with the agenda that it embodies. Indeed, while TISC initiatives are unquestionably a worthy innovation in an arena characterised by gaping deficits of appropriate governance, I argue in this chapter that, as a means of addressing the persistent, hidden, highly complex and global problems of trafficking and slavery in supply chains, they contain important limitations and contradictions which impose considerable constraints on their potential effectiveness. What follows explores some of the reasons for this.

The limits of corporate self-regulation

Ostensibly, the reach of the California TISC Act is significant. The California Franchise Tax Board estimated at the time the Act was passed that it would directly affect some 3200 companies and indirectly the many more thousands of suppliers and vendors incorporated into their supply chains (Verité, 2011: 3). It applies to larger firms with worldwide gross receipts in excess of US$1 million. Those companies are required by law to engage in verification of their supply chains to evaluate and address the risk of human trafficking, perform audits to enforce compliance with firm standards, obtain certification from direct suppliers that materials they use comply with national legislation on slavery and human trafficking, maintain internal accountability standards and procedures for employees or contractors that contravene firm standards and train relevant employees and management on human trafficking and slavery (Verité, 2011: 2; Pickles and Zhu, 2013).

Yet, despite these stipulations, the Act in fact requires very little of its target actors. It provides no more than a requirement for companies to disclose the nature of their efforts to deal with trafficking and forced labour in their supply chains, relative to the company’s own standards for ensuring adequate labour conditions. It imposes no direct penalty for non-compliance, relying instead on large firms’ concerns about protecting their brand. Firms which encounter problems of trafficking and forced labour in their supply chain are required only to provide assistance to the ‘victims’ as and when they are identified. In other words, the legislation requires little attention – much less alteration – to prevailing business models, the ways in which supply chains are organised and monitored, or a shift in corporate cultures to move towards more robust corporate social responsibility (CSR) or accountability strategies. Equally, there is no stipulation by the state or other agents of public governance of a set of standards for labour or other social conditions in supply chains, with which firms are expected to work towards complying. Instead, firms are expected to act solely within the parameters of their own standards, typically established through internally designed codes of conduct which are not externally or independently monitored, and whose shortcomings as a platform for CSR strategies have amply been exposed both in academic literatures and by CSR-related organisations (e.g. O’Rourke, 2006; Barrientos, 2008; Lund-Thomsen, 2008; Stohl et al., 2009; Taylor, 2011; Verité, 2011).

TISC initiatives thus put in place a model which is fully consistent with the prevailing drift of contemporary global governance, which is towards the primacy of private governance and corporate self-regulation (Appelbaum, 2012). They articulate a mode of governance which relies on a contract not between firms and government, nor between firms and workers, but between firms and consumers. It reflects an ongoing process through which the rise of buyer-driven value chains and the primacy of brand name loyalty in contemporary retailing have shifted the power to negotiate terms with companies from governments and workers decisively to consumers (Esbenshade, 2004, 2012). The reporting process demanded by TISC legislation is conceived as a process by which a firm reports not to government but to consumers (and shareholders), in order to enable them to make informed decisions about the provenance and credentials of the goods and services they are purchasing. The idea is that the fear of displeasing consumers will lead to a generalised disposition among large firms to improve labour standards and ensure compliance among suppliers.

However, it is far from clear that the incentives for firms to engage in energetic self-regulation are robustly embedded in contemporary global supply chains. Such incentives are weakened by the core tension which exists between the CSR-related aspects of a firm’s activities and its commercial operations. A large body of research indicates, with extensive data, that despite several waves of CSR, the vast majority of global corporations remains concerned first and foremost with the relationship with direct stockholders, based on returns on investment and the generation of profit for those stockholders, and indeed that they frame their concerns in that language (Stohl et al., 2009: 618). Notwithstanding the appeal of CSR and the ability of civil society actors (and possibly states) to coerce or cajole companies into more active and responsible governance of their supply chains, the uncomfortable reality is that the ‘heart and soul of corporate ethics will remain “business as usual” ’ (Stohl et al., 2009: 619).

The disincentives to effective self-regulation and to driving tangible improvements in supply chain conditions are especially pronounced in those sectors which are price-sensitive and labour-intensive and demand relatively low skill inputs, where competitive advantage accrues primarily from the maintenance of flexibility in relation to labour supply and labour costs. Indeed, it seems often to be forgotten that governance ‘deficits’ exist for a reason – that they have purposefully been constructed and are actively maintained by firms and private actors, especially in these kinds of sectors, which seek competitive advantage from more permissive legal and regulatory environments and associated supply conditions for abundant, cheap and unprotected labour. Indeed, many arenas of global production, and specific supply chains, rely heavily on a workforce with such characteristics, a large proportion of which is made up of migrant, contract and informal workers (Bauder, 2006; Barrientos, 2008; Phillips, 2011). It has been shown that firms in price-sensitive and labour-intensive sectors, such as the global clothing industry, as well as firms which rely on retail strategies, prefer less stringent regulation and will go to some lengths to secure those conditions (Fransen and Burgoon, 2012). Likewise, the huge numbers of ‘invisible’ firms and entrepreneurs in the informal economy (even if they are subcontractors to registered firms) generally lack incentives imposed by external stakeholders to go ‘against the tide’ and seek to boost their ‘social legitimacy’ profile; to the contrary, the incentives they face point in the opposite direction, particularly as their share of the consumer market rests on cut-throat price competition (Knorringa, 2014).

In these contexts, pressures on firms to engage in self-regulation, whether from states, consumers or non-governmental organisations (NGOs), often lead to one of two outcomes, and usually in combination. The first is that the ‘bare minimum’ becomes the norm, where a firm gives the appearance of an active programme of social responsibility but only genuinely acts when the threat or fact of exposure becomes real. This was the story with Nike and Gap as two early cases, in which sustained pressure led to far-reaching change. It has also been the case with a handful of examples since, most notably the pressure on Apple and Foxconn in the early 2010s, exposed as using companies dependent on slave labour, which led, eventually, to an ostensibly energetic programme of remedial action (Arthur, 2012; Barboza and Duhigg, 2012; Mayer, 2014). Even then, there have been concerns that Apple and Foxconn’s response has been partial and cosmetic, driven not by a fulsome desire to improve standards in supply chains but by a concern to do what is necessary to protect brand reputation and profits (Bader and Morrison, 2012; Nova and Shapiro, 2012; SACOM, 2012).

The second common scenario is that the case for CSR and greater self-regulation is accepted more wholeheartedly but the costs of social compliance are not absorbed by the lead firm, but rather they are pushed down the value chain so that they are required to be absorbed by suppliers, producers and, most of all, workers. A good deal of research has shown how the act of passing the costs of compliance down the value chain has the effect of squeezing smaller participants out of the production process and otherwise intensifying the commercial pressures on suppliers and vendors. The consequences are felt in heightened levels of precarity, exploitation and adversity for workers in those supply chains, a large proportion of which are often migrant workers, with all of the social ramifications created by those conditions (e.g. Gibbon and Ponte, 2005; Kaplinsky, 2005; Ponte, 2008).

Taken together, these scenarios indicate that a reliance on firms as agents of self-regulation is unlikely to provide a robust foundation for the governance of global supply chains. Indeed, it rarely has provided such a foundation in the past. CSR strategies provide very few checks and balances in relation to ‘irresponsible’ firms in the global economy; their impact is felt largely in encouraging already responsible firms to go ‘beyond compliance’ (Newell, 2005: 542). So it is that, despite the passing of a substantial period of time since company codes of conduct and the ‘compliance industry’ came to dominate the governance of global supply chains, even violations of the International Labour Organization’s (ILO) Fundamental Principles continue to be significant problems. Indeed, many of the critiques of private governance and CSR in relation to labour standards attain particular relevance in the case of the worst violations associated with human trafficking and slavery. Like other violations of workers’ rights, slavery and trafficking are much more likely to occur in arenas characterised by high levels of outsourcing, price sensitivity and labour intensity, which, as we saw above, are also those in which incentives for compliance, self-regulation and energetic programmes of improvement in labour standards are least likely to prevail (Phillips, 2013b). Such sectors are also those which rely heavily on unregistered, unprotected migrant and contract labour that are not covered by company codes of conduct or auditing systems, are systematically hidden from sight and as such are least likely to be scrutinised for associated problems of slavery and trafficking. Equally, auditing systems tend to be limited in their purview to first-tier suppliers and the workers that are employed directly by those suppliers, whereas often the problems of trafficking and slavery tend to be concentrated in tiers of activity further down the supply chain. Most firms tend to resist including such areas in their definition of supply chain for CSR purposes by suggesting such areas are beyond their direct control and hence difficult to audit.

The limits of consumer-driven change

We have seen that TISC initiatives articulate and harness a notion of private governance as a conversation between firms and consumers, identifying the latter as the key agents of change. As one observer put it, the California TISC Act ‘requires rather little from the business community, yet much from the consuming public’ (Mattos, 2012). The classic ‘brand reputation’ logic raises a number of problems. In the first instance, the evidence is still very mixed on the extent of consumer concern about labour standards, and interpretations vary as to the extent to which consumers can constitute a reliable and effective driving force for change (see Esbenshade, 2012: 547–548). Some of these interpretations draw attention to the self-intere...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Figures and Tables
• Acknowledgements
• Notes on Contributors
• List of Abbreviations
• Introduction
• Part I: The Globalisation of Vulnerability
• Part II: Migrant Workers, Unfreedom and Forced Labour
• Part III: The Vulnerability of Asylum Seekers
• Part IV: Hidden from View: The Most Exploited Workers
• Part V: Interventions: Tackling Labour Exploitation
• Index