My opening remarks to the World Economic Forum Panel in Nay Pyi Taw, Myanmar, on “Fair Labour is Smart Business” on 6 June 2013.
Question to be addressed is: “With over 60% of the world’s population, how can Asia create a sustainable framework for long-term human capital development?”
The mission of the organisation I lead, Walk Free, is to end modern slavery – which includes human trafficking and forced labour. Given that Asia is home to the bulk of the world’s forced labour, I am going to focus my comments on how we all, and business in particular, can work to end this scourge.
Labour practices exist on a spectrum – from the fair and decent at one end, to highly exploitative at the other. And it’s at the highly exploitative end that we find forced labour.
International conventions provide legal definitions of forced labour. An operational definition is: using coercion to extract labour for no or minimal pay. Coercion can take the form of violence or the threat of it, or other means of exerting illicit pressure – such as fraudulent debts with punishing interest rates. The essence of it is that the worker is not free to leave and seek another job.
According to the International Labor Organisation there are 11.7 million forced labourers in Asia and the Pacific. They comprise 56% of the estimated 20.9 million forced labourers worldwide.
It is a big problem in SE Asia, with the victims often coming from disenfranchised population groups, particularly migrants who don’t have a legal right to work, or marginalized ethnic groups. In this region, a there is often a strong correlation between weak and vulnerable population groups and labour exploitation. When you add poverty and a lack of employment opportunities to the mix, then you have a recipe for large scale modern slavery.
Hundreds of thousands of Myanmar migrants are exploited in the Thai fishing industry and shrimp peeling sheds. There is widespread abuse of workers in palm oil plantations in Indonesia. The region suffers from a massive criminalised sex slavery trade. There is a huge domestic servitude problem. And factories and agriculture throughout the region rely on the forced labour of nationals.
In addition to being abhorrent, and illegal everywhere under international and national law, forced labour imposes significant costs on society.[i]
Forced labour in supply chains risks makes corporations who profit from it, knowingly or unknowingly, complicit in this abhorrent crime, and carries the potential for huge reputational damage.
By way of example, an NGO, the Environmental Justice Foundation, released a report last week documenting the use of slave labour in the Thai fishing industry. This resulted in the following headlines in US papers:
“Slaves may be catching the fish you eat” – USA Today
“Was the fish you had for dinner caught by slaves? New report raises alarm.” – Christian Science Monitor
From a societal perspective, forced labour contributes to economic stagnation. It tends to pull down the wages of free labor in the same area, thus lessening the disposable incomes of free families.
It encourages reliance on obscenely cheap labour at the cost of innovation and investment.
At the same time, this large population of enslaved workers is not able to play a full role in their local economy, given that they have little or no purchasing power, subsisting on the barest necessities.
Forced labourers are not free to purchase anything in a country’s markets. They are denied the benefits of human development in the form of education and political participation, and hence remain an untapped economic resource.
The result is that forced labour stunts economic and social growth.
Governments in Asia are well aware of the problem, but commitment and capacity varies tremendously. For example, there is low capacity in Myanmar, but an apparent high level willingness by the government to begin addressing the problem. However, in neighboring Thailand there appears to be far less political will to fight slavery.
Civil society often leads the fight against forced labour, and trade unions, and the promotion of labor rights, are central to ending these abuses.
Business has a key role to play, reluctant though it often is to raise its head above the parapet on forced labour. On supply chains business has the reach and capacity – if the will exists – that governments in developing countries don’t necessarily possess on these issues.
Consider the situation of exploitation in shrimp peeling sheds in Thailand. While there are many legal peeling sheds, far too many are unregistered and dependent on Myanmar migrants. Forced labour is rife in the industry.
The police cannot visit every shrimp peeling shed – but every shrimp buyer who supplies to brand names overseas can have a program of visits to the sheds they buy from.
And given that the ultimate destination of much of this shrimp is reputable US supermarkets and restaurant chains, there is an incentive for these corporates to ensure that shrimp buyers are purchasing from legitimate suppliers.
What this means is that buyers of high-risk goods need to start demanding a level of accountability from the people they buy from. Buyers will only do this downstream if the larger brand names upstream demand it of them.
But this requires upstream businesses to set culture and standards – starting with CEOs and boards.
That is the first but critically important step if business is to start addressing the issue of forced labour in their supply chains. With high level commitment, steps can then be taken to assess the problem, implement robust policies and review their implementation and effectiveness.
It will require commitment and action by governments, civil society and business to end the scourge of forced labour. It will take time, but all are increasingly aware that business as usual on slavery is no longer acceptable, and change is slowly gathering momentum. We now all need to work to accelerate that change.
[i] These observations on societal costs are drawn from an unpublished paper “Slavery is Bad for Business: Analyzing the Impact of Slavery on National Economies” by Monti Narayan Datta and Kevin Bales.