In 2019, Theresa May, then the UK prime minister, warned that a “global epidemic” of modern slavery was spreading through the supply chains of the food we eat and the clothes we wear. “The most powerful voice of all,” she urged, “belongs not to business or government, but to the consumer. It is customers who ultimately decide whether a business succeeds or fails — and if enough of us turn our backs on companies that exploit forced labour, modern slavery will cease to be commercially viable.”
It is a seductive argument. You don’t have to look far to see people gobbling up goods and services that are suspiciously cheap without asking questions. But the average consumer is not in a position to understand the role of labour costs and other inputs in something like a piece of clothing. Even if they are, buying more expensive products does not guarantee they have been made by workers who were treated fairly. “Luxury brands produce in a lot of the same factories [and] some luxury brands are terrible in terms of what they’re doing,” says Thulsi Narayanasamy, a labour rights expert at the Business & Human Rights Resource Centre.
To complicate things further, some of the cheaper brands have better supply chain policies than most. When demand for clothes plunged last year because of the pandemic, low-price fashion retailers H&M and Inditex chose to pay for orders already produced or in production, while many others cancelled payments and pushed the pain down the supply chain.
If consumers cannot rely on price as a reliable indicator of labour abuse, what other information are they to use? The UK government points to the Modern Slavery Act of 2015, which was meant to increase corporate transparency so that, in May’s words, “we can all see exactly which companies are serious about stamping out abuses, and which should be avoided by consumers with a conscience”. But this law is too weak to achieve its aim. It simply requires companies to publish a statement once a year on their efforts to combat modern slavery and human trafficking. They can write whatever they want. Even so, 40 per cent of companies have not met this low bar, and the government has not pursued any injunctions for non-compliance.
Last month, foreign secretary Dominic Raab said there would be fines for companies which do not publish statements. But the law remains flimsy. Liberty Shared, a Hong Kong-based NGO, wrote to the UK’s Home Office last year to question the accuracy of a corporate modern slavery statement. The Home Office replied that the law “does not require the government to review or verify the content” of the statements.
To tell consumers they are responsible for policing modern slavery, when these are the tools at their disposal, is worse than disingenuous. It is gaslighting. The truth is that many big companies do not know exactly what is happening in their supply chains, which often consist of many subcontracted layers.
Such ignorance can be convenient. After the Rana Plaza disaster in Bangladesh, where a factory complex collapsed and killed more than 1,000 people, activists had to dig through the rubble for clothes labels to find out which brands were sourcing there.
Outside the UK, governments are taking on a bigger role. A number of European countries, including Germany, are preparing laws that would hold companies liable for human rights breaches in their supply chains, unless they can show they undertook reasonable due diligence to prevent them. The European parliament’s legal committee has proposed a similar EU law. In addition, a draft of the EU’s trade policy review floats the possibility of blocking imports in future that were produced with forced labour.
The US Customs and Border Protection has had this power for 90 years, and has recently banned cotton and tomatoes from the Xinjiang region in China, home to the oppressed Uighur Muslims. Cotton is notoriously hard to track in supply chains, but the CBP is testing new technology that could identify the DNA of cotton grown in Xinjiang. These measures should incentivise companies to have shorter or simpler supply chains over which they have better oversight.
There is no doubt that consumers can help to change corporate behaviour. Many want to avoid products made by exploited workers, and would value more rigorous transparency with which to make their buying decisions. But to expect them to “vote with their wallets” to combat modern slavery is to pass the buck from businesses and governments, which have both the power and the responsibility to do something about it.
sarah.oconnor@ft.com
Source: Economy - ft.com
