Forced Labour Places Corporate Profits, Reputations at Risk

An annual report assessing the risks to business from complicity in the violation of human rights worldwide has revealed a continuing global trend in the use of forced labour, particularly across the most economically important emerging markets.

 

Maplecroft's Forced and Involuntary Labour Index notes that the widespread use of forced labour in Myanmar, North Korea, Somalia and Sudan means they top the ranking. However, the volatile nature of the business environment in these countries and internationally imposed sanctions, have marginalised investment.

 

More importantly, for the fifth consecutive year, countries vital to the supply chains of multinational companies are featuring in the 'extreme risk' category of the index. These include: China (10), India (15), Mexico (21), Indonesia (23), Malaysia (27), Viet Nam (37), Bangladesh (43) and the Philippines (44).

 

"The ongoing use of forced labour in emerging economies indicates an unwillingness or a critical lack of capacity to address both the symptoms and causes, leaving business to police the problem itself," says Professor Alyson Warhurst, chief executive officer (CEO) of Maplecroft.

 

Warhurst says that responsible organisations must ensure that they and their business partners are fully compliant with international labour standards or they risk damaged reputations, litigation, investor alienation and reduced profits from consumer backlash and hidden costs relating to reduced productivity linked to adverse working conditions.

 

According to Maplecroft, forced labour is rooted in poverty, discrimination and cultural acceptance of the bonded status of social groups. Women and children are particularly vulnerable, as are migrant workers that have crossed borders in search of opportunity or who have been displaced by conflict or natural hazards. The trafficking in human beings for forced labour also remains a key concern in all countries, especially in respect of sexual exploitation and particularly of girls.

Prevalence of Forced and Child Labour in the Global South

The International Labour Organisation (ILO) estimates 12.3 million people are victims of forced labour worldwide, with children being disproportionately affected, particularly in the global south.

 

This is especially true of India. Despite substantial economic growth, NGOs place the number of bonded labour victims in India in the millions, with children worst affected. Most forced labour in India occurs within agriculture, but also affected are the garment industry, the construction sector, rice mills, brick kilns and quarries. According to a 2009 UNICEF report, more than 200,000 children were working in hybrid seed production alone.

 

Risks of Complicity

In the economic powerhouse of China, forced labour continues to be used in factories, brick kilns, coal mines and the agricultural sector. Migrant workers continue to face slave-like conditions in many industries in China and there are credible reports of China using prison labour for private production facilities that operate under a prison and commercial name.

The problem of forced labour is not confined to emerging or developing economies.

 

The issue was recently highlighted in the UK (154), which is rated 'medium risk.' In September 2011, a major police raid' resulted in the release of 24 men (mainly Poles, Romanians and Russians) from a caravan site in Leighton Buzzard, some of whom were held in virtual captivity for up to 15 years. They were believed to have been coerced into forced labour in a range of gruelling manual jobs, including asphalting.

 

 

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