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July 29, 2022updated 03 Aug 2022 10:55am

The tech supply chain is making slow progress on forced labour

Many tech companies are failing to provide the transparency needed to stamp out forced labour from their supply chains.

By Afiq Fitri

Earlier this week, it was reported that Apple, Amazon, Microsoft and Alphabet have bought gold from an Italian refiner accused of sourcing it illegally from the Amazon. The refiner allegedly procured stocks of the precious metal from so-called ‘wildcat miners’ accused of illegal deforestation and polluting the Amazon River with mercury.

The news reveals that, despite recent efforts, the world’s largest companies are still struggling to clean up their supply chains. Data from human rights advocacy group KnowTheChain reveals that the tech giants’ due diligence on human rights abuses in their supply chains is also moving at a glacial pace, with campaigners calling for faster action on forced labour.

Campaigners are calling on the ICT sector to ramp up its human rights due diligence processes within its supply chains. (Photo by JUNIOR KANNAH/AFP via Getty Images)

The incident in the Amazon is not the first time the world’s biggest technology companies have been accused of negligence in monitoring their supply chains. In 2019, human rights lawyers launched a landmark legal case against Apple, Google, Dell, Microsoft and Tesla on behalf of 14 parents and children from the Democratic Republic of Congo alleging that these companies were complicit in the deaths of children working in cobalt mines in their supply chain.

The federal court in Washington dismissed the class action lawsuit last year on the grounds that “this long chain of contingencies, in all its rippling glory, creates mere speculation, not a traceable harm”. 

But data from KnowTheChain’s ICT Index, which tracks the human rights due diligence efforts of the world’s 48 largest tech companies, leaves open the possibility that similar scandals are likely to arise in the future, largely due to the slow rate of progress in the sector.

The index scores companies out of 100 for their adherence to the UN’s Guiding Principles on Business and Human Rights. The ICT sector as a whole scores 30 out of 100, with just 10 companies scoring above 50. Almost three-quarters of the companies analysed score below 50. 

IT giant HPE ranked first in the Index with a score of 70, followed closely by Apple, Intel, Samsung and HP. According to the report, these companies have repaid workers who were forced to stump up illegal recruitment fees and provided specific details of how they support responsible hiring practices in their global supply chains.

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Each of the five companies scored more than 80 for publicly disclosing their policies in training first and lower-tier suppliers to manage labour conditions in their supply chains.

HPE also stands out in its leadership in conducting extensive human rights due diligence processes. For example, the company has previously mapped out recruitment practices across its supply chains and has partnered with other large companies in the ICT industry to develop supplier guidance on repaying worker-paid recruitment fees.

According to researchers from KnowTheChain, it is also the only US-based company that does not “limit supplier requirements regarding the right to freedom of association and collective bargaining in compliance with local law”, effectively allowing its workers in its supply chains to unionise. 

At the other end of the spectrum, companies with low scores include Hikvision, the world's largest video surveillance manufacturer, and Taiwan's Largan Precision which produces lenses for Apple. Both have committed to tackling forced labour in their production lines, but there is no evidence of any concrete steps to do so, according to KnowTheChain.

Smartphone giant Xiaomi is the only company to score zero on the Index. The Chinese manufacturer has a 14% share of the European smartphone market, third behind Apple and Samsung, according to figures from Statcounter.

Transparency on forced labour in the tech supply chain

Assessing the human rights impact of the technology supply chain is hampered by a grave lack of transparency. Fewer than a third of companies analysed in the index disclose who their first-tier suppliers are, while just six companies provide detailed information. Fewer than half (47%) have even disclosed the countries from which they source raw materials that are at risk of involving forced labour, such as tin, tungsten and gold.

The most valuable companies are not the most transparent, the Index also reveals. E-commerce giant Amazon and chip maker Broadcom, for example, both have a greater market capitalisation than HPE, KnowTheChain observes, but both score lower.

The supposed complexity of global supply chains is given as a reason why tech companies can't be more transparent about their human rights impact. But this doesn't need to be the case, says Rosie Monaghan, a researcher from the Business and Human Rights Centre.

“It appears that these tech companies share a lot of the same suppliers and therefore, there is an opportunity for the industry to work collaboratively in addressing the issue,” she says. “While it does get more complex further down the supply chain, there are a lot of shared suppliers in at least the first and second tiers, so this creates strong opportunities for collaboration.”

An easy step would be for technology providers to make their supplier lists across different tiers publicly available. “It’s a really good way for companies to begin with identifying and understanding where their risks are,” Monaghan argues. “It’s also a great way to show accountability and if your stakeholders also have access to these supplier lists, it obviously makes it much easier to identify where labour abuses might be taking place.”

Voluntary reporting practices are not having the desired impact on labour practices, the Business and Human Rights Centre has argued, and need to be bolstered with regulation. “Due diligence as companies have been carrying out so far isn’t really working, and if it was we would be seeing better progress which is not the case,” says Monaghan. “A shift in approach is needed from a box-ticking exercise to a much more comprehensive, ongoing and iterative approach.” 

This may soon be the case. Earlier this year, the European Parliament voted in favour of a ban on products that were produced using forced labour. On current evidence, many IT suppliers would struggle to comply.

Monaghan argues that ICT suppliers that engage with their community of stakeholders on human rights issues now will be well-placed should a ban come into force. “One of the really significant gaps we’ve seen in the ICT sector is the lack of engagement with civil society organisations and other rights holders like the workers themselves during the due diligence process,” she says.

“Companies should ensure that all these stakeholders are engaged throughout their due diligence processes to make sure that those are really effective, and I think that would really help them prepare for incoming legislation.”

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