Labour rights issues in food supply chains are crucial matters to investors, both in terms of compliance with international human rights norms and national legislation, and from the material point of view of securing future supplies. With this background, GES, in collaboration with AP7, The Seventh Swedish National Pension Fund, conducted a pre-study to provide input for the development of a new engagement initiative.
Findings in brief
Child labour and forced labour are the issues that are given the most emphasis in the literature related to labour rights in food and agricultural supply chains; they are the issues with, reportedly, the most severe concerns and widespread prevalence. Sustainable Development Goal (SDG) 8, on decent work and economic growth, also specifically includes targets for the eradication of child labour and forced labour.
It is estimated that forced labour and child labour are present in 65 agricultural, forestry, and fishing products, indicating a high prevalence of these internationally banned labour practices in those sectors. In 2017, the global estimate of the number of child labourers was 152 million, of which more than 70 per cent were found in agriculture. This makes it particularly relevant for the food industry to combat. As for forced labour, it was estimated to involve 25 million people globally in 2017, and 11 per cent of forced labourers were found in the agricultural and fishing sector.
Furthermore, almost one in four victims of forced labour was exploited outside of their country of residence. Migrants are particularly vulnerable to forced labour due to language barriers, integration challenges, and limited local knowledge and support. Particular emphasis will, therefore, be placed on migrant workers when engaging the food industry on forced labour.
From the point of view of the supply chain, most labour rights risks and adverse impacts take place at a farm level. Thus, the focus of the engagement will be on this tier in the companies’ supply chains. This may include both agricultural workers on plantations and independent smallholders. As discussed above, a living income is highly relevant to ensure basic needs for such a rural population and fulfil several SDGs. Living income is therefore suggested to be particularly emphasised in the investor initiative.
GES has identified five food commodities connected with some of the most elevated labour rights risks overall. These are coffee, rice, sugar, tea, and tomatoes. This conclusion is primarily based on the frequency of which these commodities are mentioned in the literature, and by key stakeholders, as being linked to child labour and forced labour.
New engagement initiative
Following the pre-study, the new engagement initiative was launched in May 2018, in cooperation with AP7 and Öhman and currently with six participating investors in total, and will continue throughout 2020. The objective is to improve companies’ preparedness to address risks of child labour and forced labour in their supply chains, as well as to remediate other potential adverse labour rights impacts. In the engagement, specific emphasis will be to push for living incomes for agricultural workers and smallholders. Particular focus should be placed on the aforementioned high-risk commodities – coffee, rice, sugar, tea and tomatoes. In order to measure progress, we have developed a set of key performance indicators (KPIs) for the fulfilment of the suggested engagement objective.
Approximately 20 food and beverage producers, as well as food retailing companies, are suggested for targeting by this engagement. A variety of factors were considered for their selection including poor performance in relevant corporate benchmarks such as KnowTheChain and the Corporate Human Rights Benchmark, and not having already been targeted by other similar engagement initiatives.
The initiative is still open for investors to join.
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[EDIT 4 June 2018] This press release has been edited to include Öhman in the first paragraph of the part titled New engagement initiative