The carmaker is facing questions after serious allegations of child labour being used in one of its US subsidiary steel plants. Australia’s Hyundai Motor Company has distanced itself from serious allegations of child labour in its US company’s subsidiary steel plant.
The allegations come after an investigation from Reuters revealed that several children, one as young as 12, have missed school to work at the Korean carmaker’s subsidiary, called SMART Alabama LLC.
According to the Reuters report, local police, three underage children, eight former and current employees of SMART have all said the flagship assembly employed underage staff to work long shifts.
While the efforts by actors on the buyer-side of value chains – such as brands and retailers – to address upstream labour abuses are well documented, there is a lack of research into how actors on the production-side of value chains – such as raw material producers – can identify and address downstream labour risks. This research presents the findings of an action research project that focused on the Australian cotton industry. By applying a sense-making lens, we propose four properties that can be used to identify labour risk in global value chains, providing insights into the capacity of producers to address downstream labour abuses. We suggest that there is a possibility for a ‘book-end’ approach that combines upstream and downstream actions by buyers and producers in global value chains.
Nearly three-quarters of the world’s hazelnuts come from Turkey and the biggest buyer is Ferrero, maker of Nutella, the chocolate and hazelnut spread. But the nuts are picked mainly by migrants, including children, who work long hours for very low pay. What is Ferrero doing to ensure its products do not depend on child labour?
In new our book “Addressing Modern Slavery“, we talk about Turkey, hazelnuts and Ferrero: “As Turkey’s Labour Code does not apply to farms with fewer than 50 employees, the state has effectively removed itself from policing this problem. Monitoring of working conditions and ensuring payment of wages is left to companies like Ferrero – a privately held company that is the third largest chocolate maker in the world – which refuses to disclose information about its supply chain” (p177 ).
My latest research finds that effective approaches to child labour in global supply chains are characterised by companies engaging with a broad range of stakeholders, taking a contextual and holistic approach by considering local circumstances and broader human rights, and by focusing on prevention and remediation. By shifting from code of conduct and auditing based approaches towards stakeholder collaboration and due diligence, companies are moving away from reactive and paternalistic approaches to child labour and instead increasingly adopt proactive and pluralistic strategies. The influence of the UNGPs has the potential to ameliorate some the tensions in multi-stakeholder partnerships by requiring companies to be first movers and using this advantage to include stakeholders rather than exclude them in developing CSR strategies. While these developments can help to elevate child labourers from latent and discretionary stakeholders to expectant and dependent stakeholders, they continue to rely on CSOs to add weight to their claims.
Andrew Forrest has called on the Australian government to consider legislation similar to the UK Modern Slavery Act to ensure Australian companies are held responsible for exploitation in their supply chains.
The billionaire businessman and philanthropist said Australia had the opportunity to lead the response to an issue deeply ingrained in the Australia Pacific region, which accounts for about two-thirds of the 45 million people in modern slavery globally.
“Critically, Australia’s supply chains are largely through Asia,” Mr Forrest said. “In this sense we are very exposed, and likely to suffer significant political and economic impact if slavery is found to be connected with our corporations or our government in any way.
“Australia could be the first country in the region to enact comprehensive legislation that ensures corporations are held to account for modern slavery in their supply chains, similar to the UK Modern Slavery Act 2015.”
Australian fashion companies lack transparency around their supply chain or do not have full knowledge of where their raw materials are being sourced from, leaving workers including children at risk of exploitation, an audit has found.
While the movement to eradicate child labour has gained significant pace, there is still a lot of ground to be covered and work to be done by companies and investors in conjunction with trade unions and NGOs, writes CSR researcher Martijn Boersma from Catalyst Australia.
In its latest report, Catalyst Australia examines the efforts and collaboration of global unions, NGOs, companies, and investors in dealing with child labour in global supply chains.
The fragmentation of global production has dramatically increased the length and complexity of supply chains. The Organisation for Economic Co-operation and Development (OECD) estimates that more than half of the world’s manufactured imports are intermediate goods. These are used as inputs in the production of other goods, sourced from different parts of the globe.
At first sight child labour may not appear to be a material issue for Australian companies and investors. However the fragmentation of global production and trade has dramatically increased the length and complexity of supply chains, which can lead to lack of oversight and worker exploitation. The global movement to eradicate child labour has gained significant pace over recent years. Increasingly, global unions and NGOs collaborate with companies and investors to find ways to deal with the risks of child labour in global supply chains. This report looks at those efforts.