Cleantech
HP, Apple Leading Action on Forced Labor, But ICT Sector ‘Must Do Far More’

The information and communications technology (ICT) industry is an at-risk sector for forced labor, and while most of the world’s largest ICT companies have publicly demonstrated awareness of the issue, far fewer have strong processes in place to address it. A new Benchmark Report from KnowTheChain reveals that of 20 evaluated companies, over half scored under 50 points overall, and three scored under 15, out of a possible 100.

Familiar brands including Apple, Canon, Cisco Systems, Ericsson, Foxconn, Hitachi, HP, Intel, IBM, Microsoft, and Samsung, were scored on a total of 22 indicators across seven themes: Commitment and Governance; Traceability and Risk Assessment; Purchasing Practices; Recruitment; Worker Voice; and Remedy. Each company was given scores out of 100 for each theme, in addition to an overall score out of 100. The methodology was developed by KnowTheChain partner organizations Humanity United, the Business & Human Rights Resource Centre, Sustainalytics, and Verité.

Recruitment and Worker Voice were the weakest themes in the sector, with average scores of 19 and 16, respectively, among the 20 benchmarked companies. Only 12 out of the 20 companies report that they prohibit fees from being charged to workers during recruitment processes, and just three companies make reference to conducting recruitment agency audits or requiring their suppliers to do so. Similarly, only 11 of the 20 companies state that they have a grievance mechanism available to suppliers’ workers and only four of those disclose how they ensure the mechanism is proactively communicated to them. None of the companies provided examples of steps taken to enable an environment where supply chain workers can organize when there are regulatory constraints on freedom of association. Apple received the top score for Recruitment (67) and Samsung received the top score for Worker Voice (38).

“Forced labor will persist in the ICT industry unless workers at the lowest tiers of the supply chain can voice their concerns. Vulnerable migrant workers must be able to organize and to access trusted, reliable grievance mechanisms. We hope this benchmark spurs companies on the road to improvement,” said Annabel Short, Deputy Director of the Business & Human Rights Resource Centre.

HP ranked first for its overall score of 72 – a full 10 points ahead of the next highest score – and ranked first in four of the thematic areas: Commitment and Governance (100); Traceability and Risk Assessment (100); Purchasing Practices (88); and Monitoring (80). KnowTheChain praised the company’s leading transparency and disclosure practices, Supplier Code of Conduct, training for auditors and program managers, work with local NGOs, trade unions and policy makers, and its process for tracing and assessing forced labor risks in its supply chain. However, the organization suggests HP strengthen its performance by disclosing evidence that it audits recruitment agencies used in its supply chain and makes improvements in the area of worker voice, such as by disclosing how the company ensures that its human trafficking and forced labor policies are effectively communicated to workers in the supply chain and whether they are translated into workers’ native languages.

“At HP we believe that our actions must focus on addressing some of the greatest challenges we face as a society, including combatting human trafficking, forced labor, and other forms of exploitation of vulnerable workers,” Jay Celorie, the Global Program Manager, Human Rights, at HP Inc. is quoted in the report. “We are pleased that [KnowTheChain] has recognized HP’s bold and transparent supply chain standards. We have been strongly committed to socially responsible business practices throughout our 75 year history, and will continue to drive these values and programs within our company, our industry, and beyond.”

Apple’s score is also driven by its commitment to labor rights that is aligned with international standards and its forced labor standards. The company ranked first in the Recruitment and Remedy thematic areas, with scores of 67 and 100, respectively, and tied HP with a score of 80 in Monitoring. Among its leading practices, Apple implemented an underage labor remediation program through which it found underage labor in one supplier facility. Once discovered, it required the supplier to return the underage worker to their home, finance the education of their choosing, and provide income to the worker that matched what they received while employed. Apple states that it follows up regularly to check in on the worker and to ensure the supplier upholds their financial commitments. At the same time, KnowTheChain encourages Apple to disclose more information regarding its practices related to both purchasing and worker voice, including worker empowerment and grievance mechanisms.

“It’s encouraging to see some companies have policies and practices in place to deal with a very difficult, but not intractable problem,” Verité CEO Shawn MacDonald said. “This report represents one of the most sophisticated analysis to date of what companies are reporting to the public on their efforts to eradicate forced labor. Now more than ever, companies have an opportunity to emulate and further develop the good practices noted in this report.”

Intel (59), Cisco Systems (58), Microsoft (57), Ericsson (55), Samsung (54), and Taiwan Semiconductor Manufacturing Co. (TMSC) (52) are not far behind, rounding out the scores above 50 points. Texas Instruments and IBM fall just short, with 48 and 45 points respectively, while the rest received overall scores below 45. The companies with the lowest scores were Canon (12), BOE Technology Group Co. (4), and Keyence Corp. (0).

“While we recognize that some companies are trying to meaningfully address the issue of forced labor in their supply chains, this report demonstrates that far more can and should be done,” said the Managing Director of Humanity United, Ed Marcum. “For investors and consumers, this report also shines a light on those lagging companies who are doing little to fulfill their ethical and legal obligations.”

In addition to the companies’ scores and thematic performance of the sector, The ICT Benchmark Findings Report highlights the best practices within the industry, establishes a baseline of performance to be measured against in the future, and identifies gaps where companies and the industry can improve.

KnowTheChain had announced earlier this year that it would conduct sector-level comparative benchmarking of corporate policies and practices to address forced labor, beginning with ICT, as part of its continuing effort to spur a “race to the top.” Within the next year, it plans to rank companies in two other sectors at high risk of exposure to the issue: apparel and footwear; and food and beverage.

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