Labour Practices Learn how to correctly analyse this topic.

In your analysis, examine the company’s treatment of employees and suppliers. To quantify the impact, include data on how many people are trapped in forced labour in the company’s supply chain, describe the conditions they endure, and what basic rights and labour standards are being violated. Consider how the workers’ health, socioeconomic status and overall well-being are being compromised.

You may use studies as proxies to report the impact and the IMP framework to describe the what, how much, and who.

Introduction

The introduction should describe the broader impact issue to set the stage for the reader.

Provide enough context information about the social impacts of poor working conditions such as wage issues and working overtime, forced labour, and others.

It should give the reader a general panorama of poor working conditions forced labour worldwide.

If needed, the introduction could also treat pervasive labour practices in the company’s specific industry or a specific country. What is the global/industry scale of the problem? Why are poor working conditions and forced labour detrimental?

Core Analysis - Labour Practices

Include:

• The number of people in the company’s supply chain
• The number of suppliers
• The number of workers/suppliers known for having poor working conditions or that are under forced labour.

• If a company’s supplier(s) is tainted with dire working conditions and forced labour, clearly define how strong and dependent is the company’s and its supplier’s business tie:
  • Is it a/are they the main suppliers?
    
  • How many products/services is the company sourcing from this supplier?
    
  • By how much is the company funding this supplier?
    
  • How reliant are the company’s operations on this supplier?
    

Caution: Please note that analyses could only be considered when there are close ties between a company and a supplier profiting from forced labour and having poor working conditions. Otherwise, the impact is deemed peripheral to the company’s activities.

For example, "A company buys 1.5 million tonnes of palm oil. It has four suppliers, two of which are known to indulge in child labour since 2015. These suppliers provide 55% (825,000 t) of the company’s total palm oil consumption".

Helpful tip: Using ranking systems like KnowtheChain can often help understand where a company stands amongst this significant issue and how it compares with its competitors.

• Describe the conditions in which workers are kept.
  • Have there been any violations of human rights?
  • Are the workers underpaid?
  • Are they overworked?
  • Are they exploited?
  • For tobacco and, metals & mining companies, are the working conditions hazardous?
• For how long have the events taken place?
• Is there a poor track record?
• Had the company pledged to end its ties with this supplier and failed to do so?

Including various sources in your research and being critical of the information presented by the company and third parties will help you add nuance to your analysis.

Common mistakes:

• Writing borderline analyses which do not establish a direct link between the company's supply chain and unfair labour practices.
• If a company's supplier is using forced labour to extract specific raw materials, the analysis can make a claim stating that the company is procuring materials from the materials in question.
  • For instance, if a link can be made with sourcing one type of mineral, metal, or other, such as cobalt, then the analysis cannot accuse the company of using another raw material, like copper.
  • Looking at the company's products and the materials they use, there is no link between the company's supplier using child labour for the company's specific materials that they are sourcing.

Core Analysis - Workforce Health & Safety

• We do not accept notes based on frequency rates only, i.e. TRIR and LTIR values only.
• Whenever companies are not reporting the exact number of accidents, but rather a frequency rate, we can estimate total accidents/injured by applying the internationally recognized OSHA formulas.

  • If the company does not provide the number of total hours worked by its workforce in X year, we estimate it by:

Estimated total worked hours by the workforce in one year = total workforce * 40hrs weekly * 50 working weeks/yr * 90% rate to avoid overestimation

• Then, we can apply the OSHA formula both for the LTIR & TRIR (same formula applies to both)

Number of injuries/accidents = (TRIR or LTIR * number of hours worked) / 200,000 (or 1,000,000)#

#Warning: We divide by 200,000 because this is the standard formula used by OSHA that all companies follow around the world. However, at times, companies might explicitly state that their TRIR and/or LTIR or similar frequency rates are “per 1,000,000” worked hours. In those cases, we simply divide by what is disclosed by the company (say, 1,000,000) and not by 200,000.

Conclusion

Decide if the company’s impact has been positive or negative, and give the reader a succinct summary of the scale and persistence of the matter. In general, no new information should be presented to the reader.

Make sure to describe the scale of the impact by taking into account:

1/ The breadth of the impact

• Is the impact local, national, or global?

• How many people are concerned? Thousands? Hundreds of thousands?
  

2/ The depth of the impact

• Is the life of people concerned deeply affected, or does the issue just marginally impact them?

• Are the changes brought by the issue profoundly changing society or the planet?
  

3/ The persistence of the impact

• How long would the impact described last for? Months? Years? Decades?

• How reversible is the impact described in the impact analysis? Can it be easily stopped/extended?
  

Context:

As of 2021, globally 40.3 million (Mn) people are involved in modern slavery of which nearly 24.9 Mn work as forced labourers. Modern slavery is a contradiction of human rights as it strips a person’s freedom of control and decision-making to work through threats and violence.

While modern slavery has boomed within the supply chains of global companies, the footwear and apparel industry relies the most on forced labour.

Activities:

Yue Yuen ranks 38th of 43 companies that lack disclosure of policies and practices on forced labour. It majorly imports leather from Minerva S.A., a Brazil-based livestock company tainted with child labour and forced labour in its activities.

Outputs, outcomes, and impact:

In recent years more than 12 cases have been recorded where slaughterhouses of Minerva, along with beef producers like JBS, have been involved in extreme labour abuses. In Paraguay’s Chaco region, Minerva’s 5 slaughterhouses are linked with child labour, slave labour, and indigenous labour exploitation.

In Brazil where it owns 10 slaughterhouses, workers in beef farms (supplying Minerva and JBS) were treated as slaves without electricity, toilets, and water. Thus far, 32% of slave worker rescues have happened from Brazil’s cattle farms.