According to international agency Baptist World Aid’s new report, Behind the Barcode: Ending Worker Exploitation, there are serious problems within the supply chains of the global retail industry.
The report reveals that over 85 per cent of fashion companies do not pay workers in their global supply chains enough to meet basic needs and that although over half of retail companies have fully traced their final stage manufacturers, just nine per cent have fully traced down to raw materials. In addition, only a third have a functioning grievance mechanism for overseas workers.
But what can HR do to safeguard ethical practices, no matter what the industry?
According to Steve Shepherd, employment market analyst at Randstad Australia, there are several practices that organisations should adhere to across all levels of their supply chains. These include: fair and transparent hiring frameworks; quality control of all suppliers, including management of the supplier selection process in some cases; contract management support and legal counsel to make sure all partners and clients comply with employment laws and regulations; compliance monitoring and management with labour and immigration laws; validated supplier hiring practices; and supplier performance management and process for the removal of non-compliant suppliers.
“It’s almost always in HR’s best interest to know what’s going on and to start putting a spotlight on it,” says The Faculty director, Kate Nicholl. She advises companies to maintain standards once they have been set and to distinguish clearly whether they are compliant or leaders in sustainable sourcing practices.
HR professionals should look out for the following warning signs that supply chain partners may be exploiting workers: workers are not provided with legally compliant contracts; there are multiple employment agents and labour brokers in the recruitment supply chain; workers are fraudulently charged fees for travel, health checks and work documentation; wages are underpaid, delayed or withheld, or there are excessive or illegal wage deductions; workers are required to stay in company or broker controlled housing and are prevented from entering or leaving the premises freely; discipline and termination practices are physically abusive or humiliating; employees engage in excessive overtime beyond legal or code of conduct limits; early termination results in monetary penalties or the withholding of wages; undocumented migrants are threatened with notification of the authorities if they leave employment; and workers are forced to pay financial deposits or security fees as runaway insurance.
