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Modern day slavery
What Global Witness is to conflict diamonds, 35 Bloomberg Markets is to modern-day slavery: both publish investigative stories, with Global Witness specializing on resource-linked conflicts and corruption in trade systems, Bloomberg Markets featuring people who, and issues that, move financial markets. Also, they both share a record in tackling such uncomfortable issues as conflict diamonds and modern slavery.
While both topics have long been understood within non-governmental organization (NGO) circles, they have for the most part remained outside of the public's cognizance. That ignorance will possibly be a thing of the past for conflict diamonds, which has begun to enjoy mainstream comprehension thanks to the 2006 blockbuster movie, "Blood Diamond." For most of the world's people, however, the concept of slavery is thought of as extinct, an unfortunate institution that faded into non-existence with Abraham Lincoln's Gettysburg Address.
That is not to say the media has ignored the issue. Such respected organs as The New Yorker36 in the US, The Guardian 37 and BBC38 in the UK, and Frontline 39 in India have all run special reports documenting stories of individuals forced into working conditions so substandard - and so limiting as regards the worker's ability to leave - that the title "slavery" was appropriate. However, none of these stories generated the level of public outrage one might have expected, in part because the reports depicted incidents that had no connection with most readers' lives.
What made the cover story of Bloomberg Markets's December issue 40 (a follow up to a breaking story of affiliate, Bloomberg News, in November) notably different was that it identified the global, Western-based brands that benefit from this form of labour. Authors Michael Smith and David Voreacos included comments from multinational companies-such as automakers Ford Motor Co., General Motors Corp., Nissan Motor Co. and Toyota Motor Corp., appliance maker Whirlpool Corp., and sink and bath maker Kohler Co.-after establishing through interviews and documents that raw materials for their manufacturing operations in the United States could be traced to suppliers that employed slave labour in Brazil.
By highlighting the nature of these firms' supply chains, Bloomberg influenced them to adopt a more rigourous approach. Most of them eventually accepted responsibility for ensuring that their business processes are not tainted by slavery of any form, at any level of their supply chains. In other words, the articles triggered a successful mobilization of market power, which previous awareness campaigns, such as books, special reports, brochures, educational or training programmes, were unable to achieve.
The fact that a financial magazine, which is dedicated to issues that affect stakeholders in the global financial markets, took interest in dealing with the topic of slavery is a testament to how human rights issues - if effectively publicised - can impact a company's bottom line. It's also a reminder that disregarding Corporate Social Responsibility (CSR) concerns will be detrimental not only to a company's reputation, but also to its financial health.
In the Bloomberg Markets report, the journalists joined labour inspectors as they raided some of the 1,000 charcoal-making camps in Brazil's Amazon basin to investigate reports of men, women, and children being exploited to aid in the production of charcoal for companies that manufacture pig iron, a key ingredient in steel-making.
The story graphically showed workers living in squalid shacks without electricity and plumbing, drinking unsanitary water and receiving no pay. Most of the workers were recruited from poverty-stricken provinces many miles and forests away and desperate to find work. The story presented damning evidence (supported by Brazilian inspectors and customs documents) that the charcoal originating from these camps was routinely purchased by brokers for sale to steelmakers and foundries, whose semi-refined product was then purchased by some of the world's largest companies that manufacture cars, tractors, sinks and refrigerators for U.S. consumption.
To Kevin Bales, president of the Washington-based NGO Free the Slaves argues "companies have an absolute obligation to understand what's in their supply chain and review it from a moral and a human standpoint". Bales, who is also a sociology professor at London's Roehampton University, challenged corporations to step up to their responsibility of ensuring the source of products they buy and sell is not tainted by slavery. He added: "Slavery is theft of life. It's just about the most profound loss of human dignity that you can have, short of murder." 41
The UN's International Labour Organization (ILO) defines slavery or forced labour as work performed involuntarily under threat of penalty, with scarce or no compensation. 42 ILO adds that the practice occurs when "people are subjected to psychological and/or physical coercion (the menace of penalty) in order to perform some work or service which they would otherwise not have accepted, or not have accepted at the prevailing conditions (the involuntariness)."
It notes that human trafficking is the process by which people end up in slavery. It is defined by the United Nations Convention against Transnational Organized Crime as "the recruitment, transportation, transfer, harbouring or receipt of persons" by such means as threat, use of force or coercion, abduction, fraud, deception, etc., "for the purpose of exploitation." 43
ILO stresses that modern slavery thrives because it is lucrative. ILO estimates that global profits made from forced labourers exploited by private enterprises or agents reach US$44.3 billion every year, of which US$31.6 billion are made from trafficked victims. Everyone profits, except for the slave, of which there are estimated to be over 12 million people. These include at least 360,000 in industrialised countries, of whom at least 270,000 have been trafficked into forced labour. Approximately 43 percent of these are trafficked into sexual exploitation, 32 percent into labour exploitation and about 25 percent for a mix of sexual and labour reasons. 44
Most are enslaved under a system of debt bondage, as was the case of the slaves in the Brazilian charcoal camps. Lured by recruiters and then hired by camp owners promising steady-paying jobs, they found themselves trapped in a cycle of working off their debts from exorbitantly priced basics like tools, soap, and food bought at company stores. Many go months without pay or see their wages whittled to nothing from the cost of even work-related items such as tools, boots and gloves. Lack of money, an impenetrable jungle and a long distance to travel to safety made it impossible for the slaves to leave. 45
As soon as the Bloomberg News story broke in November, those who are involved in the supply chain started to redeem themselves, obviously fearful of backlash. The car companies, in particular, almost immediately drew on their purchasing power to prod their first-tier suppliers to force all downstream vendors to avoid forced labour. The most concrete response was the move by General Motors, Ford, DaimlerChrysler and Honda to join together under the Automotive Industry Action Group to train their suppliers in how to avoid buying slave-made materials. The car association engaged Business for Social Responsibility, a San Francisco-based organization that promotes good corporate practices, to develop the training programme which is set to commence by the second quarter of 2007. Toyota, however, decided not to join the training programme because it believes it can better resolve forced labour issues on its own. Its decision led some to question the car manufacturer's high-profile campaign for environmental innovation through its hybrid cars. 46
One of those that voiced concern about Toyota's perceived inaction was the Interfaith Center. Representing US$700 million in investments it campaigns for improved social and environmental standards. By publicly questioning Toyota's decision, it joined groups with financial products, such as pension and mutual funds, to assert their stake in the issue.
Ideally, the fight to rid the planet of slavery, would focus global attention not only on the car showroom or the financial markets, but on the broader contexts that create the potential for slavery. The key ingredient to a slave-driven business is poverty. With over a billion people scraping by on a dollar a day, poverty breeds and feeds the supply of low-cost labourers. This is especially true in developing countries whose economies are export-dependent and have industries that are still at the mercy of Western retailers who place more value on pricing than on instituting ethics and human rights practices. Unfortunately, even in cases where governments and the private sector is responsible, corruption can undo the positives. It matters if laws are in place but enforcers turn a blind eye or are taking bribes.
That is why policymakers, NGOs, and other stakeholders in both the developing and industrialised worlds have an important role to play. They must develop strategies that address the economic, cultural and social conditions, which include illiteracy, powerlessness, inadequate governance, and the lack of economic alternatives that allow individuals to be enslaved. There are mechanisms already in place that can aid this process. For instance, the certification systems enacted for the diamond, forestry, garments, footwear, and coffee industries, among others, can play a role. Some are still works in progress, but they are all striving to address the problem.
Two hundred years ago, the trading of slaves was banned by the US and UK, ending a barbaric chapter of those countries' histories. Now, as awareness is raised in our collective consciousness that slavery has persisted and evolved, no excuse can be made for not taking all necessary steps to stamp it out for good.
35 Combating Conflict Diamonds, Global Witness, http://www.globalwitness.org/pages/en/conflict_diamonds.html
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