Our industry is experiencing a “stress test”. Now more than ever, the “S” (Social) element of ESG (Environmental, Social and Governance) issues is gaining attention: in light of the COVID-19 pandemic, it has become evident that social practices are a barometer for corporate culture and resilience – companies that have a strong/shared culture across their organisation tend to demonstrate strong social practices.
The most visible effects of COVID-19 can be seen around disruptions and high pressure on supply chains in terms of stocks, increased price of essentials, labour shortages, travel bans and delayed investments. On the less visible side, a new wave of forced labour cases and human rights violations may be triggered across our industry due to these increasing pressures – impact both direct and indirect workers, including migrant and contract workers, and indirect services – where they are at the risk of mandatory overtime, non-payment of wages, hiring/firing, and other concerns, if we are not collectively careful to root out forced labour in supply chains
The result of this stress test will become a determining factor of our industry’s resilience – not only in showing our ability to manage supplies and demands, but also demonstrating how we can maintain good social standards and labour practices across our operations during challenging times. To date, many social audits are not taking place due to constraints created by the Covid-19, in a time where workers’ vulnerabilities are at an all-time high and face new and greater risks.
This shift is also taking place in the context of increasing stakeholder campaigns and regulatory demands from the U.S., France, Germany, the Netherlands, and the EU-wide level – to name a few – which legally require companies to conduct their human rights due diligence in their business practices and relationships and annually report on them. In some cases, an import ban on key products that are suspected to have been produced by child/forced labour is also in place.
We need to continue our efforts as responsible companies and ensure that our Priority Industry Principles against forced labour are applied now to address increased instances of debt bondage, coercion and other forced labour practices. This Coalition’s objectives are an even more relevant contribution to ensuring that those invisible workers in our value chains are recognised, and their vulnerabilities addressed and put at the heart of our businesses’ concerns.