Labour Research February 2021


Countering labour abuse

The coronavirus pandemic has shone a light on — and worsened — labour abuses in global supply chains, as Labour Research reports.

New research finds that in the rush to find personal protective equipment (PPE) to keep key workers safe, and laptops to allow people to work at home during the COVID crisis, few organisations have stopped to ask questions about the safety of the workers who actually make these vital products.

A new report by the UNISON public services union, Public procuring during COVID-19, highlights shocking examples of labour abuses that have come to light during the pandemic. It found that “in the competitive scramble to secure fast-tracked PPE, electronics and other in-demand products”, almost “no ethical considerations were made”.

For example, Top Glove is the world’s largest manufacturer of medical gloves and makes PPE for companies that supply to the NHS. In June 2020, a Channel 4 News investigation found migrant workers at its factories in Malaysia were being paid just £1.08 an hour.

It also discovered that after paying recruitment fees of 5,000 US dollars (just under £3,700) to agents in their home countries, many were only earning around £225 a month. This left them in poverty and “debt bondage” — where migrant workers are forced to pay off expensive loans to recruitment agencies to work.

Workers reported working 12-hour shifts, six days a week. Payslips seen by Channel 4 News showed some workers were working up to 111 hours in overtime each month, breaching Malaysia’s employment laws.

The investigation found migrant workers from Bangladesh, Myanmar and Nepal housed in “cramped and squalid” company-run hostels with up to 24 workers per room.

And it said workers feared coronavirus infection because of poor social distancing arrangements. Meanwhile, Top Glove announced a tripling of profits during the lockdown.

UNISON also highlighted a November 2020 report in The Guardian alleging that the British government sourced PPE from factories in China’s Dandong city where hundreds of North Korean women workers were secretly making protective coveralls in conditions of modern slavery.

They were reported to be working for up to 18 hours a day, under constant surveillance and unable to leave the factory.

The failure to tackle labour abuses in global supply chains is nothing new. Back in 2007, professor Mahmood Bhutta founded the Medical Fair and Ethical Trade Group (hosted at the UK’s BMA doctor’s union) and has been a vocal critic of these failures.

He has been warning for a long time that assurance and auditing schemes are not fit for purpose and that better systems are needed.

NHS Supply Chain, which supplies PPE and other products to NHS and other healthcare organisations in England and Wales, requires all organisations to sign up to its supplier code of conduct.

But Bhutta points to numerous media investigations uncovering modern slavery and other abuses in global supply chains producing surgical gloves, masks and gowns that have found their way into the NHS.

These problems have been documented since well before the pandemic. For example, The Guardian reported in December 2018 that surgical gloves were being made in Malaysian factories accused of forced labour. This report was important, says BMA head of international Arthy Hartwell, because it suggested the NHS Supply Chain Labour Standards Assurance System — although ground-breaking when it was introduced in 2012 — was in need of strengthening.

UNISON’s new report shows the COVID pandemic has negatively affected ethical procurement and made a bad situation even worse. Instead of applying the usual procurement processes and principles, goods have been bought “off the shelf”.

As a result of this and the Cabinet Office taking control of sourcing some items like rubber gloves, it found “decision makers overlooked or didn’t know about exploitation in Malaysia”.

Bhutta also said things got worse during the COVID crisis as the government set up a dedicated supply chain and took on responsibility for procurement.He said that a National Audit Office (NAO) report on PPE procurement during the pandemic “makes clear there was insufficient priority put on ethical procurement”.

The NAO’s November 2020 report, The supply of personal protective equipment (PPE) during the COVID-19 pandemics shows Supermax Healthcare Limited, the European subsidiary of Malaysia’s Supermax Corporation Berhad, the world’s second largest manufacturer of disposable examination gloves, was awarded a PPE supply contract worth £366 million.

November 2019 saw an investigation of Malaysia’s rubber glove industry reported in The Diplomat, the international current affairs magazine for the Asia-Pacific region. This contained allegations of labour abuses, including debt bondage and passports being confiscated.

Omana George, coordinator of independent monitoring organisation Electronics Watch Asia, (see box) told a UNISON webinar on public procurement that its monitoring partners in the Philippines, China and Indonesia reported much longer working hours as the rush to complete orders and deliveries during the COVID pandemic got under way .

Across several regions, they reported that social distancing was not happening, workers were not being given adequate PPE and that migrant workers were unable to get home because sudden lockdowns literally trapped them in their workplaces.

Electronics Watch

Electronics Watch (EW) is an independent monitoring organisation using worker-driven monitoring to detect problems in factories.

It helps public sector organisations work together to protect the rights of workers in electronics supply chains in collaboration with civil society monitoring partners. EW uses a three-step process:

• public buyers become affiliates and demand decent working conditions in supply chains in their contracts;

• monitoring takes place through EW; and

• improvements are worked on collaboratively.

More than 300 public sector buyer organisations in seven countries affiliate to EW and share the cost of monitoring electronics supply chains, monitoring organisations in 11 countries, including China, the Czech Republic, Poland and India.

UK affiliates include public services union UNISON, several universities, the Greater London Authority and the London Boroughs of Tower Hamlets and Lewisham.

It reports direct improvements in factories employing tens of thousands of workers in areas including health and safety, wages, forced labour and working hours.

For example, after three years’ monitoring of Thailand’s Cal-Comp company — which supplies printers, hard drives and other computer peripherals — by EW and the country’s Migrant Workers Rights Network, 10,570 migrant workers in two facilities received compensation for excessive recruitment fees they had paid.

EW monitors equipment including desktops, laptops, printers and tablets. And it monitors production from component manufacturing to final assembly.

A pilot scheme is extending monitoring to factories, smelters and refineries and hopes to expand monitoring to electronics and batteries in medical technologies and electric vehicles.

UNISON found migrant workers with work visas tied to their employer had no choice but to work in electronics and other sectors producing high-demand goods, operating at full capacity, while Malaysian citizens were legally obliged to stay at home and abide by lockdown rules.

While these reports of abuse and exploitation are shocking, labour rights expert Ben Vanpepperstrate told another UNISON webinar that “more deeply problematic” is that these are not isolated incidences. Instead they are “part of a way of doing business in the world economy in the 21st Century”.

According to International Labour Organisation (ILO) figures for 2016, 16 million people were in forced labour in the private sector globally.

That year, research by the International Trade Union Confederation (ITUC) also revealed that the global supply chains of 50 companies with a combined revenue of $3.4 trillion, and “the power to reduce inequality”, directly employed only six per cent of their workforce. Companies, including Samsung and Nestlé, relied on a “hidden” 116 million people accounting for 94% of the workforce.

The ITUC’s 2020 annual Global Rights Index report shows that violations of workers’ rights by governments and employers, including limiting collective bargaining, disrupting the right to strike and excluding workers from unions, is at a seven-year high.

The 10 worst countries for working people in 2020 now include Bangladesh and India. Both are becoming manufacturing hubs for medical gloves and other healthcare equipment, according to the IndustriALL global union federation.

ITUC general secretary Sharan Burrow said these threats to workers, economies and democracy “were endemic in workplaces and countries before the COVID-19 pandemic”.

Now, she added, some countries are advancing their anti-workers’ rights agenda under cover of measures to tackle the pandemic.

Human rights due diligence

Campaigns for national and regional mandatory “human rights due diligence” regulation are gaining momentum and making progress, according to UNISON assistant international officer Gemma Freedman.

France introduced legislation in 2017 and the EU will do so later this year.

In the UK, EU public procurement directives led to the Social Value Act 2012. This allows public authorities to consider wider environmental and social impacts, including labour conditions, rather than lowest cost only when awarding contracts.

However, there is a question mark over what will happen to procurement law now the UK has left the EU. The Good Law Project, which is legally challenging the way the government has fast-tracked contracts during the pandemic, says we should be very worried about its recently-published Green Paper on public procurement.

The UK also has the Modern Slavery Act 2015, but Freedman points out that this is a reporting tool and not binding.

The CORE coalition on corporate accountability, which includes the UNISON public services union, the TUC and War on Want (see pages 13-15), is calling for an effective law to require companies and investors to take action to prevent human rights abuses and worker exploitation — and environmental harm — in their global supply chains.

There are currently no UK laws that specifically require companies to do this.

Purchasing Power: Putting Workers’ Rights at the Heart of Public Procurement

In response to this dire situation, UNISON has launched a new four-year project which aims to develop a “social partnership sustainable public procurement model” focusing on workers’ rights. Purchasing Power: Putting Workers’ Rights at the Heart of Public Procurement will focus on three key areas.

It aims to change purchasing practices, including the monitoring of contracts once they’ve been awarded. It wants to make sure employers recognise workers’ efforts — under austerity, members have been asked to “do more with less” — and it is important staff have the time they need to carry out work in this area.

Thirdly, the union aims to use the strong buying power of the public sector to “leverage” the industry and individual factories to allow supply chain workers to claim their right to “decent work” under the ILO definition.

“Our main emphasis is on the right for workers to form and join trade unions of their own choosing, for those unions to be recognised by the employer and to collectively bargain in good faith,”UNISON assistant international officer Gemma Freedman told Labour Research.

And she said it is the tenet of “decent work” that “enables all other exploitative practices to be tackled through mature industrial relations”.

Freedman added: “This is also the area that the corporate responsibility industry has failed so badly to promote, instead cherry-picking areas and methods that ultimately don’t give sustainable agency to workers.”

The new research will underpin a tripartite training programme, starting with a small number of local authorities at regional levels, and including local councillors, before moving to the NHS and education.

It will work in partnership with organisations including Electronics Watch, IndustriALL — representing manufacturing, mining and chemical workers — and the IUF global federation representing foodworkers. It will focus on workwear including PPE, electronics and food.

And it will bring together employers and union reps to trial and test different ways of purchasing, as well as attempting to respond to anti-union employers exploiting workers. Inserting relevant contract clauses and gaining supply chain transparency is a first step buyers will be encouraged to take.

Freedman said: “Corporate social responsibility has failed. This is a pilot to test different ways of working. We expect to fail sometimes, but we will learn lessons from failures and build on any successes.”

In the spring, the union will also launch lunchtime branch resources to start to build up knowledge among a wider group of reps who want to make a difference.

Global framework agreements

The global IndustriALL union federation has negotiated global framework agreements (GFAs) with several multinational companies.

These “put in place the very best standards of union rights, health, safety and environmental practices, and quality of work principles across a firm’s global operations, regardless of whether those standards exist in an individual country”.

IndustriALL ICT, electrical and electronics director Kan Matsuzaki explains that most China, US and Korean-based electronics companies are part of the Responsible Business Alliance (RBA). It has a code of conduct which says factories will conform to the national law where they are based.

But Malaysian law, for example, does not respect the right to freedom of association. Arthy Hartwell, head of international at the doctors’ BMA union, says suppliers should be complying with international standards, not just national laws.

The GFAs aim to increase the power of the union at national, regional and global level to tackle issues including precarious and migrant work and implement and monitor International Labour Organisation (ILO) core labour standards.

Government needs to clean up its supply chains

Meanwhile, Bhutta says both the NHS and UK government have a responsibility to do more to stamp out abuses in their supply chains. “Codes of conduct are meaningless — they have not been shown to document the truth,” he told Labour Research.

“All suppliers have signed up to assurance systems, but evidently some are supplying medical gloves and other PPE made with slave labour.”

He said there is a lack of transparency, “with audits falsified and workers coached on what to say to auditors, and nothing changes”.

And he asked: “Why don’t we know where and how gloves and other PPE supplied to the NHS is being made?

“Many leading garment companies now have open access databases showing where everything is made. Medical companies should be required to do the same.

“There needs to be an open and honest conversation about how to make improvements. It’s not just a tick box exercise — it’s much more complex.

“We need cultural change, with worker empowerment and representation, for example, through unions.”