The business of modern slavery: what connects SDG 8.7 with its overarching SDG8?

In Episode 7 of Series 5, Todd is joined by John Gathergood, Professor of Economics at the University of Nottingham, and Genevieve LeBaron, Professor of Politics at the University of Sheffield. John’s research focuses on understanding consumer behaviour in financial markets, and more recently the impact of the COVID19 pandemic on households. Genevieve’s work is at the forefront of the emerging evidence base on forced labour, human trafficking, and slavery in the global economy.

 

In this episode, the discussion focusses on the interaction between the broader goals of SDG 8 and target SDG 8.7, which focuses on ending modern slavery by 2030.

0.00– 05.06

Todd begins the discussion by asking John to give an overview on the drivers of economic growth and the benefits of trade. 

• Growth is seen as the result of a combination of technological evolution and the development of skills leading to increasingly efficient production processes
• However, the benefits of growth are not evenly distributed
• This leads to the creation of winners (the owners of capital and the organisers of production) and losers (those not in control of production processes)

In John’s view the current COVID pandemic has brought this inequality more sharply into focus, along with the need to ensure that economic growth does not come at the expense of exploitation of certain labour groups.

05.00 – 07.33

Todd asks John about the role of trade and John say it is fundamental in generating growth. He points out that:

• One of the foundations of the capitalist system is trade and specialisation. Trade facilitates specialisation and growth
• There have been waves of globalisation throughout history (often associated with pandemics)
• The last 30 years have seen the largest international movement of capital affecting the location of production and the development of increasingly complex supply chains, which has been good for growth

However, he adds that the fragmentation of production has exacerbated inequality, made complex supply chains very difficult to monitor, and susceptible to labour exploitation.

07.33 – 10.36

In Genevieve’s view, discussions on growth often overlook the business models at the centre of the mass production, fast turnover retail sector producing cheap disposable goods. 

• Her research suggests the business models are “hard wired” to produce inequality and labour exploitation.
• Problems in supply chains are longstanding. Throughout history, capitalism has relied heavily on the exploitation of vulnerable groups for forced labour and slavery.

10.36 – 16.33

Genevieve’s research, covering retail supply chains in China, tea and cocoa supply chains in India and Ghana, and garment supply chains in Southern India, has yielded several insights.

• Labour exploitation is not unusual.
• Common patterns emerge 
• 1. Why certain businesses have an endemic demand for forced labour
  2. How and why supply chains are set up to facilitate labour exploitation, in terms of how businesses make money from forced labour, and the business models they use
  3. There are clear and discernable patterns regarding both the supply and demand drivers of forced labour in global supply chains.

She argues that:

• Although the geography of exploitation and the people involved has changed over time, some form of forced labour is a constant factor in the capitalist model of production throughout history
• Solutions to issues of labour exploitation need to go beyond looking just at supply chains and confront the structures which have given rise to these problems

John adds that a key factor in supply chains is lack of accountability (anonymity) in the upper levels of supply chains, which is useful for efficient production, but can lead to labour exploitation lower down the chain.

16.33 – 19.50

The discussion moves on to the persistence of unfree labour globally.The current organisation of production encourages companies in countries with strong institutions often source their production from countries with weak institutions where the exploitation of the work force is easier.

The prevalence of unfree labour in those countries may be low but the effective prevalence of induced slavery is high.

 Lack of accountability within supply chains is a major problem.

John argues that forced labour should be treated as an “externality” and the cost should be borne by both producers and consumers, or governments should intervene.  However, given the scale and complexity of supply chains enforcing compliance would be very difficult.

19.50 – 25.25

 

Todd asks Genevieve to summarise the effectiveness of constraints and regulation in the operation of supply chains. 

Three main mechanisms are reviewed.

1. Corporate Social Responsibility Initiatives
2. Public Regulation, including labour laws, sub-contracting, and regulation of businesses
3. International agreements and conventions

She identifies an increasing reliance on voluntary industry initiatives due in part to the failure of governments to produce effective regulation of labour standards in global supply chains.

Her new book, Combatting Modern Slavery, shows that corporate social responsibility initiatives have not been effective. She cites a number of factors:

• Wealth and economic power are concentrated at the top of the chain with increasingly tighter profit margins further down to allow suppliers to cover their costs
• Lack of regulation of supply chains by governments facilitates power imbalances in favour of the businesses at the top of the supply chain, and between owners and workers
• Governments have been “the architects’ of globalisation and helped to set up supply chains in a way that has facilitated these imbalances and the conditions which lead to labour exploitation

25.25 – 30.50

The example of the fast fashion industry and the recent reports of exploitation of the local labour force in Leicester, United Kingdom, is discussed.

• The very low cost of garments for sale should be a warning to consumers that labour is being unfairly exploited
• Garments are being sourced at prices below the cost of production
• Labour exploitation is a sector wide problem and is the result of the business model. 
• The situation in Leicester is well known and has been extensively reported by  Sarah Connor of the Financial Times (see recent story)
• Although companies have made commitments to address the situation very little has happened to redress labour exploitation, and to alter the business model
• There is a need for new business models which don’t rely on labour exploitation

30.50 – 36.46In the absence of effective measures to redress the situation Todd asks whether there are economic incentives which could be brought to bear.

Raising consumer awareness is discussed. Genevieve highlights some issues.

• Finding products which do not have some connection to forced labour, given the limited effectiveness and credibility of ethical labelling systems. 
• Evidence exists of labour exploitation in ethical and fair-trade products 
• A crisis of credibility around ethical brands

Instead, she argues for regulation which controls the activities of businesses at the head of the supply chain, a redistribution of profits down through the supply chain, businesses taking greater responsibility for what goes on in the supply chain and a greater role for the employed labour force in generating solutions.

John argues for an increased criminal corporate liability placed upon people and businesses. 

36.46 - end

The discussion ends with John reflecting on the way forward. He believes consumer led approaches are unlikely to work and neither is it likely that companies reliant on manual labour can, or will, act to change the system. Regulation is, therefore, the main option available.

Additional Links

exploitation and sweatshops are at the core of fast fashion: it’s time to dismantle the system

 

Inside the sweatshops accused of modern slavery

UK: Coronavirus exposes Leicester’s sweatshops and government hypocrisy

Genevieve LeBaron, Jessica Pliley & David W. Blight (eds)(2021) Fighting Modern Slavery and Human Trafficking: History and Contemporary Policy. Cambridge University Press [in press].

Genevieve LeBaron (2020) Combatting Modern Slavery: Why Labour Governance is Failing and What We Can Do About It. Polity.

Robert Caruana, Andrew Crane, Stefan Gold & Genevieve LeBaron (2020) ‘Modern Slavery in Business: The Sad and Sorry State of a Non-Field.’ Business & Society.

Andrew Crane, Vivek Soundararajan, Michael Bloomfield, Laura Spence & Genevieve LeBaron (2019) Decent Work and Economic Growth in the South Indian Garment Industry. 

Genevieve LeBaron (2018) The Global Business of Forced Labour: Report of Findings. 

Nicola Phillips, Genevieve LeBaron & Sara Wallin (2018) Mapping and Measuring the Effectiveness of Labour-Related Disclosure Requirements for Global Supply Chains. International Labour Organization Working Paper No 32.

Genevieve LeBaron, Neil Howard, Cameron Thibos & Penelope Kyritsis (2018) Confronting Root Causes: Forced Labour in Global Supply Chains.