Labor rights progress under threat across Asia
Trump, China and India pose risk to UN-led protections for workers
It has been six years since the United Nations published its first set of corporate governance standards aimed at curbing human rights abuses in international supply chains. On Sept. 21, the U.N. Global Compact Leaders Summit in New York, bringing together leaders from government, business and civil society, will assess what progress has been made. The goal is to protect the most vulnerable people working in global supply chains, whether they be Indian children forced to work in cotton and brick factories, sugar-cane cutters in Latin America or crews recruited into the Thai fishing industry.
The standards, known as the U.N. Guiding Principles, created shared rules to which governments and corporations are supposed to adhere. They addressed a core issue that had been swept under the carpet for decades, namely that human rights abuses applied as much to trade as to politics. Those employed in the process of bringing raw materials from fields and mines into our households should be fairly treated and those who profited from treating them unfairly should be held responsible.
According to the U.N., there are more than 20 million workers around the world suffering routine human rights violations, most in mainstream sectors such as agriculture, manufacturing and construction. Their work generates $150 billion in revenue a year.
The Guiding Principles have no legislative teeth and progress remains painfully slow because of resistance from multinational corporations and governments reluctant to change economic models that rely on labor exploitation.
But now, just as the principles are beginning to bed in, a confluence of forces threatens to reverse even the small advances that have been made. They are the pro-business administration of U.S. President Donald Trump and the growing influence of India, China and other big economies. One of the aims of the American-led Trans-Pacific Partnership was to lift trading standards and introduce measures against human rights violations. During negotiations, for example, Malaysia came under the spotlight because it allowed sex slavery, human trafficking and unacceptable labor practices, particularly in the electronics sector. Trump has now withdrawn from the TPP, thus dimming the scrutiny of such practices. He is also suspending the Obama-era Dodd-Frank financial reform legislation, which, among other measures, requires companies to report on supply chain ethics, particularly regarding African minerals, revenue from which is used to fund conflict. The European Union complemented Dodd-Frank in 2012 with its European Market Infrastructure Regulation.
Campaigners maintain that the Dodd-Frank reporting requirements had led to substantial reform in the violence-ridden Democratic Republic of Congo. Some 80% of mines once run by militias and selling tin, tantalum and tungsten to Western markets were now legitimate operations. "A small provision in U.S. law has had an outsized positive effect in the Congo," said Sasha Levnev of the Enough Project campaign group. "Its suspension undermines stability and democracy in Congo."
At the same time, the global reach of expanding new economies -- whose governments operate to different standards -- is diminishing the influence that Western democracies have been able to exert. Cambodia, for example, is more reliant on Chinese aid and its relationship with Beijing than with the Western democracies which shepherded it out of its civil war a generation ago. Chinese money accounts for 70% of all industrial investment, for which Beijing gets political payback.
The government now supports China's position on the South China Sea territorial dispute. It has canceled joint military exercises with the U.S. and held them with China instead. Earlier this year, it expelled a small U.S. Navy unit that had been involved in school and health projects.
Human Rights Watch Asia says Cambodia's labor laws look good on paper, but their enforcement is abysmal. The pro-Beijing government shows little interest in implementing them and there are numerous cases of child labor, union intimidation, sexual harassment and other abuses, particularly in the garment and textile industry that comprises two thirds of Cambodia's exports. With wage levels rising in China itself, Chinese companies are setting up more factories in poorer developing countries, often accompanied by aid and infrastructure building, which are under less pressure to conform with the U.N. Guiding Principles. The International Labor Organization, now part of the U.N., was set up back in 1919 after World War I with a mission statement that lasting peace could only be accomplished if based on social justice. There is ample evidence since then of the link between an exploited underclass and civil unrest.
It took almost a century to bring in the U.N. Guiding Principles. In 2014, the ILO toughened its own outdated Protocol of Forced Labor Convention aiming to make human rights vigilance a standard business practice. But only 11 out of the 186 member states have so far ratified it.
Western governments have introduced complementary legislation. Britain now has a Modern Slavery Act, requiring companies to keep watch for violations. Australia is introducing a similar law. France has a Duty of Care law; the Netherlands a Child Labor Due Diligence Law; Switzerland is preparing a Responsible Business Initiative, and California has a Transparency in Supply Chains law.
These laws are not about penalties and fines. The deterrent lies in making clear to companies that they will be shamed publicly if they fail to comply, thus risking their reputations and the trust of consumers and investors. California attaches no penalty for non-compliance and Britain would only level fines as a last resort. So far, it hasn't.
But when it comes to labor rights, Asia's two economic giants, India and China, operate at different levels -- and neither underpins the Guiding Principles. "China is repressive on workers' rights," said Peter McAllister of the Ethical Trading Initiative. "But, they are allowed to change jobs. They are voting with their feet and labor economics are driving change. In India, we don't see much improvement because of the embedded acceptance of poverty among the lower caste."
A telling case of the limited impact of the Guiding Principles on a global industry comes from the tea plantations in northeast India, an industry worth an annual $3 billion.
In 2007, the U.N. children's agency UNICEF found that more than a million plantation workers and their families suffered some of India's highest levels of hunger, disease, illiteracy and general exploitation. They lived and worked on plantations through a cradle-to-grave system inherited from British colonialism and were now one of India's most backward communities. Despite further revelations and investigations, that remains the case today.
In 2014, Columbia University published a paper listing illegal working practices on the plantations, pointing a finger of blame at the Tata Group, which has a majority shareholding in India's big tea producer Amalgamated Plantations Private Ltd. The Tata Group rejected the allegations, but in 2016, an internal World Bank investigation broadly backed the findings. It funded a program of reform and promised change.
But in July, a report from four campaigning groups in northeast India found that virtually nothing had been done. "Living conditions continue to remain oppressive and unsafe for tea workers, with crumbling housing, squalid sanitation, the absence of toilets and unclean drinking water," said Stephen Ekka, director of one of the groups, Pajhra, noting that researchers had found no evidence of workers being given safety training or protection against pesticides.
In a statement, the World Bank responded by saying there were "long-standing challenges" within the Indian tea industry and that "poverty is deeply entrenched."
Despite a decade of revelations, the Guiding Principles and accompanying laws for India's tea industry are being largely ignored.
With the declining influence of the advanced economies of North America, Europe and Japan, there is a risk that even the slow, incremental achievements of the Guiding Principles could be reversed. From the Indian tea estates to the Cambodian garment factories and far beyond, governments and corporations will have less incentive to adhere to fair labor practices, and human rights abuses against tens of millions will be set to continue.
Humphrey Hawksley is a former BBC Asia correspondent. His next book, "Asian Waters," will be published in April 2018.