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Labour issues at origin: Who’s responsible?

From the July 2019 issue.

From forced and child labour to health and safety issues, coffee-buying countries and individual companies are having to play a greater role in prevention and mitigation.

According to the United Nations International Labour Organisation (ILO), nearly 25 million people are in forced labour worldwide, a number that doesn’t capture the additional 152 million youth in child labour. The ILO estimates that modern slavery in the private economy generates US$150 billion in illegal profit every year. Agriculture is one of the top sectors for incidence of child labour, forced labour, and other labour violations, including health and safety issues.

In the United States Department of Labor’s (USDOL) “2018 List of Goods Produced by Child Labor of Forced Labor” report, coffee ranks fourth behind gold, bricks, and sugarcane, with 17 countries reporting incidence of child labour, forced labour, or both.

In the coffee industry, labour violations can occur all along the value chain, but they are most likely to occur during harvest when labour demand and costs are highest. In addition, places with more vulnerable populations and weak or variable law enforcement are also more susceptible to labour issues, explains Andrew Sargent, Coffeelands Director at international humanitarian nonprofit Catholic Relief Services.

“In most cases, it’s not binary, as in there either is or isn’t forced labour,” adds Miguel Zamora, Core Markets Transformation Director at Rainforest Alliance. “So we try to identify those and other risk factors because when they are present, the potential for forced labour increases significantly.” Sargent and Zamora have worked together extensively on this topic and led the session ‘Labor Concerns at Origin’ at this year’s National Coffee Association (NCA) conference in Atlanta in the US.

Experts say that even though child labour and forced labour get more attention from the likes of government authorities, humanitarian agencies, and media outlets, wage, health, and safety issues are more common labour violations. Examples include under- or nonpayment of workers, absence of safety equipment or training, and substandard living conditions for migrant workers.

According to the ILO definition, forced labour is work or service that is extracted from a person under threat of penalty and for which the person has not offered voluntarily. Despite focusing on those two core elements, Sargent says it’s not so straightforward. The definition assesses three dimensions: recruitment, work and life, and the worker’s ability to leave (or not). To control workers and keep them through the end of the harvest, estate owners or labour brokers may confiscate identification or travel documents, force overtime, limit mobility, threaten violence, and withhold or delay wages.

While child labour conditions can overlap with forced labour, the ILO definition focuses on work that is harmful to a child’s mental and physical development, depriving them of their childhood, potential and dignity.

The USDOL’s 2018 report actually points to greater incidence of child labour at origin than forced labour in the coffee industry. This is due in part to a high number of migrant workers who have no childcare options during seasonal harvesting jobs in distant regions.

While forced and child labour have long been part of the agriculture sector overall and the coffee industry specifically, coffee has managed to operate somewhat under the radar due to the “characteristics of the workforce involved in coffee production and of the coffee supply chain”, says Kate Dunbar, Senior Business and Human Rights Analyst at Assent Compliance, a supply chain risk management company.

“The industry is heavily reliant on poor, vulnerable, and often migrant workers, who work in remote locations, have little leverage over their working conditions and pay, and may not have access to support systems. [Meanwhile], the coffee supply chain is nontransparent, making it hard to identify and address risks. Many of the countries where coffee is produced have weak legal protection for, and monitoring of, workers’ rights.”

Few large-scale studies have been carried out on labour issues in the coffee sector, according to Verité, a nonprofit that focuses on labour and human rights abuses in global supply chains, but the organisation’s own research and other independent reports have highlighted a number of violations in various countries over recent years.

Verité has identified indicators of forced labour in the Guatemalan coffee sector. Investigations by investigative media and research centre Danwatch and Finnish civil society organisation Finnwatch have uncovered indicators of forced labour in Brazil, Honduras, and Guatemala. A Univision/Weather Channel documentary also found child labour, degrading living conditions, and a lack of inspections in the Mexican coffee sector, and both Oxfam and the ILO have identified juvenile coffee harvesters in Kenya.

More recently, the Brazilian Ministry of Labour detected labour abuses on two farms in the Minas Gerais region last year, resulting in a rescue of 33 workers from “conditions analogous to slavery”.

Despite reports on Brazil, which has higher probability of labour issues just based on its size, experts agree that the leading coffee producer actually serves as a strong model for enforcing labour law. “There is stricter labour law in Brazil, as well as more resources to identify and disseminate information about labour issues,” Zamora tells Global Coffee Report. “So although the labour situation on Brazilian coffee farms might be better than in other countries [because of these factors], I think we will also see more reports about labour abuses from Brazil in the future.”

Among labour abuses, child and forced labour also have the most legislation currently, particularly on the buyer side. Within the past seven years, coffee-consuming countries around the world have been enacting “supply chain” and “modern slavery” legislation that regulates labour practices in companies’ supply chains – all the way back to the farms.

The US Trade Facilitation and Trade Enforcement Act of 2015, for example, prohibits all goods produced wholly or in part by any forced labour from being imported into the country. But similar to the lack of clarity around ILO definitions, “the devil is in the details,” says Zamora. “If you find information that can reasonably but not conclusively demonstrate that goods that were produced with forced labour are being brought into the US, an investigation process starts. ‘Reasonably but not conclusively’ is very subjective.”

Despite increasing regulation, the role of the private sector is not entirely clear, especially when labour issues at origin are assumed to be the responsibility of the particular countries.

“Our position is that the governments at origin are first and foremost responsible for enforcing labour law,” explains Quinn Kepes, Senior Program Director at Verité. “If coffee buyers can be confident that the governments at origin are doing their jobs regarding enforcement of labour laws, then they don’t have to invest so much in their own monitoring.”

But because of that weak or variable law enforcement that the experts cite, onus falls significantly on coffee importers and roasters. On top of increasing regulation, risk to brand reputation has motivated more companies to act.

“When it comes to respecting human rights in supply chains, companies recognise this is not simply a regulatory compliance issue,” Dunbar tells GCR. “At stake are their brand reputation, their ability to attract investment, and the stability of their supply chains. Consumers today have access to information about coffee companies that prioritise sustainability and human rights, and [they] expect companies they buy from to take responsibility for how their products were made.”

What’s more, exposed labour issues could have a negative impact on the entire coffee industry, the way they did on the cocoa industry in the early 2000s, notes Zamora. He doesn’t believe that labour issues within the coffee sector have fully hit consuming countries’ radars, “but if this blows up, the potential recourse could be significantly damaging to individual brands as well as coffee’s brand”.

This puts importers and roasters in the precarious situation of carrying full responsibility without clear next steps. “We don’t fully understand the problem, our role isn’t completely clear, there are priority issues, and the problem is at such a scale that one single company acting in isolation can’t solve the problem,” Sargent empathises. “[But then] if you say ‘I’m going to do something,’ everything falls on you, so there’s a disincentive to step forward.”

In the NCA session, he and Zamora introduced social compliance systems, a recommendation from the USDOL. “A social compliance system is a structure of integrated processes and practices that a company can implement in order to maximise compliance with its code of conduct,” Zamora explains. “These systems can help companies better understand their supply chains so they can monitor, prevent, or mitigate labour issues.” Steps include engaging with suppliers all along the chain, conducting extensive research, and mapping the risk.

Some governments and nonprofits in importing countries have resources for developing such systems, like the USDOL’s Comply Chain tool or Social Responsibility Alliance’s open-source Slavery and Trafficking Risk Template. In the works currently is a US$2 million project funded by the USDOL that Verité is leading with a robust coalition of industry stakeholders to create an open-source toolkit that can help companies identify and address labour risks across the supply chain, but especially at the producer level.

There are also organisations like Assent Compliance and Verité that can provide guidance in specific areas or even conduct full audits at origin. Those workplace audits can be very costly for a coffee company, but less so when done as a preventative measure rather than after a violation is detected. There are inherent limitations with an audit, though, if not done correctly, Kepes cautions. “Otherwise, it can lead to a very skewed picture of what’s actually going on.”

Estate owners can select which workers are interviewed, for example, or clear fields of child labourers when audits are preannounced, he says. Meanwhile, workers may not answer candidly when interviewed at the workplace, they may withhold information altogether for fear of retaliation, or they may not even know that they are victims of forced labour.

Other organisations working to help address labour issues at origin are certifying bodies, such as 4C, Fairtrade, Rainforest Alliance and UTZ (the two merged in 2018). Some coffee companies have their own certifications and standards too, such as Nespresso’s AAA Sustainable Quality Program and Starbucks’ CAFE Practices.

“Most of the certifications working in coffee include something around workers, and they all forbid forced and child labour,” Zamora tells GCR. “The problem is that by just forbidding it, you don’t solve issues like forced and child labour because they can be hidden relatively well.”

Kepes adds that certifications can give companies a false sense of security that their operations and supply chains are in complete compliance and, thus, clear of any issues.

That’s where a multifaceted, multi-stakeholder approach can have the biggest, most comprehensive impact. Relevant certifications, due diligence, and internal social compliance systems will together make individual companies stronger, while farm audits and support of related initiatives can reach beyond the single company.

Those far-reaching efforts are where Zamora sees the biggest opportunity in the coffee industry regarding labour issues – the collective action.

“Companies don’t buy coffee from only one country and many companies have similar interests [regarding labour issues], so this is an opportunity for collaboration,” he says. “Collective action can significantly reduce the cost and risk for an individual company. And with more minds working on this, we have better contacts and information, we are stronger and more efficient, and we can be more effective and impactful.”

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