ICT Companies Need to Take Action on Forced Labor in Supply Chains: Report

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Many information and communications technology (ICT) companies say they are committed to addressing forced labor in their supply chains and understand the risk forced labor poses. However, a new study found many companies in the ICT industry are not following through on their promises and are not providing transparency into how exactly they tackle the issue of forced labor in the supply chain.

KnowTheChain, an organization that benchmarks corporate practices, recently ranked 20 ICT companies, including Apple, HP, Microsoft and Samsung, on how they were trying to eradicate forced labor in their global supply chains and how transparent the companies were on their efforts to do so. The majority of these firms received scores under 50 (out of 100 points), showing how the ICT sector needs to do more to address forced labor in the supply chain, KnowTheChain’s ICT Benchmark Findings Report stated.

High- and Low-Scoring Companies

HP received the highest score out of the 20 ICT companies surveyed, gaining 72 points overall. Apple was second, with 62 points, and Intel received 59 points. Cisco and Microsoft ranked No. 4 and No. 5 on the list.

Keyence Corp., a company that manufactures automation sensors and other factory technology, received a score of zero, according to the report. BOE Technology Group and Canon Inc. also received low scores for their efforts with supply chain forced labor.

Areas of Improvement

KnowTheChain scored each company on a set of indicators grouped into seven themes — from a company’s commitment to addressing forced labor to the company’s awareness on purchasing practices.

Companies scored the lowest in the “worker voice” theme in the assessment, which measured how the company communicates with workers in its supply chain. The average company score in this section was 16 out of 100 points. The low scores were given because even though most companies say they have certain practices in place to support communication with workers — such as a “grievance mechanism” or complaint process for workers to voice concerns — only four out of the 20 companies disclose how they ensure that mechanism is proactively communicated to workers in the supply chain.

Companies also scored low when it came to addressing and preventing the exploitation of supply chain workers by recruitment agencies. The average company score in this section was 19 out of 100 points, with only four of the 20 companies in the survey demonstrating awareness of the risk that using recruitment agencies to find workers can lead to forced labor, according to the report.

Additional findings of the report include:

  • Six companies in the survey do not have a publicly available supply chain code of conduct requiring suppliers to meet certain standards that prohibit forced labor.
  • While ICT companies are tracing suppliers farther down in the supply chain to meet Dodd-Frank conflict mineral regulations, few disclose publicly how exactly they trace their supply chains. Three out of the 20 ICT companies in the report have provided examples of how they conduct assessments of forced labor risks in their supply chains.
  • Only three out of the 20 companies in the report have conducted forced labor risk assessments focused on specific commodities, regions or vulnerable groups of workers.
  • Sixty percent of companies said they require suppliers to ensure their own suppliers meet code of conducts that match the company’s standards. However, only one of the companies surveyed disclosed the specific process on how this is done.
  • Thirty percent of companies said they conduct unannounced audits of its supply chains. However, none of the ICT companies looked at for the report disclosed what percentage of its supply audits are unannounced.

KnowTheChain also provided recommendations in its report for how ICT companies can better address forced labor and gain visibility into supply chain labor practices.

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