World's largest ICT companies failing to tackle human rights abuses in supply chains
In a new analysis of how the world's 49 largest ICT businesses are protecting against human rights abuses in their supply chains, the average score is just 30%.
Compiled by NGO Know the Chain, the benchmark assesses businesses on a range of metrics relating to commitments; governance; traceability and risk assessments; purchasing practices; recruitment practices; monitoring; ensuring worker voice and remediation when breaches occur.
Performance in the fields of worker voice and recruitment practices was found to be particularly weak across the board. On the former, no company assessed could prove that workers across the supply chain had the right to collectively organise and bargain for better conditions. On the latter, only 27% of firms assessed could prove that, when suppliers charge new starters a recruitment fee, they are able to claim it back.
Areas of stronger performance were commitments and governance, traceability and risk assessment and remediation. Nonetheless, this was not sufficient to pull the average score above 30%. Collectively, the businesses analysed have a combined market capitalisation of more than $5trn (£3.9trn).
Businesses which notably scored far higher than the 30% average include Hewlett Packard Enterprise (HPE) with 70%; HP Inc with 69%; Samsung, also with 69%; Intel and Apple, both with 68%; Dell with 63% and Microsoft with 59%.
Big names scoring considerably less than 30% include Canon (14%), Panasonic (13%) and Microchip (9%).
In geographical terms, the worst average performance was recorded in Asia (18%), while the best (40%) was recorded in North America. Know The Chain also noted discrepancies relating to business size, with businesses with a larger market capitalisation generally scoring higher than smaller firms.
“The global electronics sector is comprised of powerful corporations… this brings with it a duty to prevent and address forced labour in the ICT sector’s supply chains, particularly when crises such as Covid-19 exacerbate factors that render workers vulnerable to forced labour,” the report states.
In a bid to spur improvement in corporate ambition and action, the benchmark contains a number of recommendations for businesses, best-practice case studies and calls to actions for investors. Businesses are urged to, among other things, undertake unannounced visits and off-site worker interviews; publicly publish supplier lists with information beyond name and address; strengthen the labour standards requirements in contracts and engage with unions.
ICT supply chains are widely regarded as a high-risk area for human rights abuses, given the industry’s reliance on metal and mineral mining and on the chemicals sector.
Moreover, the sector’s supply chains are complex; one smartphone will contain hundreds of components, each with their own respective supply chain. This makes transparency and the enforcement of standards a challenge.
In a previous paper, Know the Chain highlighted the fact that one-third of migrant workers in Malaysia’s electronics sector are in situations of forced labour.
The end-of-life stage of the ICT value chain is also rife with ethical issues. Of the 50 million metric tonnes of e-waste generated in 2018, the vast majority is unaccounted for, meaning it is likely polluting land or water. In areas where great quantities of this waste end up on land, forced labour gangs fronting as recycling or reuse businesses are rife.
According to the Corporate Human Rights Benchmark (CHRB), less than half of the world’s biggest tech manufacturers are able to prove that their value chains operate in line with the UN's Guiding Principles on Human Rights.