Monitoring Forced Labour and Slavery in Global Supply Chains: The Case of the California Act on Transparency in Supply Chains

Abstract

Supply chains have more and more become global supply chains, due to which it becomes increasingly more difficult for states to monitor whether the production process of goods entering the territory has been free of labour rights abuses. States are less able to hold corporate entities accountable that are knowingly or unknowingly benefiting from labour rights abuses. Transparency measures have been suggested as a way to close this accountability gap and circumvent traditional issues of enforcement when production and consumption of goods takes place in different jurisdictions. This paper discusses whether transparency measures live up to these expectations by assessing the California Transparency in Supply Chains Act (California Act). We analyse whether the Act does indeed contribute to greater accountability by filling the existing information gap between companies and consumers. The workings of the Act, as well as its impact on primary stakeholders will be determined. The paper discusses action taken by companies, consumers and non‐governmental organizations by looking at the degree to which the new California Act generated differences in behaviour and practices of these affected parties. Based on this information the question is answered which possibilities and limitations are connected to the use of transparency measures in combatting the abuse of labour rights in the global supply chain. It is discussed which lessons can be learned from the California Act and which policy implications this could have for future transparency measures.

International supply chains: compliance and engagement with the Modern Slavery Act

“…The reporting requirements in the CTSCA are limited, however, and do not require businesses to regularly update the public on their efforts to address modern slavery. The transparency achieved is thus limited (Greer & Purvis 2016, Koekkoek et al 2017. The United Kingdom's Modern Slavery Act (MSA) addresses the transparency shortcoming by requiring businesses with an annual global turnover of £36 million or more and operations in the United Kingdom to release a statement on how they are trying to identify, prevent, and address modern slavery within their supply chain (Gadd & Broad 2018).…”

“…This notion of transparency legislation surrounding modern slavery in supply chains rests on the argument that non-compliance may lead to increased scrutiny from the media and other civil society organisations. Public scrutiny and the finding of being non-compliant in letter or spirit and thus being labelled as a laggard in the move the address modern slavery can be severely damaging to the business's reputation and lead to revenue loss (Koekkoek et al 2017). There is, however, much concern as to whether this happens in reality, and at a broader level whether corporate accountability legislative tools (such as Section 54) manage to meaningfully improve labour standards in business operations rather than acting to protect industry's commercial interests (LeBaron & Ruhmkorf 2017).…”

Business and Human Trafficking: A Social Connection and Political Responsibility Model

“…Are some pathways perceived to be more legitimate by various stakeholders, for example, than others? Some research has addressed corporate disclosures related to human trafficking and global slavery (Koekkoek, Marx, & Wouters, 2017). However, there has been much less research done about stakeholder perceptions of business disclosures or of substantive actions taken to address business responses to these issues.…”

Transnational sustainability laws and the regulation of global value chains: comparison and a framework for analysis

“…61 In both cases, current analysis generally highlights the shortcomings of transnational sustainability laws. Thus, existing studies discuss severe deficiencies in transparency-based regulatory techniques, 62 poor means of enforcement 63 and the limited impact of such laws either on corporate conduct or consumer behaviour. 64 In sum, the proliferation of transnational sustainability laws in the developed economies over the past decade has produced a cross-disciplinary body of scholarship that draws attention to the various ways national lawmakers try to regulate the responsible governance of value chains.…”