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4. Does Not Adequately Account for Vulnerable People

  • What this means 
  • Why investors should care
  • What to look for 
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A social certification scheme needs to address the potential for abuse in instances when workers are hired by labor contractors or do not have a formal employment relationship—including “family labor” whereby women or children do work and only men are paid—or when indigenous peoples are not given the opportunity to provide free, prior, and informed consent. The standard should require documentation of employment relationships, cover seasonal and contract workers and recruitment processes, include commercial indicators that predictably lead to forced labor (such as sourcing below the production cost[1]), and mandate that employers cover the full cost of recruiting and supply proof of payment.[2]
 
Migrant workers, day laborers, seasonal employees, workers hired through labor intermediaries, factory workers subject to production quotas or piece rate payments, and non-employees without written contracts are among the most vulnerable workers in supply chains. They are typically marginalized due to their migration or worker status and lack of financial security. In some cases, these workers travel long distances from their homes and live in employer-provided housing, leaving them isolated, without resources, and dependent on the employer or labor contractor. In some industries, it is common for workers to bring their children, increasing the risk of child exploitation as these children miss school to help their parents instead. The precarity these workers face means they may be more easily intimidated, prone to accept dangerous working conditions, and more likely to experience confiscation of identity documents, debt bondage, wage theft, or forced labor.
 
A robust certification scheme should expect that certified entities know and report on the percentage of vulnerable people in their workforce and their operations at large, and institute procedures and safeguards to enable auditors to speak directly with these workers and communities in a trusted space. This may mean having in place procedures to hold the interview off site, recognizing that it could be more challenging to do so for a plantation or mine worksite than for a factory. Schemes should also emphasize that certified entities use an intersectional lens when identifying the most vulnerable people within the entities’ operations— in other words, be alert to the multiple identities that give rise to compounded forms of harm.
[1] Genevieve LeBaron et al., Forced Labour Evidence Brief: Social Auditing and Ethical Certification, (Re:Structure Lab, July 2022), 23-25,  https://static1.squarespace.com/static/6055c0601c885456ba8c962a/t/62d746146f5dc5205a17621c/1658275349325/ReStructureLab_SocialAuditingandEthicalCertification_July2022.pdf​.
[2] Declan Croucher, “Despite ‘No Fees to Workers’ Policies, Workers Are Still Paying.” Verité, August 18, 2023,  https://verite.org/despite-no-fees-to-workers-policies-workers-are-still-paying/.
Certification schemes that do not account for the most vulnerable workers cannot effectively reduce the presence of forced labor and can leave companies exposed to legal, financial, and reputational risks.
 
The risk of forced labor increases with subcontracting, a pervasive practice across industries.[1]  Subcontracting often takes place under the table and cannot be detected through usual audits, even when audits are conducted on site. Garment industry workers may do embroidery or other piecework at home or at an uncertified subcontracting facility. In construction, day laborers may be hired off site and on terms agreed to only verbally. In agriculture, a labor contractor or “crew boss” may recruit, hire, transport, and pay workers directly, putatively outside of the purview of the farm owner.
 
A 2023 investigation by Repórter Brasil found that 17 workers, including a 15-year-old girl and two boys ages 16 and 17, were rescued from modern slavery on coffee farms in the Minas Gerais state of Brazil, one of Starbucks’ largest suppliers. The farms held the Starbuck’s C.A.F.E. (Coffee and Farmer Equity) Practices and Rainforest Alliance certifications.[2] The rescued workers had come far from home to perform seasonal coffee harvesting and reported to a middleman who illegally recruited them and then withheld their wages among other abuses.[3] In January 2024, the National Consumers League brought a lawsuit in the District of Columbia Circuit Court accusing Starbucks of misleading consumers with claims of "100% ethical" coffee and tea sourcing, citing weaknesses of the certifications that Starbucks relies upon in protecting migrant laborers.[4]
 
Even when standards do account for vulnerable workers, a lack of specificity around how they should be implemented can result in a failure to mitigate risk and ensure that marginalized people are protected. The Bonsucro Smallholder Production Standard introduced in 2018 specifically accounted for vulnerable farmworkers in one of its core indicators required of participating sugar processors at the time:
Special care shall be taken on the treatment of vulnerable groups subject to discrimination such as female workers, migrant workers or contracted workers, underrepresented ethnic or social groups, union representatives, union members, or non-unionized workers (Indicator 2.1.3).[5]
That the standard focus on farmworkers was positive; many standards only focus on the farmer and not the farmworker. Nonetheless, a study on the implementation of the standard in India commissioned by Bonsucro found that some Bonsucro certified mills relied on contingent workers, including migrants[6] and did not commonly carry out formal identification checks or provide written contracts and pay slips that can provide essential protection for workers.[7] In 2024, Bonsucro revised its Smallholder Production Standard to require all workers on the farm to have written contracts or a national working card.
 
→ Demonstrates: Reputational risk, legal risk
[1] Genevieve LeBaron et al., Forced Labour Evidence Brief: Commercial Contracts and Sourcing, (Re:Structure Lab, 2021),   https://static1.squarespace.com/static/6055c0601c885456ba8c962a/t/61f9d3eaf800aa5cc72766cd/1643762668092/ReStructureLab_CommercialContracts_July2021.pdf.
[2] Repórter Brasil, Behind Starbucks Coffee, (October 2023), 4, https://reporterbrasil.org.br/wp-content/uploads/2023/11/monitor_starbucks_coffee_slave_labor_ENG.pdf.
[3] Ibid, 11-13. Starbucks and Rainforest Alliance responses to the reports are available on the Repórter Brasil website:  https://reporterbrasil.org.br/2023/11/integra-dos-posicionamentos-de-starbucks-rainforest-alliance-fazenda-pedreira-cooxupe-e-fazenda-cedro-chapadao/.
[4] National Consumers League v. Starbucks Corporation, Superior Court of the District of Columbia, case no. 2024-CAB-000196, (2024), https://www.courthousenews.com/wp-content/uploads/2024/01/starbucks-labor-rights-violations-suit.pdf.
[5] Ana Perez Adroher et al., The Impact of Bonsucro on Human Rights in the Sugarcane Sector: A Focus on India, (Columbia University School of International and Public Affairs, 2019), 61,  https://www.sipa.columbia.edu/sites/default/files/migrated/downloads/Bonsucro%2520Report_FINAL%2520DEC%252017%25202019.pdf.
[6] Ibid, 61.
[7] Ibid, 7.
Investors can ask how the scheme operationalizes approaches to vulnerable groups and whether and how it verifies actual steps the member took to provide protections.
➔    GoodWeave International Generic Standard requires compliance at different levels of production: exporting, subcontracting, and home-based workers. To ensure the absence of child labor for home-based workers, the certifying body ensures workers understand the parameters for how children can contribute to their work. This includes protections for the child’s participation in school, physical and mental well-being, and parental supervision while the work is performed.[1]
While not a certification scheme, the Fair Food Program, is a flagship example of worker-driven social responsibility:
➔    The Fair Food Program Code of Conduct requires that participating farms directly hire workers as employees and that workers complete registration and receive time cards before beginning work in the fields. In relation to migrant workers, the Program specifies the Mexican National Employment Service (SNE) as the sole recruitment channel for guestworkers on H-2A visas to the United States and verifies compliance with U.S. law on guestworker working conditions and pay.[2]
[1] Goodweave, Goodweave International Generic Standard, (last revised May, 1, 2021), https://goodweave.org/wp-content/uploads/2020/07/GoodWeave-International-Generic-Standard.pdf.
[2] Fair Food Standards Council, Fair Food Program State of the Program Report, (2021), 44, https://fairfoodprogram.org/results/.
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