Global ICT hardware companies fail to address forced labor risks, new report finds
Tech sector is way behind the curve as stronger regulations in many jurisdictions increase scrutiny and insist vulnerable workers are protected
Despite the high risks inherent to this $110 billion industry, the information and communications technology (ICT) hardware sector has abjectly failed to address forced labour risks and impacts in its supply chain operations, according to a new report published today. KnowTheChain, a programme run by the Business & Human Rights Resource Centre, analysed and scored 60 of the world’s largest ICT companies’ efforts to address supply chain forced labour risks. It found most companies are not conducting even adequate due diligence or providing appropriate remedy for workers suffering from the worst form of human rights abuse. Concerningly, companies received a median score of just 14/100.
Yet four companies in the KnowTheChain ICT benchmark showed this better performance is possible. Hewlett Packard Enterprise, Intel, Cisco and Apple all scored above 50/100, demonstrating the implementation of policies, the prevention of abuse and how policies have improved outcomes for workers. Despite higher scores, the interconnected nature of ICT supply chains means no company is immune from supply chain forced labour risks. For instance, Apple’s suppliers include BOE Technology, which scored 0 in the benchmark.
The KnowTheChain ICT benchmark found a breach between companies’ policies and practice when it comes to ending forced labour. Although several companies have made human rights commitments, most failed to consider how their purchasing practices were exacerbating forced labour risks within their supply chains. This raises serious concerns about essential due diligence and companies’ readiness for emergent robust regulation and tougher ESG investment demands.
Key findings included:
- Only one in five (22%) of companies disclosed forced labour risks in their supply chains and just a third (32%) disclosed forced labour violations. This does not reflect the absence of risks and violations, but rather a failure to look for them: nearly half (45%) the companies assessed failed to disclose undertaking human rights risk assessments in their supply chains.
- Companies performed most poorly on the theme of purchasing practices, with an average score of 2/100 and a top score of 50/100.
- Despite clear links between the suppression of worker voice and forced labour risks, only two companies disclosed the percentage of supply chains covered by collective bargaining agreements and only one company reported working with a union, in collaboration with a supplier and a non-governmental organisation, to resolve a worker grievance.
- Only one in eight (12%) companies disclosed data on the effectiveness of grievance mechanisms, despite that 83% disclose the availability of a mechanism, indicating workers in the supply chains of the benchmarked companies do not have meaningful access to remedy.
Áine Clarke, Head of KnowTheChain and Investor Strategy, Business & Human Rights Resource Centre, said: “While ICT hardware profits are over £100 billion per year, efforts by these companies to protect their supply chain workers from forced labour remain dismal. With regulatory and ESG risks ballooning, companies must urgently ramp up efforts to tackle forced labour risks. They must now go beyond policy commitments and tick-box due diligence to demonstrate they know where their risks are and have taken effective action to address them by working with rightsholders – workers and their organisations.
“This is no longer just the right thing to do. New legislation sanctions and incentives regimes are being developed around the world, which will hold businesses accountable for human rights abuses in their supply chains. Companies which are unable to keep up with due diligence requirements will find themselves facing increasing legal, financial and reputational risks.
“The ICT sector has perhaps faced less scrutiny for its negative human rights impacts than other sectors over the years. But KnowTheChain’s research shows that its potential for abuse is far reaching, with actual material risks to business increasing as a result of newer legislation on forced labour and upcoming laws in the European Union. This benchmark is an essential resource for companies and investors seeking to better understand forced labour risks and impacts in the ICT sector. Detailed good practice examples and recommendations provide a roadmap for change - essential in a sector that is at the centre of the global economy.”
Note to editors:
- The Business & Human Rights Resource Centre is an international NGO that tracks the human rights impacts (positive and negative) of more than 10,000 companies across nearly 200 countries. We seek responses from companies when concerns are raised by civil society.
- KnowTheChain is a project from the Business & Human Rights Resource Centre which acts as a resource for companies and investors to address forced labour in global supply chains, helping them operate more transparently and responsibly.
- KnowTheChain’s ICT benchmark analysed 60 of the world’s largest ICT companies on their efforts to address forced labour risks in their supply chains. Companies were benchmarked on their disclosure and performance of responsible recruitment and purchasing practices, due diligence measures, including stakeholder engagement, access to remedy, worker voice and remedy outcomes for workers.
Media contact: Priyanka Mogul (London-based), Media Officer, Business & Human Rights Resource Centre, +44 (0) 7880 956239, [email protected]
Read the report
KnowTheChain assessed the 60 largest information and communications technology companies on their efforts to address forced labour in supply chains. Find out more about the benchmarked companies and our recommendations.