Class-action efforts to tackle alleged labor abuses gain ground in California

By Chris Galford | Jan 21, 2016

Class-action lawsuits have been filed against businesses like Costco in an effort to shed light on products allegedly produced by human trafficking or slavery.   Stu pendousmat at English Wikipedia

SAN FRANCISCO – In California, class-action lawsuits have begun to spring up against supposed corporate negligence, aiming to shine light on human trafficking and slavery in supply chains. Their end goals: transparency and accountability.

Specifically, in a case against Costco Wholesale Corp. and Charoen Pokphand Foods, plaintiffs are seeking either better labeling or to block the companies outright from distributing products created from labor abusive systems.

Already there is legal groundwork in place for such concerns. In 2010, the California Transparency in Supply Chains Act was established, requiring retail and manufacturing corporations to disclose online what efforts they have taken (or not) to eliminate trafficking among their suppliers. Companies must also train employees on how to reduce the risk of trafficking.

New suits, like that against Costco, aim to push that requirement still further. The thought is that if companies are better policed, and must account for the production methods of their products-specifically, any labor abuses involved to create them-they would be more likely to, in turn, police their suppliers.

Though the efforts began in California, however, the mission is hardly so local. The modern economy is tied, intricately, into a global web of supply and demand—materials, labor and marketing can often come from three different continents. Yet in spite of this, some labor rights organizations point to the importance of broad efforts like those being pushed in this state.

"With tens of millions of people in slavery around the world, it isn’t practical to rescue them one at a time. We need to change the underlying conditions that allow slavery to still exist, and over time that will bring slavery to an end. The same is true for products. We can’t cleanse local shopping malls of slavery-tainted goods one cellphone at a time or even one company at a time. We need to change the market signals to inspire business leaders to cleanup an entire product line or manufacturing sector," Terry FitzPatrick, director of communications for Free the Slaves, said. Free the Slaves is an international nonprofit dedicated to labor rights activism.

What makes current efforts work, according to FitzPatrick, is that they aim to turn the market itself into a force to end slavery. Rather than apply command and control structures from governments to the problem, they simply require corporate transparency.

"Free markets require uniform access to information to work properly," FizPatrick said.

That work has already begun overseas. Free the Slaves gave credit to the European Union generally but also the U.K. specifically with regards to similar corporate accountability measures.

Last year, the European Parliament passed a new rule outright banning products rendered from African "conflict materials," which are often mined by forced labor. To enter any EU nation, imports must be certified conflict mineral free. Meanwhile, in Britain, the Modern Slavery Act of 2015 closely resembles California's current law, requiring any supplier of goods or services to prepare a statement on slavery and human trafficking "for each financial year of the organization."

It's not all happening in the EU and the US, however. FitzPatrick also pointed to Brazil's recent efforts to combat slavery. Modifications to the nation's constitution now allow for confiscations of farms and ranches where slavery has been uncovered.

It should be noted that nowhere on the books do the California law or U.S. import-export laws outright ban slavery-tainted products or even require companies do anything about the slavery themselves. All present law requires is for companies to inform the public, that they might make their choice.

It's a bit like real estate in that way. For example, real estate agents must disclose whether a house floods frequently or sits on a flood plain, but they are not required to take any extra precautions in the home to meet those threats. They simply have to advise potential buyers so they know what they're getting into.

Even as class-action lawsuits creep up against large chains like Costco and Nestlé, however, FitzPatrick notes a growing level of recognition in business circles toward the issue of slave labor. From a business angle, many companies tend to look at it as unfair advantage in their competitors, as such means of production typically illegally reduce labor costs.

"Transparency and accountability rules will level the playing field for all corporations. The Global Business Coalition Against Human Trafficking, which includes major corporations such as Ford, Microsoft, Coca-Cola, NXP Semiconductors and Delta Airlines, is working to engage fellow businesses on the value of proactively confronting modern slavery. The chocolate industry has come together to form the International Cocoa Initiative, which invests in African communities to reduce the vulnerability of child enslavement at cocoa plantations. As well, there is growing awareness that slavery-tainted supply chains are a business liability that investors should avoid," FitzPatrick said.

Though some resistance has arisen in areas like the U.S. Chamber of Commerce, Business Roundtable and the National Association of Manufacturers, FitzPatrick points out these objections have more to do with technical aspects of new disclosure rules, rather than the spirit of the laws.

Overall, there is progress in the fight against slavery, but until there is more uniformity on the issue, the lawsuits seem set to continue.

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Organizations in this Story

Business Roundtable Charoen Pokphand Foods Costco Wholesale Corporation International Cocoa Initiative National Association of Manufacturers U.S. Chamber of Commerce

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