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UK businesses overseas: stopping the abuse of vulnerable workers

By: Liz May, head of policy and advocacy, Traidcraft
Published: Wednesday, September 17, 2014 - 11:58 GMT Jump to Comments

Our fair trade organisation, Traidcraft, has just launched its Justice Campaign. The campaign is calling for the next British government to put in place mechanisms to hold UK businesses operating in developing countries to account for any harm they cause abroad.

Since 2008, human rights violations around the world have risen 70 per cent. This disturbing figure comes from Maplecroft’s Human Rights Atlas. Business-related human rights abuses include the forced displacement of rural and indigenous communities from their land, and exploiting trafficked workers and modern day slaves to fulfil the demand for reduced labour costs.

There has also been the use of unsafe suppliers, as highlighted by the tragic Rana Plaza building collapse in Bangladesh. The collapse killed more than 1,100 people, many of whom were producing clothes for UK stores.

At present UK companies can get away with abuses and failings in developing countries that would be completely unacceptable in Britain. Firms are not properly held to account and victims are denied justice. So why is this the case? A large portion of the problem is that all the possible routes victims could take to justice are fraught with obstacles.

In the first place, victims face real difficulty raising issues with the company which has allegedly harmed them. While some firms may have a system for hearing complaints from workers or local communities, many do not. Where they do exist, they may not be well publicised. On a more fundamental level, when a matter has become very serious – a person raped or severely injured - why should they need to seek help from the company which may have been complicit in this atrocity?

So, where next? Trying to bring a case in the country where the harm took place should be a good option, in theory. But, in reality, there are all sorts of issues that stand in the way of this path to justice. It may be hard to find a lawyer with the necessary resources and expertise, willing to take on a case against a powerful multinational company.

Victims may face intimidation if the government or the company do not want bad publicity. There simply might not be the right laws in place for a victim to use - for example, relating to employment or human rights. Unfortunately, that is partly true in Britain. We do not have a law that makes the violation of human rights by companies overseas a criminal offence. We have a law against “corporate manslaughter,” but this does not apply overseas. Hence the small number of cases brought in the UK to date have instead used civil law.

This means that victims have sued the company for negligence, or failing in its “duty of care” to workers, or communities. Recent changes to the way these cases are funded, though, will make them less viable in the future, because there is no legal aid, and law firms may no longer be able to recoup their costs – even if they win.

Moreover, no independent non-court body exists to which victims can take a complaint. There is something called the OECD National Contact Point, which some organisations have used to raise concerns about companies’ behaviour overseas. But the NCP does not have the power to fine a company, direct a firm to change its behaviour, or award compensation to the victim.

Lack of access to justice means that poor business decisions and practices which lead to abuse are not challenged. This risks perpetuating a race to the bottom.

Traidcraft plc is a fair trade company that proves business can be undertaken in a manner that reduces poverty for farmers and workers in the developing world. Over the years, Traidcraft has engaged with mainstream UK businesses when consulting on responsible sourcing guidelines and through membership of the Ethical Trading Initiative.

We have been delighted when retailers, brands and their suppliers have taken steps to improve the lives of workers and farmers. The British government has actively encouraged such improvements. Although we are welcoming the steps that have been undertaken, Traidcraft is concerned that the limitations of this voluntary approach are now becoming clear.

Many businesses have told us that, while they would like to improve their supply chain impacts, they are unable to do so. Perhaps firms only purchase small proportions of suppliers’ output. Or they are concerned that an improvement within the supply chain might lead to a small supplier cost increase, which is then magnified, as the rise passes along the supply chain to the final consumer price.

Businesses wishing to meet ethical standards are undermined in the UK market by others which subsidise their activities at the expense of workers, farmers, local communities and overseas suppliers. A level playing field needs to be put in place.

Companies which adopt improved business practices would have nothing to fear, and much to gain, if competitors were required to stop the exploitation and abuse of people overseas.

In recent opinion research, Populus found that 78 per cent of the public agree that British companies operating in developing countries should be held to account in the UK for any harm they cause to workers or local communities. In the run-up to the next general election, Traidcraft is calling on all political parties to consider how to enable access to justice for people who have suffered at the hands of British firms. Only then will international trade be truly just.

Liz May is head of policy at Traidcraft, a fair trade organisation which is fighting poverty through trade and helping people in developing countries to transform their lives.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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