SAN FRANCISCO, Oct. 2, 2018 /PRNewswire/ -- The largest food and beverage companies are taking some steps to address forced labor in their supply chains, according to forced labor benchmarking initiative KnowTheChain. However, significant work still needs to be done to ensure products and commodities are produced ethically. KnowTheChain evaluated 38 of the largest global food and beverage companies on their policies and procedures to combat forced labor in their supply chains. Today's report release marks KnowTheChain's second food and beverage benchmark since it was launched in 2016.
Unilever tops the benchmark for the second time (scoring 69/100), while Kellogg (66/100) surpassed both Coca-Cola (62/100) and Nestlé (58/100) and secured second place in the 2018 benchmark.
"Forced labor remains a major problem in the production of popular food and beverage products," said Kilian Moote, project director for KnowTheChain. "The isolation of workers on farms or boats increases their risk to exploitation and leads to little oversight to ensure the food we eat is produced ethically."
While the companies in the benchmark source very different product types compared to one another, they all face forced labor risks across sourcing countries and commodities. The benchmark identified some improvements in company practices since 2016; however, the average score remains low, 30 out of 100. All benchmarked companies need to take further action to address forced labor risks across commodities and tiers. Following the last KnowTheChain benchmark report, Monster Beverage is now dealing with a shareholder resolution calling on the company to address the lack of transparency regarding forced labor in its supply chain.
"It's encouraging to see increased companies working to address forced labor, including the adoption of the UN Guiding Principles on Business and Human Rights, but progress for workers is not moving fast enough. Companies across the board must do better to make demonstrable improvements for workers," said Moote.
The agricultural sector is characterized by vulnerable groups of workers, frequently isolated on remote farms or boats, and thus more vulnerable and harder to reach than more permanent factory workers. Most notably, there is a noticeable lack of remedy in the sector. Of the 12 companies for which KnowTheChain identified forced labor allegations, only three outlined some steps taken to address them. KnowTheChain recommends all companies assess and address forced labor risks across commodities and focus on themes including recruitment, worker voice, and remedy in order to protect vulnerable workers.
Five companies score below 10/100: the energy drink company Monster Beverage (4/100); Fomento Económico Mexicano (FEMSA) (7/100), the largest bottler for Coca-Cola; Inner MongoliaYili Industrial Group (1/100), one of the largest Asian dairy companies; packaged foods company Almarai (0/100); and the company which owns the world's largest pork business, WH Group (0/100).
Both Unilever and Kellogg disclose efforts to address risks of exploitation of migrant workers, which is particularly common in the agricultural sector due to the seasonal nature of the work. Unilever, the top scoring company in the benchmark, discloses that it worked with suppliers in Saudi Arabia and Malaysia to ensure passports were returned to migrant workers, and reports on initiatives in its Indian and Kenyan tea supply chains which enabled workers to better understand their rights and how to raise grievances. Disclosure of efforts like these by companies contributed to higher scores. In contrast, none of the five lowest scoring companies in the benchmark have a publicly available supplier code of conduct, nor do they take any action on worker voice and recruitment.
The benchmark also found that companies disclosing efforts taken to address forced labor are predominantly focused on risks in a few commodities such as palm oil rather than all commodities in their supply chains. While many companies have taken positive actions to address the risks associated with palm oil, a commodity where human rights abuses have been well-documented, companies must do more to protect vulnerable workers across all commodities.
The report analyzes companies' disclosure and performance against seven benchmark themes and provides good practice examples and recommendations for companies. It also evaluates corporate commitments and compliance with relevant regulations and provides considerations for investor action.
KnowTheChain is a resource for businesses and investors who need to understand and address forced labor abuses within their supply chains. It benchmarks current corporate practices, develops insights, and provides practical resources that inform investor decisions and enable companies to comply with growing legal obligations while operating more transparently and responsibly.www.knowthechain.org