Qatar World Cup scandal: how firms can banish forced labour ‘blind spots’ in their supply chain

The World Cup’s extravagant closing ceremony brought exuberant cheers at Doha’s Lusail Stadium. But some construction companies behind this opulent building in Qatar have been tainted by accusations of forced labour, with the Guardian estimating that more than 6,500 migrant construction workers died in the emirate amid World Cup preparations. To avoid backlash and boycotts, companies must conduct supply chain due diligence to stamp out forced labour.

Forced labour is more pervasive in developing low-income countries because of inconsistent law enforcement. When high-income nations such as Qatar are accused of using forced labour, it comes as a surprise to some. But should it?

Human trafficking is also prevalent in developed economies. The United States is no exception. Last year, US authorities uncovered a human trafficking ring that smuggled forced labour from Mexico and the rest of Central America to work in Georgia farms.

In Hong Kong and Singapore, foreign domestic helpers have complained of being subjected to forced labour despite being documented workers with legal rights such as paid medical insurance and a rest day each week.

To curb forced labour, there were talks in 2018 to propose a law in Hong Kong to require companies to report whether their supply chains are free from slavery, and give enforcement officers wider investigation powers. But the social unrest in 2019 followed by the Covid-19 pandemic have disrupted the progress. As Hong Kong reopens its doors to the world, it is time to resume its commitment to treat all workers in Hong Kong with kindness, empathy and humility.

Regulations should never be a means to an end. But they can motivate firms to act. We suggest four ways for companies to conduct their supply chain due diligence effectively and practically.

First, target high-risk commodities and operations. Certain supply chain operations are prone to forced labour and companies should focus their supply chain due diligence efforts on them. Indeed, most forced labour tends to occur in dirty, dangerous or difficult jobs in high-risk regions.

French pharmaceutical giant Sanofi has identified 44 sourcing categories prone to forced labour. By taking these risky sourcing activities and country-specific risks into consideration, companies such as Sanofi can prioritise their due diligence efforts.

Second, avoid shady recruitment agencies. Forced labour tends to occur indirectly through recruitment agencies in developing countries. For example, the US military has been accused of using dodgy recruitment agencies to import migrant workers from Bangladesh and elsewhere to work on US army bases in the Middle East.

Without direct oversight with independent audits, organisations are at risk. They can suffer collateral damage when their recruitment agencies are found to be coercing migrant workers.

To avoid guilt by association, companies should be particularly careful when conducting due diligence on recruitment agencies. For example, companies can use information provided by Recruitment Adviser, a global recruitment and employment review platform, to review agency records.

Third, go beyond direct suppliers. Opaque upstream operations in a company’s supply chain are susceptible to forced labour. But most companies lack visibility into all tiers of their supply chain to conduct due diligence. A 2022 McKinsey survey found that only 17 per cent of companies have visibility beyond the first two levels of their supply chain.

To gain supply chain visibility, information platforms such as SourceMap and Provenance Chain can be useful as they map and monitor end-to-end supply chain operations. With supply chain visibility, independent audits at all tiers and additional verification can enable a company to reduce the risk of being involved in forced labour. Trust, but verify.

Fourth, leverage emerging technologies. These can enable companies to monitor and authenticate supply chain operations that are prone to forced labour. Social media, mobile apps and company whistle-blower sites can encourage workers along the supply chain to report potential human rights violations.

Focus on economic growth, education to prevent harms of ‘modern slavery’

For example, to monitor the reputation of its suppliers at all tiers and any adverse media coverage of them, Coca-Cola has partnered with social tech company FRDM to provide real-time reports by leveraging machine learning to monitor vetted media sources, reports, court records and research.

Meanwhile, blockchain technology can enable a firm to establish trusted information with anonymity. Levi Strauss & Co has used blockchain technology to receive unfalsifiable yet anonymous feedback from workers about their work conditions in its and its suppliers’ production sites.

Blockchain-enabled platforms can also authenticate end-to-end supply chain operations. For example, IBM’s Blockchain Transparent Supply platform tracks sustainable fabrics such as cotton from field to shop while Tracr traces conflict-free diamonds from mine to shop.

Supply chain opacity enables unethical actors to conduct illegal operations covertly. A multipronged approach can help companies perform their due diligence to stamp out forced labour. With any luck, the next World Cup will be celebrated with cheers, and without tears.

Felix Papier is a professor of ESSEC Business School in France

Christopher S. Tang is a distinguished professor at the UCLA Anderson School of Management