New report out of Yale, Stanford, and University of Sheffield (UK) recommends corporations adopt “binding worker-driven social responsibility agreements” to fight forced labor in supply chains!

Farmworkers and Fair Food allies march on the offices of Trian Partners, Wendy’s largest shareholder and home office of Wendy’s Board Chair Nelson Peltz, in downtown Manhattan in 2019.

Yet another independent academic study confirms what workers already know: Corporate Social Responsibility (CSR) has failed, Worker-driven Social Responsibility (WSR) must be part of the answer.

Sweeping report by three leading academic institutions details shortcomings of current social responsibility models:

  • “Forced labour and human rights abuses of workers are endemic across several sectors of the global economy…”

  • “Transparency legislation, a dominant mode of regulation, is not working…”

Recommends solutions: 

  • “End prevailing social auditing ‘rubber stamping’ practices which lead to dangerous and exploitative worksites being certified…”

  • “Explore possibilities for binding worker-driven social responsibility agreements and meaningful worker empowerment…”

The mountain of academic support for mandatory, worker-driven, enforceable standards grew one research paper taller this month.

Earlier this month, researchers at Yale, Stanford, and Sheffield University in the UK issued their first report in a much-anticipated series of research briefs into the failure of governments and corporations to root out forced labor and other human rights violations in global supply chains. Published under the collective title The Re:Structure Lab — New Models for an Equitable Economy, the first release in the collaborative research project  focuses on the shortcomings of one of the prevailing models of corporate accountability today – transparency legislation, by which governments require corporations to disclose their efforts to prevent forced labor in their suppliers’ operations — and “presents new ideas and examples of how business models and supply chains can be restructured to promote fair, equitable labour standards and worker rights.”

The report pulls absolutely zero punches in its assessment of the impact of transparency legislation to date in the fight to end modern-day slavery:

Transparency legislation, a dominant mode of regulation, is not working. Academic research has highlighted major weaknesses in the effectiveness of transparency legislation to influence corporate behaviour. Corporations can comply with transparency legislation without altering the commercial practices that lead to forced labour and exploitation. Strong sanctions for non-compliance are lacking, as are paths for remedy and redress for victims. Briefly put, to date, transparency has sparked disclosure without actually changing things. Early efforts towards human rights due diligence to date have similarly focused on mapping with little action towards meaningful change.”

The report goes on to address the current state of Corporate Social Responsibility (CSR) efforts more broadly, including the kind of corporate-led and for-profit certification and auditing schemes that have multiplied in part due to the demands of transparency laws, schemes that have served as the low-bar alternative to the Fair Food Program and other Worker-driven Social Responsibility (WSR) efforts for corporations like Wendy’s, Kroger, Costco and others for more than a decade:

“Legislation has been paralleled by the proliferation of ineffective monitoring tools that are owned and commissioned by corporations and for-profit consultancies rather than being independent. Transparency legislation has expanded the role of certification standards and social auditing in supply chains that are opaque, inconsistent, and lack coherence. Not only are these ineffective tools to detect, address, and correct forced labour, but they can also mislead consumers and policymakers about working conditions in supply chains. Weak industry led monitoring tools like social auditing enable corporations to create an illusion of combatting forced labour while simultaneously reinforcing business demand for it amongst suppliers and intermediaries.”

In short, the report concludes that being transparent about efforts to protect workers’ fundamental human rights in your supply chain may be a necessary step, but it is hardly sufficient.  Furthermore, shallow auditing and consumer-facing certifications not only don’t work, they can make it harder to actually see and solve the problems that transparency might reveal.  

Indeed, misleading consumers with “fair trade” and “sustainable” labels is one of the most dangerous impacts of these certification programs: they don’t work to protect human rights on the ground and, yet, can be quite effective at satisfying legitimate consumer demand for ethical products in the marketplace.  The 2014 documentary Shady Chocolate is an excellent, if heartbreaking, analysis of the failure of ethical certification schemes on West African cocoa plantations and is very much worth the 45-minute investment to better understand the depth of the deception that is so common in the global food industry today. These ersatz labels were also at the core of the findings of the Harvard-incubated MSI Integrity report from last summer, which found that most labeling schemes and their attendant oversight structures were not actually fit for their stated purpose of protecting human rights.  The Fair Food Program and its underlying paradigm of Worker-driven Social Responsibility (WSR), on the other hand, were hailed as the emerging “gold standard” in that groundbreaking study.

The new report from the Yale/Stanford/Sheffield research collaboration not only critiques the status quo in corporate supply chain management, but also provides critical guidance for governments and corporations seeking effective approaches for identifying and remedying forced labor and other human rights abuses in global supply chains.  And like the MSI Integrity study before it, the report’s recommendations lead inevitably to the WSR model.  The evidence-packed brief argues that effective human rights protections — what the researchers call  “mandatory Human Rights Due Diligence,” or (mHRDD) —  “meaningfully involves workers, unions, and worker organizations, and key stakeholders in delivery and remediation, and is overseen by an independent body.” In its concluding section, “Recommendations for Business,” the report advises unequivocally that corporations:

  • Initiate conversations with workers, trade unions, and worker organizations about the causes of forced labour in supply chains and measures that could be taken to address these.

  • Explore possibilities for binding worker-driven social responsibility agreements and meaningful worker empowerment.

The unparalleled results of the Fair Food Program, which is designed and led by workers and rigorously enforced by an independent third-party monitoring organization (the Fair Food Standards Council), are the real-life proof of this concept.     

The new report goes on to recommend several other important solutions, including giving human rights due diligence laws more teeth by making them mandatory (the “m” in mHRDD), introducing real civil liability for violations to ensure that victims can seek justice and compensation, and giving both government and worker organizations an oversight role in implementing these standards. The brief also makes the case for baking these standards into government procurement policies across the board.

At the core of the policy brief, the researchers recommend that companies go beyond transparency and actually look at the results of their efforts: “Reporting on the measures being taken – such as social auditing or ethical certification – is insufficient. Businesses should shift towards reporting on the effectiveness of the measures they are undertaking to detect, prevent, and address forced labour.”  The echoes of the shareholder resolution to be voted on at Wendy’s annual shareholder meeting next month couldn’t be louder.  

Check out the report, titled “Due Diligence and Transparency Legislation,” and be sure to check back soon for more from the Fair Food movement, with news from the Wendy’s shareholder front and analysis of upcoming reports from the exciting new research series as they become available.