Richest corporations fail on supply chain management
Companies not doing enough to ensure worker safety and human rights despite soaring profits
A damning new report has attacked some of the world's largest companies for what they say is a "business model based on exploitation and abuse of human rights in supply chains."
The research, conducted by the ITUC, and released to coincide with the Davos business summit, looked at how global brands are making enormous profits at the expense of worker saftey, the environment and human rights.
Sharan Burrow, ITUC General Secretary claims:
“Just 50 companies including Samsung, McDonalds and Nestle have a combined revenue of $3.4 trillion and the power to reduce inequality. Instead they have built a business model on a massive hidden workforce of 116 million people,”
“Profits are driven by low wages levels that people cannot live on, these profits risk safety with the result of indefensible workplace injuries and deaths; that these profits are increased by tax evasion or tragically linked to pollution of community land and water.”
Fast food worker strike, Flickr.
Hidden work force
The report found that the global supply chains of 50 companies employ only six per cent of people in a direct employment relationship, yet they rely on a hidden workforce of sub contractors for who they often take little responsibility.
The union says that:
"The cash holdings of 25 companies of $387 billion could increase the wages in their combined hidden workforce of 71.3 million by more than $5000 for a year."
The ITUC has set out five recommendations for companies to address the scandal of global supply chains:
- Supply chain– know who you contract from and publish this;
- Safe work – inspect sites, fix hazards and recognise workers’ right to safety committees;
- Secure work – end short-term contracts;
- Minimum living wages – pay wages on which people can live with dignity;
- Collective bargaining – for wage share, decent wages and working conditions.
Sharan Burrow states:
“The number of global framework agreements between multi-national companies and global union federations which address these problems and establish a sustainable footing for the global economy are on the increase, but we still have a long way to go. Governments must not neglect their responsibilities,”.
Labour leaders at the World Economic Forum in Davos will be putting forward a four step plan to transform the business model of global companies and address inequality:
- Employers ensure fair distribution of wealth through minimum living wages and collective bargaining based on the fundamental guarantee of freedom of association.
- Safety standards are respected with workers in engaged in safety committees.
- Government leaders should implement and enforce the rule of law, mandating the due diligence that the UN Guiding Principles for Business and Human rights demand.
- Governments prioritise the dignity of the social protection floor for their people.
“Only by exposing the practices of these companies to consumers and citizens around the world will companies begin to take responsibility for their supply chains and follow the rule of law,”
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