RSN BLOG

Thursday
Feb202014

What are companies doing to fulfill their commitments to end forced labor?

Download Cotton Sourcing Snapshot

Since 2007, Responsible Sourcing Network (RSN) has engaged companies on the issue of forced labor in the Uzbek cotton sector. Some progress has been made, such as the ending of forced labor for children under 15. But those welcome changes have not ended slavery In Uzbekistan, and the issue still looms large in the supply chains of companies who source cotton without transparency or disclosure. RSN, along with SRI and NGO partners, felt it was time to take a snapshot of what the apparel and home goods industries are doing, and not doing, to help transition Uzbekistan away from its institutionalized labor abuse.

RSN’s latest publication, Cotton Sourcing Snapshot: A Survey of Corporate Practices to End Forced Labor, provides an overall understanding of what the industries are doing to identify risks, establish policies, implement procedures, and disclose practices to eliminate and prevent incidents of forced labor in cotton harvesting. This report follows on RSN’s 2013 publication, To the Spinner: Forging a Chain to Responsible Cotton Sourcing. It builds off the best practices highlighted in To the Spinner by identifying more in-depth examples of corporate procedures, providing an overall awareness of industry trends, and revealing which companies are excelling and which companies are underperforming.

Although companies may not appreciate being scored, many stakeholders have asked RSN what actions individual companies were taking to abide by the Cotton Pledge Against Child and Adult Forced Labor in Uzbek Cotton or other corporate commitments to not knowingly source Uzbek cotton. Conducting a survey, collecting best practices, and reporting on the results was the most efficient approach for RSN to communicate industry activities. In addition to understanding how companies are holding their suppliers accountable to not source Uzbek cotton, the survey had a goal of determining the activities or structures missing that could support companies and their suppliers in fulfilling their commitments.

By highlighting best practices, the report promotes examples that are currently being implemented and validates what can be done to avoid human rights risks at the raw extraction level. A few of the notable results from the survey that demonstrate the implementation of best practices include:

  • 18.5% are involved in spinner efforts individually or through another initiative
  • 16% provide training and require their suppliers/spinners to abide by their policies; an additional 8% also include this in their supplier contracts
  • 12% have independent third-party audits of their spinners/mills

By having a greater understanding of what the leading companies are doing and what percentage of the industries are following suit, the path forward becomes evident on how to prevent cotton picked with forced labor from entering product supply chains.

Download Cotton Sourcing Snapshot
Friday
Jan312014

Cotton Sourcing Snapshot: A Survey of Corporate Practices to End Forced Labor

Responsible Sourcing Network will be releasing a report and hosting a webinar on Thursday Feb. 20th with survey results of practices by apparel and home goods companies to ensure their supply chains do not include cotton produced with forced labor from Uzbekistan.

Nowhere is forced labor in cotton production more apparent than in Uzbekistan, where every autumn the Uzbek government sends the country’s youth, teachers, and civil servants to work in the fields. Corporations have a responsibility to conduct due diligence that ensures human rights are respected, even if they have not contributed directly to the violations.

Cotton Sourcing Snapshot: A Survey of Corporate Practices to End Forced Labor captures what the industries are doing and are not doing to keep their supply chains slavery-free. Points were awarded for 11 questions with an overall ranking calculated for the 49 companies surveyed.

The accompanying webinar will be held at 10 am PST/1 pm EST on Thursday Feb. 20th. Click here to register.

Register for Cotton Sourcing Snapshot Webinar

Featured panelists will include:

Patricia Jurewicz, Director, Responsible Sourcing Network

Patricia Jurewicz is founder and Director of the Responsible Sourcing Network, a project of As You Sow, where she has worked with shareholder communities to address labor and human rights abuses since 2006. Currently she sits on advisory committees for the PPA for Responsible Mineral Trade, the Cotton Campaign, ICCR’s Human Trafficking Group, and the Conflict Free Smelter Program. She has 15 years of diverse experiences related to supply chain manufacturing and corporate responsibility. Patricia has held positions with the Institute for Agriculture and Trade Policy and Gap, Inc. She has degrees from Thunderbird, Cornell, and Fashion Institute of Technology.

Karen Runde, Research Manager, Responsible Sourcing Network

Karen has focused her career on promoting multi-stakeholder efforts to improve accountability and transparency in corporate supply chains. Her work includes policy analysis and company outreach of raw commodity sourcing, specifically Uzbek cotton and conflict minerals. She attended Roskilde University in Denmark and Lund University in Sweden, earning Masters degrees in Technological & Socio-Economic Planning and Environmental Studies & Sustainability Science. She holds a Bachelor of Arts from UCLA.

Bennett Freeman, Senior Vice President for Sustainability Research and Policy, Calvert Investments

As Senior Vice President for Sustainability Research and Policy at Calvert Investments since April 2006, Bennett Freeman leads the environmental, social and governance analysis, shareholder advocacy and public policy work of the largest family of sustainable and responsible (SRI) mutual funds in the U.S with over $12 billion assets under management based in Bethesda, MD. He has helped to develop the investment themes of new Calvert funds and contributed to Calvert’s leadership on issues such as Sudan divestment; extractive revenue transparency; Internet freedom of expression and privacy; water sustainability; and climate change adaptation.

Nate Herman, Vice President of International Trade, American Apparel & Footwear Association

As Senior Vice President for Sustainability Research and Policy at Calvert Investments since April 2006, Bennett Freeman leads the environmental, social and governance analysis, shareholder advocacy and public policy work of the largest family of sustainable and responsible (SRI) mutual funds in the U.S with over $12 billion assets under management based in Bethesda, MD. He has helped to develop the investment themes of new Calvert funds and contributed to Calvert’s leadership on issues such as Sudan divestment; extractive revenue transparency; Internet freedom of expression and privacy; water sustainability; and climate change adaptation.

RSN’s Cotton Program aims to eliminate the most egregious human rights abuses at the field level of apparel supply chains. Currently, RSN’s Cotton Pledge against forced labor in the cotton sector of Uzbekistan has garnered 141 signatories.

Thursday
Jan092014

Intel Commits to Conflict-Free Chips

When Intel CEO Brian Krzanich took the stage to give the opening keynote speech at the 2014 Consumer Electronics Show (CES) in Las Vegas on January 6th, attendees assumed they would only be hearing about new gadgets and computing technology. However, Krzanich surprised the crowd by announcing that starting this year, all Intel micro-processors will be produced without conflict minerals.

Responsible Sourcing Network (RSN) has been working closely with Intel and other industry leaders over the past three years to push for strong conflict mineral legislation and for supply chains to be accountable to human rights atrocities buried in the raw materials of their products. We applaud their initiative in creating the Conflict-Free Smelter Initiative.

Intel’s leadership plus coordination by RSN, and involvement by Enough, Global Witness, and dozens of electronics companies and NGOs has started to improve the 15 year-old conflict in the Democratic Republic of the Congo (DRC). However, there is more to do.

One of the militia groups, the M23, surrendered its weapons last November. But there are at least 20 more groups causing havoc. By setting up legitimate conflict-free certification schemes in-country and prohibiting smuggled conflict minerals, the revenues fueling the violent campaigns are being eliminated. Now is the time for the toy, automotive, and aerospace industries to step up and participate in the multi-stakeholder initiatives.

Learn more about RSN’s work on Conflict Minerals from the DRC.

Monday
Oct142013

US$1 Trillion Milestone Reached in Support of the Cotton Pledge Against Forced Labor. Will the Government of Uzbekistan Finally Listen to Industry’s Demands?

As cotton merchants head to Uzbekistan for its annual cotton fair which starts on Wednesday, Responsible Sourcing Network (RSN) in the our press release today announced the latest numbers regarding corporate support of the Company Pledge Against Forced Child and Adult Labor in Uzbek Cotton. 136 international brands and companies with a combined estimated Market Cap of US$1.024 trillion* have now signed the pledge declaring their refusal to source cotton from the country until the forced labor of children and adults in the cotton fields ceases.

IKEA, lululemon athletica, and Marks & Spencer are the latest companies to add to the growing coalition of apparel companies taking a stand against oppression and forced labor in the Uzbek cotton industry. There can not be a stronger message to the Government of Uzbekistan (GOU) than having a trillion-dollars worth of the apparel industry stating they do not want any form of slave labor from entering the global market and taking actions to block it.

So, are all of the combined actions of the Cotton Coalition having any impact? In some ways yes, in some ways no. For example, the youngest children (aged 7 - 11) were not mobilized in mass quantities during the 2012 harvest. However, as a result, greater numbers of older students and adults were mobilized. This year is especially significant because for the first time the GOU is allowing the International Labor Organization (ILO) to conduct an inspection mission during the harvest (something the Cotton Coalition has been asking for since 2008). Although we all welcome the return of the ILO’s presence in Uzbekistan after being snubbed for many years, there is skepticism that the mission will produce accurate results. ILO representatives will be accompanied by Uzbek officials, making it difficult for citizens to speak openly with ILO monitors.

The Uzbek government’s continuation of forced labor this year raises further doubts about their intentions. In March and April, authorities beat farmers for planting onions instead of cotton( read more) and forced adults and children to prepare the cotton fields (read more). In August and September, school administrators forced parents to sign consent forms for their children to pick cotton as a precondition for school registration (read more). Since the start of the harvest around September 6, authorities have coercively mobilized teenagers, university students, teachers, doctors, and other public-sector workers to pick cotton or pay fines (read more ). On September 16, 200,000 people were sent to the cotton fields from Tashkent alone (read more). In some regions, one-fifth of all public-sector workers are picking cotton. Tax officials have delivered ultimatums to business owners: send their employees and contribute financially, or face extraordinary tax inspections (read more). Tragically, the death of 6-year old Amirbek Rachmatow on September 15th was the fifth fatality in the first month of the harvest (read more).

The message being sent by industry is that the GOU must meet its commitments to international labor standards in order to participate in global markets. If it doesn’t, RSN is committed to increasingly minimizing options for where the Uzbek government can sell its cotton.

The full pledge text and list of signatories is available at: http://www.sourcingnetwork.org/the-cotton-pledge.

Up-to-date 2013 Uzbek cotton harvest information distributed by the Uzbek-German Forum for Human Rights.

* The estimated Market Capitalization was derived on October 10-13, 2013. The Market Cap for privately held companies was calculated using an average P/S ratio of the public companies that signed the pledge and revenue information available in the public domain.

 

 

Thursday
Sep052013

As the First Reporting Deadline Approaches, New Paper Outlines Best Practices for SEC Conflict Mineral Reports

With less than a year until the first reporting deadline,  companies are becoming increasingly focused on evaluating any conflict minerals in their supply chains.

In May of 2014, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act will require companies in a variety of industries, from electronics to apparel, to submit reports to the Securities and Exchange Commission (SEC). The reports will disclose information on the use and mining conditions of minerals sourced from the Democratic Republic of the Congo or neighboring countries, where egregious human rights abuses linked to the mining industry have plagued the region for over 14 years.

Though the deadline may seem far off, the reports require companies to collect detailed information from many tiers in their supply chains as well as establish due diligence procedures, both of which take considerable time to implement.

In order to assist companies in providing thorough information to investors and human rights organizations, the Responsible Sourcing Network partnered with the Enough Project to create a set of guidelines and indicators. The paper, Expectations for Companies’ Conflict Mineral Reporting, encourages companies to establish baselines in their inaugural disclosures to the SEC and to clearly specify the steps they are taking to show improvement in their transparency and accountability reporting over time.

The paper describes the characteristics of a robust report, including:

  • Constructing key elements of a vigorous company conflict minerals policy and steps for implementing a program
  • Metrics that companies should track to effectively determine their actions to accurately assess the origin of their minerals
  • Commitment to only using minerals from smelters that have been audited as conflict free by a credible program such as the Conflict-Free Sourcing Initiative as they become available
  • Building a clean minerals trade by 1) Committing to sourcing conflict-free minerals from Congo and the surrounding region; and 2) Implementing OECD due diligence processes to determine if an issuers’ minerals are contributing to the conflict

Stakeholders also encourage companies to take steps beyond the 1502 reporting requirements to help in creating a peaceful and secure Congo by participating in diplomatic efforts and contributing to alternative livelihood projects in the region.

As stakeholders clearly communicate their concerns and establish their expectations about the human rights abuses surrounding conflict minerals in the Congo, companies can enhance their brands by fulfilling on these expectations with well-defined actions and reports.