Addressing Modern Slavery Worker Vulnerability During COVID-19

The COVID-19 outbreak has been affecting Asia since the end of 2019 and has created turmoil in almost all economies in the region. Most footwear and apparel manufacturers have seen major disruptions in many parts of their supply chains and business operations. For example, in Bangladesh, 72 percent of apparel buyers have not paid for materials already purchased by the supplier. This has resulted in more than US$2.5 billion worth of order cancellations in garment manufacturing and the loss of at least one million garment worker jobs. Similar trends are being seen all over the world.

This continuing crisis poses a number of challenges, some limited to moving activities online, others much more serious and related to the sustainability and profitability of business in the short, medium and long-term. While many corporate professionals can  work from home or remotely, supply-chain workers directly employed by companies have no such option: either their physical presence is essential, exposing them to potential infection, or they have been laid off without pay, benefits, or in some cases, a place to live.

For the region’s most vulnerable and precarious workers, there is no doubt that the COVID-19 crisis poses a higher risk to their wellbeing, job security and basic rights. For many reasons, such workers are now more vulnerable to modern slavery. The threats and challenges include loss of income, increased debt, low awareness of workplace labor rights, requirements to work excessive overtime to cover capacity gaps, increased demand due to supply-chain shortages, and the inability to return safely to home countries. Critical issues facing labor in the Asia Pacific include:

• Massive unemployment: With factory shutdowns, order cancellations, workforce reductions and sudden changes to supply-chain structures, many workers have lost their jobs or been furloughed for an extended period of time. Without a paycheck and unable to rely on personal savings, they may become desperate, leaving them exposed to the threat of enslavement and other forms of exploitation from unscrupulous employers. Unless factories and supply chains begin to function soon, this situation will become more dire.
• Debt bondage: As workers are told to stay home, often resulting in the absence of wages, the possibility that they may find themselves bearing excessive debt significantly increases. They might become indebted to local money lenders, community institutions or family members. In taking out loans that they cannot repay, workers leave themselves open to exploitation by these various parties. Employers may offer to lend money to their employees, and in some cases, this might be the best solution. However, it could also lead to debt bondage, in which the worker falls under the control of their employer due to the obligations incurred. The situation is generally worse for migrant workers, many of whom will have already incurred debts as part of the recruitment process.
• Quarantine: Workers may be unable to come to work because they need to be quarantined or live with someone who is sick or confined to their home. In the case of factory work, it is impossible to implement any type of online alternative. This results in the loss of wages and a significant increase in vulnerability.
• Contract workers: Contractors such as canteen staff, security personnel and cleaners are usually less protected than permanent employees when it comes to paid annual and sick leave. Even more at stake is their job security. Unless an effort is made to repurpose their roles, many of them will lose their jobs.
• Discrimination: Some workers who have come from virus-affected areas have been discriminated against because of their association with a certain country or region. Further, as countries suffer from recession, there will inevitably be a tendency for some parts of the population to turn against migrant workers, particularly where they are perceived as taking the jobs of locals.
• Excessive, involuntary overtime: With parts of Asia slowly reopening manufacturing operations, there may be heavy pressure on workers to intensify production rates to cover for months of inactivity, thus resulting in unreasonable requests for them to work overtime. This additional work can be exploitative if it is involuntary and not compensated appropriately.
• Pressures on suppliers and in the workplace: Suppliers may come under pressure due to substantial demand for ramped-up production – notably of personal protection equipment – at a cheap price on a huge scale. They may face substantial financial difficulties resulting from canceled or delayed orders and renegotiated payments. These pressures can affect the way workers are treated.
• Freedom of movement: Suppliers may decide to implement new measures to protect workers from exposure to the virus. In some cases, this might include restricting workers’ freedom of movement, such as requiring them to remain in the factory compound. While this is often considered a modern slavery “red flag”, in this case restrictions are designed to ensure worker protection during the pandemic. At the same time, some employers may take advantage of government-imposed limits on movement to keep workers on site for their own gain (i.e., to work more hours). Workers may not be informed whether they are being held due to government restrictions or the policies of their employer.
• Worksite departure: In some cases, in the agriculture sector, for example, workers worried about their safety have been given an ultimatum – either stay at their own risk of contracting the virus or leave and lose their job and pay. Imposing fees or penalties for leaving employment is an indicator of labor exploitation and should not be permitted under any circumstances.

Companies should consider some recommendations developed by The Mekong Club to pursue a “business-to-business” approach to fighting modern slavery. Our organization works with companies to support and advise them to ensure that workers’ human rights and health and safety remain paramount, and the risks of modern slavery and labor exploitation are avoided or addressed promptly and effectively.

• Transparency and clarity: Put in place short-term, medium-term and long-term mitigation plans to address the various stages of the crisis and recovery. As a brand, consider what implications the COVID-19 outbreak could have on your supply chains and develop a statement or policy to address this scenario. Use this brief as a template to model your COVID-19-related supplier policy. Communicate it to your suppliers and initiate a dialogue with them. A transparent conversation is the most effective way to identify risks and manage any issues before they escalate.
• Debt-bondage vulnerability: Workers should be educated on the risks of taking out high-interest loans from unregulated sources. It is important that they understand the terms and conditions of any loan arrangements including that they will not be forced to remain in employment against their will.
• Quarantine: During quarantine periods, employers should inform workers of what arrangements are possible. For example, the quarantine or part of it can be offset by the worker’s paid leave to ensure the person can continue to receive an income. This will lessen the risk of workers becoming indebted. This is particularly important for migrant workers who send remittances home.
• Illness disclosure: Workers should feel that they can rely on their employer to prioritize their health and wellbeing in this time of difficulty. There should also be a very clear procedure in place for workers who feel unwell or suspect they may be experiencing symptoms of the virus that would allow them to report this and receive appropriate medical attention.
• Worksite departure: For personal reasons, workers may need temporally to leave their employment during the COVID-19 outbreak. These workers should be properly compensated for any service provided up to the day they go on leave, and there should be no termination or penalty ultimatums imposed.
• Temporary limitations on freedom of movement: Workers may be requested to remain in the factory compound at all times. They may also be asked to refrain from assembling in common areas in large groups or to keep distance from one another. Suppliers should be transparent, disclosing the measures taken to the brands they work. Restrictions should be considered as exceptional actions. Passports should not be retained as a way to prevent the movement of workers. No financial penalty or wage deduction should be imposed by suppliers on workers who violate these rules – serious violations are a matter for the authorities, not employers. Keeping workers informed is key to maximizing compliance.
• Overtime policies: Overtime work should always be tracked by the factory, appropriately remunerated and a matter of free choice by the worker. The brand should have clear guidance and policies regarding overtime and what it would consider to be excessive overtime for workers.
• Discrimination: No discrimination should be permitted when implementing new measures, which should apply to the whole of the workforce unless there is a demonstrable and reasonable explanation for exceptions.
• Consent forms: It is important that worker rights are respected at all times and that their position of disadvantage in most negotiations is recognized. At the same time, in these extraordinary circumstances, workers should have the right to make an informed choice about their contribution to maintaining a viable place of employment, including accepting – on a temporary basis only – lesser conditions. If new measures are negotiated with workers as the Covid-19 outbreak continues (e.g. extended hours), the employees should be asked to sign consent forms to indicate their agreement. 
• Protection of contract workers: Where possible, companies should encourage that contract workers be repurposed during shutdown periods to enable them to receive some payment. For example, if the canteen is closed to avoid large gatherings, kitchen and service staff could cover extra turns to clean and disinfect equipment or provide support with temperature-taking and recording.

The COVID-19 crisis has significantly changed the manufacturing landscape throughout the world. The impact of this crisis on brands, factories and workers will continue for several years. Companies need to track developments and adapt accordingly. Where possible, every effort should be made to understand the vulnerability of workers and what can be done to assist them during this difficult period.