CFO insight and analysis written and compiled by Deloitte on the Wall Street Journal
Products that consumers rely on every day often have links to questionable labor practices—a shirt made from cotton picked by child laborers, a smartphone using coltan sourced from countries with child labor and coffee made from beans harvested by slaves.¹ The U.S. Department of Labor’s 2012 list of goods produced by children or forced labor includes 134 different types of goods from 74 countries.²
Despite a zero-tolerance policy on using overseas manufacturers that flout local laws, U.S. federal agencies often have limited knowledge about which factories make the clothing used by federal workers. Hence, they have inadvertently used suppliers that show a pattern of harsh working conditions.³
The persistence of labor abuse indicates the complexity of the problem and its resistance to many of the solutions currently in place. In the article, Supply Unchained: Fighting Labor Abuse in Your Supply Chain, published in Deloitte Review, the authors consider current and emerging solutions to this global challenge. They suggest that organizations focus on taking incremental steps that consistently improve the status quo without losing sight of the longer-term goal of making workplaces safe, fair and humane.
Following is an excerpt from the article by Jonathan R. Copulsky, David Linich and Sean Morris, all principals with Deloitte Consulting LLP and Nes Parker, manager, Deloitte Consulting LLP.
The current situation of labor abuse, while alarming is not-so-surprising, given the number of intertwined factors, ranging from the increased use of offshore suppliers in an effort to reduce costs to differences in legal standards and cultural norms between developed and emerging economies. The real question is what can be done to improve the current situation.
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