Reporting: NorthStar Asset Management has expanded an effort begun last year, asking four companies (up from two last year) to report about products that may be made with prison labor. Last year the proposal was to adopt a policy and it earned 4.8 percent at Costco, which later in the year adopted a policy. That proposal also earned 7.8 percent at TJX.

This year, NorthStar asked Costco “to produce an annual report to shareholders...regarding information known to the company regarding supplier compliance with the company’s Global Policy on Prison Labor.” It earned 28.7 percent in January. A resolution to Home Depot and IBM asks that the report summarize “the extent of known usage of prison labor in the company’s supply chain,” while at TJX, it asks that the report assess “the effectiveness of current company policies for preventing instances of prison labor in the company’s supply chain. NorthStar contends Home Depot does not ban all forms of prison labor and points to a lawsuit filed against it regarding some products made by prisoners.

After IBM described its existing procedures to monitor for prison labor in its supply chain, NorthStar withdrew. IBM also agreed to further collaboration on the issue in 2019.

Adopt policy: At Walmart, the Nathan Cummings Foundation also raises a new concern about the provisions of legally permissible prison labor. The foundation asks the company to

adopt a policy on the use of prison and unpaid diversion program labor by suppliers, including a policy that commits the Company to:

1. Develop and apply additional criteria or guidelines for suppliers regarding the use of prison and diversion program labor; and

2. Report to shareholders, at reasonable cost and omitting proprietary information, on Walmart’s progress in implementing the policy.

THE GROWING REGULATORY RISK OF MODERN SLAVERY IN GLOBAL SUPPLY CHAINS

Chloé Bailey
Program Officer, The Freedom Fund

Globally, it is estimated that over 40 million people live in situations of modern slavery. Approximately 16 million people are in forced labor in the private economy, in mines, factories and fields harvesting raw materials and manufacturing products for global supply chains. Over the past few years, revelations of modern slavery conditions have been traced to the supply chains of major corporations, from smartphones produced with forced child labor in the DRC, to seafood caught by trafficked migrant workers in Thailand.