Step 7. Taking Corrective Action
Fairing Hiring Toolkit for Suppliers
- Intro to Step 7
- TOOL 1: A Guide to Corrective Action
- Tool 2: Developing a Strategy for Corrective Action
7. Taking Corrective Action & Developing Systems Improvement
Many companies have the means and mechanisms to respond and react to non-conformance issues surfaced during social audits, but they may not be well-positioned to anticipate and avoid these problems in the first place, or to prevent them from happening again. Taking a reactive approach to problems can be more costly in the long run, and facility audits have shown that social responsibility problems tend to persist when remedial or corrective actions are either poorly maintained or are not implemented at all.
Developing a systems improvement plan that includes corrective and preventive measures helps a company to take both effective action against and proactively prevent practices that can lead to trafficking or forced labor for migrant workers.
A corrective action plan to address the trafficking or forced labor of a migrant worker must provide for the full protection of victim(s), and should include measures to support their rehabilitation, repatriation (if desired) or reintegration into the labor market and community. Public and non-governmental victim service providers with expertise in supporting migrant workers should be consulted as valuable resources to better understand the issue and address its root cause.
In general, a systems improvement plan must:
- Detail the company’s specific responses to the issues (ensuring at all times that vulnerable workers are protected, that contingencies are in place to respond to issues where they happen)
- Address the root causes of the issues, including the policies and practices that contributed to the problem
- Map out the risks and their sources – the particular business processes, operational functions, or structural gaps from which the risks arise
- Feed results into a management systems improvement plan.
The tools to the right offer more guidance on corrective action and systems improvement planning, where the trafficking or forced labor of migrant workers is concerned.
TOOL 1: A Guide to Corrective Action & Systems Improvement Planning
Forced labor and human trafficking are crimes under international human rights law and in most countries around the world. A case of this abuse discovered in the supply chain – among the worst forms of exploitation in the world of work – will demand immediate corrective action on the part of the facility, its sub-tier suppliers and any recruiters involved. Abuse of this kind will always be treated as a major breach of code compliance.
Corrective action will need to be comprehensive and systematic, involving both short and long term strategies. It should be focused on the needs and well-being of the trafficking victim(s) first and foremost, and involve key stakeholders such as victim service providers, health care professionals, and other public or civil society organizations, wherever necessary. This is a clear case where companies should strongly consider joint engagement in the best interests of the workers concerned.
If a case of forced labor or human trafficking is identified at the facility or in the supply chain (for example as a result of a social audit or another means of assessment), it is essential that the company respond immediately and unequivocally. This should involve an immediate investigation including the participation of brand client representatives, a clear identification of the workers affected, and a full understanding of the nature of the abuse. Together with the brand, the supplier company will need to determine the extent and form of the problem before it can institute the full protective measures that will be required.
It will be necessary for the supplier company to act quickly to remediate the problems that have occurred and to reverse the cycle of abuse. Workers may need to be paid back wages; excessive recruitment fees may need to be reimbursed; and passports may need to be returned. Whatever the nature of the abuse, the company will need to ensure that comprehensive corrective action is taken. To help with this process (and to ensure a full and timely response), it may be necessary to draw up a plan of action – a corrective action/performance improvement plan – that identifies priorities, responsibilities and timelines for each of the actors involved: the company, sub-tier suppliers, and recruiter(s).
At the center of the company’s response may be the need to consider repatriation for migrant workers. These workers – if they have suffered deception and abuse in the recruitment and hiring process – will have the right to return to their country of origin, if they desire. They may also require important assistance in reintegration into local labor markets and their communities of origin. A key element in ensuring the success of remediation efforts and a full transition for the migrant worker out of forced labor is the transition of that worker into free and fair employment.
ADDRESSING ROOT CAUSES: FROM CORRECTING PROBLEMS TO PREVENTING THEM
To fully address an issue like forced labor, it isn’t enough to take immediate and short-term measures like these, as important as they are. It is also essential to consider longer-term actions to ensure that the problem(s) do not recur.
The supplier company will need to consider a few things. First, how is it that forced labor and human trafficking are present in the facility in the first place, and do they exist in other company facilities or elsewhere in the supply chain? Second, what needs to be done to ensure that these problems are solved and the company is no longer at risk?
To answer these questions, it will be necessary to look beyond the facility in question and the specific case of abuse. The company will need to take a thorough look at its systems and protocols, policies and assessment procedures, and other aspects of its social responsibility program to determine the root causes of what went wrong and where. As part of this, it may be advisable to conduct a thorough review and risk assessment across the supply base, including labor recruiters.
Whatever the nature of the abuse, a review of this kind will lead to stronger policies and procedures, and move the company away from piecemeal, reactive engagement towards proactive and preventive engagement. Responding in this way and developing new protections for migrant workers to promote fair hiring and recruitment, will promote a cycle of continuous improvement that will benefit both the company and its suppliers.
Further guidance on taking a step-by-step approach to corrective action is provided in the next tool: Developing a Strategy for Corrective Action and Systems Improvement Planning. Review it to learn more about analyzing the problem, identifying root causes and brainstorming possible improvements.
In Focus: From Corrective Action Plans to Systems Improvement Planning
In cases where a specific problem has occurred, it will be important for the company to develop a corrective action plan to ensure that remedial action is effective, timely and organized, and involves all the key players. In other cases, where no problems have been identified but where a potential for risk is present, a company may nevertheless wish to take a proactive approach and conduct preventive action planning. In this case, the company may wish to take the necessary steps to develop a strategy for taking preventive action before problems occur. This means the company will be prepared to meet a problem head on, should one occur in its supply chain.
LONG TERM ENGAGEMENT: TACKLING COMPLEX CAUSES
Corrective action taken to address a specific incident of forced labor or human trafficking is likely to be immediate and time-bound. The company will seek to identify the problem and its root cause(s) and address it quickly, working with the facility and the recruiter in question.
For some “red flags” of forced labor, this is an appropriate strategy. The company can work through the problem directly, address the key issues, develop new policies and procedures, prohibit bad practice and thereby ensure greater protection for migrant workers. In other cases, however, problems are too complex for a “quick fix” approach and will demand a more nuanced and long-term strategy. In these cases, the company may need to look beyond its own operations and those of its suppliers to address broader, industry-wide or even nation-wide concerns. This will involve tackling the fundamental causes of workplace or recruitment-based problems, and necessitate a multi-stakeholder or partnership approach, including with brands and customers.
A broader vision and strategy is needed to tackle the complex and diverse manifestations of forced labor and human trafficking in the supply chain effectively and sustainably. The solution to the fundamental causes of these problems lies beyond the reach of any single company or stakeholder. Broader engagement on a national or industry-wide basis, with peer companies, brands, public policy actors and civil society can help companies and other business actors engage more effectively to root out these problems from their own facilities and supply chains, and from economies around the world.
Tool 2: Developing a Strategy for Corrective Action and Systems Improvement Planning
This tool sets out the steps that companies can take to develop and implement plans to address identified cases of forced labor and human trafficking in their supply chains. These steps are contextualized in the example of “Company ABC”and its approach to remediating issues of passport retention, deposits and forced savings.
The material herein is drawn from Verité’s in-depth training on Problem Solving and Decision-Making for Social Responsibility.
STEP 1: REVIEW ASSESSMENT FINDINGS
The first step to take is to review the findings of a supply chain audit, self-assessment or other form of assessment, taking the most recent one as the starting point, but also considering past assessments of the same supplier. Examine both internal and third party assessments, and identify the key gaps or problems you need to address and where they occur in your operations or those of your recruiter(s), including recruitment, hiring and management of migrant workers. A review of assessment findings may reveal specific problems like passport retention that are likely to affect migrant workers only, or it may reveal bigger problems that affect the whole workforce at the facility.
Company ABC received a fairly good audit report from one of its brand clients, but was told that it immediately had to correct the following company practices:
1. passport retention
2. deposits and forced savings
STEP 2: ANALYZE THE PROBLEM
Companies should analyze the identified problems or gaps for root causes that may underlie them. Many non-conformance issues in the supply chain are manifestations or symptoms of larger problems. In addressing compliance violations, it is important to tackle not only the symptom but the root cause as well. Approaches that do not address root causes may prove inadequate, leaving underlying issues unaddressed and resulting in the recurrence of old problems and the creation of new ones.
There are many tools available to help you with systemic analysis, including:
- Fishbone Diagram (or Cause and Effect Analysis);
- Force Field Analysis;
- KATTAR root cause analysis;
- 5Ws/2Hs (Who, What, Where, When, Why & How Many, How Often);
- Fault Tree Analysis; and
- 5 Whys
Company ABC identified several causes for the passport retention issue. It also found that one of these causes – the fear of workers “running away” from the facility – was driven by the threat of government penalties to the facility in the event that migrant workers overstayed their visas. (The facility was the visa sponsor for the migrant workers.) This concern was also found to be the root of the practice of securing deposits and forced savings.
STEP 3: BRAINSTORM POSSIBLE CHANGES AND IMPROVEMENTS TO SOLVE THE PROBLEM
Once it is clear where a problem comes from, companies should act on the most immediate causes, working with any sub-tier suppliers and labor recruiters to do so. Many problems have more than one root cause and, in most cases, companies may need to address more than one issue to inspire real change. When brainstorming these improvements, make sure there is a broad cross-section of people involved from different parts of the company and levels of the supply chain, with different perspectives and expertise.
STEP 4: DECIDE ON THE BEST CHANGE AND IMPROVEMENT OPTION OR DECISION ANALYSIS
Issues and decisions like these should be examined at policy, process and task levels to ensure that strategic thinking and decision-making is not only taking place at the operational level. This will ensure that suppliers are addressing problems in a systematic way and not just responding to issues as they occur.
Company ABC arrived at the following solutions:
1. Cease the practice by suppliers and recruiters of withholding workers’ personal documents.
2. Return workers’ passports, and provide workers with a lockable safety deposit box where they can keep their passports and other important documents. Put these boxes inside the factory.
3. Cease the practice of deposits and forced savings.
4. [To address the concern that migrant workers might “run away” if the facility no longer holds their passports] Improve worker retention by improving worker satisfaction:
Conduct worker satisfaction surveys
Benchmark practices of other companies for improving worker retention
Improve worker communication and feedback systems
Identify migrant workers’ concerns by ensuring that they have good access to worker communication and feedback mechanisms
Ensure that all grievances from migrant workers are responded to and resolved in a way that is mutually beneficial to management and workers
5. Provide supervisory training on grievance handling, communication, and techniques for positive motivation.
STEP 5: DEVELOP A PLAN FOR IMPLEMENTING THE DECISIONS
Having identified an effective change and improvement option, companies should work to:
1. Identify whether policies and procedures need to be developed or revised to support the change;
2. Identify “change owners” at policy, procedural and task levels;
3. Discuss a realistic timeframe for implementing the change;
4. Identify performance indicators to measure effectiveness of the change; and
5. Revise or design a complementary monitoring mechanism.
STEP 6: ANTICIPATE POTENTIAL PROBLEMS
After articulating the new plan, companies should consider identifying:
1. Potential roadblocks to efficient and effective implementation.
2. Preventive actions and contingent actions.
STEP 7: SUPPORT IMPLEMENTATION OF THE PLAN
STEP 8: DETERMINE MILESTONES AND MONITORING SCHEDULE
Framework for Action: What Can Brands Do? >>
1. Improving Codes of Conduct and Company Policies >>
2. Raising Awareness and Building Capacity >>
3. Strengthening Assessments & Social Audits >>
4. Taking Corrective Action & Developing Systems Improvement Plans >>
5. Reporting & Transparency >>
6. Multi-Stakeholder & Multi-Brand Engagement >>
7. Public Policy Advocacy >>
Framework for Action: What Can Suppliers Do? >>
1. Improving Codes of Conduct & Company Policies >>
2. Raising Awareness & Building Capacity >>
3. Screening & Evaluating Labor Recruiters >>
4. Managing Labor Recruiters & Monitoring for Ethical Recruitment & Hiring >>
5. Ensuring Good Practice in Human Resources Management >>
6. Establishing Effective Grievance Mechanisms & Protection for Whistleblowers >>
7. Taking Corrective Action & Developing Systems Improvement >>