Electronics tester

Verité’s two-year study of labor conditions in electronics manufacturing in Malaysia found that one in three foreign workers surveyed was in a condition of forced labor. Companies and their stakeholders have asked us to elaborate on what they should do address the problem of forced labor in supply chains.

Modern-day slavery and human trafficking emerge from complex origins. Underlying causes include poverty among labor migrants and the often-maligned role of labor brokers and other third parties. Despite complex origins, these problems can be resolved impactfully for companies and for workers. The best example is Apple’s return of $19.8 million to migrants who were overcharged fees


PROBLEM:  Practices that lead to labor trafficking and forced labor are largely hidden from standard social responsibility efforts. Standard audits typically do not uncover these practices.

SOLUTION:  An alternative assessment and accountability structure is needed to standard social audits. Companies should map their supply chains to identify suppliers that operate in countries where migrant labor is commonly used. The identified suppliers should be asked to complete a self-assessment questionnaire (SAQ) that is focused on the recruitment of migrant workers; it should ask how the company’s requirements for freely chosen employment are incorporated into their recruitment, selection and hiring process, and, in particular, how the company communicates its requirements to the labor recruiters it uses in both the receiving and sending countries, and how it ensures that those recruiters and agents are complying with its requirements. Suppliers whose responses indicate that they employ a significant number of migrant workers should be asked to undergo on-site assessments focused on the recruitment and management of foreign migrant workers. Unlike a typical social audit, these assessments would include interviewing a significant number of all the migrant workers on site using trained worker interviewers who speak the language(s) of the workers. The assessments would also include an evaluation of the practices of the labor providers used by the facility in both the receiving and sending countries, again using worker feedback as a critical component of the assessment. The results of the assessment will provide the information needed to strengthen the supplier’s standards and processes for the selection and management of labor recruiters and for the ongoing management of its migrant labor workforce.


PROBLEM:  Workers pay fees to get a job in a supplier’s workplace. These fees cause workers to become indebted and vulnerable to myriad abuses, in some cases even to forced labor.

SOLUTION:  First and foremost, companies must develop and hold their suppliers accountable for implementing strict ‘employer pays’ policies to ensure that workers in their supply chains have not paid fees to get jobs and ensure those that do pay are reimbursed.


PROBLEM:  Workers are often deceived about the conditions of work that they will face upon arrival at their destination.

SOLUTION:  Prior to deployment from their country of origin, migrant workers must be provided with a written contract of employment in a language they understand. The contract terms and conditions must be explained to illiterate workers in their native language. If they agree with its terms, they should voluntarily sign the contract and receive a copy of it signed by the employer. There can be no supplemental agreements or substituting the original contract of employment or any of its provisions with those that are less favorable to migrant workers. If workers do not agree with the terms and conditions of the contract, they must be free to turn down the job offer without financial penalty.


PROBLEM:  Workers’ passports and identity documents are often withheld from them, restricting their movement, making them more vulnerable to harassment and arrest, and preventing them from leaving an exploitative employer.

SOLUTION:  Workers must be in possession their passports and identity documents at all times. This can be achieved by providing workers with secure, lockable storage for their personal documents and other valuables.


PROBLEM:  In many cases, third-party labor recruiters charge excessive fees, deceive workers about terms and conditions of employment, and even directly manage workers onsite at the destination workplace. In almost all cases, the practices of these labor brokers are not monitored by employers who contract with brokers without conducting any due diligence or ongoing performance evaluation.

SOLUTION:  Ideally, employers should directly recruit and hire migrant workers. Third-party recruitment agents in sending and receiving countries involved in the recruitment, placement, or management of foreign workers must be subjected to rigorous due diligence – so-called ‘broker audits’ – and held accountable for operating ethically at all times in accordance with both sending and receiving country laws, and their client’s code of conduct. The recruiters should adhere to the operational standards detailed in the Verité-Manpower Ethical Framework for Cross-Border Labor Recruitment. 


PROBLEM:  Some suppliers are unaware that migrants who work on their premises are at risk of forced labor or face exploitation by third party labor brokers. Others understand the risk but have yet to take action to protect workers and bring their businesses into compliance.

SOLUTION:  Companies must train their suppliers on how to screen for forced labor risks and implement operational controls that ensure sustained compliance with international standards and best practices. One example of an operational control is a legally-binding service agreement between an employer and a recruitment agent that obligates the recruiter to adhere to the company’s code of conduct requirements and provides for the reimbursement of fees charged to workers by the agent and any agents or sub-agents it uses in the sending country.


PROBLEM:  Migrant workers are frequently isolated or segregated within the workplace. In many countries, migrants do not have the same legal rights as domestic workers. For example, in Malaysia, migrants are subject to the influence of the RELA (“people’s volunteers”), which is well known among migrants for exploiting their vulnerability and threatening them. In Qatar, migrants are subject to the kafala system that restricts their rights to move among employers. Even where rights should be respected, if migrants continue to be employed on-site by labor recruiters rather than the factory, they will lack access to independent help.

SOLUTION:  One way to protect isolated workers is through a credible, independent, rights-compliant grievance mechanism that is trusted by the migrant worker population and empowers those vulnerable individuals to highlight abuses. Vulnerable migrant workers should have easy access to a system which allows them to confidentially submit grievances in a language they understand, including anonymously, without fear of intimidation or retaliation. The system must include a process to resolve identified issues and report actions taken back to the workers.


PROBLEM:  Companies do not have information about where these practices are being respected and where abuses are happening.

SOLUTION:  To ensure these policies and processes have the desired impact, multinational companies need to extend their current social compliance audits to include inquiries about fees, worker debt, deposits, passport retention, restricted freedom of movement, and other practices that exploit the vulnerability of migrant workers. Such audits must be undertaken only by auditors who can demonstrate that they have the skills and knowledge to gather information effectively from this vulnerable population of workers. Audits must lead to corrective actions that are consistent with the pathway outlined above.

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