Rubber gloves and essential workers: How trade policy can help end abuse

Phil Bloomer, Executive Director, Business & Human Rights Resource Centre

Rubber gloves are making headlines for the first time in the UK. While the health of our essential workers including nurses, carers and doctors, depend upon them, without international trade there would be no rubber gloves as rubber comes from the tropics. So, what is the situation for Britain’s other, hidden essential workers – the migrant workers in the Malaysian factories making rubber gloves for our care? Far too many live trapped in debt bondage, working 12-14 hour days for low pay, returning to crowded rooms, desperate to pay back the extortionate fee they paid for the job, and trying to send a little money home to support their family.

But things could be about to change due to active trade policy. In October 2020 one of the biggest-ever paybacks to migrant workers was announced. Kossan Rubber Industries, one of the largest glove manufacturers in Malaysia, announced they will re-pay €10 million (RM50 million) of recruitment fees over the next 18 months to their migrant workers locked in debt-bondage. This, and similar unprecedented pay-outs to some of the world’s most vulnerable workers, may be more than mere coincidence. For instance, Top Glove has stated publicly that it will remediate recruitment fees – as much as $12.65 million (RM53 million) to 10,000 workers. The US Customs and Border Patrol (CBP) is applying a sanction - under the US Tariff Act - to ban rubber gloves suspected of being produced by forced labour. This is concentrating the minds of these manufacturers and their importers – from healthcare companies to governments’ procurement agencies. This Act, dating from the 1930s, was finally made effective by President Obama who closed a glaring loophole that allowed imports if the goods could not be procured directly from US manufacturers.

The action of the CBP has been effective because the Tariff Act allows them to impose real and substantial costs on abusive companies. These financial losses stimulate rapid company remedy – often in days, after many years of excuses and prevarication. In addition, each impounding of goods also has a major benign multiplier effect: business competitors fear similar action and act rapidly to remedy their own abuse. The announcement of Kossan Rubber Industries came only weeks after Top Glove in Malaysia had its imports to the USA banned (and promised to repay over $12 million to 10,000 workers).

Compare this to the anaemic Modern Slavery Act of the UK Government. This legislation was a flagship innovation when launched some 5 years ago. It insisted companies issue a statement on their actions on modern slavery. But with no enforcement or sanctions to apply, over 40% of companies have either ignored the law, or failed to comply with even its basic obligations. The government initially declined to set up a monitoring system to gather companies’ compliance statements for this Act, although after much criticism by Parliament and civil society, it has now agreed to do so in the coming months. In its absence, the Business & Human Rights Resource Centre, with partners, established the Registry of companies’ compliance statements to monitor potential positive effects of having such a statement, and their direct comparison on a single site. We concluded that while the Act has helped encourage a small cluster of leading companies to change, without enforcement and liability, it will likely have little effect on lives of workers in supply chains, caught in conditions of modern slavery. This problem goes far beyond rubber gloves: people in modern slavery make the imported chocolate in our cupboards, the clothes in our wardrobes and the phones in our pockets.

As the pandemic continues to destroy worker’s jobs worldwide, millions more desperate people are vulnerable to unscrupulous recruitment agencies that drive human trafficking into the UK’s supply chains. They seek migrant workers for cheap labour in the global supply chains of food, electronics and clothes bound for the lucrative markets of the UK, Europe and North America. Our latest KnowTheChain benchmark, which ranks the world’s largest food and beverage companies on their efforts to end modern slavery in their supply chains, is sobering. While a small cluster of leading companies like Tesco and Unilever continue to advance, the vast majority of companies fail on even the most essential preventive action in their supply chains. The meat sector, the poorest performer, was especially bad.

To remedy this growing abuse of workers and communities from European supply chains, the European Commissioner for Justice, Didier Reynders, has promised new legislation in 2021. This will insist companies act to prevent human rights abuse, such as forced and child labour, in their operations and supply chains (‘human rights due diligence’) or face liability when things go wrong. The potential power of this legal initiative derives from a threat that company lawyers understand and respect: financial penalties, plus compensation claims when workers’ or communities’ lives are destroyed or damaged through corporate negligence. Companies that have maximised short term profit by abusing workers, or polluting rivers and cities on which we all depend, would now be exposed to substantive legal risk. In contrast, responsible companies and investors have nothing to fear and a great deal to gain – the end of unfair competition from competitors driving down standards (a ‘level playing field’), legal certainty, and harmonised standards in human rights and environmental management. These advantages stand alongside the removal of reputation risk created by competitors, whose negligence and abuse tar other companies in their sector with the same brush.

This initiative has already gained much support from across Europe – from centre right, centre left and Green parties, civil society, and more responsible businesses and investors. But standing against them are vested interests warning about the ‘cost-to-business’ and seeking to weaken the legislation by insisting there should be no liability for companies when harm is created.

So, as Britain leaves the European Union, we have to reflect under what conditions we want our food, fashion and electronics to be produced. Trade is a wonderful thing and can build shared prosperity both within and between nations. But too often the drive to minimise price and maximise profits leads brands to producers who abuse workers or pollute the environment to cut costs. We as consumers, and the responsible companies who avoid such abuse, are harmed by this trade.

Britain can demonstrate it remains part of the regional and global movement to use trade and global markets to generate shared prosperity, rather than a race to the bottom. The UK Government should move on now from the ineffective Modern Slavery Act and introduce a mandatory human rights due diligence law, as advocated by CORE, a network of trade unions and civil society, coupled with a law permitting import bans for goods made cheap through abuse of workers.