When you think of worker exploitation, your mind might turn to Bangladeshi garment workers labouring to make cheap T-shirts for Western fast-fashion addicts, but the reality is often less lurid and far harder to spot. Two cases from New Zealand highlight how vulnerable people can be exploited and how government agencies can play a leading role in exposing problems and enacting change.
The Labour Inspectorate in New Zealand’s Ministry of Business, Innovation and Employment takes a multidisciplinary approach to modern slavery and unethical practices. Over the years, it has developed techniques to help businesses identify issues, get leadership onboard and support improvements through resources and guidance. However, it’s also prepared to call out companies reluctant to engage.
One case involves Chorus, a telecoms company that landed a contract to install ultrafast fibre broadband in early 2010. As demand increased from 2015, Chorus started subcontracting work to small local companies. As early as 2016, reports began circulating of migrant workers being exploited and lax practices among subcontractors.
Without evidence or obligation, Chorus had a limited response, so the Inspectorate stepped in. Its initial investigation of 75 subcontractors found problems in 73, ranging from a failure to produce proper employment contracts, timesheets and payslips to severe underpayment.
Using public pressure
To effect a meaningful response, the Inspectorate revealed its findings through the media. “The company really was challenged by the government, the public and the investment community,” says Rob Broadbridge, head of contract management at Chorus.
The ensuing furore caused the firm to act quickly, even though it was not legally responsible. “Thankfully, the board, CEO and the executive took the position that they wanted to address this issue and not to take the typical corporate line of ‘we subcontracted so it’s somebody else’s problem’,” adds Broadbridge.
The pressure from the bad publicity was so potent that within 24 hours of the news breaking, the company had appointed a consulting firm to carry out its own investigation and take the matter in hand.
Chorus created a system to educate subcontractors about their responsibilities and workers about their rights, especially those without English as a first language. It also tightened its contracts with suppliers and insisted that the contracts they agreed with subcontractors were compliant with the law. To support workers long-term, it also better publicised its existing whistle-blower telephone number.
Chorus had never intentionally supported this system, but the original process of audits and checks was deeply flawed. Tania Donaldson, manager, employer systems and assurance at the Ministry, says: “I don’t think they were on top of the fact that their workforce was looking so different at the bottom. It wasn’t a man in a van, it was a man with a load of workers in a van.”
Go for granular insights
This isn’t the only time the Inspectorate has successfully made a company change its operations. In 2016, it investigated nine pipfruit packhouses where it identified employment standard breaches, including workers being paid below the minimum wage.
Again, the strategy was to brief the media, which quickly prompted irate phone calls from a major UK supermarket concerned about its dealings with New Zealand Apples & Pears (NZAPI), an organisation that promotes and represents the New Zealand pipfruit industry.
NZAPI also received a call from a trading bank stating that busineses were at risk of losing access to key markets if they lost accreditation. Around this time, retailers in the EU and UK were demanding GLOBALG.A.P. Risk Assessment on Social Practice standards which reduce the risk that food is produced by exploited workers. Inability to obtain this would exclude the supply chain from accessing those retailers.
The investigation effectively demonstrated that New Zealand firms must strengthen operational oversight and the Inspectorate started working with the wider horticulture sector to educate and improve checks undertaken by suppliers. For NZAPI members, this led to more support for workers.
Members now routinely use anonymous online questionnaires in all the common languages spoken by workers to gauge how they feel about their working conditions and wellbeing.
“The quality of the responses increases over time as migrant workers understand the survey approach and trust it more, and now we can get down to a good degree of granularity – so, for instance, we understand how Samoan workers in the apple industry who are women feel about their employment conditions,” says Gary Jones, head of trade policy and strategy at NZAPI.
Can you prevent a repetition?
“Our risk assessment wasn’t robust enough,” says Broadbridge. “It needs to be done right at the start when you contract out the work.” In order to identify problems and start making changes, first you need to “get deep into your organisation. The world of managers sitting at their desks is very different to people climbing up poles in the middle of winter. Getting close to those guys is vital.”
Trouble-spotting is a start but also “it’s really important that there are continuous bits of feedback available in your supply chain, things like worker voice tools and feedback tools”, Donaldson advises. “For large businesses with huge supply chains, inevitably there will be some issues in that supply chain, but it’s about identifying and then remediating as quickly as possible. And having things in place to monitor and respond to that is absolutely key.”
Employment New Zealand has released a series of ethical and sustainable work practices resources to help businesses, including procurers future-proof their practices.
Modern slavery is a major issue for all global supply chains and long, lean chains plus a lack of downstream visibility only feed the beast. And the stakes are high for firms without comprehensive and ongoing plans to combat this. Although the Inspectorate highlights reputational risk by engaging leadership with stories of exploitative behaviour through the media, it also works with organisations to help them be proactive in clamping down on problems.
As Jones says: “If you don’t look for exploitation, you won’t find it. And our experience across the planet is – if you do look, you will find it.”