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COVID-19: The impact on workers in global supply chains

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COVID-19: The impact on workers in global supply chains


The coronavirus disease 2019 (COVID-19) pandemic is having an unprecedented impact on workers in global supply chains, with those in vulnerable groups, such as low-paid migrant workers and those in the so-called “gig economy” most at risk.

Businesses must not lose sight of their business and human rights commitments as they manage their response to the pandemic. Working closely with suppliers to reduce the impact on vulnerable worker groups will ensure that operations and reputation will endure the global crisis.

This is no longer only a global health crisis; it is also a major labour market and economic crisis that is having a huge impact on people.

Guy Ryder, Director of the International Labour Organisation, March 2020

The International Labour Organisation estimates that 25 million jobs could be lost worldwide as a result of the COVID-19 pandemic, warning that certain groups, such as those in less protected and low-paid jobs, particularly migrant workers, will be disproportionately affected by the crisis. The Council of Global Unions1 has warned that workers are on the “frontline of the economic, social and health impacts of the COVID-19”.

The short-term economic impact of the pandemic has been substantial, with job losses or pay reductions across multiple sectors, such as travel, hospitality, oil and gas, transportation, non-food retail and many smaller businesses, particularly those in the service industries. However, for low-paid workers within the supply chains of most international businesses, the impact has been devastating, particularly for those whose families rely on overseas remittances for survival.

The human cost of supply chain vulnerability

Factories are closing in Sri Lanka, Bangladesh, Myanmar, Indonesia, Albania and across Central America.2 European retailers have cancelled an estimated USD 1.5 billion of orders from Bangladesh alone, impacting over 1,000 garment factories by invoking force majeure clauses in contracts.3 

Much of the impact on vulnerable workers are the knock-on effects of wider challenges the pandemic is posing to employers throughout supply chains. Smaller suppliers and subcontractors are at greatest risk, particularly those that are exposed to debt because of delayed payments in existing contracts, have low liquidity, or face a concentration of risks through their reliance on a limited number of contracts.

Workers who are already impacted by delayed payment of wages or who are in debt to recruiters face the prospect of lay-offs and loss of all current and future earnings. Some businesses in recent weeks have forced reductions in wages or have laid off vulnerable workers who have limited recourse against employers. In the UK, some businesses have seen reputation and brand damage where they have not followed government COVID-19 advice or have not provided guarantees to worker wages.4 

Healthcare and employment inequalities

Building and Wood Workers’ International has said that, even in developed countries, inequalities in healthcare and employment protections mean that migrant workers, many of whom are employed on so-called “zero-hours” contracts (which lack proper industry regulation), are facing an increased risk of infection compared with their domestic counterparts.5 

The Geneva Council for Rights and Liberties6 has called for urgent action to protect vulnerable migrant workers from COVID-19, as they are impacted by limited access to healthcare and poor living conditions in “overcrowded or substandard accommodation”.

Within these accommodation facilities, workers are at increased risk from COVID-19 transmission owing to existing poor practices. Particularly vulnerable is group labour accommodation, which typically lacks deep cleaning, consists of only close living spaces, supplies limited basic soap and hygiene products and provides no opportunity to practice social distancing.

Some facilities have implemented basic measures to help limit the spread of the virus, such as temperature testing, training on prevention and detection, and quarantine facilities, but facilities not directly regulated by the government continue poor practice.

Bonded labour and misinformation

Workers who are subject to forced or bonded labour, where they are in debt to an employer for their recruitment or are subject to other forms of coercion, are reluctant to report health conditions for fear of not being paid or other retribution. This situation can be made worse when medical coverage is not provided by an employer or if there is an appointment or high-excess fee to seek medical advice. However, for many workers without contract protections, the advice to self-isolate means not being paid for 14 days and will simply not be an option.

A longstanding challenge for vulnerable worker groups has been access to information about their employment rights and workplace safety. Faced with a fast-moving pandemic, this lack of information from employers is filled by widespread rumours and misinformation, shared among worker communities via social media. Although rumour during a pandemic is nothing new,7 he speed and the spread of misinformation is unprecedented, with the promotion of false treatment and response measures putting workers’ safety8 at risk.

What businesses can do in their supply chains

COVID-19 is a systemic global risk that affects all businesses and presents real risks to lives of vulnerable workers. Leading businesses9 are putting workers at the heart of recovery measures and demonstrating how to limit the impact in their global supply chains. Here are six ways in which they are doing it:

1/ Request risk assessments from suppliers

  • Request supply chain risk assessments from suppliers to assess the impact on operations and contingency needs.
  • Ask about the measures that suppliers are taking to protect employment rights and safety in both the work and living environments.
  • Ensure suppliers have measures for prevention, detection and isolation that follow World Health Organization (WHO) and national government guidance.

2/ Work with suppliers

  • Work with suppliers to minimise the impact to workers where possible.
  • Ensure that suppliers are paid on time for the fulfilment of contracts.
  • Seek assurance that they quickly implement any government guidance on financial assistance to workers and that they do not penalise workers for isolation protocols or sick leave.

3/ Encourage dialogue with workers

  • Consult with workers who may face workplace closures, reduced hours or contract terminations to combat misinformation and denial of labour rights.
  • Prioritise the repatriation of migrant workers and settlement of outstanding wages.

4/ Adapt assurance activities

  • Continue and adapt assurance activities, such as supplier audits and due diligence, using technology to maintain scrutiny on supply chains.
  • Use VoIP calling platforms to continue to collect first-hand accounts of employment practices or direct surveys and messaging with workers through apps.
  • Use remote desktop audits for supplier audits and due diligence.

5/ Provide access to information

  • Ask your suppliers to fully implement WHO guidance to prevent the exposure and spread of the virus.
  • Focus on the accessibility of the message; ensure that information is clear, accurate and delivered in formats, languages and situations that have maximum impact.

6/ Ensure independent grievance reporting

  • Encourage workers to raise concerns about the virus in the workplace without fear of retribution from employers.
  • Prepare grievance lines to deal with workers who may self-report suspected cases of COVID-19.

 

1 COVID-19 Urgent Economic Stimulus and Workplace Measures Required, Council of Global Unions (CGU) Joint Statement
2 Clean Clothes Campaign COVID-19 update March 2020
3 https://www.bloomberg.com/news/articles/2020-03-23/europe-retailers-cancel-1-billion-of-bangladesh-garment-orders
4 Wetherspoon boss tells staff to get a job at Tesco’, bbc.com/news/business-52018360
5 Building and Wood Workers International, an international construction union COVID-19 campaign 2020
6 Migrant Workers are disproportionately at risk of COVID-19, https://genevacouncil.com/ March 2020
7 Lawrence Waterman OBE, chairman of the British Safety Council, March 2020
8 Samuel Kline Cohn Jr (2017) Cholera revolts: a class struggle we may not like, Social History
9 Microsoft will pay hourly workers regular wages even if their hours are reduced because of COVID-19 concerns’, techcrunch.com 6 March 2020

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