By Ed Marcum, Working Capital Managing Director, and Ryan Heman, Humanity United Investments Manager
In today’s complex, globally distributed supply chains, labor exploitation often takes place in the dark—out of sight and invisible. Despite gains in human rights made for workers over the past several decades, severe and systemic abuses persist. From ships far out at sea to mines in conflict-ridden jungles to unauthorized outsourcing of apparel manufacturing, when there is limited transparency and visibility into the production process workers are vulnerable to exploitation.
With the hope of cutting through this opacity and providing better visibility into labor conditions deep in supply chains, in early 2018 we launched Working Capital—The Supply Chain Innovation Fund. Through this venture fund, we seek to invest in scalable innovations to meet the growing corporate demand for more transparent and responsible supply chains.
Lifting the Veil
We truly believe that transparency is part of the solution and is necessary to empower workers by giving them a voice and reducing vulnerability. Yet, corporations have long struggled to take proactive action, in part because of how global and intractable the problem of labor exploitation has become. While many companies are committed to improving conditions for vulnerable workers, their success is hampered by a toolkit that is inadequate, expensive, and not effective at scale.
Technological innovation, however, now has the potential to solve for these challenges and to radically improve millions of lives around the world:
- New worker voice tools are able to crowdsource grievances in real time, to track remediation and employee retention to prevent retaliation, and to promote worker empowerment and well-being through greater coordination, communication, and compliance.
- Traceability platforms—leveraging innovations like blockchain or more cost effective DNA tracing technologies—allow for commodities to be tagged and tracked from harvest or extraction all the way to the warehouse or retail shelf, with big data analytics and artificial intelligence increasingly able to identify risks and improve corporate responsiveness accordingly.
- Responsible sourcing and recruitment platforms allow corporations to improve procurement and hiring, ultimately creating sustainable and labor-sensitive alternatives to the major systems across sectors which are built on exploitation and are notoriously resistant to change.
Each of these innovations offers an opportunity to deliver impact and improve conditions for workers, providing corporations with better data and visibility into supply chains previously unmapped or unmonitored. Each also has the potential to change the profit-driven calculus which demands exploitation to produce products at a competitive speed and value.
Mitigating Emerging Risks
Nevertheless, if not designed and implemented with forethought, these technologies can have unintended consequences for workers—who frequently feel required to provide or have little say in the data that is collected about them and how it is used. Existing power and information asymmetry mean that workers can be taken advantage of or manipulated. Informed consent is often lacking. And, real world prejudices can become exacerbated by or ingrained in technologies, resulting in greater targeting or discrimination.
We must therefore be vigilant and acknowledge that even well-meaning interventions pose the risk of further marginalizing the workers whose vulnerability these platforms originally sought to alleviate. Examples abound in our work of the potential double-edged sword of technologies gone awry or designed without the workers themselves in mind:
- Worker voice platforms allow for real-time anonymous feedback but can also lead to reprisals if proper security protections aren’t put in place or a management support system isn’t instituted to ensure trust in remediation beyond the technology workflow itself.
- Productivity tools that ensure accurate piece-rate payment and reduce wage theft can be used to punish low performing workers, monitor bathroom breaks, or discriminate against those with conditions impacting their work outputs, including pregnant women and the disabled.
- Traceability platforms that provide insight into multi-tiered sourcing can also be co-opted to insert “verified lies” into supply chains, reducing trust and instead deepening opacity through actual fraud.
- Digital identity tools can make workers visible but also make them susceptible to discrimination based on certain traits or cause them to lose the ability to control what personal data is made available and to whom.
- Sensors, cameras, and wearable devices can provide important information on temperature, toxins, or rights abuses in the workplace but can also lead to non-stop worker surveillance, serving business process optimization at the expense of worker well-being.
Meeting in the Middle
So how do we harness the potential of transparency to make it work for all? How do we promote solutions which are both good for the bottom line and good for workers? As is often the case, this is an area where technological innovation is out in front and public policy has yet to catch up.
There is no easy or single set of criteria for us to consider as we make individual investment decisions. But, we are increasingly guided by the views of other leading thinkers looking at the responsible and ethical use of data. This can begin to provide a roadmap for how to think about these trade-offs and put in place a set of questions for us to ask ourselves as we move forward:
- What is the problem that we are trying to solve, and how might better transparency and data help to reduce worker vulnerability to labor exploitation?
- If data transparency is potentially part of the solution, what is the minimum data that can be disclosed in order to achieve this end?
- Is the worker aware of data collection, and have they consented to it? Are they in control of their own information?
- Who will ultimately have access to this data, and how else might they use it?
To this end, we are proud to have co-authored the Worker Engagement Supported by Technology (WEST) Principles, which seek to align all actors around a set of design and implementation guidelines that will ensure that technology is leveraged for good. Initiated by a group of technology providers, the Principles hope to engage stakeholders at all levels of global supply chains to collectively develop a roadmap to operationalize their use.
We are also aware and in support of other initiatives, such as those at our sister organization, Omidyar Network, which stress data privacy and security by design, as well as the principle of minimization. Fostering inclusion, transparency, and oversight additionally improve trust in technology systems, again placing end-users at the center of design and implementation (learn more about Omidyar Network’s position on digital identify and privacy here).
Despite the risks involved, we remain convinced that, if properly harnessed, more accurate and transparent data has the potential to reduce worker vulnerability. We believe that the eradication of labor exploitation in global supply chains will require solutions leveraging all our ingenuity, ambition, and need for scale. Yet we also recognize that the potential unintended consequences are very real and require thoughtful consideration. We know that technology, while important, will only ever be part of a larger solution.
At Working Capital, we look forward to continued partnership with workers, technologists, corporations, civil society organizations, and all other stakeholders to ensure that supply chain technologies advance human rights and promote human dignity even in the darkest corners of our global economy.