Sugarcane supply chain: Industry urged to address forced labour issues

By Will Chu

- Last updated on GMT


Related tags Sugarcane Supply chain

Mondelēz and Archer Daniels Midland are among a number of food and beverage companies making ‘limited’ efforts to understand and assess forced labour risks in their sugarcane supply chains at the country level, a report has found.

According to the findings​, outlined by Know The Chain (KTC), sugarcane is a commodity that could be produced using forced labour in countries such as Bolivia, Brazil, the Dominican Republic, Myanmar and Pakistan.

KTC’s partner Verité also described incidences of debt bondage imposed on sugarcane workers in India as well as identifying human trafficking risks for sugarcane workers in Guatemala.

The report also found that while most companies had a grievance mechanism in place, it was unclear whether these procedures were communicated to and used by suppliers’ workers.

The companies featured in the report include Coca-Cola, Fomento Economico Mexicano (FEMSA), Monster Beverage, PepsiCo, Hershey, Mondelēz, Nestlé, Archer Daniels Midland, Associated British Foods and Wilmar International.

Worryingly, none of the 10 companies were able to provide an example of grievance procedures carried out when labour abuses were identified.

“Agricultural workers, particularly migrants, are at most risk of abuse,”​ said Killian Moote, KTC’s project director.

“This case study calls attention to the need for companies to take more robust action to protect vulnerable workers toiling in sugarcane supply chains.”

Corporations under scrutiny

Brazil and India, the two largest sugarcane producers in the world, rely on a workforce mostly made up of migrants and rural workers with little education.

These workers manually harvest the sugarcane often under hazardous working conditions, long working hours in isolated workplaces, low wages and even forced labour.

KTC said that there was little in the way of local labour law enforcement or contracts to protect the workers, whose lack of lack education and language skills leave them vulnerable to exploitation over work and housing rights, as well as agreements in wages.

In a follow up to KTC’s first food and beverage benchmark report carried out in 2016, 10 companies were identified, which either disclosed sugarcane as a key commodity or which sold a range of products that included sugarcane.

While Coca-Cola was able to identify the countries it sourced its key product ingredients, the report found it had not followed through on its commitment from 2013 to disclose the names of all its direct sugarcane suppliers within three years.

PepsiCo, Coca-Cola, Nestlé and ABF were the only companies to make efforts to understand and assess forced labour risks in their sugarcane supply chains at the country level.

Additionally, the report identified Nestlé as setting time-bound targets for salient labour issues, which included working with suppliers to promote the rights of workers to establish and join trade unions.

Industry reaction

Responding to the report’s findings a spokesperson for Nestlé said it welcomed the report that highlighted the issue of forced labour as one that “must be tackled collectively by all private and public actors across the sugarcane value chain if the positive and sustained changes needed are to be achieved”.

“This is why we work actively with partner organisations such as Proforest to help us implement practical solutions on the ground, such as providing technical assistance to mills to help them to develop their own capacity to address and manage labour rights issues.”

“In May 2017 we launched our Labour Rights in Agricultural Supply Chains Roadmap, which outlines our activities. We will continue to work on addressing the issue of forced labour in these locations, including identifying and addressing the root causes of forced labour.”

A spokesperson for the ABF added: “We take very seriously our commitment to, and support for, the Modern Slavery Act across our sugar cane supply chains.

“This report acknowledges the journey we are taking in auditing suppliers, third party growers and labour brokers across our supply chains to ensure our businesses and the communities in which they operate continue to thrive and develop in line with good working practices.”

The Hershey Company responded in kind adding that the company worked hard to ensure that its sugar was responsibly sourced, adding it was important that all members of its global sugar supply chain were fairly treated.

Sugarcane across the world

Sugarcane is one of the largest agricultural commodities in the world with around 80% of the some 170 million tons produced in 2015 sourced from sugarcane.

The Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) of the United Nations estimate the global production of sugar will grow by over 20% by 2025, with most of the additional production coming from sugarcane rather than sugar beets.

Sugarcane can be an important part of a country’s economy. In Guatemala, for example, sugarcane production has more than doubled in the last two decades, making it the country’s second largest export.