Inside Supply Management Magazine

Handling Human Rights Issues in Tech Supply Chains

February 02, 2017

By John Kloosterman and Michael Congiu

The electronics and information communications technology (ICT) industries are ever-prevalent today, and depending on your point of view, they have either profoundly connected or polarized our world. Like it or not, we rely on these devices every day at work and in our personal lives.

Global businesses are always looking for the most innovative and powerful ways to operate and engage with stakeholders, including consumers who purchase and use their products. A big factor in an organization’s reputation today is how it accounts for — and prioritizes — the impact of its operations on local, national and international human rights.

Electronics and ICT companies face significant challenges in this commitment, namely because their supply chains are often not linear or static. An example: At the heart of the processors that make ICT devices functional are minerals that, once extracted, may pass through several trading houses and other middlemen. They are then sold to an exporter and refined, making the minerals’ origin difficult or impossible to trace.

There are three main considerations for companies in these industries regarding their human rights practices:

Increasing awareness for human rights issues among employees and suppliers, as customers are increasingly aware of these issues and expect answers about a company’s human rights practices.

Crafting thoughtful human rights policies and codes of conduct with the same care generally reserved for legal documents. Some companies view these policies and codes as public relations exercises, but there can be litigation over statements made in those policies, with the statements considered a “duty of care” owed to customers.

Understanding how their devices are made and by whom, along with the parts and where they originate from.

The good news is that the industry is making progress. Know the Chain, an organization that has benchmarked 20 publicly traded ICT companies using various human rights criteria focused on forced labor, found in its study that 18 of the 20 companies “have publicly demonstrated awareness of and commitment to addressing forced labor in the supply chain."

However, the benchmark study also found that far fewer of these companies have strong processes in place to implement these commitments. To craft these processes, companies should:

Partner with legal counsel that has human rights expertise to educate key stakeholders on these issues and to draft thoughtful and intelligent public human rights commitments. Whether in a code of conduct or supplier code of conduct, human rights statements should avoid commitments that cannot be reasonably or practically followed.  Statements should also avoid a commitment to adopting International Labour Organization (ILO) standards or following voluntary international standards. These documents should be treated as legal documents, not solely as public relations exercises.

Look to existing law for examples of how best to implement your human rights commitments and strategy. The California Supply Chains Act or UK Modern Slavery Act can serve as roadmaps.

John Kloosterman, a member of the U.S. delegation to the International Labour Organization (ILO), and Michael Congiu are co-chairs of the Business and Human Rights Practice Group and shareholders at Littler Mendelson, a San-Francisco-based employment and labor law firm.