Lower Priced Goods Come at a Higher Cost: Slave Labor Imports

imagesThere’s a level of trust expected between businesses and their customers. Consumers expect a high degree of integrity in the claims companies make about their products. But while there are laws that require companies to disclose what they are doing about the use of forced labor in their supply chains, businesses such as Nestle and Costco state they prohibit, and do not tolerate, the use of slave labor by their suppliers when in fact they know it exists.

As a result of these disingenuous (many would say fraudulent) claims, people are often shocked to hear that the products they consume have in fact been sourced from slave labor. Big business in America outsources much of its supply chain overseas because products such as clothing and electronics can be made cheaper there, or because North America does not grow crops such as cocoa or coffee beans.

This issue has come to light due to press reports of violations in the Apple factories in China, as well lawsuits over the use of coffee and cocoa beans grown on plantations that use slave labor and are sold to the North American market. Footwear and clothing has come under fire even as the consumer pays a premium price for a “designer label”. And American consumers would be shocked to learn that the diamond rings they wear often leave blood on their hands.

According to the International Labor Organization, there are 21 million people around the world who are engaged in forced labor. This means they have little to no salary, no access to health benefits, little food and no clean water, are forced to work all waking hours with little sleep, and worse, some are savagely beaten and tortured.

How could this even be an issue in our modern times? Sadly, the answer is that as long as we—the United States—continue buying these products, the slave labor will continue. It won’t stop until we stop buying it.

In 1930, Congress passed a law banning the importation of these goods, however, a provision in the law provided a loophole for “consumptive demand” and the exception ended up swallowing the rule. In other words, if domestic demand exceeded domestic supply, goods produced by slave labor, such as chocolate and coffee, could still be legally imported. Yet, we can see from the forced labor clothing, shoe, and electronics factories, other companies have profited from the lack of enforcement due to this provision as well.

The good news is that as consumer awareness spreads, more and more North Americans are demanding that the products they buy are from manufacturers and suppliers who are certified as being “Fair Trade.” As a result, on February 24, 2016 President Obama signed the “Trade Facilitation and Enforcement Act.” After 86 years, the “consumptive demand” loophole in the Tariff Act of 1930 has finally been closed and we are now one step closer to shutting down the import of goods made with forced labor.

It’s going to be a long road, as enforcement has been lacking. But it’s a start, and perhaps in a few years’ time all goods sold in the USA will be certified free from modern day slavery.

 

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