University of Groningen
Faculty of Economics and Business
Forced Labor in the Seafood Industry: Multinational and
Nonprofit Collaboration across Regulatory and Geographic
Contexts
Master’s Thesis of: Rémon Jasperse
Supervisor: Dr. C. H. Slager Co-Assessor: Dr. M. M. Wilhelm
FORCED LABOR IN THE SEAFOOD INDUSTRY: MULTINATIONAL AND NONPROFIT COLLABORATION ACROSS REGULATORY AND GEOGRAPHIC
CONTEXTS
TABLE OF CONTENT
ABSTRACT 2
INTRODUCTION 3
LITERATURE REVIEW
Social Responsibility Practices in the Global Value Chain 6
Types of Collaboration 11
Forced Labor in the Global Value Chain 13
Enabling Conditions Forced Labor 13
METHODS, CONTEXT AND DATA 17
FINDINGS 26 DISCUSSION 37 CONCLUSION 44 REFERENCES 45 APPENDICES 51 ABSTRACT
This paper is about the collaborative activities of multinational corporates (MNCs) and nonprofits (NPOs) across the regulatory and geographical contexts in order to exclude forced labor within the global value chain (GVC). Due to more recent developments, excluding forced labor in the GVC has become progressively difficult and cannot be achieved by just MNCs any longer yet requires collaboration. While the importance of organizational collaboration on reducing forced labor has recently been discussed, the literature still lacks a clear understanding of MNC-NPO collaborations aimed at excluding forced labor. The explorative nature of this paper identifies the impact of the two explanatory factors on MNC-NPO collaborations. Via a mixed method case study, specifically aimed at the shrimp scandal in Thailand, this research question was resolved.
KEY WORDS: Forced labor; global value chain (GVC); collaboration; labor standards; multinational corporations (MNCs); nonprofit organizations (NPOs)
INTRODUCTION
“Working 20-hour shifts without being paid, receiving regular beatings, watching torture and execution-style killings that take place in front of you, while being offered methamphetamines to keep on going” (The Guardian, 2014, p. 1). While the use of slaves is most often seen as an obsolete form of premodern labor practice that has been supplanted by more legitimate and human practices (Crane, 2013), it is still the truth for a major part of the Thai fishermen who are catching the fish of the world nowadays. In 2014 a report revealed the damning revelations of forced labor aboard Thai fishing boats that are connected to seafood exported and sold by large MNCs worldwide, better known as the shrimp scandal (The Guardian, 2018). Forced labor, work that you have not agreed to perform under the threat of punishment (European Court of Human Rights, 2019), has become more prevalent recently in the ongoing rat race of fisheries in decreasing costs (Stringer & Michailova, 2018).
Over the past generation, information- and communication technologies and low-cost shipping have enabled organizations to outsource to suppliers around the world based on cost and capability (Kim & Davis, 2016). Yet even as production becomes increasingly disaggregated, MNCs are called on to be more accountable for the practices of their suppliers and even the actions of the nations in which they operate (Kim & Davis, 2016). Though economic globalization has increased the strength, number, and diversity of stakeholders' pressures and compelled MNCs to promote CSR-activities (Gardberg & Fombrun, 2006), organizations often do not – deliberately or unknowingly - conform to their stakeholders' expectations. Due to information asymmetry, which stems from outsourcing or subcontracting, irresponsible practices become hard to identify. Moreover, especially MNCs with a high diversification in their GVC have difficulties in ascertaining whether all of their suppliers are socially responsible given their current levels of outsourcing (Whiteman & Cooper, 2016).
Forced labor is a relatively new phenomenon within the academic research on social responsibility, since the paper from Crane (2013) we saw a growing academic interest towards this field of research. The focus within forced labor has been on describing and highlighting the dangers of this phenomenon (Surroca, Tribó & Zahra, 2013; Kim & Davis, 2016; Whiteman & Cooper. 2016). To illustrate, the few studies that have investigated forced labor typically use quantitative proxies for irresponsible behavior, such as those encapsulated in external rankings of companies, in attempts to assess whether various organization characteristics influence the incidence of forced labor (Surroca et al, 2013; Tang, Quian, Chen, & Shen, 2014).
The academic research on social responsibility has identified the drivers and the impacts of different contexts, such as geographic or regulatory contexts, that could affect the labor conditions of workers (Kim, Colichia & Menachof, 2018; Yawar & Seuring, 2017; Zorzini, Hendry, Huq & Stevenson, 2015). To illustrate, MNCs tend to increase the labor conditions when the geographical distance among organizations is low and the regulatory context is high (Fontana & Zanden, 2019), and these contexts are also influential on forced labor, illustrated by more exposure to consumers, more stricter regulations and legislation (Crane, 2013). However, as recognized by its authors, the current papers lack a clear and thorough understanding of how forced labor can be identified, evaluated and ultimately be diminished (Surroco et al, 2013; Kim & Davis, 2016; Whiteman & Cooper. 2016).
More recent research (Huq & Stevenson, 2020; Lee, Mellahi, Mol & Pereira, 2020) have started to discuss the improvement of labor conditions with a more interorganizational perspective in such a way that these papers suggest that MNCs could collaborate with other actors such as NPOs in order to address the labor conditions in developing nations. Collaborative governance driven by buyers and practiced through MNC–NPO partnerships can potentially provide better solutions than unilateral action, because it enables buyers (MNCs) to share crucial information, results in a more effective supplier relationship management, and may ultimately stimulate higher levels of compliance (Lee et al, 2020). Different types of MNC-NPO collaborations have emerged in research, resulting in three main types that are categorized from lesser intensive types towards more intensive types of collaboration, respectively: arm’s-length relationship, interactive
collaborations and management alliances (Rondinelli & London, 2003).
Since we have not studied collaboration in the context of forced labor, applying the models of collaboration found in other contexts will generate more insights into this context, and it will allow us to study the two explanatory factors (regulatory and geographical contexts). Employing such a collaborative perspective on excluding forced labor, I pose the following research question:
I examine this question through a mixed method case study that draws on secondary data from both MNCs as NPOs to analyze the MNC-NPO collaborations that target the labor conditions in the GVC with a specific focus on forced labor in the fishing industry in Thailand. The fishing industry has been chosen because this industry received a lot of attention since the shrimp scandal (2014) and there was ambivalence in excluding forced labor in the years after according to the Guardian (2018). The regulatory and geographical contexts are of great influence for the fishing industry as well (HRW, 2018), because this industry is characterized by less exposure to consumers, a high degree of informality and because one of the outcomes of the shrimp scandal was that there was a lack of law enforcement (The Guardian, 2014). The combination of the framework of Crane (2013) and the lack of knowledge about the geographic and regulatory context within the labor conditions regarding MNC-NPO collaborations make us focus on specifically these two contexts within this study. In that way, we extend the focus of previous research (LeBaron et al, 2019) by including the role of both the regulatory context as the geographical position of an MNC in the GVC in establishing collaborations.
The findings show that the types of collaboration are dynamic and increase in intensity of collaboration over time, as well as that the regulatory and geographical contexts impact collaboration once an organization experiences more public pressures and exposure to consumers. This research will distinct itself from other forms of exploitation such as child labor and overtime by solely investigating forced labor with the aim to identify certain aspects that will work differently compared to these other two forms of exploitation. On the other hand, this study also finds new and interesting patterns that also could be interesting for these other two areas or other forms of labor standards.
LITERATURE REVIEW
To underpin our analysis, three broad streams of analysis associated with social responsibility within the GVC are reviewed briefly: social responsibility practices within the GVC; MNC-NPO collaborations; and forced labor within the GVC. Recent literature reviews (e.g., Kim et al, 2018; Yawar & Seuring, 2017; Zorzini et al, 2015) have done an admirable job of comprehensively covering every stream within the social responsibility in the GVC field of research, so the intent here is more compact: briefly highlight the main concepts and constructs that were discussed within this field of research in the last fifteen years. Once this research is collected and summarized, this overview can function as a solid foundation for further and more specific research in this area.
Social Responsibility Practices in the Global Value Chain
In the last two decades research towards this phenomenon really took off, since the year 2005 the number of papers increased rapidly (Yawar & Seuring, 2017). Within this stream of literature, basically one can classify the literature among three categories in time: the stream from 2005-2010, the stream from 2010-2015, and the stream from 2015 until now. As Table 1 and Table 2 illustrate, the main focus throughout the years was on the antecedents and practices of socially responsible behavior.
First, the first few papers in this field of research (2005-2010) especially tried to understand the importance of engaging in socially responsible practices in the GVC and started to do initial research towards potential practices that could stimulate these practices (e.g. monitoring and auditing codes of conduct). According to Awayshey & Klassen (2010) there are two main reasons for organizations to embrace socially responsible practices and to allocate resources to these practices, namely to identify new opportunities to gain a competitive advantage; and to limit the dangers of reactions and worries from NPOs, the public, and consumers (Appendix 1). Creating these supplier socially responsible practices can help moderate the negative results of unforeseen occasions as well as disclosures (Awayshey & Klassen, 2010). Other papers, such as the paper from Andersen & Skjoett-Larsen (2009) reasons that especially MNCs that frequently work with suppliers in nations where environmental and social issues are not yet addressed embrace such practices. Perceiving that negative exposure about the labor conditions of its suppliers may harm the organization and its reputation extensively, executives of the MNC should acknowledge and minimize the risks accompanied by working with other actors in their GVC (Andersen & Skjoett-Larsen, 2009).
buyers and suppliers (Huq et al, 2014). However, Hoejmose et al (2013) argue that force and reliance are the key components of integrating social responsibility in the GVC, as they empower the more powerful party to increase positive trade terms by coercing other actors to participate as well. Others, such as Park-poaps & Rees (2010) describe the potential negative outcomes irresponsible practices in the GVC could have on an organization, such as a damaged reputation or loss of shareholder value. Moreover, they argue that it is up to the stakeholders of an organization, such as consumers, regulators, the industry and the media, to pressure organizations to engage in more socially responsible practices in their GVC. As a result, the paper finds that especially industry peers and media can influence the external orientation of an organization (Park-poaps & Rees, 2010).
Third, the most recent stream of papers (2015-2020) have started to focus on collaboration among buyers1. Collaborative activities, driven by buyers and rehearsed through
MNC–NPO partnerships have a relative advantage compared to sole buyer-supplier relationships. Because of the increased supplier dependence in the proposed collaborations, it empowers buyers to share more information with their suppliers, it results in a more efficient management of the relationship, and it may increase the compliance levels of the concerning suppliers in the long run (Lee et al, 2020). Trust based approaches, an approach in which buyers and suppliers collaborate solely based on trust, do not work because of the high number of short relationships with suppliers. Top down methodologies, an approach in which board executives communicate desired changes downwards towards workers, also do not work on the grounds that genuine labor issues happen more when supplier’s reliance is low (Huq & Stevenson, 2020). Collaborations force suppliers without hesitation, lessens audit costs and animates information sharing among MNCs (Lee et al, 2020). Therefore, it can be concluded that while trust and cooperation between suppliers and buyers seemed to be the solution, more recent papers (Huq & Stevenson, 2020) highlight the importance of MNC-NPO collaborations among buyers. Moreover, these industrywide collaborations force relatively smaller suppliers to engage in socially responsible behavior in their factories or plants. Mani et al (2018) points that improved social performance also results in financial gains for the MNC. Other authors (Marshall et al, 2019) argue that in the event that MNCs use pressure, authenticity, or rewards to drive or prompt suppliers to execute practices, the outcome will be opposition and a waste of resources. However, in the event that organizations provide training, expertise and education
1 In order to ease reading, the term “buyers” is used in certain sections to make a sufficient distinction between
or show others how it should be done through a sustainable direction, first-level suppliers will be substantially more likely to embrace or upgrade their own social responsibility practices (Marshall et al, 2019).
Concluding, within the field of research towards social responsibility in the GVC there has been a shift from understanding social responsibility in general, towards underlying pressures and motivators towards testing multiple practices on their probability of implementation at suppliers. However, the next step is still missing within this field. First, the findings in this field of research are contradicting regarding the influence of regulators. While some authors argue that regulatory enforcement has no influence of the social responsibility of MNCs, due to the lack of stringent regulations on modern slavery (Huq & Stevenson, 2020), others argue that it could work as an additional stimulant (Mani et al, 2018). Furthermore, research shows that suppliers’ power increases, due to the increasing demand as a result of globalization, and that individual buyers lose power which results in buyer dependency (Lee et al, 2020). Therefore, it becomes hard to make a stance as a single organization which makes it necessary to collaborate with others in order to raise the labor conditions. However, multiple questions still remain: how can buyers collaborate successfully in different contexts and since coercion and trust does not work, how should MNCs implement socially responsible practices? As mentioned, Lee et al (2020) discuss that a collaborative approach among buyers could work, but also highlight the fact that due the increasing power of producers in developing markets it is now more necessary than ever to try collaborations and to find practical implications in how to implement such practices.
Types of Collaboration
In order to establish a sufficient collaboration among MNCs and NPOs, a clear distinction should be made between different types of collaboration. Lee et al (2020) argues that MNCs especially tend to collaborate with NPOs for resources that they cannot obtain themselves, such as social expertise. Already since the rise of NPOs, multiple scholars have analyzed and constructed different collaboration frameworks and models (Austin & Hesselbein, 2000; Inkpen, 2001).
corporates and NPOs, illustrates that collaboration efforts can be categorized into three main types of collaboration. Even though the model originates from 2003, more recent research still refers to this model that illustrates the ongoing relevance of the model (Balaisyte, Besiou & Van Wassenhove, 2017; Feilhauer & Hahn, 2019; Lee et al, 2020). While there are no further additions made to the collaboration model it seems that research has focused on the underlying structures that nurture MNCs to collaborate with NPOs. To illustrate, Stadler & Jin (2019) found that stricter policy mechanisms are associated with industrywide partnerships. Others found that the dynamic capabilities of MNCs are crucial for sustainable partnerships with NPOs (Mousavi & Bossink, 2020). Based upon the increasing importance of MNC-NPO collaborations and the interfaces (e.g. the impact of stricter regulations) within social responsibility research, the modern-day relevance of the model, our interest in collaboration over time and the combination of multiple models into one, this model from Rondinelli & London (2003) has been chosen as a fundament for this paper (Appendix 2).
The model distinguishes three types of collaboration that are ranked upon the degree of intensiveness and the type of motivation of the MNC, respectively an arm’s-length
relationship, interactive collaboration and management alliances (Rondinelli & London,
2003). An arm’s-length relationship can be seen as corporate support for employee voluntary participation in environmental activities, corporate marketing affiliations and corporate contributions and gifts to environmental NPOs (Rondinelli & London, 2003). Interactive
collaborations are defined as moderately intensive collaborations between MNCs and NPOs,
Forced Labor in the Global Value Chain
One of the most prominent forms of unethical price reductions in the last couple of years is forced labor (ILO, 2013), because of the failing governments in developing nations organizations have to abide to fewer regulations and can recruit more easily from the informal sector (Huq & Stevenson, 2020). Since some organizations in developing nations get away with forced labor more easily and governments fail, it is up to socially responsible organizations to improve and keep watch of their labor conditions in their entire GVC.
The International Labour Organization (2013, p. 63) has defined forced labor as “all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily”. Alternative labels for forced labor include modern slavery and slavery-like practices (ILO, 2009; Crane, 2013), but this paper uses the label forced labor since this focuses relative more on the use of slavery in the workplace and less on other slavery practices such as human trafficking for instance. According to the International Labour Organization (2013) there are around 24,9 million workers that are trapped in situations of forced labor and in many cases, they are restrained from leaving the employers property through threats or violence. The organization further noted that forced labor nowadays also affects considerable numbers of migrant workers who are transported away from their home country or communities of origin (ILO, 2013). In addition, it is essential to mention that there are still forms of forced or compulsory labor that are imposed directly by the state, which is in violation of international standards, either for purposes of production or service (national service obligations) or as a punishment (for example for expressing certain political views) (ILO, 2013). However, this paper limits the analysis of forced labor to private rather than public organizations, since the former accounts for a major part, approximately 80 percent, of all forced labor (Belser et al, 2005) and the latter, such as forced labor in prisons, represents a different organization of powers to the right of ownership (Crane, 2013).
Enabling Conditions Forced Labor
have a relatively higher chance of being exploited (LeBaron et al, 2019). However, within the fishing industry the two utmost important and influential contexts enabling forced labor are respectively the geographic and regulatory context (HRW, 2018).
The geographic context is often described as the physical, political, psychological distance one perceives (Crane, 2013). A high geographical distance introduced by outsourcing or operating in remote areas that results in less exposure to consumers, make it relatively easy for organizations to get away with irresponsible practices (LeBaron et al, 2019). Kim et al (2018) support this view by acknowledging that the geographic location of operations plays a role in the social responsibility of an organization in the GVC. Additionally, Awaysheh & Klassen (2010) argue that when the geographical distance between buyers and suppliers increases, the supplier is less likely to implement the buyer’s codes of conduct. One possible reasoning could be that as when the geographical distance increases, the number of repeated interactions between a buyer and individual suppliers might decrease and thus make it less worthwhile to communicate and implement the codes of conduct. However, one study found that the geographic location of the headquarters of the buying organization also influences the engagement in social responsibility. Namely, Hoejmose et al (2013) found in their study one interviewee from a worldwide nourishment and drink manufacturer that remarked that social responsibility in the GVC was of specific significance when importing into the UK. The interviewee mentioned that the desires regarding engaging in socially responsible behavior were relatively higher in the UK than in the rest of Europe. According to the interviewee there was considerably less pressure in the rest of Europe for approving the social responsibility of the suppliers. This may suggest that national settings play a role when it comes to social responsibility in the GVC (Hoejmose et al, 2013). This has probably to do with the anti-slavery regulations that the UK introduced recently, which brings us to the next context: the regulatory context.
rivalry (Park-Poaps & Rees, 2010). However, regulatory enforcement within the private sphere is in the fundamental left to organizations themselves, encouraging instead of disturbing the race to the bottom in which organizations endeavor to bring down expenses and improve profitability (Crane et al, 2019). Further, the utilization of intermediaries, for example labor suppliers, have blurred the line of duty among employer and employee, making it hard to build up accountability where laborers’ rights are disregarded, with respect to wages or wellbeing and security (Allain et al, 2013). Due to these developments and gaps in regulations, nations established new anti-slavery regulations to fight forced labor effectively (Flynn, 2019).
The UK modern slavery act from 2015 belongs to one of the first concrete initiatives that realized the desire to exclude forced labor in the GVC via new anti-slavery legislation. The UK-act was designed to improve the transparency in GVCs and to enforce organizations to establish reporting mechanisms to prevent and combat modern slavery in their GVC (Sterke, 2020). The act enforces organizations in the UK with an annual turnover over £36 million to release an annual modern slavery report in which these organizations elaborate on their anti-forced labor practices (Sterke, 2020). The enforcement of the modern slavery act affects organizations in such a way that organizations are obliged to abide to the legislation once they have surpassed the threshold, increasing the exposure and risks associated with a neglection of the socially responsible practices. Ever since the UK-act was implemented the regulatory context of the UK has changed significantly via major shifts towards more NPO-partnerships and reports on social responsibility (Rao, 2019). After the UK-act was enforced, many nations followed and implemented anti-slavery legislation themselves: new legislation in France in 2017, the Australian modern slavery act 2018 and the NSW modern slavery act 2019 (Pinnington, 2019). However, the UK-act also has some limitations due to the broadly defined recommendations, a lack of strong oversight, a lack of data-driven responses and limited transparency requirements (Sterke, 2020). LeBaron & Rümhkorf (2017) take it one step further by arguing that due to these limitations, e.g. a lack of imposing additional requirements such as sanctions, the UK-act fails to establish new public labor standards or enforcement mechanisms and thus is not effective as a voluntary initiative. “The substitution of a vague reporting requirement over a more stringent model of public governance appears to have undermined its effectiveness in ‘steering’ corporate behavior” (LeBaron & Rümhkorf, 2017, p. 26).
METHODS, CONTEXT AND DATA
Case selectionIn 2014, the exploitation of workers in the Thai fishing industry was revealed by an extensive research from “The Guardian”, “New York Times” and “the Associated Press”. It was the first time that the conditions of the industry and its connections with large western retailers were revealed, the scandal is better known as the “Shrimp Scandal” (The Guardian, 2014). The decision was made to choose this particular case of forced labor as a case context because it opened up the academic research toward forced labor and it allowed for an exploration of the dynamics in collaboration between MNCs, suppliers and NPOs. The scandal saw the light after a six-month examination that showcased that a large number of forced workers, a group of trafficked and sold men, were held without wanting to on Thai fishing vessels (The Guardian, 2014). The fishing vessels recruited the forced workers in order to reduce the cost price and thus gain a competitive advantage. The slavery-like practices were deemed necessary for the production of shrimps that are sold worldwide, including at well-known and large retailers: Mars, Nestlé, Tesco, Walmart and Aldi (New York Times, 2015). The examination found that two major Thai shrimp-suppliers, Thai Union and Charoen Pokphand (CP) Foods, bought fishmeal, which it feeds to its cultivated prawns, from certain suppliers that possess, work or purchase from fishing vessels that work with slaves (The Guardian, 2014). Even though both pay a premium to factories that claim to catch fish caught by legal and licensed boats, the suppliers neglected to execute independent audits or check the fishing licenses (HRW, 2018). Escaped workers from vessels providing Thai Union an CP Foods, told the Guardian of the awful conditions, that include 20-hour shifts, ordinary beatings, torment and execution-style killings. The workers were adrift for years and were normally offered stimulating drugs to prop them up, while they watched how fellow workers were murdered in front of them (The Guardian, 2015).
and contracts). Due to this high degree of informality it has become hard for MNCs to ascertain whether their GVC contains forced labor or not.
Human trafficking has helped Thailand to become one of the world's greatest shrimp suppliers (The Guardian, 2014). Regardless of rehashed guarantees by organizations and government from the developing markets to tidy up the nation's £4.6bn seafood industry, the examination has discovered that shrimp stripped by forced workers is arriving in the US and Europe (AP, 2014). Due to the shrimp scandal, Thailand is now seen as a global center point for human trafficking (The Guardian, 2015).
Data collection
The analysis integrates various data sources, including 21 modern slavery reports, 42 annual reports, 4 NPO-reports, 55 newspaper articles and scores from the World Benchmarking Alliance (Table 3).
Publicly available reports on the shrimp scandal in Thailand were collected from multiple NPOs2 (Human Rights Watch, Environmental Justice Foundation, Verité and
International Labour organization), by searching on the worldwide web using the key words “Shrimp Scandal”, “Thailand” and “2014”. Thereafter, the search results were analyzed on their relevance (e.g. they referred to the issues concerning labor conditions in the seafood industry in Thailand rather than containing a few mentions of the word scandal in different contexts). In total, four extensive reports with a total of 290 pages were deemed relevant and downloaded. The reports that were collected contained recommendations (“Recommendations to International Buyers, Importers and Retailers of Thai Foods”), interviews, victim profiles, case studies and surveys. In a first reading of the reports, it became clear that three of them were based on the scandal of 2014 and that the ILO-report (2013) was based on exact the same issues in the seafood industry in Thailand one year prior to the publication of the scandal. Due to the extensive research towards exactly the same issues within the industry, we chose to include this report as well. Furthermore, some sections of the reports were excluded from a thorough analysis, for example, the ecological effects of overfishing as well as the commercial information about the NPOs. On average, 55 percent of the reports was analyzed and coded.
2 NPOs are in the analysis defined as the 3 non-governmental organizations (HRW, Verité &
Table 3. Overview of Data sources (Source: authors own)
Data source Use in Analysis Details
NPO-reports To collect background
information on the context in which the scandal took place; obtain insights into geographic perspective.
4 descriptive reports were collected (1 authored by The Human Rights Watch, 1 by the Environmental Justice
Foundation, 1 by Verité and 1 by the International Labour organization). Where the latter was from 2013, one year prior to the scandal, and contained more general information about the malpractices in labor conditions in the seafood industry in Thailand. Newspaper articles To collect background
information on the context in which the scandal took place; obtain insights into regulatory perspective.
17 the Guardian articles, 20
Associated Press, 18 New York Times articles all dated
between June 2014 and March 2020. Retrieved from Nexis using the keywords “Forced labor”, “Forced labour”, “Seafood” and “Thai”. Annual reports Basis of the critical analysis,
used as raw data coded with the aid of Atlas.Ti.
42 annual reports (6 authored by Mars, 6 by Nestlé, 6 by Tesco, 6 Wal-Mart, 6 by Aldi, 6 by Thai Union and 6 by CP Foods).
Modern slavery reports Basis of the critical analysis, used as raw data coded with the aid of Atlas.Ti.
21 modern slavery reports (3 authored by Mars, 3 by Nestlé, 3 by Tesco, 3 Wal-Mart (ESG-report), 3 by Aldi, 3 by Thai Union and 3 by CP Foods). WBA-reports To validate and triangulate
findings found in MNC-reports.
Table 4. Overview of MNCs
(Based on: NPO-reports, MNC-reports and WBA-reports, 2019)3
Table 5. Overview of Suppliers
(Based on: Supplier-reports and WBA-reports, 2018)
Supplier Global HQ Annual Revenue Presence UK Total Score Seafood Stewardship Index5 Thai Union CP Foods TH TH $5 Billion $63 Billion Low Low 2,70/5 2,32/5
Multiple newspapers on the shrimp scandal in Thailand were collected from both British and American newspapers (The Guardian, New York Times and the Associated press), by searching in the Lexis Uni database using the key words “Forced labor”, “Forced labour”, “Seafood” and “Thai”. Specifically, these three newspapers were chosen because they conducted a collective research towards this topic in 2014 and the years thereafter. All three of them were the fundament for further research towards forced labor. Moreover, the newspapers were chosen to further our understanding on the general business context in which the scandal took place. This set of news articles contained 55 articles, dated between 2014 and 2020. The articles totaled 223 pages, and the sections of the articles that were related to the shrimp scandal were analyzed (Appendix 4).
Publicly available annual reports and modern slavery reports from the MNCs and suppliers that were mentioned a significant number of times in the reports over the shrimp scandal were analyzed (Retail: Mars, Nestlé, Tesco, Wal-Mart and Aldi /Suppliers: Thai Union and CP Foods). Because this study is also interested in the longitudinal aspect of the types of collaboration between MNCs and NPOs only these seven organizations were analyzed. In order
3 The world benchmarking Alliance (WBA) is an independent NPO that works to incentivize and accelerate
organizations’ efforts towards achieving the sustainable developments goals set by the UN. The WBA consists of organizations that construct benchmarks in order to persuade industries to become more socially responsible.
4 The Corporate Human Rights Score covers an organizations’ government & policies, due diligence processes,
as well as how they respond to serious allegations.
5 The Total Ranking Seafood Stewardship Index covers all important aspects that concern forced labor such as
human rights and working conditions, governance and management of stewardship practices and consideration of local communities. MNC Global HQ Annual Revenue Presence UK
Main Shrimp Supplier Corporate Human Rights Score4 Mars Nestlé Tesco Wal-Mart Aldi US CH UK US DE $35 Billion $97 Billion $81 Billion $524 Billion $53 Billion Medium Medium High Low Low Thai Union Thai Union CP Foods
to triangulate, also other MNCs and suppliers in this area were analyzed at first. However, because these organizations were not significantly involved in times of the scandal that makes it hard to identify trends over time and did not provide significant other findings the decision was made to keep the other organizations out of scope for this study.
The annual reports were screened for their relevance (e.g. they referred to labor conditions at the suppliers or forced labor in their GVC). In total, 42 annual reports dated between 2014 and 2019 were analyzed. The sections of the reports that were related to labor conditions or forced labor at the suppliers were analyzed. A major part of the sections from the reports were excluded from the analysis, for instance, keynotes from the CEO and commercial information about the organization, as well as the financial figures from the organization, and so on. On average, 5 percent of the reports was analyzed and coded. Additionally, the modern slavery reports from all organizations, except Wal-Mart, from 2016, 2017 and 2018 were analyzed since the report from 2019 was not yet published. Because Wal-Mart is not present in the UK6, it did not have a modern slavery act statement therefore the ESG-report of this
MNC was taken. The reports were analyzed and coded upon the types of collaboration that the concerning MNC showcased in the report.
The scores from the World Benchmarking Alliance were used to function as a triangulation for our findings (Table 4 and Table 5). The WBA-reports have been chosen since this enables us to use the same independent and transparent body (Keppner, Weiß & García, 2019) to evaluate the organizations in this study and to have a somewhat similar set of criteria to compare both the scores from the suppliers as the MNCs. Though, not all 5 MNCs were evaluated in the WBA-report, the evaluations provide us a general indication to compare the results in this study with the results from the WBA.
Data analysis
The qualitative data analysis of this study was an iterative process that encompassed four stages: analyzing and coding the data, clustering the different codes, identifying trends and constructing a narrative.
First, the data was analyzed for longitudinal trends since 2014 until 2020. The impact of the wide media coverage of the shrimp scandal on the type of collaboration per organization
6 In the UK, Wal-Mart is present under the ‘ASDA’ brand, however because Wal-Mart moved its responsibilities
Table 6. Overview of the three types of social collaboration (Based on: Goia et al, 2012)
Examples of coded data Sub-Type of Collaboration
Description Type of Collaboration Providing proof of net-to-plate traceability and
clear, specific assurance that products are caught or farmed legally, sustainably and ethically (EJF Report, 2019, p. 5)
Social value to products Activities to add social value to products Arm’s-Length Relationship Verité is advising Mars on our global human
rights strategy, policies and practices and together, we are gathering insights, generating new research and promoting dialogue to inform action across the business and human rights community (Mars MSR, 2017, p. 10).
Developed image of SR Activities to develop image of Social Responsibility
Our work with partners such as The Forest Trust (TFT), Verité, Proforest, World Animal Protection and others has helped us to
maximize and operationalize our commitments on the ground (Nestlé MSR, 2017, p. 10).
Support favoured NPOs
Activities to support favoured NPOs
In 2012, Nestlé became the first company in the industry to establish a comprehensive supply chain approach: The Child Labour Monitoring and Remediation System (CLMRS) (Nestlé MSR, 2017, p. 14). Specific targeted support Activities that target support on specific social issues Interactive Collaboration Over 200 UK colleagues have received training
to help them tackle modern day slavery risks in supply chains and our own operations (Tesco AR, 2019, p. 27). Educating stakeholders Activities to educate stakeholders on social issues Certification in accordance with one of our
recognized standards (Marine Stewardship Council (MSC), Aquaculture Stewardship Council (ASC), Organic, Global G.A.P., Best Aquaculture Practices (BAP) and further by Global Sustainable Seafood Initiative (GSSI) recognized standards) (Aldi CR Report, 2017, p. 42). External certification Activities to obtain external certification
Over the last year we have reviewed our human rights program with suppliers and external experts, including labour NGOs and trade unions, to ensure we are addressing the most serious risks to workers and communities (Tesco AR, 2017, p. 22).
Social expertise Activities to
accumulate social expertise
Management Alliances As a result of this analysis, in 2018 we
terminated our business relationships with one contract labor provider who was not able to meet our human rights standards. We worked with six labor providers as they took steps to improve their practices to meet our
expectations. Some of the improvements that these labor providers made included
correcting pay practices and putting new contracts in place (Mars MSR, 2018, p. 6).
was analyzed. In order to do this, the newspaper articles and NPO-reports were analyzed upon the activities undertaken by the key retailers that were identified earlier on in the report (Table 3). The coding schemes, commonly referred to as the “Goia method”, constructed in Table 6 are based upon the work from Goia, Corly & Hamilton (2012).The activities were coded with codes that are based upon the collaboration model from Rondinelli & Londen (2003) in order to categorize the different activities undertaken by MNCs. To illustrate, the code social value
to products was used to address raw data such as: “providing proof of net-to-plate traceability
and clear, specific assurance that products are caught or farmed legally, sustainably and ethically” (EJF Report, 2019, p. 5). This raw data was coded as social value to products because the activity describes the efforts taken by MNCs such as informing their consumers about the origin of their products to deliver an additional message that mentions that there were no human right violations during the production of this product. The activities that relate to develop image
of SR were coded like this because they tend to focus more on the publication, reporting and
perception of consumers about their social responsibility instead of delivering tacit improvements in this area. The code support favored NPOs was coded as it is because these types of activities focus on an allocation of resources towards NPOs in order to address social issues. The activities related to specific targeted support were coded in this way because these activities tend to focus on support from MNCs that is focused at addressing one specific social issue in their GVC. The code educating stakeholders was coded in this way because the efforts aim to educate employers and suppliers about social issues. The activities that relate to external
certification were coded like this because these activities relate to that type of activities that is
aimed at obtaining external approval for one’s processes. The code social expertise was coded in this way to describe activities that are aimed at gaining more information and knowledge about specific social issues. Last, activities that relate to redesign process are coded in this manner to describe activities that are focused at a redesign of the internal processes of an MNC in order to be able to address social issues in their GVC.
The following codes were grouped together as code arm’s-length relationship: social
value to products, developed image of SR and support favored NPOs. The activities coded as: specific targeted support, educating stakeholders and external certification were grouped
together as interactive collaboration. The codes social expertise and redesign process were grouped together as management alliances.
The process of coding that is described above can be seen as an abductive process (Kolko, 2010) in which the collaboration model from Rondinelli & London (2003) was used to develop coding schemes for this context. In this manner the model from Rondinelli & London (2003) was held against the raw data that was analyzed in this study to ascertain whether the model was also suitable to apply in this context. In this process we found that one part of the collaboration model (Rondinelli & Londen, 2003) was missing in order to apply it in this context and therefore an addition has been made towards the classical categorization of types of collaboration. Instead of categorizing all activities that relate to educating stakeholders on social issues a two-split has been made: educating stakeholders and advocating human
rights. Where the former entails activities such as training employees or organizing trainings
for suppliers, the latter entails activities such as hosting events where governments participate in order to advocate for structural changes needed in the migrant labor market and sharing best practices with others in the industry or beyond the industry. Advocating human rights can be integrated in the management alliances. This can be seen as an addition towards the classic model from Rondinelli & Londen (2003).
Second, the impact of the regulatory context on the attitude towards forced labor was captured by coding and comparing the types of collaboration of the MNCs and coding whether these MNCs are UK-based or not (Table 4). The comparison between the UK and non-UK has been made because the UK was the first nation in the world to address modern forced labor with specific consequences (Sterke, 2020). Solely the retailers have been analyzed upon regulatory context since especially western organizations are prone to external pressures and thus regulatory pressures, to improve labor conditions (Yawar & Seuring, 2017). Therefore, for the two suppliers that are both situated in Thailand and thus experience less regulatory pressures (HRW, 2018) the decision has been made to keep them out of scope for this section.
FINDINGS
The findings are presented in two sections. The first section details the trend over time, outlining the degree of attention of MNCs for forced labor and the shift in types of collaboration. The second section sets out the influence of the regulatory and geographic context on the type of collaboration.
Qualitative Analysis of Types of Collaboration
Type of Collaboration: Arm’s-Length Relationship
The type of collaboration that occurred the most in 2014 is the arm’s-length relationship: an externally driven and low-intensive effort of collaboration to drive out forced labor in the GVC. An arm’s-length relationship consists of three key activities that an MNC can integrate to collaborate. First, an activity to add social value to one’s products. In our case, these activities are usually shown for promotional reasons, in the sense that the social value of an MNC is predominantly shown in order to reassure consumers about the responsibility in their processes:
“We are a global, principles-driven company seeking to promote and advance respect for human rights across our value chain - from farms to our labor suppliers’ factories to our own workplaces. Our processes are aimed to improve the labor conditions of the workers.” (Mars MSR, 2016, p. 2)
The image of social responsibility that is being showcased illustrates the process that the industry has gone through since the shrimp scandal in 2014. While MNCs are eager to showcase the additional social value that their products have to offer, often their main focus is on a developed image of SR. Noticeably, all MNCs devoted at least some resources to respond to forced labor in their GVC, and many have seen the total time spent grow in recent years due to more frequent demands for information and data (Appendix 6):
“We are committed to upholding basic human rights and fully support the UN Universal Declaration of Human Rights and the International Labour Organization Core Conventions. We are a founding member of the Ethical Trading Initiative.”
(Tesco AR, 2015, p. 20)
In addition to the efforts in adding social value to products and developing a more socially responsible image, MNCs also turn to NPOs that address social issues in their industry.
Supporting favored NPOs relates to allocating support towards NPOs that aim to improve the
expressing support towards these NPOs – to relative more resource-intensive activities over time:
“In 2019 we entered into partnership with the charity, Unseen, who run the UK’s first fully independent and confidential modern slavery helpline.” (Tesco MSR, 2018, p. 9) “In 2017, we launched a long-term, strategic partnership with Verité́ – a leading nonprofit and global expert on labor rights with more than 20 years working to ensure people worldwide are in safe, fair and legal working conditions.” (Mars MSR, 2018,
p. 12)
As the attention towards an MNC’s activities in improving labor conditions increases, MNCs predominantly translate these activities into low-intensive activities that are externally driven by consumer pressure. Especially in the first few years after 2014 this type of collaboration formed the majority response of the concerning MNCs that are analyzed in this study. Literally an ‘arm’s-length’ relationship between MNCs and NPOs evolved in which the main focus was to showcase the social responsibility. While a major part of the MNCs integrated more intensive types of collaboration over time, some MNCs such as Aldi and Wal-Mart stuck predominantly to an arm’s-length relationship with NPOs (Figure 1).
Some MNCs also managed to position themselves from a low-intensive type- towards a highly intensive type of collaboration (Figure 2). Mars functions as a suitable example of such an MNC, since Mars have come up with the “Thai Fish Supply Chain Human Rights Action Plan” (Appendix 5) in 2015 as a response to both the scandal publication and the UK-act. Mars, that imports shrimps for its animal food, has constructed this action plan in order to address forced labor at their suppliers. Notably, the type of collaboration shifts over time as Mars has more visibility and their GVC becomes more transparent. At the end of 2018 Mars concludes that, due to a high number of audits, monitoring and trainings they are certain that they excluded forced labor in their entire GVC (Mars MSR, 2018, p. 6).
Figure 2. Mars’ case type of collaboration over time (Source: authors own)
Type of Collaboration: Interactive Collaborations
An interactive collaboration seeks to confront social issues in a more upfront manner and involves types of collaboration that are deemed as more intensive and that require a higher allocation of resources. For example, specific targeted support focuses on addressing one particular social issue that has been identified. These managerial efforts can be aimed at designing whistle-blowing channels that enable workers to report on social issues:
“Our external, independently managed whistle-blowing channel, ‘Tell us’, gives all external stakeholders the opportunity to report any possible non-compliance incidents against the Nestlé Corporate Business Principles.” (Nestlé MSR, 2018, p. 12)
MNCs not only construct mechanisms such as audits and monitoring to rule out forced labor, but also frequently educate their employees and suppliers on forced labor by “providing trainings and dialogue with suppliers” (Aldi MSA, 2018, p.2), and trainings that “enable employees to help them tackle modern day slavery risks in supply chains and our own operations” (Tesco AR, 2019, p.27). Educating stakeholders aids MNCs to identify and reduce forced labor in their GVC in a more efficient and effective manner (Rondinelli & London, 2003). One MNC recounts that the educational efforts are best implemented with the aid of human rights expert:
Another variant of this approach, used by a significant amount of MNCs, consists of obtaining
external certification, that is, employing external actors that validate the social responsibility
of the products that are created by the MNC. In the case of forced labor, MNCs are certified on criteria that relate to the UN human rights due diligence (Verité, 2016). This means that external actors, most often NPOs, analyze specific parts of the process upon human rights criteria that apply in that specific context. MNCs are well-willing to cooperate with such activities because these certifications can function as promotion material, thus MNCs allocate a significant part of their resources in obtaining these certifications in order to persuade potential consumers of their outstanding social responsibility.
“Certification in accordance with one of our recognized standards (Marine Stewardship Council (MSC), Aquaculture Stewardship Council (ASC), Organic, Global G.A.P., Best Aquaculture Practices (BAP) and further by Global Sustainable Seafood Initiative (GSSI) recognized standards)” (Aldi CSR-Report, 2017, p. 42)
Beyond such external certifications that showcase social responsibility, human rights experts (HRW, 2018) also question the fact that most certification agencies adopt different kinds of criteria that fail to consequently capture the most important aspects of a MNCs processes, especially in domains as forced labor at suppliers. In addition, some of the certifications are also based on criteria that prescribe the same as existing legislation in that country which dissolves the effect of that certification (ILO, 2013). As a result, some certifications from these NPOs appear loosely relevant -if not totally irrelevant- in light of the local legal framework.
Type of Collaboration: Management alliances
Management alliances have elements of showcasing and educating social responsibility yet also of internally redesigning processes that are prone to forced labor. One form of forming management alliances consists of social expertise. This study shows that when MNCs are uncertain in how to act on identified forced labor, a majority of MNCs start of by bringing in external experts that educate the organizations on social issues:
“Over the last year we have reviewed our human rights program with suppliers and external experts, including labor NGOs and trade unions, to ensure we are addressing the most serious risks to workers and communities” (Tesco AR, 2017, p. 22)
collaborations have been established. This finding entails that MNC-NPO collaborations are dynamic and that MNCs should go through the multiple phases of collaboration from lesser intensive activities to more intensive activities. This finding is also supported by the trends identified in Figure 2.
Management alliances also entails excluding forced labor in the GVC by redesigning
processes. For example, a redesign of the process is often used to transform persistent behavior
that allows forced labor to thrive in the GVC, especially if forced labor is outside one’s reach. A redesign of the processes, both internally as externally, enables structural improvements in the area of labor conditions. These innovations often function as the fundament that opens up the debate about human rights:
“During 2019, we became the first major food and beverage company to pilot open blockchain technology. This allows consumers to track our food right back to the farm. This is part of Nestlé’s journey toward full supply chain transparency and traceability. We want our consumers to make an informed decision and be able to choose responsibly produced products.” (Nestlé MSR, 2019, p. 5)
Another variant of this approach, discovered by analyzing the collaboration efforts that are showcased in this study, consists of advocating human rights, that is, advocating social responsibility towards stakeholders in the industry and beyond. The analysis shows that when MNCs were able to reduce forced labor in their GVC, managerial efforts will be aimed at remediation approaches, such as stricter regulations and guidelines that can be scaled in partnership with other companies, civil society organizations and government, as well as advocating for the structural changes needed in the migrant labor market:
“The next phase of our plan will focus more on identifying effective remediation approaches that can be scaled in partnership with other companies, civil society organizations and government, as well as advocating for the structural changes needed in the migrant labor market.” (Mars MSR, 2018, p. 11)
regulatory and geographical contexts determine the behavior of an MNC in addressing these social issues. To illustrate, while Mars went through a declared major shift and became one of the ambassadors of human rights, others such as Wal-Mart and Aldi did not experience this shift in collaboration. Even over time, these two MNCs stuck to the lower-intensive types of collaboration (Figure 1). The next section will take a closer look at the explanatory factors in an attempt to reveal the underlying causes of these aforementioned exhibitions.
Qualitative Analysis of the Explanatory Factors
Explanatory factor 1: Regulatory context
The first key trend that one can identify is that of the 5 MNCs, Wal-Mart stands out for addressing forced labor in its GVC only with lesser intensive collaboration types, respectively “arm’s-length relationship” and “interactive collaboration”. Mars, Nestlé, Tesco and Aldi are, due to their operations in the UK, forced to construct a modern slavery act statement in which they elaborate on their efforts in excluding forced labor in their GVC. However, since Wal-Mart is not present under its own brand in the UK7, they were not obliged to construct such a
statement and thus experienced less pressure to undertake activities to exclude forced labor in their GVC.
The findings in figure 1 reveal that the strict regulatory context of the UK indeed stimulates MNCs to engage in social responsibility. Moreover, even though the UK-act clearly mentions that it is only an mechanism that enforces UK-based MNCs to report onto their efforts in excluding forced labor, the findings show that it also functions as a stimulant, illustrated by MNCs that go beyond rules and regulations in order to improve the labor conditions in their GVC. Once these stricter regulations are not in place for an MNC, such as is the case with Wal-Mart, the findings reveal that MNCs are less likely to engage in an intensive manner with reducing forced labor practices by external promotion instead of internal change:
“We are supporting initiatives to counter forced labor in the Thai seafood supply chain, are encouraging responsible recruitment practices and have third-party certifications.” (e.g., MSC) in place (Wal-Mart ESG-Report, 2019, p. 30)
In line with the findings mentioned above regarding Wal-Marts’ efforts towards reducing forced labor, stricter regulations seem indeed to stimulate a more intensive type of collaboration between MNCs and NPOs. The high regulatory context of the UK, in which the
UK-act functions as one of the main policies that currently addresses forced labor in the seafood industry in Thailand, thus influences an organization’s behavior. To elaborate, the findings indicate that organizations with a significant market share in the UK, such as Mars, Nestlé and Tesco (Thompson & Martin, 2010) also outperform organizations, that have a lower presence such as Aldi or no presence at all such as Wal-Mart in the Britain market, concerning social responsibility:
“During 2019, we became the first major food and beverage company to pilot open blockchain technology. This allows consumers to track our food right back to the farm.” (Nestlé MSR, 2019, p. 5)
Especially since the introduction of the Modern Slavery Act, MNCs started to collaborate in order to address forced labor in their GVC. Two years after the arrival of the act, one UK-based MNC declared to have excluded forced labor in its entire GVC:
“In 2018, we reached a major milestone in the Responsible Workplace program – 100% of our 121 in-scope manufacturing sites across 29 countries have now been assessed, including evaluation of forced labor risks.” (Mars MSR, 2018, p. 6)
Since 2018 Mars started to advocate for human rights in the GVC in their own industry and beyond. Due to the high visibility of its products in the Britain market (Mars AR, 2016) and the stricter regulatory context in the form of the UK-act, the findings indicate that Mars successfully has gone through the multiple phases of collaboration:
“In 2018, we convened more than 20 stakeholders to reflect on progress and next steps in our Thai fish human rights work. The next phase of our plan will focus more on identifying effective remediation approaches that can be scaled in partnership with other companies, civil society organizations and government, as well as advocating for the structural changes needed in the migrant labor market.” (Mars MSR, 2018, p. 11) “Verité is advising Mars on our global human rights strategy, policies and practices, and together we are gathering insights, generating new research and promoting dialogue to inform action across the business and human rights community.” (Mars
MSR, 2018, p. 12)
The findings in Figure 1 support this view, however as Appendix 7 illustrates the MNC has moved from interactive collaborations towards management alliances only after complementing the model from Rondinelli & London (2003).
In summary, the findings indicate that the regulatory context in which MNCs operate are utmost important for the identification and especially reduction of forced labor in one’s GVC. To illustrate, MNCs such as Wal-Mart that are not present in the UK adhere less to the international call that forced labor should be diminished and if possible, excluded out of the GVC of an MNC (supported by Table 4). On the other hand, the findings also illustrate that MNCs that are relatively more present and visible in the UK adhere more to this call and in some cases even go beyond regulation by advocating for human rights in not only their own industries but also beyond their own industry.
Figure 3. Involvement Suppliers in the Global Value Chain (Based on Dovre, 2019)
Explanatory factor 2: Geographic context
One major trend was identified regarding the influence of the geographic context on the attitude of suppliers towards excluding forced labor in one’s GVC that results in a more intensive type of collaboration with NPOs. Namely that the reach of supplier in the GVC and thus its exposure to consumers impacts its attitude towards forced labor. The two shrimp suppliers, Thai union and CP foods, were found to each serve predominantly their own share of retailers. While CP foods was identified as major supplier of the Wal-Mart, Aldi and Tesco, Thai union was identified as a major supplier of Mars, Nestlé and also Wal-Mart:
“Following the disclosures that CP Foods supplied British supermarkets including Tesco, Morrisons, Aldi, Iceland and Co-op.” (The Guardian, 2014)
The analysis of the shrimp-producing processes of both suppliers indicated that Thai Union is relatively more involved in the entire GVC compared to CP Foods. Thai Union is directly involved in the fishing of the shrimps, as well as in the processing, importing and manufacturing processes in the GVC. During the manufacturing process, Thai Union brands the shrimp under its own brand name in the UK: “John West”. CP foods on the other hand is also involved at both the fishing and processing process but exports its shrimps from there to one of its customers worldwide (Figure 3).
Though both suppliers claim to be fully dedicated towards excluding forced labor by showcasing multiple certifications or external awards, the findings indicate that Thai Union outperforms CP foods when it comes to social responsibility practices in their operations. Since the publication of the shrimp scandal, in which Thai Union was significantly involved, the supplier managed to improve the transparency in its GVC. Thai Union aims to distinguish itself by engaging in a more intensive type of collaboration with other actors:
“We are committed to leading an ongoing and active dialogue with industry, government and civil society to ensure lasting improvements in labor practices across the entire industry.” (Thai Union MSR, 2018, p. 5)
“With full traceability of all the seafood we purchase, we will have information about the labor practices on board vessels.” (Thai Union MSR, 2018, p. 5)
Though, the key operations of Thai Union are relatively further upstream in the GVC of shrimp production, the supplier is also visible and present downstream due to the use of its own label at its customers. As a result, Thai Union makes the most use of intensive management alliances, with 54%, compared to 23% at both the lesser intensive types of collaboration (Figure 4).
CP Foods, the other supplier that was significantly involved in the shrimp scandal, uses relatively lesser intensive types of collaboration in order to cope with forced labor in their GVC. Moreover, this finding is supported by less strict policies and relative less thoroughness concerning forced labor:
“2 out of 16 suppliers received Supplier Awareness Training and 0% of Tier 2 within the high-risk supply chain is in possess of a SEDEX membership. However, the goal for 2019 is to improve this.” (CP Foods MSR, 2018, p. 7)
Interestingly, even though CP Foods is improving the current situation concerning forced labor in its GVC, the supplier has allocated relatively fewer intensive resources in excluding forced labor. In addition, CP Foods sells its shrimps only business-to-business which lowers its exposure to consumers. Therefore, the MNCs’ strategy seems to focus on external certifications in order to persuade potential buyers instead of intrinsic motivated activities:
“Regular participation in Human Rights, Modern Slavery and industry specific ethical conferences including SEDEX, Stronger2gether, Seafish Ethics Common Language Group and FNET by the Responsible sourcing team.” (CP Foods MSR,
2019, p. 8)
a major shift in attention towards forced labor from Thai Union. Since the wide media coverage of the shrimp scandal, the supplier was able to redesign its internal processes and gather social expertise in order to drive out forced labor in its entire GVC. Motivated by its high exposure to consumers and brand visibility from its brand “John West”, due to its relatively downstream position in the GVC. CP Foods, on the other hand has a lower exposure to consumers and no brand visibility because it is further upstream with its production of shrimps and because of its business-to-business strategy. These findings are in line with the findings from the World Benchmarking Alliance (Table 5).
DISCUSSION
MNCs rarely question the role of the regulatory and geographic context in the anti-forced labor regime (Wright, 2016) nor their collaborations with NPOs (Huq & Stevenson, 2020), even though previous research suggests that the regulatory and geographic contexts could affect the social responsibility practices of an MNC (Huq & Stevenson, 2020). This study has begun to redress this disregard by developing a new theory of the type of collaborative activities that exclude forced labor. We found that social collaboration can be interpreted as a dynamic process that forces MNCs to begin with lesser intensive types of collaboration. We also found how explanatory factors give rise to more social responsibility. Table 7 summarizes the findings into a typology of social collaboration for excluding forced labor.
Table 7. Social collaboration model for forced labor (Source: authors own)
The collaborative perspective on exclusion of forced labor developed in this article has important implications for the study and use of MNC-NPO collaborations as mechanisms to drive out forced labor (Lee et al, 2020; Huq & Stevenson, 2020). First, each of the three types of collaboration as summarized in Table 7 has distinct implications for the usage of social collaborative activities. Second, the dynamic nature of collaboration can provide further insights to the MNC-NPO collaboration perspective on social responsibility (Huq & Stevenson, 2020). Lastly, debates about the impact of explanatory factors (Yawar & Seuring, 2017) that accompany the collaborative battle on forced labor, may open up space for future research situated in different contexts. These theoretical contributions and practical implications of the study will be discussed below.
The first set of insights relate to the impact of the regulatory context and the position of the supplier in the GVC, hereafter “supplier reach”, on the types of collaboration. The study deepens insights into the interplay between MNC-NPO collaborative activities and the external
Type of collaboration Regulatory context Supplier reach Type of company
Arm’s-length relationship Low Low -Wal-Mart
-Aldi
Interactive collaboration Medium Low -Tesco
-Nestlé -CP Foods
Management Alliances High High -Mars
