Modern Slavery in the Global Food Market: A Litmus Test for the Proposed Business and Human Rights Treaty

A recent initiative to adopt the UN Treaty on Business and Human Rights (BHRT) is an attempt to correct the imbalance between rights and obligations of corporations in the field of human rights. While companies regularly invoke human rights to defend their interests, they lack corresponding obligations to respect and uphold such rights throughout their business operations. The examples of reported labour rights abuses in the Thai food industry supplying international and European markets test the capacity of the recent Draft BHRT to end impunity for human rights violations in global value chains.

Pineapple, Chicken, and Modern Slavery: Brought to You by Your Supermarket

In 2013, a Finnish NGO Finnwatch revealed serious human violations in the operations of Natural Fruit Co. Ltd., a pineapple processing company in Thailand. Natural Fruit supplied pineapple concentrate to Refresco — the Netherlands-based company with notable cus­tomers in Europe including some of the biggest supermarkets. The Finnwatch report alleged that the factory employed many undocumented workers, including children younger than the legal minimum age in Thailand, that the workers were paid less than the minimum wage prescribed by Thai laws, were forced to work overtime, had their passports and work permits confiscated, and were subject to discrimination, violence, and dangerous working conditions.

In 2016, 14 migrant workers from Myanmar filed a complaint to the National Human Rights Commission of Thailand (NHRC) against Thammakaset Co. Ltd., a Thai-registered chicken farm, which directly supplied one of the country’s top exporters of chicken. The workers complained of the various forms of ‘labor abuse’ including forced labour and the restriction of their freedom of movement by confiscating their passports and allowing them to leave the premises for only two hours per week and under supervision. (NHRC Examination Report no. 114/B.E. 2559, 31 August 2016, on file with the author).

What connects these cases are not just the allegations of deplorable working conditions and the fact that both companies supplied products to reputable international clients, but also strategies deployed against workers who complained of rights violations and human rights defenders who helped expose such practices.

Natural Fruit responded to the Finnwatch report by pressing multiple civil and criminal charges against Andy Hall, a researcher hired to compile the report. He was prosecuted for defamation and for violation of the Thai Computer Crime Act B.E. 2550 (2007) because of disseminating purportedly ‘the false findings of the research’ on the Finnwatch website and through a press conference. (Judgement of the Southern Bangkok Criminal Court, No. Or2949/2559, 20 September 2016, on file with the author). Similarly, Thammakaset filed multiple defamation lawsuits against both the workers who complained of rights violations to the NHRC and human rights defenders including a TV reporter. The company also filed theft charges against two workers and a project coordinator with the Migrant Worker’s Right Network (MWRN) for stealing the company’s timecards used to substantiate a claim that they had been made to work excessive hours.

Whimsical Justice for Migrant Workers and Activists

The defamation charges brought by Natural Fruit against Andy Hall resulted in his conviction in 2016, for what the court phrased as ‘an act of violation of the Prosecutor’s rights’. (Judgement of the Southern Bangkok Criminal Court, No. Or2949/2559, 20 September 2016, on file with the author). This conviction was quashed by the Appeals Court in 2018. (Judgement of the Appeals Court, Case No. 591/2, 31 May 2018, on file with the author). But in a separate case concerning civil damages and defamation in relation to his interview to Al-Jazeera, the Court ordered him to pay 10 million baht (260 000 euros) in damages to Natural Fruit.

In July 2018, criminal defamation charges against the workers at the Thammakaset farm were dismissed, and the same year, the Lopburi Provincial Court dismissed the criminal complaint against the workers and the MWRN staff for stealing the timecards. The case against Andy Hall for his use of social media in the Thammakaset case remains pending.

The domestic judgments exonerating migrant workers and activists are laudable. The trial court in the Thammakaset case held that the petition filed by the workers was ‘an expression of statement in good faith … for the protection of a legitimate interest’ and therefore should not be considered as defamatory. (Judgement of the Don Muang District Court, Black Case No. 2769/2559, Red Case No. 1351/2561, 11 July 2018, on file with the author). The Appeals Court in the defamation case against Andy Hall ruled that ‘the evidence adduced by the defendant was reasonably well-grounded to establish that the plaintiff had really mistreated the migrant workers, as described in the research findings’ and it was ‘in the public interest’ to disclose such findings. (Judgement of the Appeals Court, Case No. 591/2, 31 May 2018, on file with the author).

But it is questionable to what extent such outcomes resulted from an intense media scrutiny, international pressure, and significant financial resources provided to support both the workers and activists, and whether there are adequate checks to prevent ‘the increasing misuse of criminal defamation laws in Thailand’. In its annual report on human trafficking, the US State Department noted that officials in Thailand ‘may have been hesitant to pursue investigations of exploitation due to risks of facing criminal defamation charges brought by unscrupulous employers.’ Moreover, beyond a mere escape from criminal convictions, the workers received little satisfaction for human rights violations they claim to have endured. In 2016, the Lopburi Province Department of Labor Protection and Welfare ordered Thammakaset to compensate workers for unpaid wages, overtime pay, and holiday pay under the Thai Labor Protection Act. Still, they have not received any payment until now. In addition, a lawsuit filed by the workers at a labour court seeking civil damages for the alleged mistreatment was dismissed.

Furthermore, despite serious and well-documented allegations of abuses, including the fact that the workers at the Thammakaset farm could only leave the premises for a couple of hours per week and under supervision, that their passports were confiscated, that they were forced to work overtime, and had no weekends and public holidays off, the NHRC found that these conditions did not amount to forced labour. (NHRC Examination Report no. 114/B.E. 2559, 31 August 2016, on file with the author). The NHRC implied that because some workers were travelling back to their home countries during their employment and ‘the border of the farm is only simple short wood fence, which is not feasible to detain’, the confiscation of their passports did not amount to forced labour as defined in the Thai Anti-Human Trafficking Act B.E. 2551 (2008). This is in stark contrast with the prevailing understanding of what constitutes forced labour articulated in the jurisprudence of international human rights bodies.

In addition to exposing the flaws in the domestic system, which failed to provide adequate protection and remedies to the workers, these cases raise the question of accountability of the companies that purchased products from the local producers. When the accusations against the two companies became public, some of their international clients provided financial assistance to human rights defenders subject to litigation emphasizing that ‘employees must have the opportunity to safely and legitimately raise their concerns’. (see also here). But the question is, are these efforts sufficient and is there a need to move from voluntarism to ‘hard law’ duties to ensure accountability within global supply chains? Thus, given that labour rights abuses are reported to be wide-spread across the country, responsibility of companies implicated in such violations through their supply chains must be considered.

To what extent does the proposed Draft of the BHRT respond to the challenges illustrated by the two cases?

Preventing Labour Rights Abuses in the Global Supply Chains

The Natural Fruit case illustrates that voluntary due diligence is not enough. The 2013 Finnwatch report reveals that Refresco claimed that it had audited the Natural Fruit factory in 2010, 2011, and 2012 — the same year when the Finnwatch research took place — but it found no issues, which is said to be ‘proof enough of inadequate monitoring standards’. The report implies that had the company done a diligent job, it is likely that the abuses would have been uncovered earlier and further violations could have been prevented.

Article 5 of the Draft BHRT articulates human rights due diligence obligations to be placed on corporations. These include, among others, a duty to identify and assess any actual or potential human rights violations arising out of their own business activities or from their contractual relationships, and a duty to take appropriate actions to prevent any such human rights violations. A similar requirement to prevent human rights violations in the context of its business activities featured in the earlier Draft of the Treaty (Article 9) and had been criticised for being vaguely defined and too onerous, imposing on companies ‘a standard of result’ instead of ‘a standard of conduct’. Whereas the new Draft tones down the said standard by requiring that companies ‘take appropriate actions to prevent human rights violations’ (Article 5 (2) (c)), one should not lose sight of the fact that the Treaty does not seek to impose obligations on businesses directly. Instead, it mandates States to develop and implement legal framework to ensure that enterprises comply with a certain standard of care towards people affected by their operations, but gives them freedom to specify the scope and intensity of such duties to ensure that corporate actors do not bear unnecessary or disproportionate burdens. States are furthermore not required to adopt uniform regulation for all corporate actors within their jurisdiction but instead are asked to pay attention to ‘the size, nature, context of and the risk associated with business activities’ (Article 5 (4)) and may offset the burdens placed on ‘small and medium sized undertakings’ by providing incentives and other measures to facilitate compliance (Article 5 (6)). The provisions of the new Draft outlining human rights due diligence obligations do not seem to hold risk of placing unsurmountable burdens on corporate enterprises.

In line with that, not only would the alleged abuses of workers in Thailand have not gone unnoticed by the enterprises sourcing products from the local companies, had they been obliged to comply with measures outlined in Article 5 Draft BHRT, but such international buyers would have also been required to take ‘appropriate steps to prevent’ the alleged abuses. What such ‘appropriate measures’ entail is left for the States Parties to determine and this creates a risk of different standards being applied across different jurisdictions. Still, merely cutting the ties with an entity within its supply chain involved in rights abuses should not be considered as an appropriate action. In fact, the first recommendation in the Finnwatch report urged companies to continue trading with Natural Fruit whilst using their leverage to work towards improvements in working conditions at the factory.

Access to Justice and Remedies for Labour Rights Abuses in the Global Supply Chains

Would the proposed Treaty make any difference to the migrant workers employed at two companies in Thailand in terms of their access to justice and remedies? The Draft Treaty obliges States to ‘ensure that their domestic legislation provides for the liability of [a business enterprise] … for its failure to prevent another natural or legal person with whom it has a contractual relationships, from causing harm to third parties’ provided that it ‘sufficiently controls or supervises the relevant activity that caused the harm, or should foresee or should have foreseen risks of human rights violations’ (Article 6 (6)). ‘Contractual relationship’ is broadly defined to include, as relevant here, suppliers.

Since the international companies buying products from the two Thai companies accused of serious labour rights violations seem neither to have had control over the latter nor to have supervised the relevant activity that had caused the alleged harm, they could only be liable if it was proved that they should have foreseen risks of the alleged rights violations. However, the current Draft fails to specify the test for establishing when an enterprise should foresee or should have foreseen risks of rights violations (or the test for establishing the extent of sufficient control or supervision). Moreover, the current Draft BHRT fails to clarify the relationship between compliance with human rights due diligence obligations outlined in Article 5 and the standards of liability contained in Article 6 (6).

One possibility is that the level of scrutiny required by the human rights due diligence obligations is commensurate to the extent of control or supervision of a company over the entities down its supply chains, which in turn determines the scope of its civil liability. Arguably, any liability of an enterprise for harm caused by another entity with whom it has a contractual relationship must be confined to the former’s own actions or omissions in executing its human rights due diligence obligations. Accordingly, a company would be absolved from responsibility if it could prove that it had complied with human rights due diligence procedures prescribed by domestic law. In cases discussed here, this would mean that the workers would have no grounds for holding the companies that purchased products from their respective employers responsible for harm they claim to have suffered. Still, the Draft BHRT allows for allegations against these companies to be examined by the courts in the countries of their domicile (Article 7 (1)) and it entitles these courts to reverse the burden of proof ‘for the purpose of fulfilling the victim’s access to justice’ (Article 4 (16)). Furthermore, Article 4 contains various procedural guarantees to secure victimas’ ‘fair, effective and prompt access to justice’. Such procedural rights would enable a thorough investigation of any potential lability of corporations involved in human rights abuses through their supply chains and ensure the equality of arms between victims and the impugned companies, even if this did not result in their liability.

Protection of Human Rights Defenders

It is beyond doubt that the cases discussed here would not have been exposed without the involvement of human rights defenders. The multiple lawsuits filed by the two Thai companies against such defenders have had serious consequences on their ability to carry out their work. Andy Hall thus stated that he has spent ‘more than $100,000 defending the criminal charges against him — mainly fundraised from supporters — and the better part of the last five years dealing with the charges and his appeals’. Whereas the Draft BHRT requires State Parties ‘to recognize, protect and promote all the rights recognised in this (Legally Binding Instrument) to persons, groups and organizations that promote and defend human rights’ (Article 4 (15)), it fails to explicitly mandate their protection from intimidation and retaliation. Such protection is expressly required only for ‘victims, their representatives, families and witnesses’ (Article 4 (3)). It is not entirely clear whether in the cases discussed here human rights defenders could be considered either as victims’ representatives or witnesses.

In sum, while the Draft BHRT lays solid grounds for ending impunity for human rights violations in global supply chains, cases discussed here show that there is still significant room for improvement.