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Human Capital: Uber engineer explains why he spoke out against Prop 22

Welcome back to Human Capital, where we discuss the latest in labor, diversity and inclusion in tech.

This week’s eyebrow-raising moment came Wednesday when the U.S. Department of Labor essentially accused Microsoft of reverse racism (not a real thing) for committing to hire more Black people at its predominantly white company.

And that wasn’t even the most notable news items of the week. Instead, that award goes to Uber engineer Kurt Nelson and his decision to speak out against his employer and urge folks to vote no on the Uber-sponsored ballot measure in California that aims to keep drivers classified as independent contractors. I caught up with Nelson to hear more about what brought him to the point of speaking out. You can read what he had to say further down in this newsletter.

But first, I have some of my own news to share —  Human Capital is launching in newsletter form on Friday, October 23. Sign up here so you don’t miss out.

Now, to the tea.


Stay Woke


Coinbase loses about 5% of workforce for its stance on social issues

Remember how Coinbase provided an out to employees who no longer wanted to work at the cryptocurrency company as a result of its stance on social issues? Well, Coinbase CEO Brian Armstrong said this week that about 5% of employees (60 people) have decided to take the exit package, but that there will likely be more since “a handful of other conversations” are still happening.

Armstrong noted how some people worried his stance would push out people of color and other underrepresented minorities. But in his blog post, Armstrong said those folks “have not taken the exit package in numbers disproportionate to the overall population.”

Trump’s DOL goes after Microsoft for committing to hire more Black people

Microsoft disclosed this week that the U.S. Department of Labor Office of Federal Contract Compliance Programs contacted the company regarding its racial justice and diversity commitments made in June. Microsoft had committed to double the number of Black people managers, senior individual contributors and senior leaders in its U.S. workforce by 2025. Now, however, the OFCCP says that could be considered as unlawful discrimination in violation of Title VII of the Civil Rights Act. That’s because, according to the letter, Microsoft’s commitment “appears to imply that employment action may be taken based on race.”

“We are clear that the law prohibits us from discriminating on the basis of race,” Microsoft wrote in a blog post. “We also have affirmative obligations as a company that serves the federal government to continue to increase the diversity of our workforce, and we take those obligations very seriously. We have decades of experience and know full well how to appropriately create opportunities for people without taking away opportunities from others. Furthermore, we know that we need to focus on creating more opportunity, including through specific programs designed to cast a wide net for talent for whom we can provide careers with Microsoft.”

This comes shortly after the Trump administration expanded its ban on diversity and anti-racism training to include federal contractors. While this does not fall into the scope of that ban, it’s alarming to see the DOL going after a tech company for trying to increase diversity. However, it does seem that the effects of the ban are making its way into the tech industry.

Joelle Emerson, founder and CEO of diversity training service Paradigm, says she lost her first client as a result of the executive order. While it’s not clear which client it was, many of Paradigm’s clients are tech companies.

Crunchbase report sheds light on VC funding to Black and Latinx founders

It’s widely understood that Black and Latinx founders receive not nearly as much funding as their white counterparts. Now, Crunchbase has shed some additional light on the situation. Here are some highlights from its 2020 Diversity Spotlight report.

Image Credits: Crunchbase

  • Since 2015, Black and Latinx founders have raised more than $15 billion, which represents just 2.4% of the total venture capital raised. 
  • In 2020, Black and Latinx founders have raised $2.3 billion, which represents 2.6% of all VC funding through August 31, 2020.
  • Since 2015, the top 10 leading VC firms in the U.S. have invested in around 70 startups founded by Black or Latinx people.
  • Andreessen Horowitz and Founders Fund are the two firms with the highest count of new investments in Black or Latinx-founded companies since 2015.

Gig Work


Uber engineer encourages people to vote no on Uber-backed Prop 22

Going against his employer, Uber engineer Kurt Nelson penned an op-ed on TechCrunch about why he’s voting against Prop 22. Prop 22 is a ballot measure in California that seeks to keep rideshare drivers and delivery workers classified as independent contractors. I caught up with Nelson after he published his op-ed to learn more about what brought him to the point of speaking out against Prop 22. 

“It was a combination of COVID affecting unemployment and health insurance for a bunch of people, getting close to the election and not having seen anyone who is really former Uber or Uber or former any gig companies saying anything,” Nelson told me. 

Plus, Nelson is on his way out from Uber — something that he’s been forthcoming about with his manager. He had already been feeling frustrated about the way Uber handled its rounds of layoffs this year, but the company’s push for Prop 22 was “the final nail in the coffin.”

Uber’s big arguments around why drivers should remain independent contractors is that it’s what drivers want and that it’d be costly to make them employees. Uber has said it also doesn’t see a way to offer flexibility to drivers while also employing them.

“I think it’d be really challenging,” Uber Director of Policy, Cities and Transportation Shin-pei Tsay told me at TC Sessions: Mobility this week. “We would have to start to ensure that there’s coverage to ensure that there’s the necessary number of drivers to meet demand. That would be this forecasting that needs to happen. We would only be able to offer a certain number of jobs to meet that demand because people will be working in set amounts of time. I think there would be quite fewer work opportunities, especially the ones that people really have said that they like.”

But, as Nelson notes, Silicon Valley prides itself on tackling difficult problems. 

“We’re a tech company and we solve hard problems — that’s what we do,” he said.

In response to his op-ed, Nelson said some of his co-workers have reached out to him — some thanking him for saying something. Even prior to his op-ed, Nelson said he was one of the only people who would talk about Prop 22 in any negative way in Uber’s internal Slack channels. And it’s no wonder why, given the atmosphere Uber has created around Prop 22. 

During all-hands meetings, Nelson described how the executive team wears Yes on 22 shirts or has a Yes on 22 Zoom background. Uber has also offered employees free Yes on 22 car decals and shirts, Nelson said.

As for Nelson’s next job, he knows he doesn’t “want to touch the gig economy ever again,” he said. “I know that for a fact. I’m done with the gig economy.”


Union Life


Kickstarter settles with NLRB over firing of union organizer

Kickstarter agreed to pay $36,598.63 in backpay to Taylor Moore, a former Kickstarter employee who was fired last year, Vice reported. Moore was active in organizing the company’s union, which was officially recognized earlier this year. As part of the settlement with the National Labor Relations Board, Kickstarter also agreed to post a notice to employees about the settlement on its intranet and at its physical office whenever they reopen. 

In September 2019, Kickstarter fired two people who were actively organizing a union. About a year later, the Labor Board found merit that Kickstarter unlawfully fired a union organizer.

NLRB files complaint against Google contractor HCL America

It’s been about a year since 80 Google contractors voted to form a union with U.S. Steelworkers. But those contractors, who are officially employed by HCL America, have not been able to engage in collective bargaining, according to a new complaint from the National Labor Relations Board, obtained by Vice.

The complaint states HCL has failed to bargain with the union and has even transferred the work of members of the bargaining unit to non-union members based in Poland. The NLRB alleges HCL has done that “because employees formed, joined and assisted the Union and engaged in concerted activities, and to discourage employees from engaging in these activities.”


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Human Capital: Workers are upset about labor practices, and Amazon and Apple are on the defensive

Happy Labor Day and welcome back to Human Capital, where we unpack the latest in tech labor, and diversity, equity and inclusion. Human Capital will soon be available as a newsletter. Sign up here so you don’t miss it when it drops!

This week, we’re looking at Pinterest’s newest edition to its DEI team, a California bill that seeks to increase racial diversity at the board level, Amazon’s messy week and a court decision forcing Apple to pay its workers for time spent in security screenings.

But first, a quick history of Labor Day, which was first celebrated on September 5, 1882 in New York City following a proposal by the Central Labor Union in the city. On that day, between 10,000 to 20,000 workers took unpaid time off to march from NYC’s city hall to Union Square in what became the first Labor Day parade.

In the time between the first Labor Day parade and when it became a federal holiday in 1894, railroad workers went on strike after George Pullman laid off hundreds of employees and cut wages by 30 percent for those who remained. In May 1894, workers walked out and their union, the American Railway Union, called for a boycott on Pullman train cars. Shortly after, the group representing Chicago’s railroad companies called on the federal government to help shut down the strike. Once federal troops arrived in Chicago, the strike turned deadly as the National Guard killed as many as 30 people.

The troops left in July and, that same month, Labor Day became a national holiday to be celebrated the first Monday in September every year. The strike ended in early August. It’s a complicated history, but it shows labor struggles have been at the heart of American capitalism since the country’s inception (slavery). Now, more than 100 years after the first Labor Day, workers are still fighting for better protections, pay and working conditions.


Stay Woke


Pinterest brings on new head of inclusion and diversity

As Pinterest grapples with some internal unrest over claims of racial and gender discrimination, the company has brought on a new head of inclusion and diversity. Its last head of diversity, Candice Morgan, quietly left earlier this year for venture firm GV. 

Tyi McCray, the company’s new global head of inclusion and diversity, previously worked at Airbnb where she held a few different roles. She began as Airbnb’s interim director of Diversity and Belonging before becoming a diversity strategy lead and ultimately, a government affairs and strategic partnerships lead.

McCray will report directly to Pinterest CEO Ben Silbermann. This marks the first time Pinterest is having a head of diversity report directly to the CEO, rather into HR. Facebook did something similar earlier this year when it began having its chief diversity officer, Maxine Williams, report directly to Facebook COO Sheryl Sandberg. But Facebook still fell short of having Williams report directly to CEO Mark Zuckerberg.

Diversity advocates for years have been calling for heads of diversity to report directly to the CEO. Many companies, however, have yet to do that. More often, tech companies have their heads of diversity report into the head of HR.

California may soon require more diversity at the board level

The tech industry has been under scrutiny for its lack of diversity for years now. Some progress has been made in terms of representation of Black and brown folks within companies, but not always at the leadership level. AB979, which is heading to California Governor Gavin Newsom’s desk, aims to accelerate diversity at the board level.

The bill would require public companies based in California to have at least one board member from an underrepresented group. If signed into law, the bill would also require companies with between four to nine directors to have at least two board members be from an underrepresented group. For boards with nine or more directors, the bill would require a minimum of three people from an underrepresented group.

The bill defines an individual from an underrepresented community as someone who self-identifies as Black, Latinx, Asian, Pacific Islander, Indigenous and/or as gay, lesbian, bisexual or transgender.

This bill seeks to build on top of preexisting law that went into effect in 2018 that mandated publicly held corporations based in California would have a minimum of one female director on its board by the end of 2019. By the end of 2021, companies with five or more directors must have a minimum of two female board members while companies with six or more directors must have at least three female board members.


The 99%


Amazon is a mess

Amazon found itself under scrutiny again over its labor practices. It started when reports surfaced that Amazon was looking to hire an intelligence analyst. Specifically, Amazon in a job posting said it was seeking someone who would inform higher-ups and attorneys “on sensitive topics that are highly confidential, including labor organizing threats against the company.” 

Amazon swiftly took down that job post, saying it was “not an accurate description of the role – it was made in error and has since been corrected,” Amazon spokesperson Maria Boschetti said in a statement to TechCrunch. While Amazon did not give a specific revised description, the company said the role is meant to support its team of analysts that focus on external events, like weather, large community gatherings or other events that have the potential to disrupt traffic or affect the safety and security of its buildings and the people who work at those buildings. 

However, that same day, Vice reported Amazon had been spying on workers for years to monitor for any potential strikes or protests. Amazon has since said it will stop using its social media monitoring tool.

“We have a variety of ways to gather driver feedback and we have teams who work every day to ensure we’re advocating to improve the driver experience, particularly through hearing from drivers directly,” Boschetti said in a statement. “Upon being notified, we discovered one group within our delivery team that was aggregating information from closed groups. While they were trying to support drivers, that approach doesn’t meet our standards, and they are no longer doing this as we have other ways for drivers to give us their feedback.”

Amazon did not comment on how long it had been monitoring closed Facebook groups.

Meanwhile, Bloomberg reported some Amazon Flex drivers have resorted to hanging smartphones in trees in order to get more work in Chicago.

Apple owes its retail workers backpay for time spent in security screenings

Apple has had intense security practices for some time now. Part of that has meant requiring workers to go through security screenings before leaving the store at the end of their shifts. 

The case dates back all the way to 2015, when a group of Apple retail workers in California filed a class-action suit arguing they should be paid while waiting for their bags to be searched.

From the ruling:

Employees estimate that the time spent waiting for and undergoing an exit search pursuant to the Policy typically ranges from five to twenty minutes, depending on the manager or security guard’s availability. Some employees reported waiting up to forty-five minutes to undergo an exit search. Employees receive no compensation for the time spent waiting for and undergoing exit searches, because they must clock out before undergoing a search pursuant to the
Policy.

In February, CA Supreme Court ruled in favor of the plaintiffs. But a US District judge later granted Apple’s request for a summary judgment since some workers part of the class were not required to go through searches since they didn’t bring bags or devices to work. This week, however, an appeals court ruled that it wasn’t relevant if workers did or did not bring their devices or bags to work. Now, Apple must pay more than 12,000 class members for time spent waiting for security screenings.

Apple did not respond for our request for comment.


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Human Capital: Uber and Lyft’s ongoing battle with the law and a brief history of diversity at Snap

Welcome back to Human Capital (formerly known as Tech at Work), which looks at all things labor in tech. This week presented Uber and Lyft with a fresh labor lawsuit as a judge heard arguments from Uber, Lyft and lawyers on behalf of the people of California in a separate suit brought forth by California’s attorney general. Meanwhile, Snap recently released its first-ever diversity and inclusion report — something the company had been holding off on doing for years. 

Below, we’ll explore the nuances and the significance of these lawsuits, as well as Snap’s track record with diversity and inclusion. Let’s get to it.


Gig life


CA Superior Court Judge Ethan P. Schulman heard arguments regarding a preliminary injunction that seeks to force Uber and Lyft to reclassify their drivers as employees

In May, California Attorney General Xavier Becerra, along with city attorneys from Los Angeles, San Diego and San Francisco, sued Uber and Lyft, alleging the companies gain an unfair and unlawful competitive advantage by misclassifying workers as independent contractors. The suit argues Uber and Lyft are depriving workers of the right to minimum wage, overtime, access to paid sick leave, disability insurance and unemployment insurance. In June, plaintiffs filed a preliminary injunction in an attempt to force Uber and Lyft to comply with AB 5 and immediately stop classifying their drivers as independent contractors.

This week, more than 100 people tuned in to the hearing regarding the preliminary injunction. The hearing, held on Zoom, initially was only able to hold just 100 people. But the interest in the case forced the court to increase its webinar capabilities to 500. There hasn’t been a ruling yet, but Judge Schulman said we could expect one likely within a matter of days, rather than weeks.

In the hearing, Schulman expressed how hard it is to determine the impact of a preliminary injunction in this case. For example, how Uber and Lyft would comply with the injunction is unknown, as are the economic effects on drivers, such as their ability to earn income, the hours they would be able to work and their eligibility for state benefits, Schulman said.

“I feel a little bit like I’m being asked to jump into a body of water without really knowing how deep it is, how cold the water is and what’s going to happen when I get in,” he said.

Here are some other key quotes from the hearing:

Rohit Singla, counsel for Lyft

The proposed injunction would cause irreparable injury to Lyft and Uber, and would actually cause massive harm to drivers and harm to riders.

Matthew Goldberg, deputy city attorney for San Francisco

We think the parties have drastically overstated precisely what they would need to do to be in compliance with the law.

The other lawsuits against Uber and Lyft

Earlier in the week, California Labor Commission sued Uber and Lyft in separate lawsuits. The goals of the separate suits are to recover the money that is allegedly owed to these drivers. By classifying drivers as independent contractors rather than employees, both Uber and Lyft have not been required to pay minimum wage, overtime compensation, nor have they been required to offer paid breaks or reimburse drivers for the costs of driving.

What these lawsuits share is a core focus and argument that Uber and Lyft are misclassifying their drivers as independent contractors and breaking the law. These two companies have been sued many, many times for their labor practices, specifically as they pertain to the classification of their respective drivers as independent contractors. What’s different about the latest string of lawsuits is that they’re coming in light of a new law that went into effect in California earlier this year that is supposed to make it harder for these gig economy companies to classify their workers this way. The lawsuits are also coming from legislative bodies, rather than from drivers themselves. 

This moment has been a long time coming. Uber faced its first high-profile labor lawsuit back in 2013, when Douglas O’Connor and Thomas Colopy sued Uber for classifying them as 1099 independent contractors. Uber settled the lawsuit several years later in 2019 by paying out $20 million to O’Connor and Colopy, as well as the other class members


Stay Woke


Snap finally releases a diversity report

Snap, after declining to release diversity numbers for years, finally decided now was the time to make them public. Before we jump in, let’s take a quick look at Snap’s history with diversity.

2016: Snap came under fire for a couple of filters that many people called out as being racist. The first was a Bob Marley filter that basically enabled some sort of digital blackface. The second time it had to do with a lens that was supposed to be a take on anime characters. Instead, there was an outcry about Snapchat enabling yellowface.

2017: “We fundamentally believe that having a team of diverse backgrounds and voices working together is our best shot at being able to create innovative products that improve the way people live and communicate. There are two things we focus on to achieve this goal. The first—creating a diverse workplace—helps us assemble this team. We convene at the conferences, host the hackathons, and invest in the institutions that bring us amazing diverse talent every year. The second—creating an inclusive workplace—is much harder to get right, but we believe it is required to unleash the potential of having a diverse team. That’s because we believe diversity is about more than numbers. To us, it is really about creating a culture where everyone comes to work knowing that they have a seat at the table and will always be supported both personally and professionally. We started by challenging our management team to set this tone every day with each of their teams, and by investing in inclusion-focused programs ranging from community outreach to internal professional development. We still have a long and difficult road ahead in all of these efforts, but believe they represent one of our biggest opportunities to create a business that is not only successful but also one that we are proud to be a part of” – Snap’s S-1

2018: A former Snap engineer criticized the company for a “toxic” and “sexist” culture. Snap CEO Evan Spiegel later said the letter was “a really good wake-up call for us.”

2019: Snap hired its first head of diversity and inclusion, Oona King. King previously worked at Google as the company’s director of diversity strategy.

June 2020: Spiegel reportedly said in an all-hands meeting the company will not publicly release its numbers. Snap, however, disputed the report, saying it would release that data.

August 2020: Snap releases its first-ever diversity report showing its global workforce is just 32.9% women, while its U.S. workforce is 4.1% Black, 6.8% Latinx and less than 1% Indigenous.

Snap’s numbers are not good, but also nothing out of the ordinary for the tech industry. What’s novel about Snap’s report, however, is the intersectional data breakdown. You’ll note that the representation of Black women (1.3%) is lower than the representation of Black men (2.8%). The same goes for all race/ethnicity categories. Across all distinct races, there are more men than women. Again, this is not good, but it’s to be expected, unfortunately.


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6 ways companies can be a ‘force for good’ in their supply chains

“We were forced to work around the clock. We never saw land. They beat us. Whipped us. The company hunted us day and night,” intone Burmese workers in “Ghost Fleet,” a Vulcan Inc documentary about slavery on fishing vessels.

The Ghost Fleet clip opened the GreenBiz20 workshop “Putting People First: How to be a Force for Good in Your Labor Practices,” because moderator Jack Kittinger, senior director of practice at Conservation International and a professor at Arizona State University, said he wanted to put a face to the mind-numbing numbers — 40 million people in modern slavery today, 16 million of them in the private sector. 

Eradicating forced labor, a persistent scourge throughout human history has no easy answers and requires collaboration across companies, NGOs, government and other partners.

“It’s our collective responsibility to make sure that these occurrences are brief, rare and nonrecurrent,” Kittinger said. “It’s about putting safeguards in place to lower risk to the lowest level possible, and having access to remedy when abuses happens.”

Here are six takeaways from the workshop about how companies can do that.

1. Acknowledge the problem and your role in it

Helen Crowley, head of sustainable sourcing innovation at the luxury apparel brand Kering (on sabbatical as a fellow at Conservation International), said that a pivotal moment for her was hearing Hannah Jones, founder and president at Nike Valiant Labs, speak about the brokenness of supply chains. The first step in finding solutions, Crowley said, is to “accept that supply chains are broken, accept that this is not the best way of doing things, this power structure we’ve created on financial margins.”   

Miguel Zamora, director of markets transformation at Rainforest Alliance, agreed: “What doesn’t work is when people say, ‘It’s not a problem, move on, we don’t want to talk about it.’ The problem gets bigger and it affects everyone else. When companies get together and realize there’s a problem here … we see more action getting closer to success.”

Taking it a step further, Roxanne Nanninga, director of sustainability at Thai Union, said admitting your organization is part of the problem and needs to be part of the solution is important for companies, but the government needs to take part in the solution as well.

In Thailand, a lot of progress has been made because the Thai government’s response, she said, in large part due to international pressure. 

2. Cover the basics  

Once you’ve acknowledged the problem, there are 12 steps to take, quipped Crowley, who then boiled down Kering’s approach to three fundamental actions: mapping supply chains; setting standards and communicating them to suppliers; and incentivizing good behavior.

“Nothing replaces mapping your supply chain,” stressed Crowley, who oversees sourcing of 15 to 20 raw materials from cotton to artisanal gold. “You have to know where your stuff comes from. That’s how you set priorities.”

Second, Kering focuses on “creating a relationship with the producers or the people right next to the producers, the ginners and spinners, [and communicating] the standards we expect and want to encourage,” she said.

Kering starts with certification schemes, such as the Fairtrade cotton certification and the Alliance for Responsible Mining standard for artisanally produced gold, and adds its own internal standards on top.

“We try to be collaborative with our suppliers,” she said, “[and tell them] …This is what we currently require from you, and here’s where we’re going. We communicate that we want continuous improvement and are not walking away when there’s a problem.” 

Last, financial incentives to reward good behavior are key for Kering, even if it can’t offer direct payment. Crowley said she tries to create projects that align with communities’ needs and feels the company has been successful with its cashmere and artisanal gold supply chains but has more work to do with cotton, especially in China.

While these steps may seem fundamental, many companies still aren’t taking them, Kittinger said in a later interview.

3. Fish or cut bait? It depends.

Like Kering, Thai Union takes a collaborative approach to working with suppliers to address violations it finds through its vessel auditing program. “It’s not meant to be a punitive program,” Nanninga said.

“We recognize that where there are issues, you can’t just stop sourcing from them in a lot of cases because they’ll sell to somebody else and workers will remain enslaved. So how do you engage with them, and keep an open relationship where you can actually change an attitude, change behavior?”

To date, Thai Union has audited 100 vessels around the world, according to Nanninga, and it focuses on interviewing workers on ships, rather than reviewing paper policies. Companies initially balked because they didn’t want their workers interviewed, Nanninga said. But “once they see it’s an open dialogue and meant to help,” their attitudes slowly shift. 

Kittinger queried where companies draw the line on fixing versus avoiding abuses. He recounted the story of a colleague who stumbled onto a dangerous, illegal fishing operation in Indonesia, and chose not to engage for safety reasons. Two years later the operation was broken up. “Sometimes it’s not right for driving improvement. It just needs to end,” he said.

Zamora said that when the Rainforest Alliance detects abuses, “It doesn’t help to expel a farm from certification. We need to work with workers … to give them the right resources so they can get out the situation.”

But he added, “If that farm really wants to make a commitment to change, maybe we give it a chance with very strict [reforms], but they need to show how they’ve changed… If that doesn’t happen, it can’t continue.”

“While it’s ideal that you stay in and fix the system,” it’s not always possible, Crowley said, citing the UK Modern Slavery Act  “If you sign up to commit to making sure you don’t have bad practices in your supply chain, when you find it, it is hard to stay.”

4. Step up access to remedy

Workshop participant Greta Matos, head of business development, research and development at Wider, a supply chain auditor, spoke to the importance of brands having remediation policies in place when human rights abuses are found by auditors. “The audit is a terrible place to find forced labor,” she said. “Very often the brands and retailers are ill-equipped to deal with it properly in a way that keeps people safe.”

Matos said she “never felt more helpless” than the moment she was working in a Moroccan strawberry field and discovered that about 70 percent of the women were in a forced labor situation, and that the brand that hired her had no remediation policy or procedure for forced labor. “That meant that as soon as I put it in the audit report, they’d leave that supplier and all of those women … would continue to live in that reality.”

“It’s very difficult sometimes to figure out how you provide a voice or outlet for people so they don’t get stuck in those forced labor scenarios,” agreed Nanninga, who said that Thai Union has focused on ethical recruitment and programs that give workers voice.

Thai Union factories provide anonymous hotlines for workers, and at sea it has piloted satellite communications that provide workers with a phone app to communicate back to their families. “It’s a pilot, very expensive, but it showed you could make a huge difference if you gave workers the opportunity to talk with people on shore,” Nanninga said.

For ethical recruitment, Thai Union representatives go into communities and recruit workers, so that it doesn’t rely only on agents, who often prey on refugees and migrant labor and hire them under false conditions. Its ethical recruitment program has been lauded as landmark by independent evaluators, but thus far it only extends to its factories.

5. Expand your moral perimeter

“You have a moral perimeter you’ve created around your family or your employees or your company,” Crowley said. “Why aren’t we expanding that into our supply chain, to all of those people that are supporting us in our business?” 

“It’s very upsetting to me in the apparel sector that we still haven’t figured out a living wage. It’s complicated, yes, but it’s also a prioritization. There has to be a deep willingness and commitment.”

Building on the concept of moral perimeter, Kittinger said, “It’s that first set of hands that touches whatever we’re consuming that are the most vulnerable and least protected.” 

Coining the term “first mile,” Kittinger said that the moral perimeter needs to stretch to workers in that first mile, to the workers who are harvesting the fish, picking the coffee or cotton, or mining the cobalt for our cell phones. “It’s where we’ve seen a lot of egregious practices.” Many workers in the first mile are migrant laborers or refugees.

Workshop participant Catherine Ceresa, business development director at Martello Risk, agreed that victims of displacement and refugees always have been “easy targets for slave labor and indentured servitude,” but now victims of climate displacement are also becoming forced laborers in supply chains as well.

6. Keep boots on the ground

“I think the whole question about, ‘Do we really know where that comes from?’ is going to be moot in the next three to five years,” predicted Crowley, citing the Trase initiative and its ability to use third-party data, such as bills of lading to trace where things are coming from.

Kittinger agrees that technology will be transformative. “We’re going to continue to see radical transparency become more the norm,” he said in a later interview. 

He cautioned that blockchain, which some tout as a solution to transparency on human rights, doesn’t solve the problem of where the information gets generated in the first place. He worries that the blockchain pilots being created under optimal conditions could be undermined by less scrupulous people taking the system and inputting their “illegal, fraudulent information and passing it off as responsible.”

“People are being oversold,” said Ceresa more bluntly. “They’re putting their faith in blockchain when it’s not yet built to a degree where it can work. The gap is at the bottom of the supply chain.”

Blockchain data, she said, is only good to a degree when you’re 100 percent sure that the people collecting it are being validated by a trusted source. But human rights abuses occur often in unstable regions with little regulation and where bribery is rampant. 

While Ceresa believes that blockchain is needed and ultimately will be successful, she said that companies should know that at present, “visibility to the source must done with traditional boots on the ground and observational data collection.” Companies employing blockchain should ask who is providing the data and how are they being incentivized to be honest, she said.

More broadly, Kittinger said, “It’s incumbent on you to ensure that all the hands that touch these products, up the supply chain have some set of basic protections in place. It’s not enough to pass it off to your supplier.”

Source: GreenBiz.com
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