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August 18, 2010
MacArthur Foundation Grant Helps Business for Social Responsibility Launch Second Stage of Migrant Workers Initiative
    by Robert Kropp

The Migration Linkages initiative, launched in 2008, will expand its focus on labor abuses of migrant workers in receiving countries such as Malaysia to include sending countries like Indonesia.

With its announcement last week of a second grant from the John D. and Catherine T. MacArthur Foundation, Business for Social Responsibility (BSR) is set to embark on the second phase of its Migration Linkages initiative, the mission of which is to help protect the rights of migrant workers by encouraging the collaboration of business with other stakeholders to develop better management of supply chains.

For sustainable investors and companies alike, the issue of forced labor, especially as it pertains to the most vulnerable potential victims of the practice such as migrant workers, is quickly becoming a significant concern.

Last month, the publication by
Verite of a report documenting the role of brokers in labor rights abuses coincided with its launch of the Well Made initiative, which seeks to "demonstrate how all stakeholder groups can make a difference through impactful programs in their supply chains," according to the Massachusetts-based organization.

This month, the
Global Unions Committee on Workers' Capital (CWC) announced that the publication of its report represented a "starting point" for "responsible investors to…engage more substantially in labor rights issues."

BSR's Migration Linkages initiative was launched in 2008 with its publication of a report entitled
International Labor Migration: A Responsible Role for Business. Noting at the time that "Labor migrants now represent roughly 190 million people," the report stated that the goal of the initiative would be "to ensure that migrant workers in global supply chains– particularly those migrating from one emerging economy to another – are treated with dignity and respect." spoke with Virginia Terry, Manager of Advisory Services at BSR, who said, "The focus of the initiative has been, first of all, the growing trend of labor migration, which has increased during the recession. Another focus for BSR has been looking at the most vulnerable workers in the supply chain, which certainly includes migrant workers."

"There are abuses in the supply chains of companies that they are not even aware of, much less in control of," Terry continued. "Practices unaligned with their corporate codes of conducts, which could subject them to legal and reputational risks."

"One such risk that we've already seen in practice is that there have been brands that have been sued for abuses that they were not even aware of," Terry said.

An example cited in the report by BSR was the exposure in 2008 of "conditions of poor housing, withheld passports and monthly wage deductions among 1,150 workers from Burma, Bangladesh and Vietnam, in a Hytex Group factory north of Kuala Lumpur, Malaysia."

"Nike is one of several brands that sources T-shirts from the factory," the report continued.

In response to the violations, Nike implemented policy changes designed to protect the rights of migrant workers in its supply chains in Malaysia, and began working with
Tenaganita, a Malaysia-based nongovernmental organization (NGO) whose "mission is to undertake research, advocacy and action to prevent, solve and address grave abuses that happen to migrants and refugees."

Terry pointed out that one clothing company with "an explicit policy for migrant workers" is Gap. The company's
Code of Vendor Conduct states, "Factories that recruit or employ foreign contract workers shall ensure that these workers are treated fairly and on an equal basis with its local workers."

Affirming the finding of the Verite report, that "compliance programs can address…vulnerabilities through questioning practices used to recruit and place workers," Terry said, "A difficult but absolutely key area for companies is the influence they can have on their suppliers' relationships with brokers. That's sometimes where the system breaks down. There are examples of unscrupulous brokers."

According to Terry, the launch of the second phase of BSR's initiative will occur at the October meeting in Mexico of the
Global Forum on Migration and Development (GFMD), a United Nations initiative that seeks a global response to the implications of migration.

"Our first stage focused on receiving countries, primarily Malaysia," Terry said. "In Malaysia we tried to bring in some top government agencies into the initiative, but with limited success."

"The second stage will focus on sending countries like Indonesia," Terry continued. "We're also expanding into receiving countries in the Middle East."

Asked if there has been a role for investors in the initiative thus far, Terry said, "BSR engages with investors on an ongoing basis in our supply chain work, but it's a good idea to get them involved in this initiative as well. Engagement from the investor community can accelerate and deepen our impact, because when investors ask questions companies usually jump."

Asked to describe the ideal result of BSR's initiative, Terry said, "Ideally, the result will be healthy and active relationships between the key stakeholders that influence the lives of migrant workers. If we are successful in forging those relationships that last over time, that would be one critical success indicator."

"If we can help to build resources so companies can have a positive impact on their supply chains and a measurable impact on the lives of migrant workers, then that would be a critical success as well," she continued.

Referring to the $400,000 grant from the MacArthur Foundation, Terry said, "Our partnership with the MacArthur Foundation is making all this possible."

"It's a renewal, and a larger amount, so I think it's an affirmation and a validation of our work. We're please because the grant allows us to deepen our impact and reach a greater number of stakeholders," she said.


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