Labor Abuses Abroad

In the 1990s, more U.S. companies began manufacturing abroad, where labor was cheaper. But soon, they had a problem. Journalists, consumers and human rights groups noticed that, away from the eyes of American unions and regulators, these multinationals sometimes used brutal cost-saving measures, such as sweat shops and child labor.

Executives — in garments, mining and agriculture, for instance — found a solution. Companies would hire outside inspectors to scrutinize their supply chains. These inspectors would visit their suppliers’ factories, investigate abuses and determine whether everyone was following the rules. Major companies signed on, sending a message that they could clean up their own supply chains. There was no need, they argued, for governments to intervene.

But my reporting over the last year has shown how flawed these audits can be. I visited sugar mills in India, the world’s second-largest producer, that supply multinational companies. Their sugar sweetens cans of Coke and cups of tea. In the state of Maharashtra, I met dozens of women who were pushed to have hysterectomies, often as a consequence of routine gynecological problems made worse by an absence of bathrooms, menstrual products and running water in the fields. Sometimes they borrowed money for the surgery from their employers, who forced them and their families to pay it back through more work.

Many farm laborers also said the contractors who hired them had saddled them with enormous debt — for salary advances, health care and other costs — that would prevent them from ever leaving their jobs. Women described working in the fields as children. Our photographer, Saumya Khandelwal, saw kids cutting cane. The Times published my investigation into these farms this morning.

In today’s newsletter, I’ll explain why, despite some scrutiny, serious labor abuses still lurk in major companies’ supply chains.

A cursory inspection

Most major companies have policies that ban labor and environmental abuses. To enforce them, they rely on a process known as social auditing. Factories pay social auditors to visit for a few days, during which they look at corporate paperwork and interview workers and managers. These observers look for anything that might be amiss: unsanitary work stations, underpaid or underage employees, illegal chemicals, unsafe conditions.