Why supply chains for commodities like tea need urgent regulation

| 13th April 2011
Shopping basket
It is time for the UK government to act if we want to stamp out the ongoing abuses perpetrated by corporations overseas and ensure an ethical weekly shop, argues Seb Klier

There are certain British favourites, like tea, which are available in houses across the UK at a moment’s notice. It is a drink enjoyed at all times of the day and is part of our social history. But when we step into a supermarket and stock up for the home or the office, the products we buy tend to obscure their true origins. In the case of tea, it is likely that what is on sale in the aisle, often picked and packed on plantations in Kenya or India, comes at the expense of the workers who produce it.

The global tea industry is big business, producing 3.5 billion tonnes of tea a year, with much of that exported from the global South to countries in the West. After water, tea is the most popular drink in the world and in Britain alone we drink an incredible 60 billion cups a year. Yet despite this success, it is clear that workers on plantations and in factories are not sharing in the rewards.

As is common in global supply chains, workers who produce the tea we drink are routinely exploited. Low wages, precarious employment and poor safety standards are the norm and barriers are placed in front of trade unions and other groups that try to organise workers and improve their terms and conditions. 

Large multinational corporations on both the production and retail sides swallow up the vast majority of the profits. Research into the tea industry in India and Kenya found workers paid around one third to a half of a living wage – the figure needed to support themselves and their family, including costs for essentials, housing, education and healthcare. As a result, a large percentage of the workforce lives hand to mouth, in countries with high unemployment, rising food prices and without adequate social security.

Sadly, this situation is nothing new and certainly not unique to the tea industry. For years, campaigners have tried to ensure that the goods we source from overseas – from clothing to flowers to wine – are produced in safe conditions, with workers paid a living wage and allowed the right to organise. We have all heard and seen the scandals of abuses in sweatshops, while at the same time watched the profits of high street clothing companies rocket and their shops expand across Britain.

Sustained lobbying of companies in the late twentieth century, alongside public demonstrations and shareholder actions, saw the rise of corporate social responsibility (CSR) in company strategies as business responded to criticisms of the continued abuse of people in their overseas supply chains. Despite this perceived change in emphasis, though, the key problems for those producing goods on the ground have remained unresolved.




CSR is secondary

The CSR initiatives of companies have been wide-ranging in recent years, and it is now standard practice to operate a company with some CSR direction and input. However, all of these schemes have proven to be fatally hamstrung by their voluntary nature. Codes of practice appear to be a constructive way of enhancing corporate behaviour and focusing their operations on the treatment of workers and their effects on the environment. But until these codes are made mandatory, CSR will remain secondary to commercial considerations.

As companies such as UK supermarkets compete in ongoing price wars to attract customers, while also trying to maximise their profits, it follows that CSR schemes will fall back in the priorities of the company. Ultimately, the ethical treatment of workers cannot be realised under voluntarism, because the nature of competing businesses means that they will undercut each other on price – by paying low wages, for example - leading to financial reward for those who act least ethically.

Furthermore, companies are able to operate like this with little opposition from governments in the global South because of the threat of relocation of production to other low-cost countries in the developing world. In taking advantage of this situation and of the reliance of workers on jobs in these industries, companies create a race to the bottom, where labour standards are ignored in poor countries, keeping costs low in order to attract foreign investment.

To end this abuse, legislation is needed that would compel companies to ensure the workers in their supply chains are treated fairly. The legal obstacles around global regulation remain difficult to overcome, but other quasi-legal instruments have been proposed that need consideration. One example is the campaign for a commission on business, human rights and the environment. Such a body would be part of the British government and have the powers to investigate environmental and human rights abuses carried out by UK companies and provide remedies for their victims. Its role would also involve ethical guidance to companies and work with other commissions overseas to build capacity and joint learning.

Importantly, this proposal chimes with what has been happening at the UN-level around business and human rights. Professor John Ruggie, the UN special representative of the secretary general on human rights and transnational corporations, has developed a framework in the last decade around the three pillars, Protect, Respect and Remedy, with regards to human rights. This third pillar is particularly relevant to the commission, which as a body would seek to ensure access to justice to those who are currently denied it. The UN Human Rights Council has endorsed this framework and is looking at ways it can be practically implemented. A commission would be one way Britain could further this process and take a lead on the issue internationally.

Keeping the pressure on

How can we bring forward regulatory solutions? We can and should keep the pressure on companies, and expose their mistreatment of workers, wherever we can. This keeps this issue in the public gaze and tips business towards looking at better standards for workers, if only to avoid bad publicity.

At the same time, we need to be supporting the efforts of tea workers and others in fighting for their rights – and this type of action remains vital. Organised groups on the ground can make a real difference to day-to-day working life and help ensure that people in factories and plantations can build to defend their rights. They are even stronger when supported internationally by activists, trade unions and the consumers of their products.

Ultimately though, decision makers must act. Overseas supply chains desperately need regulation and that can only come through government. A mechanism that really takes seriously the grievances of workers and supports them in calls for compensation would be a permanent step forward. Where we can, we need to build momentum behind calls for regulation, and keep this pressure on until we get a result. It is a long journey towards a fair cup of tea, but also eminently achievable. We should consider this the next time we boil the kettle.

Seb Klier is a campaigner with War On Want



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