In this post yesterday, I mentioned the Business Supply Chain Transparency on Trafficking and Slavery Act of 2015, a bill currently in committee in both houses of Congress. The proposed legislation includes detailed requirements on what and how U.S. companies with more than $100 million in annual sales revenues would be required to publicly disclose their policies and procedures for preventing, identifying and addressing instances of forced labor, trafficking, slavery and the worst forms of child labor in their supply chains.
In both cases — the what and the how — the current language of the bill would provide a welcome standard for communication on issues that have not been part of specialty coffee’s sustainability conversation to date.
What’s In a Name?
I started working in coffee in 2004 when I helped lead the CRS Fair Trade Coffee Project out of the gate. I still recall the sensation during my first few visits to The SCAA Event of being part of a kind of ghetto of progressive roasters, certifiers and non-profits working on Fair Trade that kind of hung out on the margins of the show and worked in the margins of the trade. Over time, of course, that sense of isolation gradually changed as the principles and practices pioneered in the early days of Fair Trade began to migrate from the margins to the mainstream of specialty coffee.
In a matter of just a few years, the language that was once heard mostly in The Event’s side meetings on Fair Trade was finding its way onto the covers of the special issues of trade publications whose release was planned to coincide with The Event. The lexicon of Fair Trade gave the entire industry a vocabulary that fostered dialogue on pressing issues of trade justice in the coffeelands — smallholder farmers, cooperatives, social premiums, transparency, etc.
A more recent example is food security. Before Green Mountain Coffee Roasters commissioned original household-level research into the extent and causes of hunger in the coffeelands and communicated the results of that research courageously to the industry, specialty coffee did not have the vocabulary it does now to discuss issues affecting smallholder farmers in specialty coffee supply chains.
Similarly, the Business Supply Chain Transparency on Trafficking and Slavery Act of 2015 would go a long way toward standardizing the vocabulary on labor issues and supply chain transparency in the specialty coffee community at a time when the conversation is just getting started in earnest.
What + How to Report on Labor Issues
The essence of the Business Supply Chain Transparency on Trafficking and Slavery Act of 2015 is Section 3, which proposes amending the Securities and Exchange Commission Act of 1934 — still a seminal piece of legislation governing U.S. financial markets — to include detailed guidance on what and how companies compelled to make annual public disclosure should do so.
The bill says what companies should include in their reporting and how to label it.
Policy: The policies the company and its supply chain partners have put into place to identify and eliminate risks for forced labor, slavery, trafficking, the worst forms of child labor and sexual abuse of minors
Practices: The specific ways the company has evaluated and addressed supply chain risks related to labor, including whether and how organized labor was involved in the process
Audits: Details regarding the independence and scope of audits of supply chain partners
Remediation: The policies and practices in place to remediate victims in a company’s supply chain or more broadly in its sector of the economy.
Companies would need to publish this information under the heading, “Policies to Address Forced Labor, Slavery, Human Trafficking, and the Worst Forms of Child Labor” and make it available on their respective websites “through a conspicuous and easily understandable link to the relevant information that shall be labeled Global Supply Chain Transparency.”
We know that the U.S. Department of Labor has reported child labor in the coffee sectors of 14 countries, including these prominent specialty coffee origins: Colombia, Dominican Republic, El Salvador, Guatemala, Honduras, Kenya, Mexico, Nicaragua, Panama, Tanzania and Uganda. We do not necessarily know what, if anything, U.S. coffee companies are doing to identify and address the sources of risk for child labor in their supply chains. The proposed legislation would require disclosure on that count for large companies.
We do not believe there is an epidemic of forced labor, slavery or trafficking in the coffee sector, but as this unfortunate episode showed, trafficking and slavery can happen in coffee, even in the United States. The proposed legislation would help us get a better sense of the prevalence and nature of these practices globally by requiring companies to report on them.
Even if the reporting requirements do not surface new insights on the specific practices they are trying to expose and eliminate, the coffee sector only stands to benefit from them.
Coffee companies forced to increase investment in supply chain transparency will more effectively identify risks of all kinds in their supply chains, not just risks related to farm labor, and position themselves to respond more effectively to the growing demand in the marketplace for expanded traceability and supply chain transparency. Meanwhile, the public nature of this kind of compulsory disclosure at the federal level, and the precision in the proposed communications requirements, promises to expand the vocabulary for Global Supply Chain Transparency in the coffee sector to the benefit of everyone in the supply chain, from growers and workers to consumers.
Michael Sheridan is the Director of Sourcing and Shared Value at Intelligentsia Coffee. He also orchestrates the Extraordinary Coffee Workshop (ECW), an annual supply chain summit that convenes Intelligentsia’s Direct Trade partners from around the world. Prior to joining Intelligentsia, Sheridan led coffee programming for the international development agency CRS for more than a decade. He is a member of the SCA’s Sustainability Center Advisory Council, and has served as a volunteer advisor to the industry on sustainability issues since 2012.