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Understanding and Evaluating Labor Abuse Risk in the Coffee Sector

[Editor’s note: This is Part 2 of an ongoing editorial series led by Verité exploring labor issues affecting the global coffee sector through its U.S. Department of Labor-funded Cooperation On Fair, Free, Equitable Employment (COFFEE) Project. See more of Verité’s work on coffee here. Daily Coffee News does not engage in sponsored content of any kind and all views or opinions expressed in this piece are those of the author/s.]


Photo courtesy of the authors.

Labor Risks in Coffee: Understanding the Need for Robust, Actionable Information

Verité research has documented a significant risk of forced labor and child labor in the coffee sector in a variety of countries across Latin America. Yet, many mainstream risk assessment services have characterized the coffee sector as low or moderate risk in these countries.

This discrepancy is in large part due to the fact that risk assessments are often based on published government, press, and NGO reports on labor violations — reports that do not often do not exist in countries with low levels of institutional capacity.

The result is that countries with government, press, and civil society institutions that are more active in identifying and publishing information on labor violations are subsequently given higher risk scores. 

Furthermore, because labor violations have been uncovered in these countries, key stakeholders are more aware and tend to take more preventative action, resulting in an actual reduction in risk over time.

Meanwhile, in countries in which labor violations have not yet been identified, there is a lack of actionable data that can help key stakeholders to address labor risks. This results in a latent risk of labor abuses in countries in which violations have yet to be uncovered. 

For coffee companies, this reality can also increase legal and reputational risks. 

The “Echo Chamber” Effect

It can be counterproductive to base risk assessments solely on adverse media scans or published reports of labor violations. These reports tend to come from government publications, statistics or labor inspections, or from civil society and press investigations.

There tends to be more information on labor violations in countries in which governments invest more time and resources in labor inspections and are more transparent in sharing data. Similarly, more information comes from countries with a robust civil society and an independent press that have the capacity and freedom to investigate labor issues. 

The reliance on such reports can create an echo chamber effect, in which reports of labor violations in a given country and sector are repeated and highlighted by international media outlets and NGOs, while labor issues in other countries go unidentified and unaddressed.

While naming and shaming companies and governments implicated in labor violations can be helpful in spurring action, NGO and press publications often fail to include information on positive steps taken. This can disincentive governments from publishing data or even carrying out inspections. It can also disincentivize companies from disclosing information on their supply chains. 

The Case of Brazil

Among coffee producing countries in Latin America, Brazil has the strongest labor laws, labor inspectorate capacity, presence of labor unions in the agricultural sector, and civil society and journalist capacity to investigate and report on labor issues, especially conditions analogous to slave labor.

Brazil is also a leader in transparency, publishing data from labor inspections and a Dirty List of employers implicated in cases of slave labor, the largest number of which are related to the coffee sector.

However, the country’s capacity for identifying labor violations and its transparency in sharing information on identified cases has led to Brazil being singled out for labor risk, despite the existence of similar or worse labor conditions in other coffee-producing countries. 

When there is a lack of civil society and press capacity, or restrictions or violence against human rights defenders and journalists, it is more difficult for them to investigate and report on labor violations. In other words, it is possible, if not likely, that labor risks are in fact higher in countries that have been characterized as “low risk.” 

Actionable Information to Tackle Root Causes

Given this risk assessment landscape, is important that companies conduct a robust evaluation of labor risks throughout their supply chains based not only on published information on labor violations, but on proxy indicators that measure all countries on an equal footing.

With this in mind, Verité’s U.S. Department of Labor-funded Cooperation On Fair Free Equitable Employment (COFFEE) Project created the open-source Risk Evaluation for Action in the Coffee Trade, or RE-ACT Dashboard. To develop the RE-ACT Dashboard, Verité carefully collected, collated, and analyzed data on proxy indicators and root causes of risks of forced labor, child labor, human rights violations, and workers’ and farmers’ livelihoods for the top 17 coffee producing countries in Latin America — those that export at least 50,000 60-kilogram bags of coffee per year.

This includes data sources such as poverty indexes, information on children’s school enrollment, the minimum age for child labor, trafficking in persons rankings, trade union density rates, the percentage of agricultural workers employed in the formal sector, compliance with labor rights and the number of human rights defenders killed, among others. 

Rather than providing a high-level score that can cause companies to reduce their sourcing from countries categorized as higher risk, which can be counterproductive by pushing workers and farmers in these countries further into poverty, the RE-ACT Dashboard provides actionable data on risk factors and root causes.

This constitutes a more comprehensive and reflective approach to helping companies focus on addressing underlying risk factors through targeted interventions rather than taking a reactive approach based on a single risk score that mostly relies on adverse media scans.  

Data on proxy indicators of labor and human rights risks and their root causes can enable companies, civil society organizations and government agencies to proactively focus their efforts on tackling specific root causes and mitigate existing abuses in countries that might have otherwise gone under the radar.

With this information in hand, companies can carry out more targeted audits, assessments and research to determine whether specific issues exist in their supply chains, and take proactive measures to protect workers in their supply chains from labor exploitation before they face reputational damage or legal repercussions.  

Read more from this Labor in Coffee Series here