ESG Viewpoint: The role of migrant workers in international supply chains

Discover how companies can better protect migrant workers in supply chains.
July 2021
Marcus Wilert

Marcus Wilert

Vice President, Responsible Investment team

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This article was co-authored by Saif Khan, Founder, Labour Standards Consultant, Footprints

Companies often rely on migrant labour when the domestic workforce is either not sufficiently large, or when the jobs are comparably low-paid or in some other way not considered attractive by domestic workers. This is often within factories, but also in the services and hospitality sectors too. Meanwhile, international migration for employment provides much-needed incomes and remittances that support source countries. For example, Bangladesh is a major exporter of labour, with an estimated 12.2 million people working abroad, and World Bank data reveals that remittances by overseas workers accounted for 6% of the country’s GDP in 2019.

But the often-complex recruitment of international migrants creates higher risks of exploitation and human rights abuses, including modern slavery and forced labour. Some of the problems include:

  • Irresponsible actors being involved who extract unfair payments, leading to personal debt and the risk of retribution in case of non-payment.
  • Workers might not be presented with full and accurate job descriptions, leading them to expect another type of job than what ultimately materialises.
  • Contracts are often delivered late or not at all before the worker leaves their source country, forcing them to rely on the promises by the agents, and without recourse should the conditions or remuneration end up being different than what was promised.
  • Workers might find themselves unable to extricate themselves from the job, weighed down by debts incurred by agent fees, and compelled to accept worse conditions than were promised.
  • Women migrating for work face additional risks such as sexual harassment and violence.

In late 2018, reports surfaced in the UK that the NHS was using rubber gloves made in Malaysian factories where migrants are allegedly subjected to forced labour – one company involved being Top Glove. In July 2020, the US Customs and Border Protection agency stopped a shipment from Top Glove due to similar allegations.

Supply chain sustainability is rising up corporate agendas – but clearly, the recruitment process needs to be included in these assessments, to help companies mitigate risks, remediate non-compliances and ultimately establish themselves as preferred employers.

So… what can companies do to ensure that recruitment processes are fair and transparent?

Risk warnings

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

BMO Global Asset Management’s voting, engagement and public policy work is conducted independently of the wider BMO Financial Group. Positions taken by BMO Global Asset Management may not be representative of the views of the BMO Financial Group as a whole or of the other lines of business.

Use our handy glossary to look up any technical terms you are unfamiliar with.

Download the full viewpoint to discover the steps we believe companies should take to include the recruitment stage in their supply chain due diligence, as well as a case study of our engagement with Top Glove.

Get to know the authors

Marcus Wilert

Get to know the authors

Marcus Wilert, Vice President, Responsible Investment team

Marcus joined the Responsible Investment team at BMO GAM in 2020 and is focusing on labour standards and biodiversity. Before joining BMO, Marcus spent a decade and a half in supply chain sustainability across the world. When not working, he enjoys sailing and Filipino martial arts.

Saif Khan

Saif Khan, Founder, Labour Standards Consultant, Footprints

Saif is a supply chain sustainability expert with strong focus on migrant worker issues in Asian supply chains. He manages a CSR consultancy firm, Footprints, that offers modern slavery risk assessment and responsible recruitment consultancy services to buyers and suppliers.

Risk warnings

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

BMO Global Asset Management’s voting, engagement and public policy work is conducted independently of the wider BMO Financial Group. Positions taken by BMO Global Asset Management may not be representative of the views of the BMO Financial Group as a whole or of the other lines of business.

Use our handy glossary to look up any technical terms you are unfamiliar with.

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