Politics of Poverty

Global supply chains are broken: What’s at stake and how to fix it

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women sorting cherries
Workers' rights and safety should be front and center when addressing supply-chain disruptions. Photo: BearFotos

For the workers whose labor powers the supply chain, disruptions are more than an inconvenience.

Since the beginning of the pandemic, frequent and widespread supply-chain disruptions have exposed vulnerabilities in our global economy.

The situation has intensified this fall. Although a global recovery is underway in the US, UK, and Europe, consumers are once again facing half-empty shelves. Holiday shoppers are being told to expect fewer choices and higher prices this year, and Costco is bringing back purchase limits on toilet paper and other supplies in order to cope with delivery delays. Things will get worse as cargo ships and trucks increasingly encounter bottlenecks at ports and railways across the world.

The evidence is clear. The world has failed the supply-chain resiliency stress test. And instead of using that failure as a catalyst for transforming a deeply flawed system, manufacturers and retailers have been playing Whack-A-Mole: as soon as they fix one problem in the supply chain, another pops up.

But who else is paying the price now for meeting market demands? The most vulnerable people in our global supply chains: small-scale farmers, and women, migrants, and other supply-chain workers. They do some of the riskiest, lowest-paid jobs and have the least capacity to cushion blows to their incomes, health, and well-being. In Vietnam, for example, COVID-19 lockdowns combined with continued high demand for seafood have meant that workers in seafood factories must work, eat, and sleep within the plants, completely isolated from their families, in order to fulfill orders for export markets.

Supply-chain solutions must go beyond addressing short-term logistical problems. We need to view the disruptions through a human-centered lens—focusing on the people who continue to risk their lives and their quality of life so we can put food on our tables.

Long before the pandemic, Oxfam argued that companies need to urgently address human-rights risks and environmental concerns to make globalization work better for all, especially for those who are so consistently left behind.

The pandemic has exacerbated these critical problems—and we have since called on companies to turn the crisis into an opportunity to tackle the structural changes needed to reduce risks and improve resilience in global food-supply chains.

Unfortunately, major food companies and retailers have continued with business as usual, prioritizing low costs and value extraction. Food retailers have distributed nearly all (98%) of their net profits to their owners and shareholders during the pandemic. There is little evidence that supermarkets are investing in long-term supply-chain improvements to prevent and mitigate the risks to workers and farmers, which have been intensified by the pandemic.

But it’s not too late. Companies should learn from the real-time lessons of COVID-19 and move quickly to reshape their supply-chain strategies.

What should be done?

  • First, it’s time to build trust and really improve supply-chain accountability. Several leading companies have made commitments to ease the hardships faced by workers and small-scale farmers through integrating the UN Guiding Principles on Business and Human Rights into their purchasing policies. They are starting to measure what matters (rather than just what’s easily measurable) when it comes to human rights and environmental risks in their supply chains.
  • No plan will be effective without clear timelines, and companies must communicate their plans and timelines publicly to demonstrate that they are willing to hold their own feet to the fire. This is how to build trust.
  • Second, no matter where you’re sitting, supply-chain issues are no longer someone else’s problem. They pose a collective challenge and thus require a collective response.
  • Powerful actors such as food companies and retailers have a responsibility to integrate the voices of trade unions, NGOs, women’s-rights organizations, national governments, and international activists into the process of improving their practices. While disagreements will arise, negotiated results will better address the real needs than policies crafted solely by company management.
  • Third, companies should use their corporate political power to aggressively advocate for regulatory reforms on wages, gender equality, working conditions, and social protections for workers and farmers.

Instead of looking for legal loopholes that enable exploitation of their workers, multinationals like Amazon should exercise their global leadership by integrating a set of fundamental values—including sustainability, inclusiveness, and care—into their business models. For example, they should commit to gender policies that extend to all supply-chain operations, and they should lend their voices and support to the most marginalized women, workers, and farmers and ensure that their grievances receive attention.

As the world continues to wrestle with the impact of COVID-19, there is growing disparity between the fates of the haves and the have-nots. For those who sit in corporate boardrooms, the pandemic supply-chain issues affect the bottom line; for the workers and farmers who perform the hardest and most dangerous labor on the chain, the stakes are tremendously higher. But in the end, when profits come at the expense of humanity and the environment, everyone loses.

Act now to demand your supermarkets prioritize people over profits while tackling their global supply-chain problems.

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