Debate Shifts

The announcement by the world’s largest foodmaker, and its pledge to stamp out abuses, shifted the debate. Companies have said it’s impossible to prove their products are tainted by forced labor, given how many suppliers and middlemen make up modern supply chains. Now one of the biggest was conceding it was a distinct possibility.

“We need business to own up to the abuses in their supply chains and then work collectively to eradicate them,” said Steve Trent, executive director of Environmental Justice Foundation, which tracks slavery in the Thai fishing industry. He hailed Nestle’s statement as a huge step forward. Chris Bayer, a researcher at the Germany-based nonprofit Development International, advises companies on compliance issues. He agreed with Trent, and not just for moral reasons.

“Companies that have such policies and systems in place are far less vulnerable to reputational risk,” Bayer said. “It would behoove any reputable company that qualifies to make sure it’s at least legally compliant.”

Transparency Plans

Transparency initiatives don’t include giving in to the lawsuits, however. Edie Burge, a spokeswoman for Nestle’s U.S. unit, echoed other defendants when she said there’s no legal justification for requiring warnings on company products.

Under California’s supply chain transparency law, the first of its kind, companies with more than $100 million in revenue must publicly disclose their efforts to fight slave labor. It doesn’t require them to have a policy -- but if they do, they have to say what it is.

“This was a very simple approach to an important problem,” said Darrell Steinberg, the former state senator who sponsored it. “If large companies trace their supply chains and publish the results on their websites, by definition that will be a major deterrent.”

Some of the lawsuits use Steinberg’s bill as a starting point: They claim companies like Nestle and Costco violated California law by not also stating publicly that slave labor probably had a part in making their products.

Right To Sue

The proposed class actions envision an individual right to sue, arguing that shoppers are being illegally deceived because some wouldn’t buy a product potentially tainted by slave labor. In ruling for Nestle, U.S. District Judge Cormac Carney said state legislators had the chance to require slave labor warnings, and passed.