Masterclass Webinar: Responsible Recruitment Practices and Supply Chain Due Diligence | Best Practice Approaches from the Apparel Industry

This expert panel discussion addressed responsible recruitment practices and supply chain due diligence, and examined best practice approaches from the apparel industry. With new regulations reshaping the landscape, businesses must adapt to ensure that they’re employing ethical practices throughout their supply chains.

Key Topics

– Primary recruitment-related risks

– The role of international frameworks and emerging regulations

– Practical solutions and case studies for implementing responsible recruitment

Panelists:

– Wendy Savage, Senior Director, Social Impact and Transparency, Patagonia. Wendy sets the strategy and implementation for the company’s commitments to Labour & Human Rights, Product Traceability, claims transparency, as well as Animal Welfare.

– David Schilling, Senior Advisor, Interfaith Center on Corporate Responsibility. For the past ten years, David has provided staff leadership for ICCR’s programmatic initiatives to counter human trafficking and modern-day slavery in the US and globally.

– Wiebke Flach, Senior Advisor, The Mekong Club. Specialising in responsible procurement within the retail, fashion, FMCG, and hospitality sectors, Wiebke has a rich background in human rights and supply chains.

Moderator:

– Soledad Mills, TDi Sustainability

Watch the Video:

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Transcription:

Sarah Wilkinson
So good afternoon, everybody, and welcome to this TDI Sustainability master class webinar and responsible recruitment and supply chain due diligence, best practice approaches from the apparel industry. I’m Sarah Wilkinson, marketing manager at TDI Sustainability, and in this session, our panel of expert speakers will be sharing their insights on key recruitment-related risks. We’ll be talking about the impact of regulations and providing practical solutions for implementing ethical recruitment practices. So, today’s facilitator is my colleague, Soledad Mills. Sol is a Senior Vice President at TDI Sustainability with more than 20 years of experience in the environmental, social, and governance space. She’s a sought-after advisor, facilitator, and thought leader on strategies, standards, and best practices in responsible sourcing and sustainable development.

So, Sol is joined for our panel session today, and Q&A by our three panelists, who are David Schilling. David joined the Interfaith Center on Corporate Responsibility, or ICCR, in 1994 and works with ICCR members and allies to engage corporations, cross sectoral and multi stakeholder initiatives on human rights and corporate operations and global supply chains. He has participated at delegations to a number of countries in Africa, Asia and Latin America, visiting factories and meeting with workers and nongovernmental organizations. For the past 10 years, David has provided staff leadership for ICC as initiatives to counter human trafficking and modern-day slavery in the US and globally. Welcome David. Wendy Savage. Wendy has more than 20 years of experience in corporate social responsibility and sustainability, advising a range of companies in apparel, food, beverage, agriculture, and extractives. At Patagonia, Wendy sets the strategy and implementation for the company’s commitments to labor and human rights, product traceability claims, transparency and animal welfare. She’s also a key advisor to Patagonia’s public policy advocacy work, emerging sustainability legislation and stakeholder engagement, serving on the Fair Labor Association’s board of directors and Textile Exchanges Fiber Standards committees, Wendy is a leading voice in the industry, fostering a collaborative approach to complex environmental and social issues. Welcome Wendy. 

And then, Wiebke Flach; Wiebke has more than 20 years of experience driving sustainable business practices, specializing in responsible procurement within the retail, fashion, and hospitality sectors. Wiebke has spearheaded projects on modern slavery investigation for the UN IOM and developed comprehensive training programs on responsible recruitment and prevention of modern slavery under the ILO fair program. While based in Hong Kong as a senior sustainability manager for Little Asia, she was responsible for managing supply chain issues across raw materials, products and production sites for textiles, footwear, and hard goods. Currently, Wiebke divides her time between her role as an independent consultant and her position as senior advisor to the Mekong club. Her recent work includes enhancing supplier guidance on responsible recruitment, research and recruitment costs across recruitment costs across 15 common Asian migrant worker recruitment corridors. Welcome Wiebke. Thank you very much to all of our speakers for joining us today.  

On your screen, you can see the agenda for today’s session. We’ll start with a brief introduction from Sol, followed by the panel discussion with all of our speakers. Finally, we’ll end with a Q&A session where we’ll put your questions to the panelists, so please keep questions coming in throughout the session using the Q& A box at the bottom of your screen. We’ll collate the questions as we’re going along. And also, if you have any questions for any of our moderators, please just ask using the Q& A chat box as well. General chat has been turned off for the session so that it doesn’t distract our speakers. Now I’ll hand over to Sol for the introduction.  

Soledad Mills: 
Thank you, Sarah, good morning, afternoon, and evening. Thank you for joining us today for this important discussion on forced labor and responsible recruitment. Responsible recruitment, also known as ethical or fair recruitment, is the process of hiring workers in a transparent and fair manner that respects and protects their rights throughout their employment journey from hiring through to and post termination. This approach is not only a cornerstone of human rights, but also a fundamental step toward eliminating forced labor and modern slavery. Forced labor can often involve human trafficking, which is the recruiting, transporting, transferring or receiving of individuals through force, fraud or coercion for the purpose of exploitation. According to the International Labor Organization, approximately 28 million people worldwide are trapped in forced labor, with over 3 million being children. 63% of these individuals work in the private economy, migrant workers, in particular, are over three times more likely to fall victim to forced labor, and many migrants find themselves caught in a gray market dominated by unscrupulous recruiters and exploitative employers. Victims are often tricked into jobs where they’re paid little or nothing, trapped by debt manipulation or the confiscation of identity documents. These conditions essentially amount to modern-day slavery. Globally, the Asia-Pacific region accounts for the largest number of individuals in forced labor, with 15 million people affected, while the Arab states have the highest prevalence rates. However, forced labor is not confined to specific regions, and the vulnerabilities that lead to forced labor exist within all supply chains in all countries. The ILO has defined several indicators of forced labor that can help to identify these vulnerabilities. The mere fact of being in a vulnerable position does not necessarily lead a person into forced labor, but when an employer takes advantage of a worker’s vulnerable position, a forced labor situation may arise. 

When it comes to responsible recruitment, one of the overwhelming risks is bonded labor, where individuals become debt bonded through payments to third-party recruiters with interest that can’t be paid off. This is often a result of excessive recruitment fees charged by employment agencies and intermediaries along the recruitment cycle; coercion is also key here, and it’s one of the fundamental risks in recruitment practices. The use of coercion is often very subtle and hard to detect. It may be in the form of deception and misinformation about the employment terms and conditions, retention of passports to prevent freedom of movement, debt bondage, and withholding of wages to cover housing or equipment costs. And the reason migrant workers in particular, are often exposed to these risks is that they might not speak the language of the country where they’re working. They might not understand the local labor rights laws or the terms and conditions of their contracts. They might not have access to a grievance mechanism or legal recourse for their situation, and they may fear retaliation, repercussion, or deportation if they engage with local authorities. So, after painting a rather depressing picture, I’m hoping our distinguished panelists can shine some light on how these risks can be detected, avoided, and mitigated, and the critical role of responsible recruitment practices in addressing these challenges. We’ll discuss how companies can and have worked to safeguard workers, eliminate forced labor, and build more responsible, transparent supply chains in the textile and apparel industry, and how these lessons could inform similar approaches in all sectors. Now we’ll move on to our panel session, and I’d like to ask each of our panelists to give a short overview of how their organizations are working on these issues, as a bit of an introduction to them and their organization. Wiebke, let’s start with you.  

Wiebke Flach: 
Hello everyone, and thank you very much to TDI for organizing this webinar and for inviting me today, looking forward to some interesting questions and discussions. So, to introduce the organization I’m presenting here today, which is the Mekong Club, I should let you know that they are non-profit organization, and they are a business membership organization. They have the ambitious mission to eradicate modern slavery and forced labor. They’re headquartered in Hong Kong, but they have a couple of staff all over the world, and certainly a network of experts and contributors in all parts as well, and organizing different trainings, for instance, collective working groups, where they really bring representatives of the private sector together into a safe space. They do research, and they do tool development. For instance, at the moment, there has been a lot of effort going into upgrading a baseline assessment tool to help businesses understand where they sit with regards to due diligence processes in their business that prevent modern slavery, and this has now been aligned with all the recent legislation. So that’s the Mekong club, and I represent them as a consultant for their members, as well as in direct support to the organization and their service development. 

Soledad Mills: 
Thank you. And Wendy, 

Wendy Savage: 
Thank you. Good evening, good morning, good afternoon. Thank you for having me here. And so Patagonia, for those of you who don’t know, we are global outdoor brand based in California. We’ve been working on responsible recruitment for over a decade now. Earlier, when we identified this issues that Sol mentioned, some of those red flags were thanks to our in-depth traceability program. It’s at the heart of everything we do for all of our impact work, understanding where our products are made and where processes happen. I’d say our strategy over the years that’s focused on or four parts. One making sure we get commitment and understanding and alignment internally to education for our suppliers, and commitment and partnership with suppliers in order to make change. External engagement has been an extensive part of our work. 

Sessions like this for raising awareness, and the last part of our strategy has focused on partnership with brands, industry, government officials as well as NGOs, and both understanding and starting to address the red flag issues that we identified in the supply chain. So, very excited to be here and have this discussion with my esteemed panelists and dive into some of the areas that I mentioned. Thank you for having me.  

Soledad Mills: 
Thank you, Wendy. David? 

David Schilling: 
Thank you  Sol, and thanks for organizing this this panel. It’s great, great to be here. So, I have been at the Interface Center on Corporate Responsibility for 30 years. ICCR started in 1971 and for about 20 years, was really engaged, actively involved. Because of strategies in South Africa, we got contacted by a person named Desmond Tutu, who said, ICCR utilized your shares in companies and all of our members, you know, our share owners, to get companies in the US to withdraw from South Africa until apartheid is dismantled. So that got us really into, you know, the frame of human rights, but looking at all the other aspects of that, when I joined the staff in 1994 and primarily faith-based organizations, Protestant, Catholic, Jewish, and non-Muslim funds, but we have really expanded to, you know, social responsible investors, public pension funds, union funds. When I joined, it was like 84 billion assets under management. Meant, if you added all our member holdings in portfolio companies, and now it’s close to 5 trillion in the market. So it’s grown a lot, plus we’ve also, in 2018 felt the need to go beyond our own investors of over 300, and we’ve put together the investor alliance for human rights, and now that since 2018 has grown to over 200 investors, because we really believe that investors have the responsibility to really protect and, you know, and to really respect human rights, as well as companies, etc. So, I’ve been working in this field, in 2005 we started with sexual exploitation of the children and engaging, you know, some of the issues with some of the travel and tourism companies, and then 2014 really started a concrete kind of program to get workers no longer to pay fees, but rather the employer’s responsibility to do so, and of course, we’ll be discussing this throughout the panel, but it’s I’ve really been fortunate to be able to be at an organization that changes, that grows, but we’re engaging companies daily, and as a result, you know, I think investors have a role to play here. Thanks.  

Soledad Mills: 
Thank you. David and Wendy, what are you seeing in your day-to-day work? Are you seeing the number of victims of forced labor increasing? And where do you currently see the greatest risks?  

Wendy Savage: 
Yeah, I’ll start with the greatest risk. I think that that remains in the standing country. So, on the issue of migrant worker recruitment, you have the receiving countries, and then you have the standing countries. We’ve been focused on our work has focused on Taiwan. That’s where most of our tier-two suppliers are. And Taiwan is a country where there is shortage of labor, so they depend on migrant workers, especially for manufacturing and other industries. And so, when you think about the standing countries, it is… they’re multiple. It is much harder for a buyer or brand to control the different hiring practices and the different fees that the workers pay before they even get to their country where their jobs are, so that .. addressing the issues in the standing countries and working with government officials to improve the hiring practices there remains the most difficult part, I think, what we’re seeing now, I think after 10 years of work on the positive side, there’s much more brand collaboration, much more engagement from government organizations and NGOs also bringing much attention to the issue, which then in turn, results on faster solution for the issues that we’re encountering. As far as you know, how fast can we get there? one brand alone cannot solve the issues. This is a widespread problem that goes beyond just the practices and the supply chain. It has to do with legislation, and we’ll talk more about that. But yeah, it’s encouraging after a decade and yet, not fast enough, I would say. But yeah, leave it at that.  

Soledad Mills:  
Thank you. And how do you identify where the greatest risks are and in your supply chain?  

Wendy Savage: 
I mentioned traceability earlier in the introduction, and I would say, before anything, you have to understand where your supply chain is, and where all those issues are, I think for many years, especially in apparel, a lot of the work had focused on tier two cotton, I mean tier one cotton. So manufacturing, over the years, more and more brands are diving further down the supply chain. Legislation, in different countries is helping brands be more accountable for what happens further down the supply chain. And so, for us, that’s sort of at the center. Obviously, we rely on country risk assessments that we look at and the different indicators on human rights or slavery being one, but the vast part of the information that we use is the information that we gather directly from our own suppliers. We have a very extensive pre-sourcing, resourcing evaluation for all of our suppliers before they even come into our supply chain, so we are able to gather the actual realities at each of those suppliers, and that, along with the information from the country and all the other indicators, helps us identify where in our supply chain, at what level and which countries have the highest risk, and how are we going to focus on those. 

Soledad Mills: 
Thank you and David, can you tell us a bit more about how ICCR works with companies on these issues, particularly when it comes to human trafficking? 

David Schilling: 
Great. So maybe a little bit of background here. I mean there, there are four basic areas for us. And the first is, of course, the kind of the primary and that is corporate dialogs. So here you have now about almost 350 institutional investors working together. And it’s amazing to have still this kind of coalition, you know, 53 years later, because when we started in 1971 there wasn’t the field. So now it, you know, we really a start with that whole core, you know, concern, which is all right, look at these portfolio companies that our members are holding, do some assessments as to where some of the issues are, and then actually engage. So, like most years, I know this last year that at least 300 dialogs, 300 different engagements with a whole range of sectors, and that includes not only human trafficking, modern slavery, but environmental issues, you know, issues around health issues around racial justice, etc. So, number one, we really get prepared, get our members together, and they come from, that might be a union pension fund, a religious fund, etc, to really look at what are the core issues, and you know, human rights has been a huge area, and the work around, you know, modern slavery and human trafficking has been a key component of that, especially given the work with supply chain so but beyond sort of the engagement, sometimes there’s the need for another tool, which is shareholder resolutions, which gets an issue before, not only all the shareholders, but also the top management at the annual shareholder meetings. And that is a tool where either there are, you know, things are not moving, or there’s a new issue. And then I think the third, we’ve had a lot of success at pulling together multi-stakeholder round tables where we invite, you know, companies, government, trade unions, NGOs, etc, to the table, and we’ve done that on human trafficking, as well as this issue, which has helped us to get a real handle on where’s the need to really pull together. And then another is policy, and I think we’ll talk a little more about that, but there’s a lot of issues. Initially looking at, we want transparency, investors love transparency, and so we’ve been working on that issue for a very long time. And of course, there’s the modern slavery acts in different countries that are important, but other legislation that gets to the heart of what workers are experiencing in the recruitment process, as well as once they get to the country of destination.  

Soledad Mills: 
Thank you. And how have you seen this work evolving over time? You touched on it a little bit. Are you finding there’s now a deeper understanding from companies that this is a significant risk? 

David Schillling: 
I would say, yes. I mean, one, here’s the thing, it’s easier, I think, for us as we engage and for other institutions that are really, really concerned about this. It’s easier to get policies in place. And that’s a good indicator. I mean, for example, we’ve been working since March of 2019 with a key engagement that includes, you know, we work along with, Know the Chain that does rankings around forced labor, you know, periodically on, you know, apparel of food, apparel, footwear, and then food, the tech companies, etc. So we’re seeing there that, for example, in that issue alone, where we meet quarterly with a whole range of, whole range of investors that, you know, starting about 2019 there were, there was a pretty small percent of companies that had adopted the Employer Pays Principle and because of our engagement, and, of course, other others as well, it has really moved up to, you know, well over 60% and I think we still need to look at the next, the next couple of years, but so I really feel like there has been some improvement knowing what’s at stake in terms of the Employer Pays Principle, but I think some of the areas where we still see a gap is between the policy and it’s easier to get a good policy, as opposed to the intricate work that you know, everyone in a company that’s doing this work knows that there’s an awful lot that needs to be addressed. So, I have a feeling like we’re going to need to close the gap between policy and practice in a way, so that, in the end, workers don’t pay for any of the costs, and therefore there doesn’t need to be on the other end, if they do a reimbursement, which is another old question here. So, I do feel like there’s a greater understanding and a greater totally, you know, the need for multi-stakeholder engagements, because obviously neither sector can, whether it’s a company or investor or it’s a nongovernmental organization agency, We need to work together. 

Soledad Mills: 
Absolutely. Thank you. Wiebke, where are you seeing the greatest risks and apparel supply chains?  

Wiebke Flach: 
Yeah, so you mentioned in your introduction already some of those risks, and Wendy referred to it as well. So the Mekong club has about 40% of it apparel companies that represent our membership and while the apparel industry has been trying to tackle human rights issues for a long time, unfortunately, we still see those risks, and the whole palette of them represented; so recent research, for instance, by Transparentem, an american foundation on investigating remedial efforts for human rights issues and apparel, has recently focused on researching upstream supply chains of apparel industries in India, and they have again confirmed that all the issues from child labor to underpaid wages to the use of pesticides to bonded labor. All of these issues are still very much present in supply chains of the apparel industry, but particularly what we’re seeing, they’re always upstream in the lower tiers of the supply chain. So, you have to think of the cotton farms, the ginning facilities, the cotton mills, and so that’s really where the risk is the highest, according to what we hear. And that’s, of course, where the visibility of brands and corporates is usually the lowest. So, you look at it, can look at it very much from a tier-based risk perspective, in this case. But of course, we think about it as well as like, who is at risk in these situations? And as you mentioned there, of course, migrant workers or internally displaced people, vulnerable groups, are always at highest risk of becoming caught up in situations of forced labor. And the risk that this means for the businesses ultimately are one of business continuity. So any any risk or any stoppage in your supply chain is a fundamental risk to the business, not just a compliance risk or a reputational risk, but the last thing on the risks that I want to say is we’ve recently noted a positive trend at the Mekong club, with the regards to not just our members, but also businesses in general seem to have an increased willingness to disclose cases of modern slavery and also share how they’re going about addressing them and how they are remediating them. So, this is really something that while it is still happening and the risk is still very high, we need to also acknowledge that there is some positive inroads here. 

Soledad Mills: 
Definitely. Thank you. And David, you mentioned policies as one aspect, what else do you think companies should be doing to address these risks? 

David Schilling:
There’s a long list, but I think number one, we need … in order to really make greater progress -and this is difficult work-  but number one is to take the programs that companies have put together so far, and some have really already done this, but to really have a worker-centered understanding of how do we address responsible recruitment? You know, as investors, often when we’re dealing with top management, that is one piece. That’s an important piece. But from the beginning, our organization has had a foot in the community, as well as in the company as investors, and without the agency of workers, it’s going to be really, really hard to identify and address and, you know, mitigate, and then do whatever remedy is needed without that component. And so, worker-driven social responsibility, I think, is a really important process whereby companies need to look at their own policies, and a number are doing that; but it really seems to me that that’s, that’s a key, and I think probably another is, you know, we’re, we’re definitely needing mapping, mapping of the supply chain. But, you know, I have to say that for a long time, ICCR and the program I worked on in terms of supply chains, really looked at the farm or the factory, what the working conditions were in the farm or the factory, in the place of work, as opposed to how workers got there. And so, once I really saw that, and there’s a number of, you know, important research resources there, of course, but it really means that, you know, companies together, I think, would need to do that mapping of the recruitment chain, not just their own supply chain. And that’s a whole other area. And we know that, for example, you know, work with Isra Institute. Their work like, for example, in Myanmar, where they have a network of community-based organizations. You know, so much of the cost that the payment of fees starts in that first mile, even before you know, a job seeker gets to the capital. So that means we need to be much more aware of the whole dimension to the recruitment chain, as we have improved, you know, the supply chain. So those are two key things that I think that are really, really important if we’re going to move forward with a greater understanding of how workers can be such an important piece to this, this whole structural of injustice.  

Wendy Savage:
Well, may I comment on that fully agree with David, and just adding, you know David, you were comparing how the gap between legislation and the actual practice, and that’s one of the, one of the issues, you know, identifying what the workers actually went through. I can give you the example in Taiwan, for instance, there’s four main countries that we, that we deal with as a standing country, the Philippines, Vietnam, Thailand, there’s so all those workers speak the local language. We have to connect with the workers in their local language. And this you multiply. It’s just not one facility, there’s several in Taiwan that we have to do. And so, all of that work takes time, all of that work takes investigation, focusing the audits, and finding out exactly what the recruitment fees were for all those worker groups. It’s quite a lengthy process, and that’s just… that’s just the beginning. That’s just identifying what has happened, how much are those workers owed? When did that happen? For how long it takes? Quite a bit of time. So just wanted to emphasize the importance of the message here that David shared with us.   

Soledad Mills:
Thank you, Wendy, and for Patagonia, what mitigation measures have you found to be effective in addressing some of these challenges? 

Wendy Savage:
So, I spoke earlier about the sort of extensive vetting process that we have as one of our tools. We do a pre-sourcing vetting process. It’s called a fourfold approach, and it’s not just for social issues, but also for environmental issues, and what that helps us not only identify what problems we have, but also what suppliers we want to partner with. And for us is very important. You know, we know there’s issues in the supply chain, we know there’s no perfect supplier, but we need to make sure that we engage with suppliers who are willing to commit to working with us and remediate, and are willing to learn and understand that even though practices may be legal, they’re not best practices, and that we need to change. And I think that’s a very important connection. There’s a lot of practice, especially when it comes to recruitment of migrant workers, that may be legal in the country where the workers are, but they do not meet our standards, and they do not meet best practice or ILO best practice requirements. So, commitment from suppliers is very important, and so through that process, we’ve been able to, you know, stop partnerships that were important for our company, but were not aligned with our philosophy of, you know, environmental impacts and social impacts, quality, you name it. So that’s sort of one of the tactics that I would say has helped us. I wouldn’t say mitigate, but limit and be very selective as to who we partner with and understand what the road ahead is, before we can even allow those suppliers to manufacture our product. 

Soledad Mills: 
Wiebke, with the supplier trainings that the Mekong Club does, what practical tools or advice do you provide businesses to try and prevent irresponsible recruitment practices? 

Wiebke Flach: 
Yeah, thank you, Sol;  the Mekong Club does a lot of different types of training, some for awareness raising, some specifically for senior engagement, but you always need to know your audience. So those supplier trainings are very important to us because they would be in depth in the specific country where the suppliers are operating in collaboration with local experts, and they sort of have, like the besides a general overview of the information you presented in your introduction, four core elements to them that we find very effective in trying to prevent irresponsible recruitment practices. So, the third one would be to humanize workers, and if we’ll go into what I mean by that; the second would be to provide the legal context, the overview of what is relevant for the country in which they’re manufacturing or operating, and the third one is always the elephant in the room, which is literally the cost of recruitment and what does it cost to responsibly recruit migrant workers, also internally, and then, and then, finally, selecting recruitment agencies which want not to go for and how to work with them more effectively, and these are the four core elements that we try to bring across in our trainings. And if I can just say what I mean by humanizing workers as a very important starting point for these trainings is that there are often suppliers who have a not very stable workforce, or they work through agencies and manpower agencies and they sometimes fail to see that you might want to recruit workers, but the people who are coming to do the jobs are human beings, are people, right? and they have the same aspirations as the people in management positions, they want better opportunities for their children and want to build a house, and they might just want to get on a plane, explore a different culture and get a better smartphone. So, the motivations for migrant workers in vulnerable situations to work hard are just the same as for anybody else. And it’s important, often to sort of start off with this and remind people of who they are employing and who they are working with. And then secondly, what we find is the legal context, so very often when we go to these trainings, is that we find that the people who are hiring are not very certain of what local or national laws are with regards to recruitment fees. Obviously, many countries globally prohibit recruitment fees from being charged to workers, but there are also some that allow maybe one month salary as a maximum cap for recruitment agencies to charge to the workers. And that in itself, causes a lot of confusion. People are not clear on if the country of origin from where they recruited somebody has an allowance that is legal, what does it mean if the country in which they operate doesn’t, and so there’s a lot of conflict, and we find there’s a real need for education and awareness of these suppliers in country. And then, thirdly, the cost. So, what we literally do is we do certain exercises and break down the legal costs that recruitment entails. It could be anything from a medical check to the visa to transport to the new location of operations and or police clearance. All of these costs are quite fixed costs that we can research for a specific recruitment corridor so, to the likes of what Wendy was mentioning earlier, depending on where workers come from and where they’re seeking employment, or even if they’re just within their country traveling, these costs also apply. And then we share a sum that is specific to the audience that we’re working with on that day. And nine times out of 10, you will see people take in some air, and there’s a gasp, and they’re like, what is that the cost for one person? And they’re shocked at the cost that ethical recruitment would actually require if they, as the employer, are paying for it. And that shows you straight away that there is a mismatch. And a lot of the time, people just don’t know how expensive recruitment actually is, or how much of the cost is being fought off to the workers, and the risk that that entails. And then the last point that we find is very important, and I’ve worked on with the ILO fair program extensively as well, is the point at which suppliers select recruitment agencies. Of course, there are some who might recruit directly and do it themselves, and this is certainly something that we find reduces the risk of exploitation and enhances transparency and traceability. But most of the time, we see suppliers using agencies for the recruitment process, and we’ve designed cheat sheets for them to sort of try to discern with a couple of quick checks on the website of that recruitment agency, or when they engage with them for the first time, of how to discern whether this is an agency they can work with, or whether it’s one of those black sheep. And I don’t want to vilify agencies, but it would be easy to do so because it’s a very opaque industry and there, and it’s, it’s, and there’s a lot of quick money to be made and then renaming of businesses. So for some examples of the types of questions we encourage to ask, for instance, is, can we have a cost breakdown of, you know, the charges that you are charging the brand or the supplier for your recruitment services, and how do you train your staff to ensure zero fees to workers, are actually implemented? And then often you get a bit of a pause already, and people might find that not so easy to answer, and what are their general policies and procedures? So, there’s a lot that we equip them with, with sort of practical tools in terms of deciding which agency might be right, and it is evidence to be the most impactful moment in time at which a brand or a supplier themselves can inadvertently contribute to irresponsible recruitment and modern slavery by choosing, by poorly choosing, the recruitment agency. So, this is a crucial, crucial point to make.  

Soledad Mills: 
Thank you, Wiebke. And coming back to the employer paying, I was wondering, Wendy, if you could speak a little bit more about what the employer pays principal is and what it means. 

Wendy Savage:
It’s in the name, it’s basically making sure that the cost of recruitment is not absorbed by the workers, but it is absorbed by the companies. And this is, you know, to prevent, obviously, a worker being in a situation of debt bondage, I think, as Wiebke was explaining, those workers can pay, you know, up to a month salary or more just to get the job. And those fees are continuously being withheld from the workers´ pay. And so it is, it is one of the biggest, one of the biggest issues in the whole array of migrant worker recruitment issues, the employer pays. The Employer Pays, sort of requirement is one of the key ones that we have to resolve. And it is. It starts with, you know, again, going back and underscoring what this could just say, you have to understand what is that cost. And it is not easy, you know, because you have to calculate the fees that the workers paid before getting to the job. So, whatever they paid in the sending country, then you have to understand whatever fees they’re paying in the receiving country, because those are other fees, and that can range from travel, training, help, health checks, translators, you name it. And it’s, it’s quite, quite daunting, like you know you said, once you realize and what suppliers understand, what it is, I think, key to the Employer Pays focus here is making sure there’s education behind it, and that suppliers understand and put themselves in the in the shoes of the workers, humanizing the workers, again, we spend quite a long time in educating suppliers and just helping them connect those dots between the fees, the recruitment fees the workers’ pay, and those red flags for that bondage, because that link is not immediate once you once you bring those issues to suppliers, you’ll be surprised, especially when it’s legal, right? Especially when your country is telling you it’s a legal practice. This has been done for many years, so it’s really, really difficult to get to the point where you get owners of big corporations saying, I get it. I get why I don’t have to do this. So education is so, so important.  

Soledad Mills: 
Great. Thank you, Wendy. We’re going to move into the Q &A session now, so just as a reminder, please type your questions into the Q& A chat box and add any other questions as we’re going along, starting with the first question, how do you see the area of responsible recruitment evolving in the future? Maybe, David, I’ll pass that to you first.

David Schilling:
So there, there’s, there are some areas that are just getting started here. So that’s going to be one thing. But there are a lot of companies that have been introduced to starting in, like 2016, 2017, 2018 and I think there, there are two or three things I’d say. One, I hope that that we see more of shared responsibility. Shared responsibility is a, you know, it’s a broad topic, but in a concept. But I think there’s, there’s a need, especially given COVID, where we saw that some of the contracts that had force majeure in it. So here you had work that stopped, and the and companies, a number of companies, didn’t pay for the actual goods that they had, you know, procured, you know, did not pay for what they’d already had, you know, to make sure that, you know, workers would get, you know, pay. And so, what we found about COVID, I think, was too often the contracts were putting a lot of the pressure onto the supplier in the factory. So, I think more of a shared responsibility. And there’s one, there’s one initiative that we’ve been a part of. It started, you know, a few years ago, with the American Bar Association’s human rights group. And it essentially is now an independent, you know, it’s responsible contracting project, which is looking at the contract and having that a more shared responsibility. So, for example, I know already, you know, companies have put in into some of those contracts, issues around Employer Pays and recruitment, and that can be broader, but I do feel like there needs to be a shared responsibility and also the cost so that companies, suppliers, and, you know, work together on that because that is a critical, critical piece. I think the second is that I love, I think there’s there needs to be, and hopefully there will be in the future, seen responsible recruitment connected to the whole concept of decent work. And because they’re interrelated. So, if there’s a vulnerable community, it’s not just the recruitment process, but it’s also all the aspects. When you get to the factory or farm and there’s no, there’s no ability to participate in any, you know, trade union or there’s no real agency in order to get health and safety, gender justice, you know, etc. I think we need to look at the interconnection between recruitment and some of the other key elements. And then finally, to me, it seems like there is a there’s an opportunity for non-governmental organizations, trade unions, etc., to work more closely with the process that companies are going through that in good faith are really trying to drive this, so find creative ways of getting together. And I know that there’s, there’s so many different resources now, you know, for example, like, I know Verité has this responsible recruitment sort of calculus about wages, and so, you know, companies can use that, others can use that as well to define what it is, but I think the will needs to be there. And there’s so many issues going on in the world now and political the arena, we’ve got to stay the course on this and not move to other issues, but to really integrate it into some of a more holistic, intersectional view of what’s needed. 

Wiebke Flach:
I was nodding heavily there, David, and couldn’t agree more, what came to my mind as you were speaking about shared responsibility there as well, which is so key to what we’re talking about here is that something that seems to be shifting potentially is that brands are willing, to some extent, park compliance and prioritize transparency. And there are some leaders out there who are starting to move in that direction of saying they don’t want to score, they don’t want to incentivize their suppliers any longer to just be compliant, they rather know what’s going on, because we have to assume they’re all not compliant in their entirety. So, therefore, they’re choosing that model of saying, like, let’s, let’s incentivize transparency. Let’s work with them. Let’s integrate responsible recruitment on our scorecards. Let’s collaborate on the selection of these agencies and see how we can, how we can work together as part of a shared responsibility and really see the issue, understand the issue before we want to give rewards for being compliant on these issues. So that’s just what came to mind. 

Soledad Mills: 
Thank you. And Wendy, one for you. How does Patagonia’s responsible recruitment stance get communicated internally, for example, to your procurement teams, and how is the Recruitment Policy integrated within the business in relation to suppliers? Right?  

Wendy Savage:
Great question, that was early in the process. We spent quite a bit of time making sure that one we communicated and educated internally on the problem, not only to, you know, sourcing and the teams that we work with directly, but to the executive. Because this needs to have sort of like an executive, global company approach to commitment. You have to commit as a company, not just as a single department, to work on these issues and resolve it’s part of our responsible purchasing practices, as part of, you know, our philosophy and our commitment to human rights so early on in the process, as we identify red flags, that’s what we communicated internally. Lots of questions asked, lots of disbelief at some point that, you know, this is happening in our supply chain, that we’ve been working with our suppliers for so long and then, you know, moving on to like, okay, what do we do? how do we do it together, and how do we partner? And the importance of this topic and speaking in one voice of the company is so important, especially for you know, sometimes you have teams that work on silos. For us, it’s been helpful to work as an organization. This is, this is a Patagonia requirement, this is not a sustainability requirement or a human rights requirement, no, this is a company requirement. And the same message that I would give to the suppliers when I would speak to them or my team would, it’s the same message that our VP of Sourcing would, that our Material Suppliers would that our CEO would when speaking to suppliers on very important decisions and so very, very key in spending the time to educate, gain commitment internally and answer all those questions, because not everybody in the organization is an expert in these issues, and so you have to spend the time in educating, and I can’t emphasize, I can’t emphasize more, the importance of gaining commitment internally from the top levels of the organization, in order to then be able to work on the issues and get the commitment from the suppliers. If you can go with one voice, it would be very difficult.   

Soledad Mills: 
Thank you. I think we’ve just got time for one last quick question. Could you discuss illegal recruitment fees and the role of subcontracting impacting recruitment fees? Does anyone want to take that?  

Wiebke Flach:
I can give it a quick go, and then maybe the rest adds to it. Yeah. So, the recruitment fees that I mentioned earlier, that that we will give outlines for, are the legal recruitment fees, so the visas and the trainings; the illegal recruitment fees, there’s a lot of research by ILO being done. They always come on top. They are the invisible ones on top, and they range up to like, 15 times the monthly salary the worker might earn. So, they go very astronomical and that does not even include the interest the worker is being charged on that debt. So, it’s that is why it is debt bondage because these illegal recruitment fees are so high. And the question is quite right to ask about subcontracting, because we can see that the risk of illegal recruitment fees being charged definitely increases substantially with the amount of subcontracting, and that is in terms of where the worker is employed in your supply chain, but also because the recruitment agency quite likely subcontracts their work across different countries or across different regions. If it’s within one country, on their very local level, there will be lots of manhandlers, lots of agencies involved in that, and they all charge illegally in elements, so subcontracting and illegal recruitment fees are highly linked and the highest risk. So, the more vertically integrated your supply chain, the lower your risk to inadvertently contribute to modern slavery through recruitment processes, 

David Schilling:
I agree with that, and my own view is where there is no visibility, there is more exploitation, and that’s the case as you go further down the supply chain. But you know, with the corporate sustainability due diligence directive in the EU that includes companies that purchase, that buy, you know, that sell into the EU, like a number of  US companies as well, that it really sets a bar where the visibility and the transparency and these are, these are not means to it. They’re, they’re means to an end, but they’re not the end itself. IE, we really want to eradicate, you know, the kind of human trafficking, the forced labor that we’ve been discussing here, and the fees is one aspect of that, and it can be debilitating when you think about, oh my goodness, a person I met and has become a friend who was in Myanmar, came to Bangkok, ended up being trafficked into a fishing vessel, that for 16 years he was on that vessel and never was able to get off. Because, as you know this, the ship would come into port and the fish would be offloaded. But the human beings had to stay on the on the ship. Because, you know, you know, guards kept them there, because if they were able to go, they would never come back. And these are the kind of people I keep thinking about when working on these issues, where you see that human face, who a person that then stayed for a whole year in Bangkok before going home to Myanmar so he could testify against the ship owner so that no other workers would be put into that position. These are, you know, there’s got to be, once you’ve seen that visibility, you know, to really up your, you know, not only concern, but your solidarity with and look at the various mechanisms. So, one of them is, you know, if it’s further down the supply chain, then, there’s a likelihood that there’s greater exploitation, but we’ve got to figure out a way that you know this person and a person like him would, you would, would never have that happen again. 

Soledad Mills: 
Thank you, David, that’s very inspiring. An amazing story. Thank you for sharing. Well, I think we’re just about at time, and I want to thank our esteemed panelists for their insightful contributions, and thank you to everyone for being here today to engage in this vital conversation. We’ve touched on a lot of aspects of good practices, best practices, a few, a few key takeaways, I think, include taking a worker centric and a human centered approach to these issues, the opportunity to increase leverage through multi-stakeholder initiatives and partnerships between brands, suppliers, unions, investors, civil society, organizations, government, governments and workers themselves can help to provide effective solutions the Employer Pays Principle is gaining traction and emphasizes the responsibility of employers to pay the recruitment fees or reimburse them. And then lastly, this concept of not only mapping the supply chain and increasing visibility and transparency all the way upstream where the highest risks may be, but also mapping the recruitment chain, I think, is an interesting concept, and that can help identify risks for workers in sending countries where those risks originate, and help to drive better practices among suppliers and selecting recruitment agencies. So hopefully this has helped all the participants learn more about responsible recruitment practices, and hopefully we can work together to create a more just and equitable global labour market where all workers have the right to safe and decent work. So, thank you all for joining us today, thank you again to our speakers, Wendy Savage, Wiecke Flach and David Schilling. Here are some additional resources on how you can implement responsible recruitment practices, including know the chain, which David mentioned, as well as some other tools that the speakers mentioned. So we’ll share these links in the slides afterwards, and finally, a short survey will appear on your screen at the end of the webinar. We’d be grateful if you could complete this survey to help us improve our webinars going forward and share any information you’d like us to include in future sessions. Thank you very much, everyone, and goodbye.