by Anant Gautam, PGP 2021-23, IIM Indore
The 2021 data for 193 nations by the IMF projected India as the world’s fifth fastest-growing economy and the fastest-growing trillion-dollar economy of the world. India, still aiming to enter the “Developed Nation-State” category, aspires to become a global manufacturing powerhouse. In order to accomplish it, the Indian government launched several initiatives for reforming the supply chain with a major focus on the Make in India campaign. These reforms transforming the supply chain ecosystem started the boiling debate around human rights violations in the supply chain industry.
The Supply Chain Industry offers the emergence of new business opportunities that helps in the economic development of the state; however, it also presents serious human rights breach which the companies and laws do not effectively respond to. According to the International Labour Organization, more than 450 million people in the world work in supply chain-related jobs. For India, one estimate predicted that the Indian supply chain Industry may employ 30 million people by 2022. This figure is slightly troublesome as this population will include women workers, migrant workers, child laborers, or residents of rural or poor urban areas too.
Human Rights Violation?
The Business and the Legal field are intertwined with one another but not many legal provisions are discussed within the companies supply chain. Each product that is headed to reach the end-user goes through a cumulative effort of multiple organizations. These organizations combine to form the Supply Chain Industry. Thus, these multiple chains are not paid a lot of attention by the company because they do not fall within the four walls of it. This leads to severe violations of various laws and most importantly the human rights. Major human rights violations in the context of the supply chain industry are;
- Labour Law violation (Four codes- Code on Wages, Code on Social Security, the Industrial Relations Code & the Occupational, Safety, Health and Working Condition Code)
- Child Labour (Article 24)
- Right to life and all rights covered under it (Article 21)
- Breach of International Humanitarian Law,
- Right to safe environment
These violations leave us with very prominent questions; who should be held liable, how should it be curbed, and what should be the course of action.
Placing blame and mea culpa
The debate of shifting the liability for these violations has been long-standing. There has been a constant shift of blame by different institutes but no concrete action, to date, has been taken. However, these institutes are largely responsible for providing and implementing provisions but have failed severely. There are discussions but no public mea culpa for their involvement. Three major institutes responsible for harboring a safe human rights environment are;
- State
The lack of state action has led to a surge in human rights violations. The government does not regulate the business effectively. India has come up with four specific codes covering all aspects of labor law, but there is a need for proper implementation. The loopholes in these codes and poor enforcement leads to the violation of human rights.
Government should oversee and regulate business human rights practices. They must do so by enforcing laws, regulating company behavior, and ensuring that all companies that are part of its economy, must responsibly take their human rights due diligence.
- International Organizations
International law is not binding in nature. Therefore, any organization violating the principles and provisions set by the ILO is not held liable for its actions. ILO conventions have promoted the welfare of the labor by discussing their rights at length and asking the member state in creating and implementing Labour laws and extending their scope by encompassing Human Rights, but it does not bind the states. Its high time that ILO should bring out a binding standard on human rights in global supply chains.
- Companies or Organizations
UN Guiding principles mentions that companies must have a human rights policy. Indian constitution provides a set of fundamental rights that if infringed will hold the organization liable. These companies need to follow state laws and the company guidelines of their respective organization. However, weak labor laws help these companies in bypassing the system and human rights are left at the mercy of the segments of the supply chain industry. Thus, in a full circle, strong labor laws need to bind these companies responsible for human rights breaches by extending their responsibility outside the four walls of the company.
The course of Action for curbing Human Rights Violation
The west is known for advocating human rights. Paradoxically, the demand for a dedicated Supply Chain Act started in Western states because of the number of human rights violations. However, Indian labor has adapted to the weak system and when coupled with unawareness about the basic rights, there has never been a push for such demand.
A dedicated Supply Chain Act along with a binding ILO statute for the member states can positively impact the supply chain Industry. This move could help in curbing human rights violations in a developing state like India. India by bringing such an act could become a flag bearer of advocating human rights in the supply chain industry across the world.
Conclusion
Managing a supply chain in a country like India is a challenging job for any organization because it has a diverse market, flexible yet strict government regulations, infrastructural problems, etc. However, all organizations must endeavor to achieve the unaccomplished goal of protecting human rights along their supply chain. They must take preventive steps and design frameworks such that no person involved in the supply chain faces a human rights violation.
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