by Cindy Huynh
“We are partnering with the pilot of this project to further increase transparency and efficiency of the verification process related to labor policies within our supply chain,” said Brent Wilton, Coca-Cola’s global head of workplace rights, as reported by Reuters.
The beverage giant and the US State Department will work with The Bitfury Group, Emercoin, and the non-profit Blockchain Trust Accelerator (BTA) to pilot a secure registry for workers and their contracts with blockchain technology.
If the pilot is a success, it would have significant ramifications for global supply chains as it would new standards for ethical labor policies and practices.
Forced Labor in Complex Global Supply Chains
According to the International Labor Organization, an estimated 25 million people are involved with forced labor conditions in 2016, with 47 percent concentrated in the Asia-Pacific region.
In the 2016 update of it’s Behind the Brands Campaign, Oxfam noted that “[t]he Big 10 [food and beverage companies] have barely shown any improvement [from 2013] on the issue of labor rights in their supply chains.”
While forced labor occurs across a variety of industries, the food and beverage industry is considered an at-risk sector. They have recently been under significant pressure, especially forced labor in countries that obtain sugarcane. Unfortunately, according to a study released in 2017 by Know The Chain (KTC), while the 20 largest food and beverage companies demonstrate a growing awareness to address forced labor, they had to take active steps to strengthen existing processes.
The Blockchain to Combat Forced Labor in the Food and Beverage Industry
As one of the ten global companies examined by KTC, Coca-Cola agreed to conduct 28 country-level studies on ethical practices and corporate social responsibility. These include child labor, forced labor, and land rights for its sugar supply chains by 2020.
The pilot between Coca-Cola, the US State Department, The Bitfury Group, Emercoin and the BTA will, therefore, explore blockchain technology as a potential solution to reduce and eradicate the use of child labor. In theory, blockchain technology can create a transparent global sourcing solution where products can be traced from the source to the consumer without any gaps in the system that can be used to exploit children.
The Bitfury Group will be responsible for building the blockchain solution, Emercoin will provide the blockchain services, while the State Department will utilize its expertise on labor protection.
“The Department of State is excited to work on this innovative blockchain-based pilot,” Deputy Assistant Secretary Scott Busby said in an email to Reuters. Busby also noted that while blockchain cannot force companies or authorities to follow labor contracts, it can hold companies accountable encouraging compliance with those contracts.
Blockchain’s growing application for social causes could have global ramifications for supply chain ethics. If Coca-Cola’s blockchain pilot is successful and blockchain technology can reduce incidences of forced labor, it can add additional pressure for companies in the food and beverage industry to adopt and uphold new labor standards in their global supply chain.