In September 2023, the US Department of Labor (DOL) launched investigations into possible child labor violations by meat and chicken processors Perdue Farms and Tyson Foods. The investigation, which is to determine whether migrant children are working inside slaughterhouses owned by the poultry-processing giants, follows a New York Times magazine report of minors working at the facilities of both companies. “There are currently [Wage and Hour Division] investigations open at Perdue and Tyson Foods,” a DOL spokesperson told CNN recently. Perdue had an annual revenue of $8 billion in 2022 according to Forbes and is the parent company of Perdue Foods and Perdue AgriBusiness. Tyson had a revenue of about $53.6 billion in 2022 and is the biggest US meat company by sales. Together Tyson and Perdue produce a third of the poultry sold in the US.
To be clear, the slaughterhouses where the evidence of the use of child labor was found are not directly owned by Tyson or Purdue but belong to smaller independent third parties. This begs the question—what is the responsibility of large companies for human rights violations and environmental pollution that occur in their value chains? The question is important because companies “may be involved with adverse human rights or environmental impacts either through their own activities or as a result of their business relationship.” Moreover, adverse human rights impacts “can occur at any level of a supply chain – from the first tier of direct or strategic suppliers, all the way down via multiple layers of sub-suppliers and sub-contractors, to those providing the raw material inputs.” For example, in February 2023, Packers Sanitation Services Inc. LTD, one of the largest food safety sanitation services providers in the US, paid $1.5 million in civil money penalties after the DOL found that the company employed at least 102 children in hazardous occupations. Back in November 2022, a US District Court issued a temporary restraining order forbidding Packers from committing child labor violations. Significantly, although Packers provides services to some of the nation’s largest meat and poultry producers, including companies like Tyson, Cargill Inc., JBS Foods and Turkey Valley Farms, and although the investigation found that the child labor violations at Packers “were systemic and reached across eight states, and clearly indicate[d] a corporate-wide failure by Packers Sanitation Services at all levels,” the major corporations that actually benefitted from Packers’ services were never investigated or penalized.
Multinational Corporations, Human Rights and Supply Chain Risks
The DOL’s Tyson/Perdue investigation raises thorny, timely and very important questions about the responsibility and liability of large corporations for human rights violations and environmental pollution that occur in their supply chains. Human rights abuses occur at all stages of the supply chains in most production sectors in the US including the food and agriculture sector. Globally, the food and agriculture sector is recognized as a high-risk sector for human rights abuses and environmental pollution. According to Hilal Elver, the former UN Special Rapporteur on the Right to Food, although agricultural workers play a critical role in achieving food security in most countries, they are “among the most food insecure” and “fac[e] formidable barriers to the realization of their right to food.” In her 2018 annual report, Elver observed that agricultural workers “are increasingly faced with low wages, part-time work, informality, and a lack of social and economic protections” and “are further faced with dangerous working conditions owing to regular exposure pesticides and to long hours spent in extreme temperatures without adequate access to water.”
Across the globe, the number of people living in modern slavery continues to rise, according to the Global Slavery Index 2023. An estimated 50 million people were living in situations of modern slavery on any given day in 2021. Of the 50 million living in situations of modern slavery—women, children and migrants—remain disproportionately affected. It is estimated that more than 12 million of all people in modern slavery are children, while women and girls account for over half of them (54 percent). In the US alone, the DOL has reportedly seen a 69 percent increase in children being employed illegally between 2018 and 2022.
Changing Times, Increased Scrutiny
For a long time, the DOL targeted subcontractors and pretty much allowed the large corporations that engage the subcontractors to evade investigation and avoid liability. Times are changing, however; consumers, lawmakers, regulators, investors and other stakeholders are demanding more. In an open letter to Tyson CEO Donnie King, Missouri Senator Josh Hawley asked for more information about Tyson’s child labor practices. On October 17, 2023, workers and activists rallied outside Tyson’s headquarters to protest child labor. In a February 2023 press release, the DOL and Department of Human Services announced the establishment of a DOL-led Interagency Taskforce to Combat Child Labor Exploitation and called on Congress to investigate corporations that flout child labor laws. Indeed the Tyson/Perdue probe “appears to be the first time the [DOL] has attempted to hold a parent company jointly liable for the child labor violations committed by a subcontractor.”
The DOL’s Tyson/Perdue investigation should be a wake-up call for large US corporations to closely scrutinize activities throughout their value chains. In an April 2023, letter to ‘Members of the Meat and Poultry Industry,’ the United States Department of Agriculture warned that companies “must consider both their legal and moral responsibilities to ensure they and their suppliers, subcontractors, and vendors fully comply with child labor laws.” Companies in food manufacturing “need to be vigilant about the standards of their suppliers to help reduce systemic violations and abuses,” the letter added. In the letter, the USDA requested all actors in the food supply chain to take important precautionary steps toward: “determin[ing] whether illegal child labor is being used anywhere in [their] supply chain,” “[i]nclud[ing] strong language in supplier, subcontractor, and vendor contracts to prohibit illegal child labor,” and “[a]dopt[ing] standards for suppliers, subcontractors, and vendors that will better guard against the use of illegal child labor …”
Tyson’s Human Rights Policy and Standards: Good, But …
Tyson has not commented publicly on the DOL’s child labor investigation. However, the company’s policy documents affirm commitment to the Universal Declaration of Human Rights and declare zero tolerance for any form of child labor. Tyson has a Global Human Rights Policy Statement and a Supplier Code of Conduct. In its Supplier Code of Conduct, Tyson requires its suppliers to have controls in place that, among other things, “[e]nsure no forced labor or child labor is being used or human trafficking is occurring,” “[r]espect the right of employees to freely associate, organize, and bargain collectively,” “[e]nsure compliance with applicable wage and hour laws,” and “[p]rohibit discrimination, harassment and workplace violence.” Also, according to the company’s Global Human Rights & Modern Slavery Statement 2022, Tyson “plan[s] to conduct [its] risk assessments with respect to human rights, work with [its] suppliers to help them better understand anti-slavery activities they should be undertaking, and provide awareness training, along with resources, to [its] employees on methods of identifying and taking appropriate action against suspected modern slavery, human trafficking, or human smuggling.” The document also states that Tyson “[does] not tolerate any form of forced or abusive labor, modern forms of slavery, involuntary servitude, human smuggling, or human trafficking in [its] operations or facilities,” “[does] not tolerate any form of child labor or prison labor in any operations or facilities, except as permitted by local laws,” and “aim[s] to ensure that [its] supply chains are free from modern slavery, human trafficking, and human smuggling.” Are these enough? Not really. Not if emerging international norms and evolving international best practices are taken into account.
Across the globe but particularly in the European Union, the idea of voluntary and mandatory human rights due diligence (HRDD) is growing in popularity, and companies like Tyson and Purdue must lead by example. At a minimum, they must take immediate steps to implement effective due diligence strategies throughout their supply chains. Principle 17 of the United Nations Guiding Principles on Business and Human Rights requires businesses regardless of their size, sector, operational context, ownership or structure to carry out human rights due diligence in order to identify, prevent, mitigate and account for how they address their adverse human rights impacts. At a minimum, the process “should include assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed.” Meaningful and effective due diligence “[s]hould cover adverse human rights impacts that the business enterprise may cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships.”
The idea of supply chain due diligence is gaining traction throughout the world. In a growing number of jurisdictions, states have adopted or are in the process of adopting laws that impose mandatory due diligence requirements on companies. Examples include Germany’s Supply Chain Due Diligence Act (2021) and the Dutch Child Labor Due Diligence Act. On 23 February 2022, the European Commission adopted a proposal for a Directive on corporate sustainability due diligence (Draft Directive). The Draft Directive imposes obligations on companies for actual and potential human rights and environmental adverse impacts with respect to their own operations, the operations of their subsidiaries and the value chain operations carried out by entities with whom the company has an established business relationship.
Conclusion
Tyson’s international footprint is expanding into new geographies that may present unique human rights risks. For example, in 2019, Tyson completed the acquisition of the Thai and European businesses from BRF S.A. Tyson is facing growing pressure from investors to improve its human rights and environmental footprints. In a 2021 shareholder proposal, some shareholders requested Tyson’s Board of Directors (Board) to “prepare a report … on Tyson’s human rights due diligence process to assess, identify, prevent, mitigate, and remedy actual and potential human rights impacts.” In a 2020 shareholder proposal, shareholders noted that while Tyson’s Code of Conduct and Supplier Code mention human rights, “there is inadequate disclosure demonstrating effective implementation of human rights commitments throughout the value chain to address Tyson’s salient human rights risks.” Significantly, Tyson’s Board opposed both proposals and in each case asked shareholders to vote against the measure, writing, “We disagree with the implications.” At a February 2021 shareholders meeting, Tyson’s investors rejected the call for the company to disclose more information about how it protects workers from abuse.
The good news is that there are now a growing number of guidance, training manuals and toolkits available for any company interested in implementing an effective supply chain due diligence program. The bad news is that many companies, particularly companies in the food and agricultural sector, “are either unable or unwilling to implement effective human rights and environmental due diligence strategies.” According to the 2023 Food and Agriculture Benchmark, which ranks the sustainability performance of the 350 most influential companies, the vast majority of food companies lack comprehensive commitments and procedures prohibiting child and forced labor in their supply chain. According to the report, just eight percent of the 350 companies demonstrate having a full human rights due diligence mechanism in place, while the vast majority of companies (304) do not have this in place. What is more, over half of companies (202) do not explicitly require their supply chain to prohibit child labor.
A meaningful and effective supply chain due diligence strategy can enable a company to identify, prevent, mitigate and remedy human rights violations in their supply chains. With the growing number of supply chain due diligence laws being enacted around the globe, companies may no longer have a choice on whether or not to put in place a credible supply chain due diligence framework. Going forward, businesses that fail to integrate effective due diligence strategy into their operation expose themselves to considerable risks including litigation, reputational, financial and human capital management risks.
Professor Uche Ewelukwa Ofodile (SJD, Harvard) is a Senior Fellow of the Mossavar-Rahmani Center for Business and Government at Harvard’s Kennedy School of Government and a member of the Council on Foreign Relations. She holds the E.J. Ball Endowed Chair at the University of Arkansas School of Law.
