In a previous post, we discussed blockchain’s use in the food supply chain to speed up tracking. Now it’s being used for responsible sourcing.
Can blockchain technology address the use of forced labor in countries that produce sugar cane?
Around 45 million individuals are in forced labor conditions worldwide, according to the International Labor Organization. Many food and beverage companies are under pressure to eliminate forced labor.
In the U.S. State Department’s first major project to use blockchain for a social issue, it is working with Coca Cola to address this issue in its sugar cane supply chain.
The thought is that the transparency of blockchain may reduce the use of forced labor. In and of itself, this technology won’t prevent unethical labor practices, but it could provide a chain of evidence for Coca Cola to document responsible sourcing of its sugar cane.
This post is based on the Reuters article, Coca-Cola, U.S. State Dept To Use Blockchain To Combat Forced Labor, by Gertrude Chavez-Dreyfuss, March 16, 2018. Image sources: Shutterstock / heromen30 and Shutterstock / DR MANAGER.
1. How important is the responsible sourcing of materials?
Guidance: It is increasingly important. Customers and employees are demanding that organizations behave in a socially responsible fashion. In particular, Coca Cola has been under pressure to ensure their sugar cane supply doesn’t use forced labor, but proving that has been difficult. Coca Cola believes the transparency of blockchain technology will demonstrate that forced labor is not used in their sugar cane supply chain.
2. What are drawbacks to using blockchain to track worker payments?
Guidance: Many of the workers will not have a smartphone or other means of accessing the blockchain to confirm the information submitted.
Another concern is transparency. Making the blockchain as transparent as possible allows verification of payments to workers—protecting them from forced labor. However, being able to identify workers could put them at risk.
Also, total transparency allows competitors to identify suppliers in the supply chain, potentially allowing competitors to also source from the suppliers, or completely co-opt them.