Burgess COMMENTARY
I spent the first half of my career in corporate financial management. In the mid 1980s I observed that profit had become the single biggest cost in the modern economy ... and in the subsequent 30 years the situation has become significantly worse. To a great extent profit is now earned by exploiting people (workers), society (tax avoidance) and environment (resource depletion and pollution) in ways that are totally unsustainable and represent a growing existential risk for humanity as we now know it! There is a race to the bottom in terms of corporate behavior. There has to be a better way ... we have amazing technology, but it needs to be deployed doing things that will make the world a better place. Peter Burgess ... http://truevaluemetrics.org
Peter Burgess

The global supply chains of 50 companies employ only six per cent of people in a direct employment relationship, yet they rely on a hidden workforce of 94 per cent according to new research from the International Trade Union Confederation. By 24/7 Staff

Scandal - Inside the Global Supply Chains of 50 Top Companies

The ITUC report exposes an unsustainable business model, with a global footprint that covers almost every country in the world and profiles 25 companies with headquarters in Asia, Europe, and the United States.

A new report from the International Trade Union Confederation states more than 100 million “hidden workers” exist within the global supply chains of 50 major corporations, including Apple, McDonald’s, Coca-Cola Company, Johnson & Johnson and Wal-Mart.

The International Trade Union Confederation looked at 50 of the world’s largest companies - nine of them based in Asia, 17 in Europe and 24 in the United States.

“Scandal: Inside the global supply chains of 50 top companies,” released by ITUC, said 6% of the workforces for these companies are “direct” employees.

The other 94% of the workforce are classified as a “hidden workforce,” which are people working off the record or providing undeclared work somewhere in the supply chain.

“Just 50 companies including Apple, Samsung, McDonalds and Nestle have a combined revenue of $3.4 trillion and the power to reduce inequality, instead they have built a business model on a massive hidden workforce of 116 million people,” said Sharan Burrow, ITUC General Secretary.

The ITUC report, Scandal: Inside the global supply chains of 50 top companies released on the eve of the World Economic Forum in Davos exposes an unsustainable business model, with a global footprint that covers almost every country in the world and profiles 25 companies with headquarters in Asia, Europe, and the United States.

Sharan Burrow, ITUC General Secretary

“Profits are driven by low wages, it’s greed pure and simple”Sharan Burrow, ITUC General Secretary

“Sixty per cent of global trade in the real economy is dependent on the supply chains of our major corporations, which uses a business model based on exploitation and abuse of human rights in supply chains,” said Sharan Burrow, ITUC’s general secretary.

ITUC research shows:

• The cash holdings of 25 companies of $387 billion could increase the wages in their combined hidden workforce of 71.3 million by more than $5000 for a year;

• The combined wealth of 24 companies in the US from including Amazon, Walmart and the Walt Disney company, could buy Canada;

• Nine companies in Asia including Foxconn, Samsung and Woolworths have a combined revenue of $705 billion, the equivalent value of the UAE;

• Seventeen companies in Europe including Siemens, Deutsche Post and G4S have a combined revenue of $789 billion, the equivalent value of Malaysia.

• “Profits are driven by low wages levels that people cannot live on, these profits risk safety with the result of indefensible workplace injuries and deaths; that these profits are increased by tax evasion or tragically linked to pollution of community land and water.”

“When global business won’t pay the moderate demands of workers for a minimum wage on which they can live with dignity, $177 in Phnom Penh, $250 in Jakarta, $345 in Manila – then this is knowingly condemning workers and their families to live in poverty. It’s greed pure and simple,” said Sharan Burrow

The ITUC has set out five recommendations for companies to address the scandal of global supply chains:

• Supply chain – know whom you contract from and publish this;

• Safe work – inspect sites, fix hazards and recognise workers’ right to safety committees;

• Secure work – end short- term contracts;

• Minimum living wages – pay wages on which people can live with dignity;

• Collective bargaining – for wage share and decent wages and working conditions.

“The number of global framework agreements between multi-national companies and global union federations which address these problems and establish a sustainable footing for the global economy are on the increase, but we still have a long way to go. Governments must not neglect their responsibilities,” said Sharan Burrow.

Labour leaders at the World Economic Forum in Davos will be putting forward a four step plan to transform the business model of global companies and address inequality:

Employers ensure fair distribution of wealth through minimum living wages and collective bargaining based on the fundamental guarantee of freedom of association; Safety standards are respected with workers in engaged in safety committees; Government leaders should implement and enforce the rule of law, mandating the due diligence that the UN Guiding Principles for Business and Human rights demand; Governments prioritize the dignity of the social protection floor for their people.

“Only by exposing the practices of these companies to consumers and citizens around the world will companies begin to take responsibility for their supply chains and follow the rule of law,” said Sharan Burrow.

Frontlines Report 2016 - Scandal Related Companies International Trade Union Confederation

Scandal - Inside the Global Supply Chains of 50 Top Companies

The ITUC report exposes an unsustainable business model, with a global footprint that covers almost every country in the world and profiles 25 companies with headquarters in Asia, Europe, and the United States. By ITUC

Why is the global business model in such bad shape?

With global GDP having trebled in just 30 years and major corporations commanding 60 per cent of global production, transport and services through their supply chains, the respect for rights, the guarantee of minimum living wages and collective bargaining for a fair share of the profits through higher wages with safe, secure and skilled work should be the norm.

Instead we have a model where companies can’t or won’t identify their supply chains and their hidden workforce.

They preside over profits based on low wages, lobby against minimum living wages or regulations designed to ensure safe and secure work and turn a blind eye to the use of informal work or even slavery in their employ.

Workers know it’s a scandal; their families know it’s a scandal. Governments know too but lack the courage to act. Even the CEOs of 50 of the world’s largest companies know it’s a scandal, but to admit it would be to accept responsibility.

The 50 companies listed in this report could act to change the model of global trade. They have the resources and the reach.

Working people pay the price of the scandal – slavery, informal work, precarious short-term contracts, low wages, unsafe work and dangerous chemicals, forced overtime, attacks by governments on labor laws and social protection, inequality – it’s all part of a great global scandal that is today driven by corporate greed with an eternal quest for profit and shareholder value.

Consequently we have a business model that has lost its moral compass. For big business, labor is increasingly just a commodity and labor rights are bad for business.

Just 50 companies hold a combined wealth equivalent to that of 100 nations. Our governments – even those democratically elected – are influenced by their interests.

Related Companies ... International Trade Union Confederation