Informality occurs in all types of employment, but with 94% of agricultural workers employed informally, the issue is most pronounced in food and agricultural supply chains.
Rather than seeking to eliminate informality, which is often the result of family-run smallholder farms and an important cornerstone of local economies, it is essential to recognise the blind spots it can create when it comes to human rights risks and adapt HRDD strategies accordingly.
To explore the solutions to these challenges, we spoke with Priyanka Kanani, Principal Consultant leading our Food and Agriculture work, who has extensive on-the-ground experience in South Asia and a background in sustainability and international development at PwC.
When it comes to mapping human rights risks in supply chains, are there any challenges that food and agriculture businesses face which differ from other sectors?
Informality and supply chain complexity are both challenges which can leave businesses overwhelmed and unsure where to start.
In food and agriculture, it is really difficult to get a clear, initial picture of what’s going on in your supply chain because the supply chains are so complex. For example, a single supermarket’s peppers might come from hundreds of different farms. Many of those farms could be informal, run by smallholder farmers, potentially in remote locations.
Within food and agriculture, there is also huge variance in what a supply chain can look like, dependent on many factors including sector, location and cultural context.
Informality in seafood is particularly high, due to the sector’s mobile and seasonal business model, as well as the inclusion of smaller vessels further down the supply chain.
On vessels, workers often lack formal work contracts, and recruitment for working on fishing vessels is often enabled by informal networks and recruitment agencies, making workers vulnerable to debt bondage.
And what about the risks for child labour? What do companies need to know in relation to informality and child labour?
Child labour in informal settings is complex and must be understood in its local and economic context but never accepted or ignored. It often occurs within families on small farms or in situations where migrant children work alongside their parents.
Whether driven by poverty, or family reliance on children’s work, it remains a serious violation of children’s rights and a material business risk.
Even if participation appears voluntary or culturally accepted, children may face significant risks: physically demanding tasks, exposure to hazardous tools and chemicals, and extreme weather conditions. Companies that fail to identify and address these practices responsibly may face significant legal, reputational, and operational consequences.
To make lasting change, companies should engage with suppliers, communities, and local authorities to strengthen protections for children while supporting families to find safer, sustainable alternatives to child labour.
What examples have you seen of food and agriculture businesses successfully remedying child labour?
One of the key root causes of child labour is poverty. It is a tough issue to address and the crux of this is around paying farmers and farm workers a living wage. Many are not even paid a minimum wage, let alone a living wage. We’ve created guidance for clients around working collaboratively with their supply chain on this topic so that a fairer share of the profits are spread out lower down the supply chain.
Another solution that has worked well is enabling better access to school or education. Some children have no option of going to school because there aren’t any local schools or those that do exist do not teach children over a certain age. We have found that improving transport links to school has helped to increase attendance.
In terms of remediating child labour, Impactt has published guidelines on this which we have also implemented in the food and agriculture space. This includes paying the child’s family what they would have earned or minimum wage (whichever is higher), until they are at an age at which they could work. This is conditional upon the child’s attendance at school.
What advice do you have for companies facing the challenge of informality?
Firstly, I think it’s important for companies to understand their supply chain and where the things they source actually come from. We have worked in many different sectors with many different clients be it in cotton, tobacco, cocoa and leather. Each company and their subsequent suppliers source goods differently.
For example, in cotton, some companies use traceability technology to identify the region in which their cotton was grown. In tobacco, some suppliers source directly from contracted smallholder farmers. We have worked with clients to enhance their human rights due diligence by conducting assessments of conditions on farms, as well as evaluating supplier management systems. We have supported them to build the capacity of local teams to conduct human rights assessments on farms. This has enabled them to gain a much clearer picture of the realities and risks of where they are sourcing from.
To begin with, companies should first understand where they are sourcing from, conduct a risk assessment to better understand their high-risk sectors and geographies and then put in place appropriate human rights due diligence. This must go beyond simply conducting assessments. Companies need to identify actual and potential risks, prevent those risks where possible, mitigate risks that can’t be fully prevented and address any harm caused by them to workers in their own operations and supply chain.
What, in your opinion, do companies really need to know about identifying and remediating blind spots?
Due to complex multi-tiered global supply chains, it can be hard for companies to identify every issue. This can occur due to many reasons including:
- Focus on audits or certifications: Standard social audits or certifications are a good start but can often miss harder to find issues such as forced labour or predominantly rely on self-reported data which is not verified.
- Outsourced accountability: Companies relying on their suppliers to manage human rights risks further down their supply chain, whilst only having oversight of tier one suppliers.
- Missing links in the supply chain: Key parts of supply chains can be left out of human rights due diligence, for example workers who transport goods or farm workers, with many suppliers only focusing on farmers.
Thorough human rights due diligence that goes beyond checklists can help to identify these blind spots to enable companies to remediate. Rightsholder and stakeholder engagement across the supply chain is key to this.
Impactt recently worked with leading sugarcane companies in the Dominican Republic on a remediation programme to strengthen worker empowerment, engagement and trust.
A core part of this project was social dialogue between sugarcane companies, local NGOs, worker representatives, trade unions, and government entities. This inclusive social dialogue aimed to identify and address challenges impacting sugarcane workers.
This was a prime example of co-creating solutions with the people on the ground who understand the local context and are directly affected by it. Social dialogue enables companies to understand what is possible to achieve, how to prioritise actions and how to sustainably implement them in a way that improves the lives of workers and supplier relationships.
What practical steps can businesses take to strengthen human rights in agricultural supply chains?
In summary, there are a few key practical steps to consider when it comes to strengthening human rights across agricultural supply chains:
- Map and understand your supply chain: Know exactly where products originate from.
- Conduct targeted risk assessments: Identify high-risk sectors and geographies for focused action.
- Invest in human rights due diligence: Embed it into everyday business practices like procurement and supplier engagement.
- Collaborate with suppliers: Support them in improving worker conditions rather than merely passing down requirements. Ensure recommendations and support are context-specific, realistic and informed by workers.
- Engage diverse stakeholders: Include rightsholders to understand root causes and co-create lasting solutions.
Informality can create significant blind spots for human rights due diligence, but there are ways to adapt.
The challenges lie in the complexity of food and agriculture supply chains: when a single product could have come from hundreds of smallholder farms, often in remote locations, standard audits often miss deeper issues like forced labour.
The opportunity for lasting change comes from going beyond compliance checklists to conduct thorough, context-specific due diligence, that acknowledges the voices of rightsholders and supports suppliers collaboratively.
Find out more about our diagnostics services here, and contact info@impacttlimited.com to discuss how Impactt can support your business to identify issues in your supply chain.
