The
current trade disputes with China have caused a growing number of businesses to
look for other manufacturing sources. While some are setting up new deals in other
Asian countries, a number of companies are looking at non-traditional
locations.
One
of the emerging areas is West Africa. Why? Low-cost labor, good natural
resources, reasonable shipping costs and schedules, and low risk of government
tariffs. Put it all together and it can make sense to move manufacturing to
these places that you may never have heard of.
Of
course, many of these countries are relatively undeveloped and offer their own
set of challenges. These include political instability, security risks and –
and this seems almost inconceivable in 2019 – slavery issues.
Yep,
slavery.
Some
estimates suggest there are more than 40 million slaves around the world. These
are victims of human trafficking, forced labor, forced marriage, sexual
exploitation, etc. And one of the worst areas for this is West Africa.
How
does this impact American businesses? There is a new due diligence item that is
showing up in business transactions: sellers must now confirm their
international manufacturing sources are not using slave labor. Not only in West
Africa, but in South Asia, South America, and even former communist countries
in Europe and Asia. This confirmation is also being required of businesses who
supply their products to the US government and other large institutions that
must validate the legitimacy of their products. It’s no longer good enough to
claim a product is green – now it must be ethically defensible on all fronts.
And
before arrogance sets in that this could never happen in the good ‘ole USA,
it’s good to remember the Agriprocessors meatpacking plant scandal in
Postville, Iowa. About 10 years ago it was discovered that a kosher meatpacking
plant was being staffed by more than 400 illegal workers from Central America
who were victims of child labor in prohibited jobs, sexual and physical abuse
by supervisors, nonpayment of regular and overtime wages, denial of immediate
medical attention for workplace injuries, workplace safety issues, etc. While
it wasn’t slavery, it may have been close.
