Amphenol Corporation: Reporting on Forced Labor Risks
BE IT RESOLVED: Shareholders request the Board of Directors to report, at reasonable cost and omitting proprietary information, on the Company’s process for identifying and analyzing potential and actual human rights risks of its operations and supply chain.
SUPPORTING STATEMENT: In developing the report, the Company could consider:
Human rights principles used to frame the assessment
Frequency of assessment
Methodology used to track and measure performance on forced labor risks, and
How results of the assessment are incorporated into company policies and decision making.
WHEREAS: An estimated 16 million people are trapped in conditions of forced labor in extended private sector supply chains, generating over $150 billion in profits for illegal labor recruiters and employers through underpayment of wages.
Migrant workers globally are prime targets for exploitation including discrimination, retaliation, debt bondage, illegal wage deductions, and confiscated or restricted access to personal documents that limits workers’ freedom of movement and leads to forced labor and human trafficking.
According to KnowTheChain, most electronic brands source at least some components from Malaysia. A 2014 study by Verité found that nearly a third of migrant workers in Malaysia’s electronics sector are in situations of forced labor; risks to migrant workers in Malaysia have also been highlighted by the U.S. State Department and the International Labor Organization. The State Department also lists China as a country where electronics may be produced using forced labor.
Raw materials used in electronics products – including tin, tungsten, tantalum and gold – may be produced with forced labor (see: pg. 16).
According to the UN Guiding Principles on Business and Human Rights, companies have the corporate responsibility to respect human rights within their operations and supply chains. Any company directly or indirectly employing migrant workers must have a policy that assesses if workers are being recruited into debt bondage, forced labor and, ultimately, slavery. The State of California and the United Kingdom passed laws requiring companies to report on their actions to eradicate human trafficking and slavery.
While Amphenol’s policies supplier code prohibits forced labor, KnowTheChain’s 2018 Benchmarking Report on Forced Labor in the ICT Sectorgave the company an overall score of only 9 out of 100. According to KnowTheChain, Amphenolis also not compliant with either the UK Modern Slavery Act or the California Transparency in Supply Chain Act.
Given the company’s lack of risk mitigation and disclosure, investors have insufficient information to gauge if the company is sufficiently addressing this serious risk to the company and to workers.