Investors Urge Leather Working Group to Add Labor Compliance to Audits

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While child labor and unsafe working conditions remain prevalent in the leather industry, a group of investors is demanding additional labor compliance for tannery audits.

On Tuesday, a group of Interfaith Center on Corporate Responsibility (ICCR) investor members wrote to the Leather Working Group (LWG), requesting that it broaden its scope beyond environmental concerns to include labor compliance.

“Investors don’t have the information they need to fully assess how companies are measuring and managing salient human rights risks in their leather supply chains, especially at the tannery level,” said Lauren Compere of Boston Common Asset Management. “We need look no further than the Rana Plaza tragedy or abuses in seafood supply chains to understand how a lack of human rights due diligence can impact an entire industry.”

According to LWG, the objective of the group is to develop a protocol that evaluates the environmental compliance and performance capabilities of leather manufacturers, while promoting sustainable environmental business practices in the leather industry. While the LWG measures company performance on environmental risks, including water pollution, the ICCR said there are no audit regulations for labor concerns.

[Read more on labor compliance efforts: Report: Actionable Ways Brands Can—And Should—Fight Forced Labor]

In the letter, the investors argued that the leather industry is at risk for many labor rights violations, including forced child labor and exposure to hazardous chemicals in tanning facilities, that need to be regulated by sector-specific compliance groups, including the LWG.

The investors cited two reports to demonstrate potential labor rights violations in the leather industry. The first report by New York-based non-profit Transparentem, which was released to The Associated Press in March, revealed that several tanneries in Bangladesh employed teenagers, which is against the law in the nation. What’s more, KnowTheChain’s report, “How footwear companies and luxury brands tackle forced labor risks in their leather supply chains,” showed that although some brands, including Adidas, have addressed labor abuse risks in their supply chains, most haven’t undertaken supply chain assessments for additional violations.

With the letter, the investors aim to persuade industry-specific groups, including LWG, to prioritize labor compliance, in addition to environmental compliance, in leather industry audits worldwide.

“Since 2005 the Leather Working Group has had the important work of certifying leather tanneries that are performing in a responsible way,” said David Schilling, senior program director at ICCR. “In order to be credible moving forward, the initiative must address the tragic labor abuses taking place in tanneries today where children are employed and exposed to toxic chemicals, and serious injury.”

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