Commercial Contracts and Sourcing

Irresponsible purchasing practices – such as sourcing beneath the costs of production and the failure to incorporate considerations around wages into commercial contracts – are key drivers of forced labour in global supply chains. This brief outlines how contracts and sourcing practices, as well as the legal regimes surrounding them, could change to promote equitable labour practices and protect supply chain workers from exploitation. We provide an overview of sourcing tools and agreements that promote decent work, including living wage benchmarks, ringfenced labour costs and binding worker-driven social responsibility agreements. Stressing that commercial and contract law are often the main vehicle through which governments implement and enforce duties on corporations, including due diligence and transparency, we explain the far-reaching reforms that need to take place to enable workers to hold businesses accountable for the terms and conditions within their contracts and enable workers to enforce them.