- GANS Trade Insights
Ethical labour practices have become an important consideration in international trade. Buyers increasingly want evidence that products are manufactured, processed, packed and transported under working conditions that respect applicable labour laws and internationally recognised rights.
This expectation can extend beyond an exporter’s own employees. Labour risks may arise at farms, factories, packing facilities, warehouses, subcontractors and logistics providers. Exporters must therefore understand who participates in their supply chains, where higher-risk activities take place and whether suppliers have suitable controls.
The global scale of labour risk remains substantial. The International Labour Organization estimates that 27.6 million people are in forced labour, with 63% of forced labour occurring in the private economy. More recent ILO estimates indicate that nearly 138 million children were engaged in child labour in 2024, including approximately 54 million undertaking hazardous work.
For South African exporters, responsible labour management can support market access, reduce reputational exposure and strengthen relationships with international buyers. It also helps protect the people whose work makes export activity possible.
Building visibility across a complex labour network
The first step is to understand how labour is used throughout the supply chain. An exporter may have strong employment practices at its own premises while remaining unaware of conditions at a seasonal producer, subcontracted packhouse or third-party warehouse.
A supplier map should identify direct suppliers, important subcontractors, labour brokers and outsourced service providers. It should also record where work is performed, the nature of the activity, the number and type of workers involved, and whether seasonal, migrant or temporary labour is used.
The purpose is not to treat every supplier as equally risky. It is to identify where the most serious potential impacts may occur and direct attention accordingly. This reflects the OECD’s risk-based due-diligence approach, which encourages businesses to assess and address actual and potential negative impacts in their operations, supply chains and business relationships.
Exporters should establish whether workers receive clear employment terms, lawful remuneration, appropriate working hours, suitable rest periods and safe working conditions.
Controls should prohibit forced labour, child labour, discrimination, harassment, retaliation and the retention of identity documents or other practices that restrict a worker’s freedom.
Employees should be able to raise concerns, access grievance procedures and exercise lawful rights to association and collective bargaining without intimidation or adverse treatment. These areas can be incorporated into a written supplier code of conduct. The code should translate broad commitments into practical expectations that suppliers can understand and implement. The ILO’s Fundamental Principles and Rights at Work provide a useful foundation. They cover freedom of association and collective bargaining, the elimination of forced labour, the abolition of child labour, the elimination of employment discrimination, and a safe and healthy working environment. A supplier code should also require compliance with the labour legislation of the country in which the work is performed. International principles provide an important baseline, but they do not replace national employment, health and safety, immigration or social-security requirements. Before onboarding a supplier, exporters can use a structured questionnaire to gather information about employment practices. Supporting evidence may include workplace policies, wage records, working-hour records, health and safety assessments, training logs, worker contracts and licences held by labour-service providers. Documents alone should not determine the result. Records should be compared with the size and nature of the operation, observations made during site visits, worker feedback and any previous incidents. Information that appears unusually uniform, incomplete or inconsistent should be investigated further. Supply agreements should clearly state the standards expected, the information the supplier must retain and the exporter’s right to request evidence or conduct appropriate assessments. They should also explain how problems will be addressed and when failure to cooperate may place the commercial relationship at risk. Ethical labour performance should be incorporated into purchasing decisions. A supplier selected solely on the basis of the lowest price or shortest lead time may face pressure to reduce staffing, rely on unverified labour intermediaries or extend working hours during production peaks. Procurement teams should therefore consider whether the negotiated price and delivery schedule allow the supplier to meet employment obligations responsibly. Unrealistic purchasing practices can undermine the standards that the buyer expects the supplier to maintain.
Moving from supplier audits to continuous improvement
Audits can provide useful information, but an audit represents conditions at a particular moment. It may not show what happens during seasonal peaks, night shifts, unexpected production increases or periods when large export orders must be completed quickly.
A more effective programme combines supplier screening, risk assessment, site verification, worker engagement, performance monitoring and corrective action. The level of review should reflect factors such as the country, industry, workforce profile, production process and previous supplier performance.
Site assessments should examine actual working conditions and not only management systems. Reviewers may need to inspect production and accommodation areas, examine time and wage records, evaluate health and safety controls and speak confidentially with workers.
Worker interviews should be conducted in a language the worker understands and without managers present. Workers must not be coached, penalised or placed at risk because they participated. Where migrant or temporary labour is used, the assessment should consider recruitment fees, contract substitution, document retention, deductions and freedom of movement.
Grievance mechanisms provide another important source of information. Workers should have a safe and accessible way to report concerns, including options that do not require them to complain directly to a supervisor.
A suitable mechanism should explain how concerns can be submitted, who will investigate them, how confidentiality will be protected and when the worker can expect a response. It should also prohibit retaliation and provide a route for escalation when the initial response is inadequate.
When a problem is identified, the immediate response should consider the interests and safety of affected workers. Automatically terminating the supplier may remove commercial exposure for the buyer without correcting the harm or improving conditions for the workforce.
Where continued engagement is appropriate, the exporter and supplier should agree on a corrective-action plan. This should identify the problem, its root cause, the action required, the responsible person, the completion date and the evidence that will demonstrate improvement.
Examples of corrective action may include:
- Repaying unlawfully charged recruitment fees
- Correcting wages, overtime or unauthorised deductions
- Improving protective equipment and workplace safety controls
- Formalising employment terms and recordkeeping
- Restricting excessive working hours
- Providing supervisor and worker training
- Establishing a confidential grievance channel
- Strengthening oversight of labour brokers and subcontractors
Serious cases involving coercion, trafficking, hazardous child labour, violence or immediate danger require urgent specialist intervention. The response should be guided by applicable law, worker safety and appropriately qualified advisers.
Corrective actions should be verified rather than accepted on the basis of a written assurance alone. Verification may involve revised records, photographs, worker interviews, follow-up assessments or evidence that affected workers received an appropriate remedy.
Supplier development can make this process more constructive. Smaller suppliers may understand the required outcome but lack formal policies, documentation systems or specialist staff. Practical templates, training and phased improvement plans can help them build stronger systems without lowering the standard expected.
Exporters should track performance over time using indicators such as corrective actions completed, repeat findings, safety incidents, worker complaints, staff turnover, training completion and the use of unapproved subcontractors. Persistent or worsening issues should trigger increased monitoring or commercial escalation.
Furthermore, the merger provided Company with enhanced buying power through the combined volume benefits from shared suppliers. This advantage led to a reduction in the cost of goods sold (COGS), further contributing to overall cost savings.
Through our diligent efforts, we identified hundreds of millions of dollars in cumulative synergies that Company could capitalize on following the merger. The company has successfully reinvested a significant portion of these savings into strengthening its brands and fostering continued growth and success.
Making ethical labour practices part of export competitiveness
Responsible labour management should not operate separately from procurement, quality control and export planning. Labour risks can affect production continuity, shipment quality, delivery schedules, customer confidence and the exporter’s ability to participate in international supply programmes.
International buyers may request supplier codes, audit reports, workforce information, corrective-action records or broader environmental, social and governance disclosures. An exporter that cannot provide credible information may face additional buyer scrutiny, delayed onboarding or exclusion from certain opportunities.
Responsibility should therefore be assigned internally. Senior management should approve the labour policy, while procurement teams should apply it during supplier selection and contracting. Operations teams should monitor workplace conditions, and sales teams should understand what evidence can be shared with customers.
Information supplied to buyers should be accurate and capable of verification. Businesses should avoid broad claims such as “fully ethical” or “zero risk” unless those statements can be substantiated across the relevant supply chain.
A more credible approach is to describe the systems being used, the scope of supplier assessments, the principal risks identified and the improvements achieved. Transparency about remaining challenges can demonstrate more maturity than unsupported claims of perfect compliance.
Ethical labour practices can also improve operational performance. Safer working conditions, clearer employment terms and effective worker communication can support staff retention, productivity and more consistent product quality. Workers are often the first to identify unsafe equipment, unreasonable production demands or quality problems that management systems have missed.
For South African exporters, the objective should be to build a supply chain in which commercial growth and responsible employment reinforce one another. This requires realistic lead times, fair supplier engagement, traceable labour arrangements and ongoing attention to conditions beyond the exporter’s immediate premises.
GANS South Africa works with businesses to coordinate supplier requirements and build more structured sourcing and export programmes. This can include communicating buyer expectations, gathering supplier information, improving documentation and supporting closer coordination between customers, suppliers and logistics partners.
By treating labour practices as part of supply-chain performance, exporters can protect workers, strengthen buyer confidence and create more durable commercial relationships in global markets.
* This report provides general commercial information and does not constitute legal, employment, human-rights or regulatory advice. Exporters should confirm applicable requirements with qualified advisers, relevant authorities and their international buyers before implementing a labour due-diligence programme.
