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Supply Chain Characteristics that Impact Traceability

Traceability Takeaways

  • Most footwear production is outsourced to various manufacturers, contractors, and subcontractors. Unauthorized and/or informal subcontractors are present and associated with high risks of forced labor. This opacity is a barrier to traceability and due diligence efforts, so robust supply chain mapping and analysis of potential gaps is a useful initial strategy for companies to understand the full scope of upstream supply chains. To enable prioritization of social risks in supply chains, traceability systems should provide insight on the types of worksites present in a company’s upstream supply chain.
  • Like other manufacturing sectors, the footwear sector relies heavily on migrant workers, female workers, and ethnic minorities, often recruited by third-party labor recruiters. These workers are at greater risk for experiencing forced labor indicators such as excessive fees, retention of identity documents, sexual harassment, and hazardous working conditions. Understanding the practices of these recruiters is a critical aspect of combating forced labor risk. Downstream companies should consider traceability systems that allow for identification of and engagement with specific facilities in their supply chains. Once individual worksites utilizing labor recruiters have been identified, companies can make efforts to understand the actual risks faced by workers on the ground. They can utilize systems that trace labor recruitment chains and assess the practices of recruiters at each site. For example, Verité’s CUMULUS Forced Labor Screen maps labor supply chains using patented technology to gather data on workforces, recruiters, and unethical recruitment and employment practices. This information can be used to prioritize on-the-ground assessments of recruitment, hiring, and labor conditions and implement any necessary prevention or remediation measures.

Nature of Labor Rights Risk/Vulnerable Workers

Forced Labor or Trafficking in Persons cited by U.S. Government

Child Labor cited by U.S. Government

Risk of Forced Labor or Trafficking in Persons cited by other source

Risk of Child Labor cited by other source

Documented presence of migrant workers

Documented presence of other vulnerable workers

Documented presence or significant likelihood of third-party labor recruiters

Features of Production and Supply Chain

Large numbers of dispersed, unorganized, or informal small producers or other worksites

Multiple points of aggregation, co-mingling, and/or transformation across supply chain

Complex/opaque supply chains and/or lack of vertical integration

High degree of flexibility in procurement practices of downstream entities

Distribution of Labor Risk in Various Production Areas

Scale or nature of risk is strongly associated with certain types of suppliers/entities

Scale or nature of risk is present across multiple tiers or nodes of supply chain (including in associated downstream or upstream goods)

Scale or nature of risk varies significantly based on geographic area of production

Linked Upstream and Downstream Risks

Risk in Nodes in Footwear Production

Footwear supply chains start with the trade and transport of raw materials, for example leather and rubber. The raw materials are used for production of upper and bottom components by producers who specialize in manufacturing specific component pieces. Footwear components are then assembled and refined (through joining the upper and bottom components) and finished (polished, enhanced with accessories, such as buckles) in the shoe assembly stage. Assembly and finishing an occur manually or on semi-automatic production lines. Finally, finished footwear products are marketed and distributed.18Rossi, Marta et al. “Life Cycle Assessment of a Leather Shoe Supply Chain.” International Journal of Sustainable Engineering, 2021 14:4, 686 – 703, www.tandfonline.com/doi/pdf/10.1080/19397038.2021.1920643.

While major downstream businesses are mainly responsible for the final node of marketing and sales, the first three nodes of production are often outsourced to various manufacturers, contractors, and subcontractors,19Strengthening Protections Against Trafficking in Persons in Federal and Corporate Supply Chains – Phase I: Research. Verite, 2017, www.verite.org/wp-content/uploads/2017/04/EO-and-Commodity-Reports-Combined-FINAL-2017.pdf. including unauthorized and/or informal subcontractors.202021 Apparel and Footwear Benchmark Report. KnowTheChain, 2021, knowthechain.org/wp-content/uploads/2021-KTC-AF-Benchmark-Report.pdf. The common practice of outsourcing limits supply chain transparency, and together with the pressure from downstream actors to meet short lead times and reduce costs, has heightened the risks of forced labor and child labor in all upstream nodes of footwear production.212021 Apparel and Footwear Benchmark Report. KnowTheChain, 2021, knowthechain.org/wp-content/uploads/2021-KTC-AF-Benchmark-Report.pdf.

 

Production of Components

Assembling and Refining

Finishing and Packing

Trade and Transport of Raw Materials

Wholesale and Retail

Associated Upstream Goods with Labor Risk

Some of the most common materials for footwear are leather and rubber, the production of which has been reportedly associated with forced labor and child labor.

Cotton is a common material found in footwear, the production of which has been reportedly associated with forced labor and child labor.

Associated Downstream Goods and Consumer Sectors

Textiles Apparel and Luxury Goods

Footwear is associated with the Textile, Apparel, and Luxury Goods sector.

Top Global Countries

  1. China22List of exporters for the selected product in 2021 Product: 64 Footwear, gaiters and the like; parts of such articles. ITC Trade Map, www.trademap.org/Country_SelProduct.aspx?nvpm=1%7c%7c%7c%7c%7c64%7c%7c%7c2%7c1%7c1%7c2%7c1%7c%7c2%7c1%7c%7c1.
  2. Vietnam
  3. Italy
  4. Germany
  5. Belgium
  6. Indonesia
  7. France
  8. Netherlands
  9. Spain
  10. Poland

Examples & Resources: Traceability Efforts Associated With Footwear

Footnotes