Case Study
Coca-Cola - Article 6, ICESCR; Article 7, ICESCR; Article 8, ICCPR

Right + Threaty: Article 6, ICESCR; Article 7, ICESCR; Article 8, ICCPR
Sector: Beverage sector
Country: Global
Right to work, Right to just and favourable conditions of work, Freedom from slavery and servitude

In March 2018, Reuters announced that Coca-Cola, the US State Department and two other companies had launched a joint project to develop a secure blockchain registry for workers.

The project comes after a study released in 2017 by KnowTheChain (KTC) identified that the food and beverage industry is an “at-risk” sector with regard to labour rights, and that most companies in the industry fall short in their efforts to solve the problem. Although KTC ranked Coca-Cola second on its benchmark, it identified potential for the company to improve by “auditing recruiters used in its supply chain and improving and disclosing its practices in the areas of worker voice and remedy.”

The blockchain registry project may address some of these concerns. Blockchain refers to a distributed and decentralised ledger technology that enables data to be stored in a real-time and immutable online record. Each ‘block’ stores some specific data, which could be an amount of money, a digital certificate of ownership, or the terms of a contract. When the data is modified or transferred a new block storing the updated data is permanently added next to the previous one, creating the immutable chain of blocks (the ‘blockchain’). The entire system is cryptographically recorded and continuously verified by a network of participating computers worldwide.

Coca-Cola’s project will capitalise on blockchain’s smart contracts capabilities, which allow contracts to be verified, facilitated and enforced. In Coca-Cola’s instance, the project will likely store the details of sugarcane workers’ employment contracts (i.e. scope of work, pay, and employment term) on the blockchain, enabling workers and enforcement agencies (including workers’ unions) to ensure that these contracts are upheld by employers and recruiters throughout the supply chain. Brent Wilton, Coca-Cola’s global head of workplace rights, told Reuters that the company is joining the project “to further increase transparency and efficiency of the verification process related to labor policies within [Coca-Cola’s] supply chain.”

Multinational companies in other industries are also adopting blockchain technologies to minimise risks of labour abuse. These invariably function by attributing digital identities to resources based on predetermined characteristics in order to reliably track their progress through the supply chain. In 2018 several businesses in China, technology giants Apple and Samsung, and car manufacturers Tesla and Volkswagen set up a blockchain-enabled Responsible Cobalt Initiative. The initiative seeks to minimise the potential for child labour being used in supply chains. A similar project has been implemented in the diamond industry to reduce ‘blood diamond’ practices.