MEC is committed to the fair treatment of workers throughout our supply chain. One important part of this effort is to eliminate the potential for forced labour.
We expect our supply chain partners to treat all workers fairly, ethically, and in line with local laws and international standards, as well as with our Code of Conduct.
Despite this, we know there are areas in our supply chain that have a higher risk. In particular, we know that recruitment fees paid by foreign migrant workers is an ongoing issue.
Who are foreign migrant workers?
Foreign migrant workers are people who move internationally for work. Foreign migrant workers may be particularly vulnerable to forced labour, so we make sure to include additional screening when we know these workers are in factories that we are auditing.
What are recruitment fees?
Recruitment fees are payments made by foreign migrant workers to get work in another country. These fees are often paid to third-party recruitment firms in the worker’s home country. Recruitment fees can range from a couple of weeks of pay to more than six months.
Although the payment of recruitment fees does not necessarily mean that a worker is subject to forced labor, it can be a large risk factor. For example, recruitment fees can cause a worker to take on debt, which might in turn make it hard for them to leave their job. This debt could also cause a worker to accept poor working conditions. This situation is sometimes called debt bondage, which is an indicator of forced labour.
Where do we see recruitment fees in our supply chain?
We’ve seen recruitment fees in our Taiwan finished goods manufacturers, particularly in factories producing bikes and bike accessories. We also know that there is a risk of recruitment fees deeper in our Taiwan supply chain.
Ongoing engagement towards responsible recruitment
We have been engaged on the issue of recruitment fees in Taiwan since 2018, but work continues. Resolving a complex issue like this requires collaboration between many parties, in part because workers can be charged fees at various points in their recruitment and across multiple jurisdictions. Some recruitment fees are legal in Taiwan, which adds to the complexity.
MEC believes in the employer pays principle, which means it is the responsibility of the employer (generally the factory) to pay for any costs associated with recruiting and hiring employees, as well as fees during employment. We continued to communicate this principle to factories in 2023, and issued corrective action plans to factories when recruitment fees were identified. Despite this, remediation has remained slow.
We will continue to work with other stakeholders on this complex subject, understanding that change comes when we work together. We will provide updates on recruitment fees in our annual Supply Chains Act report.
