Coca-Cola and US State Dept Use Blockchain to Combat Forced Labor

A private-public initiative spearheaded by the Coca-Cola Co. (KO) and the United States Department of State will use blockchain technology to combat forced labor in their supply chains. The announcement came following a report highlighting the extent of the problem across the world, and especially in the Asia-Pacific region, where Coca-Cola sources most of its sugarcane. A working group plans to tackle employee labor agreements and verification using smart contracts

The partnership is part of Coca-Cola’s efforts to respond to criticisms that a large portion of its sugar cane supply is the product of forced labor. The company was at the center of a report by KnowTheChain, a partnership founded by Humanity United, a U.S.-based non-profit organization. Findings highlighted in the report demonstrated a serious need for systemic changes to the status quo and raised a variety of questions surrounding the company’s supply chain.

Coke's efforts to bring transparency are not the first such initiative to recruit support from the private and public sectors. The United Nations also recently announced plans for a project to increase transparency and provide easy identity documents for all people. These programs highlight the increasing uses found for blockchain beyond the business realm. Such initiatives leverage the technology’s advantages as a positive force for social change. 

Tackling Human Rights On the Supply Chain

The KTC study, which focused on Coca-Cola and 10 other companies worldwide, studied the food and beverage industry’s supply chains, eventually finding that these corporations do too little in the fight against forced labor. The problem is also pervasive in the region where many of these companies have large stakes. Per the International Labor Organization, almost 25 million people work in forced labor around the globe, with nearly half concentrated in Asia and the Pacific.

In the aftermath of the study, Coca-Cola committed to a series of 28 studies at the country level that will deal with land rights, child labor and forced labor in broader terms by 2020. The company’s priority will be to increase transparency across its supply chain whilst ensuring workers are both properly rewarded and protected by the law and its own corporate rules.

The beverage giant has also been exploring projects involving blockchain for some time now, looking for the right model to resolve persistent problems. The lack of transparency in hiring practices in the sector alongside an inability to properly monitor contracts and labor agreements means many times workers have no way to end their agreements or seek help. Similarly, these workers may lose their lands in disputes over a lack of proper documentation and murky bureaucratic processes.

Aimed At Better Labor Record-Keeping

The joint effort by the State Department and Coca-Cola will seek to directly address these problems by employing blockchain and smart contracts to deliver greater transparency and record-keeping regarding laborers and their contracts. The project also includes a collaboration with Blockchain Trust Accelerator – a non-profit that uses blockchain to deliver social impact world-wide – and will be developed by the Bitfury Group using Emercoin’s ledger services.

By deploying blockchain’s distributed ledger, the venture is working to build a secure registry for employees and contracts.  In addition, an essential component of the work surrounds establishing higher verification standards to prevent forced labor and child labor. This is similar to existing technology which employs smart contracts to create more transparent agreements between parties and reduces the possibility of unfair labor practices. Moreover, there are several companies working in the supply chain management sector that are engaging blockchain to increase accountability and record-keeping quality. (See also: What is a Distributed Ledger?)

To be sure, while viewed as a positive step, the project is not a panacea. Although blockchain-based systems can offer the benefits of transparency and accountability, they cannot force people to abide by them. Moreover, there are concerns that even if the program takes off, many laborers will not have access to the services. Of the individuals working in this group, many do not have smartphones or easy access to computers where they can take advantage of the future application. The group hopes, however, that a clear trail of evidence will make compliance a more likely outcome. (See also: Banks Claim They're Building Blockchains. They're Not.)

Blockchain As a Force for Change

Coca-Cola’s initiative is one more in a string of recent private-public partnerships aimed at tackling global problems using blockchain. In a similar announcement earlier this month, the United Nations revealed they are working with crypto wallet company Blockchain to explore a variety of use cases. This includes areas like voting rights and transparency, sustainable development, and resource conservation. ConsenSys, a group representing 22 organizations, is currently developing an incubator for social initiatives that use blockchain in humanitarian aid.

These ventures highlight the growing influence of blockchain, and a change in perception as the technology sheds its cryptocurrency origins to become a standalone offering. Its many benefits are also a strong fit for social endeavors as they create more transparent and democratic models that remove barriers to access. (See also: Can Blockchain Make Medications Cheaper and Safer?)

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