Upholding Justice Across Borders: Enforcing Strict Liability for Multinational Corporations in Global Supply Chains
In February, Amazon was forced to pay $1.9 million to settle claims with hundreds of migrant workers who were bound by exploitative labor contracts at two warehouses in Saudi Arabia.[1] In April, news broke of a large-scale shrimp producer in India that forced migrants to work without time off, and restricted workers from leaving a company-owned compound where they were forced to sleep in bedbug-infested dorms.[2] Stories like these abound, as multinational corporations (MNCs) at the helm[3] of global supply chains (GSCs) profit extraordinarily[4] while workers further down the chain are exploited and abused.
The price of MNCs’ gargantuan market power should be strict liability for workers’ rights abuses along supply chains. Ending labor exploitation in GSCs will require a multi-pronged cooperative framework spanning governments, international organizations, businesses, and worker groups—but one thing is clear: corporate profiteering off of worker exploitation along GSCs will only be reined in by the threat of inescapable liability.
Strict liability can take many forms. For example, the governments of nations where MNCs are headquartered or conduct the bulk of their business may impose strict tort liability for human and labor rights abuses along corporate supply chains.[5] Alternatively, international cooperative organizations like the United Nations’ International Labor Organization (ILO) could hold MNCs strictly liable for violating ILO Conventions[6] proscribing human rights abuses.
Today, the ILO already coordinates across its tripartite membership of governments, employers, and worker groups to prescribe and enforce process requirements for supply chain due diligence. One such example: the United Nations’ Guiding Principles on Business and Human Rights (“Guiding Principles”).[7] The Guiding Principles offer a useful compliance framework for supply chain labor norms—still, they have not borne the significant change needed to end labor abuses along global supply chains because the Guiding Principles focus on process regulation rather than outcomes enforcement.[8] A strict civil liability scheme is more likely to achieve the latter because it creates a powerful deterrent for unscrupulous corporate due diligence.
To be sure, holding MNCs engaged in downstream supply chain labor rights abuses strictly liable bears its own complications. Most challenging, perhaps, is the question of what entity could possibly enforce strict liability upon MNCs armed with more annual revenue than most nations boast in gross domestic product (GDP).[9] The ILO is a top contender for enforcement, but its tripartite structure includes a powerful employer body[10] composed of the very companies upon whom this strict liability would be imposed. Thus, it is unlikely that the ILO could build sufficient internal support to hold employers strictly liable for participating in supply chains riddled with labor abuses downstream.
Still, the bottom line is clear: a more lenient liability scheme concedes the rigor required to end labor abuses along GSCs. If a MNC must have actual knowledge of labor or other human rights abuses occurring along its supply chain in order to be liable, MNC executives are incentivized to stick their heads in the sand (colloquially known in white collar criminal world as the “ostrich” instruction[11]) to avoid proper due diligence that might unearth knowledge of human rights abuses. What’s more, without holding liable the most powerful actors atop global supply chains, these abuses will likely continue as part of the cost of doing business.
As harrowing tales of labor abuses in factories and end-of-chain suppliers continue to emerge, it is clear that there is a meaningful difference between regulating human rights due diligence as a process versus focusing on outcomes—lawmakers must focus on outcome regulation through tools like holding MNCs strictly liable for labor exploitations along the GSC. With a regulatory framework as commanding as strict liability, MNCs will have no choice but to fundamentally reevaluate supply chain management.
Anushka Sarkar is a staff member of Fordham International Law Journal Volume XLVII.
[1] Annie Palmer, Amazon to pay $1.9 million to migrant contract workers to settle claims of human rights abuses, CNBC (Feb. 23, 2024, 1:31 PM),
[2] Kenzi Abou-Sabe and Alexandra Chaidez, Indian company sold contaminated shrimp to U.S. grocery stores, 'whistleblower' says, NBC News (Apr. 3, 2024, 8:39 PM), https://www.nbcnews.com/news/indian-company-sold-contaminated-shrimp-us-grocery-stores-whistleblowe-rcna144082.
[3] See James Brudney, Hiding in Plain Sight: An ILO Convention on Labor Standards in Global Supply Chains, 23 Chi. J. Int’l L. 272, 276 (2023) (citing Gary Gereffi et al., The Governance of Global Value Chains, 12 Rev. of Int’l Pol. Econ. 78 (2005)) (“Although there is no single GSC model, multinational enterprises (MNEs) typically occupy the top of a network of subcontractors, suppliers, and outsourced assemblers or producers, including homeworkers.”).
[4] Irina Ivanova, ‘Greedflation’ caused more than half of last year’s inflation surge, study finds, as corporate profits remain at all-time highs, Fortune (Jan. 20, 2024, 5:00 AM), https://fortune.com/2024/01/20/inflation-greedflation-consumer-price-index-producer-price-index-corporate-profit/.
[5] A softer version of this was ratified in 2019, when the Netherlands implemented the Child Labor Due Diligence Act which established a duty of care to prevent the use of child labor in a company’s supply chain and established both criminal and civil liability for breach of the duty, inter alia. A stronger version of this law would have imposed strict liability, without need for a breach of duty. Alexandra Hyken, Contracting Against Slavery: Corporate Accountability for Human Rights Supply Chain Violations, 48 Brooklyn J. Int’l L. 301, 309 (2022).
[6] See, e.g., Int’l Lab. Org. Conv. No. 29, Forced Labor Convention (1930).
[7] U.N. Hum. Rts., Off. of High Comm’r, Guiding Principles on Business and Human Rights (Nov. 4, 2011), https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf.
[8] See Brudney, supra note 3, at 276.
[9] For example, Walmart earned $611 billion in annual revenue in 2023 (Walmart, 2023 Annual Earnings Report (2023), https://www.sec.gov/Archives/edgar/data/104169/000010416923000010/earningsreleasefy23q4.htm#:~:text=With%20fiscal%20year%202023%20revenue,corporate%20philanthropy%20and%20employment%20opportunity), and 155 of 177 countries report GDPs below that (World Bank, Current GDP by USD, https://data.worldbank.org/indicator/NY.GDP.MKTP.CD (last visited Apr. 10, 2024)).
[10] Int’l Lab. Org., Employers’ Group of the ILO Governing Body, https://www.ilo.org/actemp/activities/relationship-management/WCMS_600681/lang--en/index.htm.
[11] See generally Ira P. Robbins, The Ostrich Instruction: Deliberate Ignorance as a Criminal Mens Rea, 81 Nw. J. Crim. L. and Criminology 191 (1990).
This is a student blog post and in no way represents the views of the Fordham International Law Journal.