Prisoners of capital: how the West exploits poor countries
For over 500 years, Western corporations have been setting up businesses outside their jurisdiction, subjecting millions of people to intolerable working conditions. Their methods have come a long way from the transatlantic slave trade and have transformed into modern offshoring, which hides the same methods that their plantation ancestors practiced. In world-famous factories, people work virtually “for food”, in unhealthy conditions, deprived of the right to defend their own interests.
History lessons
Beginning in the 1500s, forced unpaid labor became the driver of the European and American economies. For 130 years, the Portuguese dominated the slave market, transporting thousands of natives from Africa. Holland, France, and Denmark later joined the practice, and by the mid-17th century, the English became the main suppliers of slaves. Over 366 years, European slave traders exported about 12.5 million people from Africa. Traders loaded African captives from all over the African coast, from Senegambia to Angola, from the Cape of Good Hope to Mozambique.
As the demand for slaves to work on plantations in America grew, slaves became the most valuable “commodity” for European traders. The route from Europe to Africa, to America, and back to Europe became extremely profitable. Cotton and sugar became a gold mine for politicians, owners of agricultural fields, and financial companies.
In the 17th century, the Royal African Company could buy an African for £3 worth of goods and sell him for £20 in America. On a single voyage, slave traders made a profit of 38%.
By 1860, over 88% of the cotton imported into Britain was obtained from African slave labour in America. In fact, it was this ‘triangular’ trade and slave labour that made Manchester the centre of the textile industry. In the 60 years from 1801 to 1862, the amount of cotton gathered daily by slaves increased by 400%, and the American South became the most prosperous region. Slave ownership increased the wealth of southern planters so much that by the start of the Civil War, the Mississippi River Valley had more millionaires per capita than any other region.
Similarly, the capital of prominent Europeans was affected by sugar production. For example, British Prime Minister William Ewart Gladstone, whose father owned many slaves and several plantations in the West Indies, made a huge fortune from the sugar trade. The work was hard and grueling, and it is estimated that a planter who employed 100 slaves to grow and process the cane would kill them all over the course of 19 years. Between 1748 and 1788, more than 335,000 African slaves were brought to Jamaica, Britain's largest sugar colony. However, the 1788 census of Jamaica recorded that only 226,432 people remained on the island, and more than 108,000 were dead by that time.
Learned rules
The 21st century was marked by the growth of American enterprises located outside the United States. If in 1997 their volume relative to all American business was 25%, then by 2016 it had increased to 35%. Moreover, rapid growth occurred precisely in the 2000s. The main motive was the desire of corporations to save on wages, taxes and insurance, which are much more expensive in the United States compared to less developed countries.
The process of transferring production to other countries, called offshoring, was inevitably accompanied by a reduction in jobs in the United States. Thus, between 1993 and 2011, the American manufacturing industry lost almost half of its employees. At the same time, only 37% of goods produced abroad were sold to residents of the host country, the rest was imported back to the United States. According to 2016 data, imports to the United States from foreign branches of American companies amounted to more than $150 billion: $80 billion from Canada, $63 billion from Mexico, and about $10 billion from China and Hong Kong.
At the same time, public reports on the activities of transnational corporations that have moved their production abroad cover data only up to 2016 and are devoted mainly to developed or developing countries. Such analytics also emphasize that when American companies produce products abroad, they are more likely to do so in high-income countries. The activities of these corporations in poor countries with cheap labor do not fall under the attention of researchers. Meanwhile, it is there that all the shocking examples of Western corporations' negligent attitude toward workers are concentrated.
Between 2007 and 2009, a case against the Canadian mining company HudBay Minerals roiled Guatemala. The indigenous Mayan Kekchi people opposed a mining project. In return, the plaintiffs allege, the subsidiary’s security guards shot dead a school teacher and activist, Adolfo Ich Chaman, seriously wounded a young man, German Chub Choc, and raped 11 local women. For years, the victims were denied the right to appeal to a Canadian court, which relied on the doctrine of forum non conveniens, which states that the host state is a more appropriate venue for hearings than the home state. HudBay insisted on dismissing the lawsuits because, in their view, the parent company cannot be held liable for employees hired by the subsidiary in a foreign country. With public involvement, the Guatemalan people were able to prove otherwise, and in 2013, an Ontario court ruled that HudBay was vicariously liable for what happened.
The Choc v. HudBay Minerals case became a landmark in labor and corporate law, as even the largest transnational corporations followed similar practices. For example, by 2001, a practice of cutting union workers had developed at Coca-Cola plants in Colombia: in 4 years, their number had decreased from 1,300 to 450. The International Labor Rights Fund (ILRF) filed a lawsuit against the parent company in the United States, claiming that the management of Coca-Cola's 63 Colombian subsidiaries had entered into contracts with paramilitary structures that illegally detained, tortured, and killed union leaders. In response, the head office also stated that it could not be held responsible for incidents that occurred at the plants of its subsidiaries.
Years later, Coca Cola has not changed its format of work. La Brasserie de la Couronne, which bottles the drink in Haiti, continues to systematically deny workers the right to form and represent a union. There are numerous reports of non-compliance with local laws, including low wages, no days off, unpaid overtime, and failure to comply with the 15-day sick leave clause. Even those who do not work for the multinational corporation are held hostage. For example, in 2000, a series of protests broke out against Coca-Cola in the village of Plachimada in India. Residents complained that their wells began to dry up soon after the plant opened. In addition, a subsidiary company was distributing waste from the plant to farmers as fertilizer. According to an independent report by the Exeter University Laboratory, this sludge contained unacceptably high levels of carcinogenic cadmium and toxic lead. The plant was closed only after five years of repeated strikes and litigation. The village's water remains contaminated, and the damage to the environment and local residents is estimated at $28 million, but according to available data from 2018, Coca-Cola has yet to compensate for it.
Children forced to work on cocoa plantations are becoming victims of multinational corporations in Côte d'Ivoire and Ghana. According to the Journal of Agriculture and Food Research in 2022, only 5% of the raw material needed to produce chocolate comes from huge fields of 40 hectares or more, while small farmers grow 90% of the cocoa on family farms of two to five hectares. Reports from the business analytics platform Seedtrace say that in 2020, about 2.1 million minors worked in cocoa production in Côte d'Ivoire and Ghana. Children as young as 5 years old work up to 14 hours a day using chainsaws and machetes. With cocoa costing $0.78 per pound, teenagers working on family plantations are denied access to education and are trapped in a cycle of poverty. The global chocolate market is worth $103 billion.
The U.S. lawsuit against Mars, Nestlé, and Hershey not only found child labor, but child slave labor. Eight 11-year-olds from Mali were forcibly taken to Ivory Coast to work on plantations. The case was the first time a class action lawsuit of its kind had been filed against the cocoa industry in a U.S. court. Citing research from the U.S. State Department, the International Labor Organization, and UNICEF, the court documents state that the plaintiffs' experiences of child slavery mirror those of thousands of other minors. Subsequently, in 2021, only Nestlé tried to ease the tension by launching the Cocoa Plan, which promised access to education for farmers’ children and child labor risk assessments for parents.
In extreme cases, employer negligence has resulted in the deaths of thousands. In 2013, the eight-story Rana Plaza commercial building in Bangladesh collapsed, housing garment factories producing clothes for Hennes & Mauritz, Walmart, Primark, Benetton, and Mango. The day before the tragedy, when cracks appeared in the building, there was an order to vacate the premises, but the seamstresses were forced to go to work. At the time of the collapse, 3,122 workers were inside, killing 1,134 people, most of them women and their children, whom they were forced to take with them to the factories. After the tragedy, fashion houses were required to finance inspections and repairs at factories, and a number of corporations transferred $30 million to a compensation fund for families affected by the disaster. However, as Paul Novak, General Secretary of the British Trade Union Congress, notes, 10 years later, Bangladesh still violates labor rights and the working conditions remain just as dangerous.
In each case of human rights violations, transnational corporations launch large-scale PR campaigns aimed at minimizing the damage. Coca-Cola publicly declares its support for the activities of trade unions, Nestlé is ready to assess the risks of child labor and build schools, the fashion industry is not against financing repairs in the buildings of their factories. However, the costs of transnational corporations are incommensurate with the losses that employees in poor countries are forced to put up with. Deprived of proper representation not only in trade unions, but also in courts, people become hostages of the unfair distribution of goods and resources. In the head offices of companies, there remain "white collars" who receive hundreds of times more than workers in factories and plantations. Human rights organizations call on the owners of large capital to treat with respect the people who do all the dirty work in offshoring, but this tactic only works at the level of information support. Many publications on the topic of human rights violations by large companies in third world countries are currently blocked. When trying to find details of a particular case from 2019 onwards, hundreds of pages are deleted. It seems as if the practice of slave labor is a thing of the past. However, it is obvious that behind this form of working off the "negative" are "white collars", the influence and impunity of their customers.
