Supply Chains - Partnership Development - Innovation & Acceleration -Companies

Partnering for Fair Labor and Supply Chain Transparency in Thailand’s Sugarcane Industry

Article - November 20, 2020

Quick Facts:

  • Partnership: FairAgora, Winrock, U.S. Agency for International Development (USAID)
  • Facilitator: Resonance
  • Time period: August 2019-August 2020
  • Country: Thailand

Sugarcane is the largest agricultural commodity in the world. It provides Thailand with more than 1.5 million jobs and generates nearly $6 billion in revenue each year. Yet the industry faces enormous environmental and social challenges, from depletion of natural resources to child labor and human trafficking.

Over two thirds of Thailand’s sugarcane is produced by smallholder farms who could strengthen their businesses and attract higher-paying buyers by meeting international social and environmental standards. However, farmers lack the capital and logistical capacity to address these challenges alone.

FairAgora Asia is a Thailand-based social enterprise that develops and implements cost-effective digital solutions for supply chain compliance and sustainability. Its mobile-friendly Verifik8 software platform helps smallholder farmers and their buyers to start the journey toward environmental compliance. FairAgora’s founder Emanuelle Bourgois planned to add social compliance features to the platform next, but few private sector customers were willing to shoulder the cost and risk to test an unproven approach that might uncover labor violations or threaten their sourcing base.

Making the Match

 In 2019, Bourgois was searching for a strategic partner to help FairAgora expand Verifik8 to include labor monitoring and training. Then, Resonance reached out with an opportunity. As the private sector engagement lead for the USAID Thailand Counter Trafficking in Persons (CTIP) project, Resonance was interested in whether Verifik8 had the potential to improve ethical recruitment practices and working conditions in Thailand’s sugarcane industry.

 “I was searching for a partner willing to pioneer solutions that increase transparency and foster safe and fair labor practices, and that’s the exact focus of USAID Thailand CTIP,” said Bourgois. “When the opportunity arose, I jumped at the chance. The partnership helped me move things forward and get buyers interested in something that has been tested and validated.”

Resonance helped USAID and FairAgora develop shared goals, metrics, and a new process to digitize and track labor standards and worker wellbeing on smallholder farms and sugar mills. USAID Thailand CTIP provided the funding, facilitation, and technical assistance for FairAgora to develop and test Verifik8’s enhanced social metrics and monitoring features with sugarcane smallholder farmers and their buyers. Meanwhile, FairAgora delivered an accessible, user-friendly, and cost-effective method for incorporating worker feedback and measuring progress.

Together, FairAgora and its partners added the following social functions to Verifik8:

  • Social metrics to monitor unsafe labor practices and cases
    • The 12 categories of social metrics added to Verifik8 include: workers’ representation, grievance mechanism, fair recruitment, fair remuneration, decent working hours, gender and non-discrimination, health and safety, fair disciplinary procedures, community development, freedom of movement, child labor, and forced labor;
  • A grievance mechanism for sugarcane mill workers, laborers, and growers that enables monitoring of the 12 social metrics above and adds a communication feature to connect workers who are at risk with support services; and
  • A blockchain worker agreement function that creates and stores an immutable copy of a standardized working contract that is accessible to the worker and allows the farm manager, owner, and worker to enter information, including salary and working hours. This simplifies the hiring process and establishes employee records.

USAID Thailand CTIP’s involvement attracted major brands for pre-competitive collaboration to demonstrate Verifik8’s value and feasibility for scale within the agribusiness sector and beyond. With financial support from Coca-Cola and supplier connections from PepsiCo, the partners piloted the project in Phitsanulok province with 24 sugarcane farmers and 15 mill extension officers at one of Thailand’s leading sugar mills.

Engaging the Supply Chain

The partners engaged dozens of stakeholders—buyers, farmers, workers, sugar mills, extension service providers, producer associations, traders, brands, and others—in surveys and a co-creation workshop to better understand user needs.     

“To engage the entire sugarcane supply chain in Thailand means a lot of preparation, strategy, and know-how. You have to navigate extremely sensitive topics,” said Bourgois. “A brand’s buying power can add pressure to improve practices, but it doesn’t often get long-term results. Resonance’s support was key in preparing for those conversations, and ultimately in obtaining commitments from our stakeholders.”

The engagement helped Bourgois’s team adapt, improve, and tailor the Verifik8 interface so that the tool serves these users, rather than adding another burden. And FairAgora now has a basis for moving Verifik8 from early adoption to scale within the sugarcane industry, and beyond. 

Scaling the Platform

Since 2019, the partnership has facilitated four onsite and online trainings at sugar mills; added hundreds of new users—including farm owners, farmers, farm workers, mill extension service providers, and farmers’ associations—to the Verifik8 platform; and garnered interest from two international buyers.    

Moving forward, FairAgora will continue to work with the USAID Thailand CTIP project to test the solution among current customers and gather data to help scale its adoption on more farms and sugar mills. The team is also reaching out to investors and corporate partners—with the USAID pilot serving as a proof of concept. As more companies sign on, the Verifik8 platform has the potential to reach and empower workers across sectors, from coffee to seafood.

For Bourgois, it’s part of the larger goal she hopes to achieve: “So many barriers stand in the way of obtaining safe and fair food,” she said. “Partnerships like these help connect the dots on agricultural supply chains and create solutions the industry is ready to adopt. That’s how change starts. That’s how we make a difference.”

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