Using Frontier Technology to Detect Hidden Labour Abuses in Agricultural Sectors in Thailand

26 February 2021
Policy Innovation

Leanne Melnyk  | Head of Human and Labour Rights Governance, Diginex Solutions
Juliette Alemany  | COO, FairAgora Asia

In 2020, VerifiK8, a sustainability firm working with agribusinesses in Southeast Asia and Diginex Solutions (Diginex), a technology company specializing in responsible supply chains, joined forces to see how frontier technology can be used to improve the working conditions of agricultural workers in Thailand.

The two firms set out to test the efficacy of eMin, which is an innovative platform developed by Diginex that uses distributed-ledger technology to share a version of the employment contract with all key parties in an employment relationship. The multi-party sharing and verification ensures that if any party seeks to change the terms and condition of employment, this change is permanently documented on the Tezos blockchain protocol, thereby reducing the risk of deceptive recruitment and employment practices. For this project, eMin was integrated into the VerifiK8 mobile application which enables the user to enter data points of a verbal or written agreement and directly sends the information to the eMin platform.

Modern Slavery Risks in Agriculture

Modern slavery is a critical risk for workers in the agricultural sector worldwide. According to the International Labour Organization (ILO), an estimated 24.9 million people are in forced labour. The Global Estimates indicate that much of forced labour today occurs in the private economy, most notably in agriculture. Amongst the cases of forced labour in the private sector, over half (51 per cent) were driven by debt bondage. This proportion rises above 70 per cent for adults who were forced to work in agriculture.

Agriculture is one of Thailand’s most important industries, employing more than 11 million Thai workers and a significant number of migrant workers from Myanmar, the People’s Democratic Republic of Lao and Cambodia. Despite the sector’s size and importance, research on working conditions and forced labour prevalence, remains limited, in part owing to difficulties in gaining access to agricultural workers (local and migrant) in geographically remote locations.

The project targeted two specific groups of users within the agricultural sector to better understand their exposure risk to modern slavery, interest in secure document storage for their contract and other key employment documents and comfort-level with the technology. The two groups were:

  1. Permanent workers with formal employment contracts.
  2. Seasonal workers employed through verbal agreements.

Findings from the Field Trip with Permanent Employees (Sugarcane Mills)

In October 2020, we tested eMin with 20 workers in the sugarcane mills attached to the Bonsucro[1] certification scheme in the Phitsanulok district of Thailand. Workers at the mill were predominantly local, permanent employees with written employment contracts. It should be noted that this field trip was organized with the mill owners’ consent, and worker interviews were carried out at the mill, which may have limited workers’ ability to speak freely about their working conditions.

From this field visit we were not able to find a strong use case for eMin with local agricultural workers that were employed on permanent contracts. The mill workers with whom the project team engaged did not seem interested in using technology to have direct and immutable copies of their employment contract. This was likely due to a combination of factors including the fact that the workers trusted their employer and did not see the benefit of the tech tool, even if it would provide an additional layer of security. In addition, most of the workers had been employed by the mill for over a year and had a positive employment history, which provided a solid basis for this trust.

Managers did note that the tool could be useful for the employment of daily labourers (who did the cutting, planting or fertilization), with whom the mills did not sign formal employment contracts. Daily labourers only receive the basic daily wage in cash (with no receipts), which may be below the minimum wage, and they are not eligible for bonuses and benefits as they are not covered by the social security system. In addition, in the absence of a formal employment relationship, daily labourers have very insecure jobs and can be easily dismissed. Managers noted the tool could be useful to help the mills provide evidence of social compliance with the certification standards by showing payment of minimum wage to the daily workers.

The project also showed a stark difference in tech-comfort levels between workers and managers. It required a significant amount of encouragement on the part of the VerifK8 team to have the mill workers use eMin directly, without the intermediation of the managers.  This lack of confidence is understandable given that most had access only to a basic phone with no internet. With significant encouragement, the workers were also able to use the tool unaided. 95 per cent of managers, by contrast, owned smart phones and had access to technology. Unsurprisingly, these managers were able to use eMin without any challenges or additional support. While the digital divide in Thailand will no doubt change overtime, it is evident that access to technology differs according to employment and education levels.

Findings from the Field Trip with Seasonal Employees (Sugarcane Harvest, Rubber and Rice)

In December 2020, Verifk8 undertook a second trip to speak with 58 workers in the sugarcane, rice and rubber sectors in the Nong Bua, Sikhoraphum District, Surin. Many of the villagers owned small rice farms in Nong Bua and became seasonal agricultural workers in Ratchaburi Province during the sugarcane harvest.  This year because of the pandemic and internal restrictions in Thailand, the villagers in Nong Bua could not travel to Ratchaburi, which provided the VerifiK8 team with an opportunity to meet them to test out eMin. The team spent several days with the villagers, getting to know them and gaining their trust. Through these interactions, the team learned more about the challenges these workers faced through their employment in seasonal agricultural work.

We learned that seasonal agricultural workers in Nong Bua were extremely vulnerable to the risk of labour exploitation. Many villagers worked in multiple commodities as a way of making ends meet, travelling from one farm to the next and even working on construction sites in between harvests. The seasonal agricultural sector lacked formal processes to manage the employment relationship, such as signed written contracts with clear terms and conditions shared with workers in an accessible and transparent manner. These arrangements can provide businesses in Thailand with necessary flexibility but are also linked with significant decent-work gaps such as lower earnings, reduced social security coverage and health and safety concerns.

During the second field trip, VerifK8 identified the utility of a tool like eMin amongst internal migrants that work in seasonal agriculture. The seasonal agricultural workers often spent 2-3 months working on a farm and received a salary advance (the amount in advance varied greatly from 10,000 – 50,000 Baht or US$300 to US$1667) to work in the sugarcane harvest. The advance provides much needed household financing, but it also means workers are not free to leave their employers even in cases of exploitation. In addition, workers that receive advance payments are less likely to understand the link between hours worked and payment received, particularly if employers make other deductions for interest or other “costs” (such as for food, tools and transportation).  In consequence, workers suggested eMin could be used to clearly document their loan and employment terms and conditions, including in-kind payments and costs (such as provision of food and transportation). In documenting these critical elements at the start of the employment relationship on an immutable ledger, it would provide greater transparency and trust to both parties and lessen the risk of exploitation.

Furthermore, many seasonal agricultural workers—particularly those who also worked casually during the “off season” in the construction sector—reported stories of employers promising payments, which were then not provided even after the work was completed. eMin—particularly if it includes improved features for the recording of verbal contracts—might be a useful means to improve adherence to work agreements, even informal ones.

Workers appeared more confident in using technology when they were engaged in the villages and away from the watchful eyes of managers. Nevertheless, smartphone penetration rates remain low, particularly amongst the older generation.  Among the users trained, 64% were women and 36% were men. The average age of women was 50 years old and the average age of men was 60 years old. Only 57% declared owning a smartphone with internet access. Most of them noted that they would still have access to a smartphone through family members.

Conclusions and Next Steps

The project shows that both formal and informal workplaces face challenges in documenting compliance with social standards, including payment of minimum wage. Seasonal workers, and some daily workers are in the highest risk category as they neither have the means to document promises and payments made by employers, nor do they have a written employment contract. Furthermore, many remain financially indebted to their employers. Under these conditions, labour exploitation is still very common with at least one well-documented case of modern slavery identified by field workers.

Technology tools need to be adapted to meet the unique needs of the user base. In the case of eMin, enhancements are needed to make it more user-friendly. Most workers cited the need for better icons and images that aligned with the look and feel of Line and Facebook, which were the two most common platforms cited. The tool also needs to be available to use offline, even if with limited functionality. Finally, one of the most critical findings is the need to build additional functionalities to document verbal contracts as well as in-kind payments.

As a next step, Diginex Solutions is refining eMin to make a version that is more geared to workers, taking inspiration from the points above. We do see huge value in offering precarious workers a safe and secure way to document their terms and conditions of employment. Although enforcement and the digital divide will remain a challenge, formalizing employment status can help to shift the power dynamics between workers and their employers. Particularly when coupled with good worker representation and robust monitoring by brands and retailers, technology can help shed light on the informal workforce and reduce workers’ risk of exploitation.

This article has been prepared by Leanne Melnyk and Juliette Alemany as a contribution to Delta 8.7. As provided for in the Terms and Conditions of Use of Delta 8.7, the opinions expressed in this article are those of the authors and do not necessarily reflect those of UNU or its partners.

[1] Bonsucro offers a metric certification process to demonstrate commitment to environmental and social sustainability in sugarcane.

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