Combating Unjust Labor through the Use of Blockchain

May 1, 2019

Today is Labor Day or otherwise known as International Workers’ Day in some countries, which honors the contribution of laborers and the working classes all across the world.

May 1st commemorates the 1886 Haymarket affair which initially started as a general strike for the eight-hour workday, alongside prevention of worker abuse. While for the most part, the battle against long workdays has been won, there is still much effort being made to reduce the labor of workers and make jobs easier. With this in mind, new technology such as blockchain is fast becoming a key solution to this effort.

Blockchain is a time-stamped series of an immutable record of data that is managed by clusters of computers and not owned by any single entity. Each block of data is secured and bound to each other using cryptographic principles. What this means is that a blockchain network is a shared and immutable ledger where information is open for anyone to see. Thus, everything within the blockchain is transparent and everyone involved is accountable for their actions.

In relation to labor, blockchain can make supply chains more humane by ensuring that commercial goods are ethically produced through its ledgers. Traditionally, activities occurring within a supply chain can be difficult to trace beyond the first two levels of suppliers, making comprehensive monitoring impossible. In certain industries, there can be up to 50 layers and as a result, companies are often the last to know about illicit activities in their supply chains, such as the use of conflict minerals or child, forced, or indentured labor.

With the use of blockchain, if there is concern about a commercial good, a vendor can trace the supply chain to identify possible issues with the chain of custody, which refers to the path a finished good take, from the first stage in the supply chain to delivery to the customer. Since each record created on the blockchain must be verified by every node in the network, unauthorized changes to a copy of the blockchain are identified in real-time by the rest of the network.

To illustrate how blockchain can be used in real life cases, one can consider its application in the cobalt mining industry, a market that has been the subject of much major human rights concerns. In this case, ethically mined cobalt can be placed in sealed bags that are marked with a digital tag that the stakeholder can upload onto the blockchain. The blockchain records the data and other relevant information to verify the origin of the cobalt, creating a link between the physical good and its digital identity. This is repeated with every subsequent transaction until the cobalt is incorporated into a finished product. In turn, each link in the supply chain becomes part of an immutable record, viewable and certifiable by any party with access to the blockchain.

As a matter of fact, automotive giant Ford just recently entered a partnership with IBM, Huayou Cobalt, and LG Chem to build a blockchain platform to monitor the supply of cobalt from the Congo to ensure that child labor does not make up any part of its supply chain.

Beyond its usage in the cobalt industry, there are already other world-renowned businesses that are using blockchain to expedite the distribution of humanitarian aid and ensure that products are sustainably and responsibly sourced.

Last year, Coca-Cola and the United States State Department announced a global project to combat forced labor by creating a secure registry for workers and their contracts using blockchain’s validation and digital notary capabilities.

Considering all of the above, it is undeniable that blockchain will be very useful in the near future when it comes to protecting workers’ rights. Of course, before that happens, companies need to recognize the need for such solutions and put their workers as their number one priority.

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