The New York City comptroller, overseeing significant pension investments, is urging major global sugar buyers to address issues of child labor, debt bondage, and coerced hysterectomies in western India.
The city’s pension funds hold nearly $1 billion in stocks of companies such as Coca-Cola, PepsiCo, and Mondelez, which source sugar from Maharashtra. An investigation revealed severe labor abuses in the region, including threats of kidnapping and violence.
Comptroller Brad Lander emphasized the need for companies to collaborate with labor groups in Maharashtra and seek improvements in their supply chains. He has mobilized institutional investors, including BNP Paribas Asset Management and Sands Capital, to support these efforts.
The Biden administration is also applying pressure, encouraging American firms to leverage their purchasing power to instigate changes within sugar mills. Diplomats are advocating for partnerships between companies and labor unions.
Norway’s sovereign wealth fund is investigating at least one of its portfolio companies connected to the sugar industry, while the U.A.W. Retiree Medical Benefits Trust has called on companies to enhance labor practices.
Efforts to change the status quo come amid a backdrop of significant economic stakes for both buyers and producers in Maharashtra’s sugar industry. Local politicians, owning most sugar mills, often deny the existence of labor issues.
Documented abuses include coercing female workers into undergoing unnecessary hysterectomies and the pervasive use of child labor. Workers often find themselves in debt bondage due to advances received that function as undocumented loans.
While companies are not advocating for a halt in sugar imports from Maharashtra, there is a consensus among investors that improved labor practices are essential. Labor experts warn that without fundamental changes in recruitment and payment processes, exploitation will persist.
Responses from companies vary. Coca-Cola announced initiatives to provide health training and promote wage transparency among cane cutters and factory middlemen, although it did not disclose financial details of these programs.
PepsiCo is investigating reports of labor abuses, while its franchisee Varun Beverages has expanded operations in Maharashtra. Nestlé initially claimed to have ceased sugar purchases from the region due to human rights concerns, but later clarified this was due to an export ban, despite evidence suggesting continued purchases through brokers.
Mondelez stated it is taking steps to address labor issues in the sugar supply chain and confirmed it has stopped buying from Dalmia Bharat, a mill associated with reported abuses.
Recent developments indicate a potential shift as companies begin responding to the growing scrutiny surrounding labor practices in sugar production.