Reflections from Tesco on Ten Years of Dhaka Principle 1 – No Fees Are Charged to Migrant Workers

Throughout 2022, IHRB is marking ten years of the Dhaka Principles for Migration with Dignity with guest commentaries from representatives of business, trade unions, civil society organisations, and the UN system that reflect on the continuing importance of each of the twelve individual Principles. These experts are exploring challenges relating to each Principle in turn and discussing how faster progress can be made.

For the past 10 years, the Dhaka Principles have provided a framework for companies to do their part in ensuring ‘migration with dignity’. The first of these principles, and central to combatting the exploitation of migrant workers, is ‘No fees are charged to migrant workers’.

Evidence continues to demonstrate that the debt burden migrant workers carry from excessive recruitment fees and costs exacerbate their vulnerability, placing them at heightened risk of forced labour. When done well, implementing ‘no fee’ recruitment models drastically reduce vulnerabilities for workers. What’s more, responsible recruitment typically increases worker wellbeing, fostering an improved work environment and positively impacting performance at work.

Evidence continues to demonstrate that the debt burden migrant workers carry from excessive recruitment fees and costs exacerbates their vulnerability and places them at heightened risk of forced labour.

Despite the clear need to ensure implementation of the Employer Pays Principle, that ‘No fees are charged to migrant workers’ – these fees and costs remain widespread. Why? Overhauling well-established recruitment practices in favor of responsible recruitment, including ensuring workers are not charged fees, requires effort and commitment from all actors in the value chain. This is not easily achieved. At the same time, where existing forms of due diligence have failed to detect recruitment fees and costs that are often hidden, false assurances have been created. As a result, in some supply chains, the recruitment fees and costs are overlooked.

Given that recruitment fees and costs are the most common Modern Slavery indicator in Tesco’s business and supply chains, our modern slavery strategy focuses more heavily on responsible recruitment. This also aligns with the broader commitment within our Human Rights strategy, to provide decent, fair and safe work to all. Decent work starts with responsible recruitment. We have learnt a lot from our efforts to implement Dhaka Principle 1. In 2020 we launched ‘Responsible Recruitment requirements’ for our suppliers in Thailand and Malaysia, the region where we identified recruitment fees and costs occurring at relatively higher levels to other markets. This time-bound policy required all suppliers to move to a ‘no fees’ recruitment model with Tesco publicly committing that by the end of 2022 ‘zero workers pay for a job in 100% of primary sites in Thailand and Malaysia’. Our policy has created a level-playing field for our suppliers and in turn, accelerated progress towards this commitment. However, implementation has not been without its challenges. At the supplying sites where Tesco has low volumes and therefore low leverage, we are reliant on other customers also asking for ‘no fee’ recruitment in a similar timeframe – more often than not these are misaligned. Where our suppliers do agree to a ‘no fees’ model, the HR teams responsible for this require additional support to ensure effective implementation as well as building effective mechanisms to monitor on-going compliance.

Tesco is not alone in our increased efforts to implement Dhaka Principle 1. Conceptualised by the Leadership Group of Responsible Recruitment in 2016, the ‘Employer Pays Principle’ seeks to ensure that employers are paying all fees and costs associated with recruitment. The Principle was subsequently adopted by companies across a range of industries and locations with timelines to implementation developed. Another critical step forward was the publication of the ILO definition of recruitment fees and costs in 2019, which provided much needed clarity on the nature and characteristics of these issues. This, in turn, has created greater alignment across industry as companies are asking for the same types of fees and costs to be covered. Small differences in the definition of recruitment fees and costs had previously served as a means for some companies to delay embedding ‘no fee’ policies.  

As momentum has built behind the Employer Pays Principle, companies are increasingly sharing their learnings as they move from commitment to operationalisation.

A wealth of tools and resources are now available to support companies in the implementation of ‘no fees’ policies. Amongst others, the Responsible Recruitment Toolkit, launched in 2019, provides a practical step by step guide on ‘Eliminating Recruitment and Employment Fees Charged to Workers’. Region-specific guidance is also available. For example, a number of papers from the Issara Institute outline their experiences in supporting companies in Thailand to map recruitment fees and costs and develop a financially viable ethical recruitment model. Most recently, AIM-Progress and the World Business Council for Sustainable Development launched the Responsible Recruitment Interactive Initiative Mapping Tool, which gathers together all existing key initiatives, emerging standards, schemes, risk assessment tools and other programmes related to responsible recruitment, including the eradication of recruitment fees and costs.

As momentum has built behind the Employer Pays Principle, companies are increasingly sharing their learnings as they move from commitment to operationalisation. For example, in 2019, seafood producer Thai Union published an independent report “Ethical Recruitment and the Employer Pays Principle: Translating Policy Into Practice”. This evaluation outlined the benefits brought about through the company’s ethical migrant recruitment policy and the opportunities for further progress. Equally, the UK Modern Slavery Act, which requires companies to report annually the steps they are taking to mitigate the risk of modern slavery in their own-operations and supply chains, provides an additional platform for businesses to share progress in eradicating  fees and costs. For example, Tesco’s 2021-22 Modern Slavery Statement, outlines not only the progress made to implement the Employer Pays Principle but also efforts to remediate migrant worker recruitment fees. Tesco is committed to continuing to document our experiences in the hope these shared learnings will enable other businesses to better identify and mitigate similar risks.

Looking forward, there is still much work to do before ‘No fees are charged to migrant workers’ becomes the norm. Only with an increased demand for a responsible recruitment marketplace and ‘no fee’ recruitment channels will we start to see a noticeable change.

Looking forward, there is still much work to do before ‘No fees are charged to migrant workers’ becomes the norm across all industries. Only with an increased demand for a responsible recruitment marketplace and ‘no fee’ recruitment channels will we start to see a noticeable change. To truly understand how fees and costs manifest in recruitment supply chains, trusted relationships must be built with workers to ensure they are empowered to share their experiences. Equally, a cost structure that adequately covers all fees and costs end-to-end in the recruitment supply chains must be agreed with all in the value chain to avoid these costs later being passed on to workers. And this needs to happen now. COVID-19 has only exacerbated risks to migrant workers. As cross-border recruitment channels increasingly reopen, fees and costs associated with recruitment are increasing – leaving workers at greater risk from unscrupulous recruitment practices. More than ever, it is essential that we work transparently and collaboratively to tackle this complex issue.

This month’s expert is Rachel Munns, Responsible Sourcing Manager at Tesco. Currently based in Hong Kong, Rachel is responsible for the development and delivery of programmes that advance human rights across Tesco’s apparel and general merchandise supply chains. Representing Tesco in the Leadership Group for Responsible Recruitment, she continues to evolve Tesco’s Group approach to responsible recruitment, including operationalising the ‘Employer Pays Principle’. She has led a number of initiatives to tackle this risk in high-risk supply chains, including a review of migrant worker welfare in Tesco’s own-operations, the repayment of recruitment fees and launch of responsible recruitment requirements.