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This cell phone

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started its trajectory

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in an artisanal mine

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in the Eastern Congo.

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It's mined by armed gangs

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using slaves, child slaves,

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what the U.N. Security Council

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calls "blood minerals,"

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then traveled into some components

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and ended up in a factory

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in Shinjin in China.

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That factory -- over a dozen people have committed suicide

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already this year.

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One man died after working a 36-hour shift.

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We all love chocolate.

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We buy it for our kids.

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Eighty percent of the cocoa comes from Cote d'Ivoire and Ghana

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and it's harvested by children.

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Cote d'Ivoire, we have a huge problem of child slaves.

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Children have been trafficked from other conflict zones

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to come and work on the coffee plantations.

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Heparin -- a blood thinner,

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a pharmaceutical product --

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starts out in artisanal workshops

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like this in China,

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because the active ingredient

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comes from pigs' intestines.

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Your diamond -- you've all heard, probably seen the movie "Blood Diamond."

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This is a mine in Zimbabwe

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right now.

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Cotton: Uzbekistan is the second biggest

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exporter of cotton on Earth.

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Every year when it comes to the cotton harvest,

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the government shuts down the schools,

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puts the kids in buses, buses them to the cotton fields

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to spend three weeks harvesting the cotton.

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It's forced child labor

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on an institutional scale.

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And all of those products probably end their lives

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in a dump like this one in Manila.

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These places, these origins,

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represent governance gaps.

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That's the politest description

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I have for them.

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These are the dark pools

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where global supply chains begin --

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the global supply chains,

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which bring us our favorite brand name products.

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Some of these governance gaps

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are run by rogue states.

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Some of them are not states anymore at all.

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They're failed states.

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Some of them

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are just countries who believe that deregulation or no regulation

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is the best way to attract investment,

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promote trade.

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Either way, they present us

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with a huge moral and ethical dilemma.

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I know that none of us want to be accessories

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after the fact

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of a human rights abuse

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in a global supply chain.

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But right now,

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most of the companies involved in these supply chains

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don't have any way

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of assuring us

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that nobody had to mortgage their future,

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nobody had to sacrifice their rights

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to bring us our favorite

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brand name product.

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Now, I didn't come here to depress you

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about the state of the global supply chain.

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We need a reality check.

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We need to recognize just how serious

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a deficit of rights we have.

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This is an independent republic,

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probably a failed state.

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It's definitely not a democratic state.

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And right now,

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that independent republic of the supply chain

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is not being governed

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in a way that would satisfy us,

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that we can engage in ethical trade or ethical consumption.

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Now, that's not a new story.

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You've seen the documentaries

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of sweatshops making garments

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all over the world, even in developed countries.

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You want to see the classic sweatshop,

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meet me at Madison Square Garden,

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I'll take you down the street, and I'll show you a Chinese sweatshop.

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But take the example of heparin.

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It's a pharmaceutical product.

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You expect that the supply chain that gets it to the hospital,

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probably squeaky clean.

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The problem is that the active ingredient in there --

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as I mentioned earlier --

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comes from pigs.

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The main American manufacturer

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of that active ingredient

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decided a few years ago to relocate to China

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because it's the world's biggest supplier of pigs.

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And their factory in China --

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which probably is pretty clean --

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is getting all of the ingredients

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from backyard abattoirs,

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where families slaughter pigs

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and extract the ingredient.

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So a couple of years ago, we had a scandal

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which killed about 80 people around the world,

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because of contaminants

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that crept into the heparin supply chain.

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Worse, some of the suppliers

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realized that they could substitute a product

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which mimicked heparin in tests.

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This substitute cost nine dollars a pound,

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whereas real heparin, the real ingredient,

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cost 900 dollars a pound.

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A no-brainer.

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The problem was that it killed more people.

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And so you're asking yourself,

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"How come the U.S. Food and Drug Administration

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allowed this to happen?

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How did the Chinese State Agency for Food and Drugs

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allow this to happen?"

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And the answer is quite simple:

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the Chinese define these facilities

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as chemical facilities, not pharmaceutical facilities,

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so they don't audit them.

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And the USFDA

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has a jurisdictional problem.

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This is offshore.

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They actually do conduct a few investigations overseas --

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about a dozen a year -- maybe 20 in a good year.

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There are 500

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of these facilities

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producing active ingredients in China alone.

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In fact, about 80 percent

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of the active ingredients in medicines now

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come from offshore,

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particularly China and India,

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and we don't have a governance system.

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We don't have a regulatory system

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able to ensure

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that that production is safe.

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We don't have a system to ensure

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that human rights, basic dignity,

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are ensured.

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So at a national level --

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and we work in about 60 different countries --

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at a national level

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we've got a serious breakdown in the ability of governments

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to regulate production

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on their own soil.

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And the real problem with the global supply chain

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is that it's supranational.

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So governments who are failing,

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who are dropping the ball

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at a national level,

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have even less ability to get their arms around the problem

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at an international level.

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And you can just look at the headlines.

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Take Copenhagen last year --

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complete failure of governments

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to do the right thing

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in the face of an international challenge.

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Take the G20 meeting a couple of weeks ago --

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stepped back from its commitments of just a few months ago.

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You can take any one

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of the major global challenges we've discussed this week

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and ask yourself, where is the leadership from governments

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to step up and come up with solutions,

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responses,

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to those international problems?

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And the simple answer is they can't. They're national.

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Their voters are local.

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They have parochial interests.

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They can't subordinate those interests

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to the greater global public good.

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So, if we're going to ensure the delivery

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of the key public goods

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at an international level --

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in this case, in the global supply chain --

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we have to come up with a different mechanism.

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We need a different machine.

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Fortunately, we have some examples.

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In the 1990s,

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there were a whole series of scandals

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concerning the production of brand name goods in the U.S. --

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child labor, forced labor,

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serious health and safety abuses.

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And eventually President Clinton, in 1996,

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convened a meeting at the White House,

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invited industry, human rights NGOs,

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trade unions, the Department of Labor,

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got them all in a room

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and said, "Look,

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I don't want globalization to be a race to the bottom.

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I don't know how to prevent that,

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but I'm at least going to use my good offices

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to get you folks together

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to come up with a response."

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So they formed a White House task force,

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and they spent about three years arguing

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about who takes how much responsibility

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in the global supply chain.

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Companies didn't feel it was their responsibility.

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They don't own those facilities.

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They don't employ those workers.

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They're not legally liable.

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Everybody else at the table

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said, "Folks, that doesn't cut it.

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You have a custodial duty, a duty of care,

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to make sure that that product

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gets from wherever to the store

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in a way that allows us to consume it,

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without fear of our safety,

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or without having to sacrifice our conscience

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to consume that product."

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So they agreed, "Okay, what we'll do

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is we agree on a common set of standards,

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code of conduct.

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We'll apply that throughout

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our global supply chain

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regardless of ownership or control.

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We'll make it part of the contract."

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And that was a stroke of absolute genius,

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because what they did

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was they harnessed the power of the contract,

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private power,

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to deliver public goods.

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And let's face it,

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the contract from a major multinational brand

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to a supplier in India or China

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has much more persuasive value

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than the local labor law,

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the local environmental regulations,

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the local human rights standards.

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Those factories will probably never see an inspector.

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If the inspector did come along,

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it would be amazing if they were able

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to resist the bribe.

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Even if they did their jobs,

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and they cited those facilities for their violations,

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the fine would be derisory.

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But you lose that contract

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for a major brand name,

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that's the difference

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between staying in business or going bankrupt.

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That makes a difference.

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So what we've been able to do

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is we've been able to harness

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the power and the influence

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of the only truly transnational institution

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in the global supply chain,

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that of the multinational company,

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and get them to do the right thing,

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get them to use that power for good,

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to deliver the key public goods.

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Now of course, this doesn't come naturally

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to multinational companies.

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They weren't set up to do this. They're set up to make money.

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But they are extremely efficient organizations.

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They have resources,

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and if we can add the will, the commitment,

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they know how to deliver that product.

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Now, getting there is not easy.

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Those supply chains I put up on the screen earlier,

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they're not there.

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You need a safe space.

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You need a place where people can come together,

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sit down without fear of judgment,

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without recrimination,

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to actually face the problem,

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agree on the problem and come up with solutions.

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We can do it. The technical solutions are there.

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The problem is the lack of trust, the lack of confidence,

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the lack of partnership

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between NGOs, campaign groups,

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civil society organizations

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and multinational companies.

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If we can put those two together in a safe space,

282
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get them to work together,

283
00:11:43,000 --> 00:11:46,000
we can deliver public goods right now,

284
00:11:46,000 --> 00:11:49,000
or in extremely short supply.

285
00:11:49,000 --> 00:11:51,000
This is a radical proposition,

286
00:11:51,000 --> 00:11:53,000
and it's crazy to think

287
00:11:53,000 --> 00:11:56,000
that if you're a 15-year-old Bangladeshi girl

288
00:11:56,000 --> 00:11:59,000
leaving your rural village

289
00:11:59,000 --> 00:12:02,000
to go and work in a factory in Dhaka --

290
00:12:02,000 --> 00:12:05,000
22, 23, 24 dollars a month --

291
00:12:07,000 --> 00:12:10,000
your best chance of enjoying rights at work

292
00:12:10,000 --> 00:12:12,000
is if that factory is producing

293
00:12:12,000 --> 00:12:14,000
for a brand name company

294
00:12:14,000 --> 00:12:16,000
which has got a code of conduct

295
00:12:16,000 --> 00:12:19,000
and made that code of conduct part of the contract.

296
00:12:20,000 --> 00:12:22,000
It's crazy.

297
00:12:22,000 --> 00:12:24,000
Multinationals are protecting human rights.

298
00:12:24,000 --> 00:12:26,000
I know there's going to be disbelief.

299
00:12:26,000 --> 00:12:28,000
You'll say, "How can we trust them?"

300
00:12:28,000 --> 00:12:30,000
Well, we don't.

301
00:12:30,000 --> 00:12:32,000
It's the old arms control phrase:

302
00:12:32,000 --> 00:12:34,000
"Trust, but verify."

303
00:12:34,000 --> 00:12:36,000
So we audit.

304
00:12:36,000 --> 00:12:39,000
We take their supply chain, we take all the factory names,

305
00:12:39,000 --> 00:12:41,000
we do a random sample,

306
00:12:41,000 --> 00:12:44,000
we send inspectors on an unannounced basis

307
00:12:44,000 --> 00:12:46,000
to inspect those facilities,

308
00:12:46,000 --> 00:12:48,000
and then we publish the results.

309
00:12:48,000 --> 00:12:51,000
Transparency is absolutely critical to this.

310
00:12:52,000 --> 00:12:55,000
You can call yourself responsible,

311
00:12:55,000 --> 00:12:58,000
but responsibility without accountability

312
00:12:58,000 --> 00:13:00,000
often doesn't work.

313
00:13:00,000 --> 00:13:03,000
So what we're doing is, we're not only enlisting the multinationals,

314
00:13:03,000 --> 00:13:06,000
we're giving them the tools to deliver this public good --

315
00:13:06,000 --> 00:13:08,000
respect for human rights --

316
00:13:08,000 --> 00:13:10,000
and we're checking.

317
00:13:10,000 --> 00:13:12,000
You don't need to believe me. You shouldn't believe me.

318
00:13:12,000 --> 00:13:15,000
Go to the website. Look at the audit results.

319
00:13:15,000 --> 00:13:17,000
Ask yourself, is this company behaving

320
00:13:17,000 --> 00:13:20,000
in a socially responsible way?

321
00:13:20,000 --> 00:13:22,000
Can I buy that product

322
00:13:22,000 --> 00:13:25,000
without compromising my ethics?

323
00:13:25,000 --> 00:13:28,000
That's the way the system works.

324
00:13:30,000 --> 00:13:32,000
I hate the idea

325
00:13:32,000 --> 00:13:35,000
that governments are not protecting human rights around the world.

326
00:13:35,000 --> 00:13:37,000
I hate the idea

327
00:13:37,000 --> 00:13:39,000
that governments have dropped this ball

328
00:13:39,000 --> 00:13:42,000
and I can't get used to the idea

329
00:13:42,000 --> 00:13:45,000
that somehow we can't get them to do their jobs.

330
00:13:45,000 --> 00:13:47,000
I've been at this for 30 years,

331
00:13:47,000 --> 00:13:49,000
and in that time I've seen

332
00:13:49,000 --> 00:13:52,000
the ability, the commitment, the will of government

333
00:13:52,000 --> 00:13:54,000
to do this decline,

334
00:13:54,000 --> 00:13:57,000
and I don't see them making a comeback right now.

335
00:13:57,000 --> 00:13:59,000
So we started out thinking

336
00:13:59,000 --> 00:14:01,000
this was a stopgap measure.

337
00:14:01,000 --> 00:14:04,000
We're now thinking that, in fact,

338
00:14:04,000 --> 00:14:06,000
this is probably the start

339
00:14:06,000 --> 00:14:09,000
of a new way of regulating and addressing

340
00:14:09,000 --> 00:14:11,000
international challenges.

341
00:14:11,000 --> 00:14:14,000
Call it network governance. Call it what you will.

342
00:14:14,000 --> 00:14:17,000
The private actors,

343
00:14:17,000 --> 00:14:19,000
companies and NGOs,

344
00:14:19,000 --> 00:14:21,000
are going to have to get together

345
00:14:21,000 --> 00:14:23,000
to face the major challenges we are going to face.

346
00:14:23,000 --> 00:14:25,000
Just look at pandemics --

347
00:14:25,000 --> 00:14:28,000
swine flu, bird flu, H1N1.

348
00:14:28,000 --> 00:14:30,000
Look at the health systems in so many countries.

349
00:14:30,000 --> 00:14:32,000
Do they have the resources

350
00:14:32,000 --> 00:14:35,000
to face up to a serious pandemic?

351
00:14:35,000 --> 00:14:37,000
No.

352
00:14:37,000 --> 00:14:40,000
Could the private sector and NGOs

353
00:14:40,000 --> 00:14:42,000
get together and marshal a response?

354
00:14:42,000 --> 00:14:44,000
Absolutely.

355
00:14:44,000 --> 00:14:46,000
What they lack is that safe space

356
00:14:46,000 --> 00:14:48,000
to come together, agree

357
00:14:48,000 --> 00:14:50,000
and move to action.

358
00:14:50,000 --> 00:14:53,000
That's what we're trying to provide.

359
00:14:54,000 --> 00:14:56,000
I know as well

360
00:14:56,000 --> 00:14:58,000
that this often seems

361
00:14:58,000 --> 00:15:00,000
like an overwhelming level of responsibility

362
00:15:00,000 --> 00:15:02,000
for people to assume.

363
00:15:02,000 --> 00:15:04,000
"You want me to deliver human rights

364
00:15:04,000 --> 00:15:06,000
throughout my global supply chain.

365
00:15:06,000 --> 00:15:09,000
There are thousands of suppliers in there."

366
00:15:09,000 --> 00:15:12,000
It seems too daunting, too dangerous,

367
00:15:12,000 --> 00:15:14,000
for any company to take on.

368
00:15:14,000 --> 00:15:16,000
But there are companies.

369
00:15:16,000 --> 00:15:19,000
We have 4,000 companies who are members.

370
00:15:19,000 --> 00:15:21,000
Some of them are very, very large companies.

371
00:15:21,000 --> 00:15:23,000
The sporting goods industry, in particular,

372
00:15:23,000 --> 00:15:26,000
stepped up to the plate and have done it.

373
00:15:26,000 --> 00:15:29,000
The example, the role model, is there.

374
00:15:30,000 --> 00:15:32,000
And whenever we discuss

375
00:15:32,000 --> 00:15:34,000
one of these problems that we have to address --

376
00:15:34,000 --> 00:15:37,000
child labor in cottonseed farms in India --

377
00:15:37,000 --> 00:15:40,000
this year we will monitor 50,000 cottonseed farms in India.

378
00:15:41,000 --> 00:15:43,000
It seems overwhelming.

379
00:15:43,000 --> 00:15:46,000
The numbers just make you want to zone out.

380
00:15:46,000 --> 00:15:49,000
But we break it down to some basic realities.

381
00:15:49,000 --> 00:15:51,000
And human rights

382
00:15:51,000 --> 00:15:54,000
comes down to a very simple proposition:

383
00:15:54,000 --> 00:15:57,000
can I give this person their dignity back?

384
00:15:57,000 --> 00:15:59,000
Poor people,

385
00:15:59,000 --> 00:16:01,000
people whose human rights have been violated --

386
00:16:01,000 --> 00:16:03,000
the crux of that

387
00:16:03,000 --> 00:16:05,000
is the loss of dignity,

388
00:16:05,000 --> 00:16:07,000
the lack of dignity.

389
00:16:07,000 --> 00:16:10,000
It starts with just giving people back their dignity.

390
00:16:10,000 --> 00:16:13,000
I was sitting in a slum outside Gurgaon

391
00:16:13,000 --> 00:16:15,000
just next to Delhi,

392
00:16:15,000 --> 00:16:18,000
one of the flashiest, brightest new cities

393
00:16:18,000 --> 00:16:21,000
popping up in India right now,

394
00:16:21,000 --> 00:16:23,000
and I was talking to workers

395
00:16:23,000 --> 00:16:25,000
who worked in garment sweatshops down the road,

396
00:16:25,000 --> 00:16:28,000
and I asked them what message they would like me to take to the brands.

397
00:16:29,000 --> 00:16:32,000
They didn't say money.

398
00:16:32,000 --> 00:16:35,000
They said, "The people who employ us

399
00:16:35,000 --> 00:16:38,000
treat us like we are less than human,

400
00:16:38,000 --> 00:16:40,000
like we don't exist.

401
00:16:40,000 --> 00:16:43,000
Please ask them to treat us like human beings."

402
00:16:44,000 --> 00:16:46,000
That's my simple understanding of human rights.

403
00:16:46,000 --> 00:16:49,000
That's my simple proposition to you,

404
00:16:49,000 --> 00:16:52,000
my simple plea to every decision-maker

405
00:16:52,000 --> 00:16:54,000
in this room, everybody out there.

406
00:16:54,000 --> 00:16:56,000
We can all make a decision

407
00:16:56,000 --> 00:16:58,000
to come together

408
00:16:58,000 --> 00:17:01,000
and pick up the balls and run with the balls

409
00:17:01,000 --> 00:17:03,000
that governments have dropped.

410
00:17:03,000 --> 00:17:05,000
If we don't do it,

411
00:17:05,000 --> 00:17:07,000
we're abandoning hope,

412
00:17:07,000 --> 00:17:10,000
we're abandoning our essential humanity,

413
00:17:10,000 --> 00:17:12,000
and I know that's not a place we want to be,

414
00:17:12,000 --> 00:17:14,000
and we don't have to be there.

415
00:17:14,000 --> 00:17:16,000
So I appeal to you.

416
00:17:16,000 --> 00:17:18,000
Join us, come into that safe space,

417
00:17:18,000 --> 00:17:20,000
and let's start to make this happen.

418
00:17:20,000 --> 00:17:22,000
Thank you very much.

419
00:17:22,000 --> 00:17:25,000
(Applause)