Letter to Corporations Named in NYT Investigation Regarding Use of Migrant Child Labor

A version of the following letter was sent by a coalition of investors to the leadership of 11 companies named in a New York Times investigation on migrant child labor in the supply chains of various companies. The companies that received the letter were: Amazon, Berkshire Hathaway, Ford Motor Company, General Mills, General Motor Company, Hyundai Motor Group, JBS, Target, PepsiCo, Unilever, Walmart.

Letter:

Dear Chairs,

We write as long-term shareholders or elected State Treasurers to express acute concern regarding the recent New York Times investigative report by Hannah Dreier (the “New York Times Report”) that {Company Name} may be profiting from the use of U.S. suppliers that illegally employ underage migrant children. We are horrified by the prospect that one of our portfolio companies could be contributing to the exploitation of children as young as 13 years old.

In addition, such practices pose serious legal, regulatory, operational, and reputational risks to the Company and shareholder returns. The New York Times Report spoke to a situation that would amount to serious breaches and/or blind spots in Company controls and processes that are material to the Company and its ability to meet investor expectations.

In light of the allegations in the New York Times report, we request that {Company Name}’s Board of Directors immediately clarify:

1. The steps it is taking with respect to the named suppliers; and
2. The steps it is taking to identify other domestic suppliers that may employ child labor.

In the first instance, we request disclosure of the Company’s intended response with respect to the named suppliers. We expect that {Company Name} has the authority to hold its suppliers accountable either through the Company’s supplier contracts, oversight, and/or its vendor code of conduct, and that the Company will expeditiously address the situation with timely and appropriate corrective action, up to and possibly including terminating supplier business relationships. We request a full accounting of such actions.

We are also concerned that the illegal employment of underage migrant children may be more widespread than the instances cited in the New York Times report.  Given the seriousness of the allegations, we urge the Company to conduct a risk-based assessment to identify any additional domestic suppliers that may employ underage migrant children.[1] Some companies have well-developed supply chain monitoring programs, often requiring third-party audits, to identify child labor at suppliers operating in high-risk countries. Given the New York Times report, we believe that the Company’s domestic suppliers should be subject to the same level of scrutiny for potential child labor abuses as suppliers in high-risk countries.

Thank you for your timely consideration of these concerns regarding the significant legal and reputational risks to the Company posed by these grave allegations, and the well-being of these young people, who could be any of our children.

In light of these horrific stories, we look forward to your reply. Please direct your written response to New York City Comptroller Brad Lander (c/o Michael Garland, Assistant Comptroller, at mgarlan@comptroller.nyc.gov).

Sincerely,

New York City Comptroller Brad Lander
Amalgamated Bank
New York State Comptroller Thomas P. DiNapoli
Connecticut State Treasurer Erick Russell
Delaware State Treasurer Colleen Davis
Maine State Treasurer Henry Beck
Massachusetts State Treasurer and Receiver-General Deborah B. Goldberg
Nevada State Treasurer Zach Conine
New Mexico State Treasurer Laura Montoya
Oregon State Treasurer Tobias Read
PIRC Ltd
SOC Investment Group
The Local Authority Pension Fund Forum (LAPFF)

[1] The New York Times, for example, analyzed government data to identify places with high concentrations of children who had been released to people outside their immediate families, which it indicated could be red flag that they might have been expected to work.