What is blockchain and why should workers care?

Drawing of boxes with computer circuitry inside (State Dept./D. Thompson)
(State Dept./D. Thompson)

Coca-Cola wants to get a better look at sugar. In 2016, a labor rights group called Know The Chain released a report on the “Big 10” food and beverage companies, of which Coca-Cola is among the biggest. It found that none met international labor standards in their supply chains, and sugarcane was one of the worst-regulated commodities measured.

In response, Coca-Cola has partnered with the U.S. Department of State to test blockchain technology on its sugarcane supply chain to improve supplier transparency and accountability.

Infographic explaining blockchain technology (State Dept.)

FRDM, a software company that uses data to assess labor-abuse risks in supply chains, has followed the partnership between Coca-Cola and the State Department since it was announced. The company’s director, Adeline Lambert, thinks it looks very promising.

“Right now we live in a world where a buyer is able to contract with a supplier, but that’s all they know about their supply chain,” Lambert said. Workers at the bottom of the supply chain often don’t have access to their contracts, if they exist. This is where supply chain regulators often find the worst labor-rights abuse.

She thinks if companies had a system that lets buyers know not just who their supplier is, but that supplier’s suppliers and other third parties they’re working with, then supply chains will become more transparent.

The State Department is using Coca-Cola’s sugarcane supply chain as a “test site” for this application of blockchain, and may one day expand its uses to empower other communities of workers.

Acting Special Representative for Global Partnerships Thomas Debass was inspired to see how blockchain could help “smallholder farmers, women [and] refugees” join the modern economy after hearing a presentation by Ashish Gadnis, the founder and CEO of BanQu.

BanQu counsels financial institutions, nonprofits and government agencies on how to set up their databases on blockchain. When a business starts recording transactions on blockchain, Gadnis explained, it writes a workers’ existence into the supply chain.

“If you look into a traditional sugar supply chain, the crop changes hands eight times. The person that loses most is … that laborer who is being abused,” he said. But with blockchain, “those workers now have economic passports to get out of predatory slave-labor practices because they can take their data with them.”

This could be life-changing for transient populations like migrant workers, the homeless and refugees who may have lost important identifying records.

On August 27, Gadnis will speak through a webcast at the U.S. Embassy in Jordan about establishing Syrian refugee women in a blockchain so they can legally work and access credit.

“Everybody tries to make it complicated, but if you’re that worker, all you’re trying to do is feed your kids,” he said. “It’s all about data rights.”