Intersect Conversations: Dan Viederman

I'm first curious about your time in China ––  as we share being an English teacher abroad. So how did that influence your future career path? 

For me, I left home having grown up in suburban New Jersey; for you, suburban Massachusetts. I had international exposure certainly in that I kind of knew that the world was different. But then I landed in a city called Chongqing in western China in 1985, November 1985, so a long time ago. And to teach English, I was one of a couple of dozen foreigners, most of whom were North Koreans studying Chinese at the local foreign languages academy in a city of [approximately] ten million. So it was a profoundly disorienting experience in the sense that there was nothing that was familiar to me. 

“That really was the foundation for me of what came next, which was an appreciation and understanding and desire to make that kind of cross-cultural learning a part of my career.”

And it was, at the time, a very poor country. And I think what it embedded in me is that, first of all, there's always stuff going on that you don't know about, and the best way to learn is to just immerse yourself, right. I immersed myself in this place and made friends and learned the language. That really was the foundation for me of what came next, which was an appreciation and understanding and desire to make that kind of cross-cultural learning a part of my career. So it was absolutely the time I spent teaching which was foundational. And I left teaching to go study Chinese and became more solid in my language skills. And then that opened up doors for me.

So interesting. Such an interesting time to be in China as well. And who was the party secretary at that time?

Deng Xiaoping was still the so-called paramount leader. So very much, as you say, an interesting time. And it was a moment, and that moment has changed now, certainly, but it was a moment when there was an intentional openness, an opening to other parts of the world. China, from its top-down leadership, sort of reflected all the way down to the twenty-two-year-olds. I taught nineteen and eighteen year-olds; I was twenty-two. It reflected all the way down to a desire to see what the rest of the world was like after having been in somewhat self-imposed isolation from the West, or the non-Soviet West, for a long period of time. And so I certainly was welcomed and appreciated in a way that continued for a while and is probably still there on a person-to-person basis and not necessarily there on an institution-to-institutional basis in the same way. 

How did you decide to enter the [supply chain responsibility] space with Verité and later with the Working Capital Fund? And what's the difference between your work then and your work now?

Yes, there's a throughline from my time in China also. So what I did immediately after –– taught, lived in China for a while, went to grad school, and then moved back and ran a very early-stage development organization based in Macau. It was part of the Catholic Relief Services (CRS). So I was doing cross-border stuff in the CRS, a development organization –– a good, well-respected  organization –– and tried to figure out what role they could play in China at that time. What I really wanted to do, and ended up doing, was run an international NGO focused on environmental issues in China.

I was really fortunate enough to engage with the World Wildlife Fund (WWF) when it was just trying to figure out what its next steps were on the mainland. So the WWF had been operating on the mainland from a base in Hong Kong for a while, mostly focused on giant panda conservation, but was broadening its understanding institutionally of what conservation meant and certainly engaging more the recognition that you can't just protect animals without taking into account the concerns of the people who interact with those animals who live in the habitat. My more development-oriented background and people-interested background led me into the position of running WWF for China and then moving the office to Beijing. And the answer to your question emerges in that I had this realization emerging over time that despite the fact that the mainland was, and still is, largely a very, heavily government-influenced place, ultimately the private economy and the private sector determines whether conservation goals can be met or not. 

Are you or are you not able to meet the needs of people in society more generally, but certainly people, when you're talking about giant panda habitat, people who are living in the mountains where the pandas are as well? Can you figure out how to exploit the forest in such a way that is sustainable, for example, or create alternative economic models that allow them to leave the habitat intact? So for me, it became a real interest in, okay, what can the private sector do. If that's an essential intervention, or private sector interventions are essential and also a limiting factor, how can we get them done? 

And so it led me to, at the time, a very early-stage organization called Verité, and I ended up running it for 16, 17 years. It was focused on the way in which mostly Western companies outsourced their production through their supply chains. There was an emerging understanding that that was both an area of risk and exploitation. That is, when a Western company was sourcing in China, in this case, there was a lot of risk to the company from conditions that they didn't understand and had no visibility to. The fact that in many cases, they didn't even know where their factories were, certainly below the factories that they were engaged with directly. But that was also an area of opportunity. Because there was concern, certainly among many, several leading companies, if not all of them, certainly not all of them, that they had to pay attention more to those conditions, that they were not only acting unethically, but also running legal and commercial risk if they did not pay attention to what was going on in those facilities, both environmentally and in terms of the human rights. And so we began to really focus on leveraging that supply chain influence.

“At Verité, we were among the first organizations to really identify the tight link between migrant labor and forced labor and able to really put that issue on the map for the multinational community.”

One of the opportunities that emerged for us strategically in the space, the supply chain space, was a deep focus on the much more serious elements of risk and exploitation. So if you think about the range of issues that a company might face in its overseas sourcing, they include wages and health and safety and discrimination and freedom of association and conditions of work. But they also include things like forced labor and child labor. And at Verité, we were among the first organizations to really identify the tight link between migrant labor and forced labor and able to really put that issue on the map for the multinational community. And so, strategically,  that found a role for us to play that built on our organizational knowledge and our kind of unique visibility into the world, intersecting with an issue that was of concern to multinationals, because they didn't want to be associated with forced labor. And also, laws prohibit them from engaging forced labor and other labor expectations in their supply chain. So that was a place where we really focused for Verité.

But one of the characteristics of the responsible supply chain space, and particularly with reference to forced labor, is it is vital and well-noted on the commercial space at this point [with regard to] companies and multinationals, but progress has been slow. There are some people who estimate that the numbers of people in conditions of work that are akin to forced labor in global supply chains really haven't changed over the course of the last couple decades. The numbers are striking, so we did some research in 2014, 2015, and 2016 on the electronics supply chain in Malaysia. So this is production from all the big electronics companies you can identify or imagine or name. And many of the people in the facilities that supplied them directly, not necessarily the lower tier facilities, but the actual final assembly facilities that supplied them from Malaysia, were migrant workers –– migrants from Nepal or Indonesia or South Asia, elsewhere. And about ninety percent that we surveyed had some risk of forced labor in their conditions of work, and primarily because what happened was they crossed borders facilitated by labor recruiters, and those labor recruiters charged them thousands and thousands of dollars in debt, and so those workers were essentially in debt bondage. 

That's the instance that kind of crystallizes the concern. There are estimates that similarly ninety percent of workers in Brazilian agriculture also have some risk factor for forced labor. So we're not talking about isolated pockets. We're talking about real, large numbers of people who are absolutely essential to the smooth operation of really important industries like electronics in Malaysia and agriculture in Brazil. Getting back to my story, I became increasingly convinced that there was a resource shortage, that the ideas were there and there was a lot of innovation and the solutions were emergent from this community of NGOs and consultants. There weren't enough resources in the space. And so I took the step with a colleague then, and now a couple of colleagues, to build an impact investment company so that we could channel more resources into the problem of forced labor and other labor exploitation and supply chains by promising people that we would give them money, promising, hoping and planning and occasionally actually delivering on giving them their money back after they invested in us. 

So we found more circular revenue-generating interventions that we could support. And those interventions would find purchase in the market and we would take ownership stakes in them, and they would eventually pay us back and we would return the money to our investors. So again, the long and complicated story over a couple of decades was trying to figure out how to get more capital focused on innovation and impact in the space of supplier responsibility, particularly focused on forced child labor. And we've been able to do that. 

I think that what really stands out to me is that you’re using this innovative, intense development model, but for humanitarian development purposes. So it's pretty cool stuff. If you want to talk about some of the specific projects, that would be great.

I want to be clear, there are certain social problems that need philanthropy and grants and that kind of capital, right? We have yet to find a business model that really supports an intervention in worker organizing, for example. It's not to say it's not out there, but the hard and vital work of organizing disaffected, marginalized workers around the world need support, and our type of capital isn't really going to figure out how to support them because we need money that's going to come back by investing in a thing. So we are very clear about our role in the ecosystem and absolutely focused on the kind of innovations and particularly scalable innovations, which are generally technological and generally involve technology. 

Again, distinct from the on-the-ground people gathering data who are hidden in supply chains, like people in forced labor or with children who are working. So again, distinct from and very clear about our role. But having said that, that innovation ends up having some real promise, I think. And I can give a couple of examples because of what we've invested in. We've invested in a total of twenty-four companies so far. About sixteen of them are still around. They're very different in their paths to impact. It's not one type of intervention, it's many different types of interventions. So, for example, we've invested in companies that build tools that workers use directly. So there's a Swedish company called Quizrr that was founded by a couple of former H&M employees, and its job is to provide information directly to workers that they can use to protect themselves. So it offers insight about wages and wage payment in China; it did some work on how to parent as a migrant worker, so some real social development stuff. 

But one of the most exciting things they do is they have a whole suite of tools that focus on migrant workers who are, as we discussed, this incredibly vulnerable population as they cross borders. They help them understand what their roles, rights, and responsibilities are; what expectations they might have; and what are the risk factors. It’s delivered through an app with this really engaging ed-tech/edutainment, a really short-form video that's highly produced and is incredibly engaging and now has been demonstrated to be effective at changing understanding and in some cases behavior on the part of migrant workers. So an example of a tool, highly scalable, now applied, literally has reached a million workers around the world, a small part of the global supply chain, but massively higher than any other intervention of its type has reached. And that's incredibly exciting, right? It's a profit-driven model. It sells services to multinationals. It's being deployed extensively throughout supply chains, and it's in the hands directly of workers. And our support for them has been important over the years, and we help them kind of get going, and eventually imagine that they will return the capital to us, and we'll return it to our investors in keeping with our model. So that's one example, right? It's not exactly bottom-up, because it's not organizing again, but it's a worker-direct model. 

“So two examples of the way in which our portfolio has avenues to impact that look distinct –– very scalable, return-oriented, and included in the ecosystem, playing a really important role.”

And at the other extreme, we invested in a company called Altana, which is applying big-data analytics to supply chains –– basically saying to its clients that Altana can help them figure out where they're sourcing and where their sources are sourcing. So really tracking sourcing details all the way down to raw material and identifying where those risks are associated with those sourcing nodes along the way. It is helping its clients avoid legal trouble from importing goods made with forced labor into the United States. So there's also a legal driver. You're not allowed to, according to the Tariff Act of 1935, import goods made with forced child labor into the U.S., and Altana is able to tell them where those goods are being made. 

More recently, regarding China, there's a law called the UFLPA –– the Uyghur Forced Labor Prevention Act –– which prevents anything made in Xinjiang province, which is where the Muslim minority in China is being exploited, from being imported into the United States. So Altana can help them do that as well. Again, sort of distinct from Quizzr with this kind of worker-direct model, Altana is operating at this very expansive level across supply chains, very broadly, but also deeply. And it's helping folks who are responsible for procurement or legal risks, the general counsels of companies figure out how to avoid risk. 

Again, Altana, distinct from Quizzr, looking almost top-down, but broadly and with some depth and granularity at where the risks are for multinationals, both, again, ethical, moral, practical, but also legal risks that they might face. So two examples of the way in which our portfolio has avenues to impact that look distinct –– very scalable, return-oriented, and included in the ecosystem, playing a really important role.

Cool to know that it was both on-the-ground, grassroots, direct-worker interventions as well as expansive projects like Altana, so that's pretty interesting. I'm curious, what do you see as the role of international organizations like the ILO (International Labor Organization) and international conferences like Davos or the World Economic Forum (WEF) because they've unfortunately been getting a lot of pushback, I think. On the far-right, but as well on the far-left, there's been a populist backlash against them. So what is the role of international organizations and conferences for the future of forced labor abolition?

That's a big question. As I said, we are very clear about what our role in the ecosystem is. And our role depends on there being other institutions in the ecosystem as well. And so the ILO –– for all its unwieldiness and the criticism that may be leveled against it –– is a place where employers and governments and workers, through their directly-elected, constituent-based representatives, go to hash out what's important in the world. And so the reason there is a very clear set of areas that we focus on in the labor rights world is because the ILO has its core conventions. Those have the force of law in almost every country around the world, but not every country around the world. And so they really did set this kind of core standard. And that's indispensable, right? It's indispensable going forward. 

The ILO also has developed its indicators of forced labor, so it has created consensus around what forced labor means. And without that, we would be arguing a lot about it, and we wouldn't have a common standard, and we wouldn't have a clear pathway of how to move forward. So, it's really hard to, criticism aside, suggest that they haven't played anything other than a vital role. And I think the standard-setting going forward is the legitimization that emerges from these kinds of multilateral UN-based institutions. The legitimacy that emerges from these multilateral institutions is still vital from the perspective of my work as a kind of a backdrop and a framing. 

World Economic Forum also, right? There has been lots of ink spilled about what it does, what it could do. For me, it's a place that is taking forced labor seriously. There's a new initiative that we started within the WEF called the Global Data Partnership Against Forced Labor, which is organizing, bringing together most of the organizations, multinational organizations, some of the big private sector companies, HPE (Hewlett-Packard Enterprise) being a leader, Amazon at the table as well, Cisco at the table. So, you know, the companies that are really trying to figure this stuff out and have a really important commercial role to play.

“For me, one of the things I’m driving, including within the WEF these days, is that we need to be more urgent and we need to adopt within the human rights world, and in particular on forced labor, the kind of time-bound targets that the climate community has adopted long ago. ”

For me, the thing that the World Economic Forum does is it talks to the private sector in a way that the private sector understands. And when I've attended the Davos meeting of the WEF, I've always found sustainability to be quite high on the agenda rather than ignored. I feel like there's always been an important role for us and the impact economy to play. So it's actually been a very positive experience. 

Again, I'm not suggesting that the WEF is a panacea or the ILO is a panacea. The framing I come back to is it's our job as those close to the issue to make sure everybody knows why it's important. And it's important not only because the individual experience of human beings being exploited is a tragedy, it's important because those human beings, if they are not allowed to live up to their potential, are an economic drag on society. The conditions of forced labor give rise and space for corruption and just more generally economic inefficiency. They lead in the direction of inequality which can, when it's at its most dramatic, drag on the economic development in society. So forced labor is this node of concern that has tentacles that spread outward into all sorts of other parts of the economy. Again, not to mention human rights are broadly respected and part of law around the world. And ethics requires that we pay close attention to the conditions of work as well. So it's our job to make sure that that's firmly on the agenda. 

Everybody's got to figure out within their own institution, within their own constraints, how to take action. For me, one of the things I'm driving, including within the WEF these days, is that we need to be more urgent and we need to adopt within the human rights world, and in particular on forced labor, the kind of time-bound targets that the climate community has adopted long ago. So the idea that it's net-zero [carbon emissions] by 2030. We, in the forced labor world, tend to think of these issues as not present unless someone illuminates them, which is now happening more frequently; or rather the sorts of things that we need to put in systemic changes for, but we're not holding ourselves accountable to a timeframe. So my hope is through this World Economic Forum data partnership that we will put on the table some really concrete time-bound targets and then act on them and begin to move in a direction not only of remedying forced labour more quickly, but also preventing it.

I recall reading your article for the World Economic Forum in January, and I think you spoke about that as well. I had no idea about the specifics of the data partnership, though, so that's good stuff.

The theory is, if you have data and it is not debated, it's irrefutable, then people will take action. I think it's arguable that that's the case, but it's worth trying, and I think it exists in the other spaces that you and your colleagues at school will be paying attention to as well. If you have hard data, you have something that's compelling, it's easier for people to take action to address it than if it's debated or contested.

Yes, definitely. I have two more questions. So one of them is, do you have any book or documentary recommendations about forced labor?

I think the best book on forced labor was written by a friend of mine, Ben Skinner, probably ten or fifteen years ago, called A Crime So Monstrous. I would highly recommend that to anyone interested in understanding forced labor and its manifestations around the world. And certainly there's a focus on supply chains there as well. So that's one I’d mention.

I'll check that out. And then my final question is: any one piece of career advice that you would give to someone?

For me, I do hearken back to my origins, which were landing in Chongqing in Western China and just immersing myself. I think there's lots of ways to have an impact in the world, but you have to leverage what some people in the space call proximity. So are you in touch with, are you able to engage with, and are you learning from the people who are most affected by something? This does not really describe the work I do at this point as an investor, but it's a guiding principle. And I think certainly for someone at your stage of career and your colleagues in school to make sure that you have that proximity which can inform not only an understanding of the particular issue or the particular geography you're in, but more generally how big picture issues affect people and get interpreted on the ground.

“So are you in touch with, are you able to engage with, and are you learning from the people who are most affected by something?”

That's really the key. If you're trying to change conditions in communities or in cities, you have to know what's going on in those communities and those cities, but also more generally: how do they extend into change? Where do they not? Where do institutional obstacles just naturally emerge? Get as close to a problem as you possibly can. And then navigate between the closeness and the change that closeness allows, and the scale that can be allowed as you extrapolate upwards a little bit.

Dan Viederman engages and supports entrepreneurs in pursuit of innovative tools to scale improvements for marginalized workers in global supply chains. He is an award-winning social entrepreneur and leader in supply chain innovation, having led Verite for fifteen years. He began his career in China where he established two international NGOs. Dan is a graduate of Yale University, has an MA from the Columbia University School of International and Public Affairs and a certificate in Chinese from Nanjing Teacher’s University.