Supply Chain Governance and Labour Exploitation Risks: Sustainability Certification, Responsible Labour Practices and Buyer Pressure in Vietnam's Coffee Industry

Abstract

This study examines how external and internal supply chain governance mechanisms shape firms' responses to labour exploitation risks in Vietnam's coffee supply chains. Using survey data from 405 individuals involved in the sector and Partial Least Squares Structural Equation Modelling (PLS-SEM), the study finds that sustainability certification is negatively associated with responsible labour practices but has no significant direct association with labour exploitation risk or worker well-being. In contrast, global buyer pressure positively strengthens responsible labour practices, which subsequently improve worker well-being. Responsible labour practices and worker well-being are also positively associated with reported exploitation-related indicators. Rather than indicating higher exploitation prevalence, this finding suggests that stronger internal governance may improve the visibility and detection of previously hidden vulnerabilities. The results further show that sustainability certification can influence labour outcomes indirectly through responsible labour practices and worker well-being, indicating that certification alone is insufficient to generate substantive social improvements. The study therefore challenges compliance-centred approaches to supply chain governance and highlights the importance of organisational capabilities and buyer–supplier relationships in translating external sustainability requirements into effective labour protections. The findings contribute to research on responsible business and sustainable supply chain governance in emerging markets and provide implications for ethical recruitment, worker protection, responsible sourcing and Sustainable Development Goal 8.