Tag Archives: Forced Labour

What more can be done about human trafficking: a lot more

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This is my speech to the Thirteenth United Nations Congress on Crime Prevention and Criminal Justice, Doha, Qatar, 14 April 2015

(reproduced with kind permission of the Institute for Human Rights and Business)

Global supply chains are powerful. They are fundamental to the global economy. If we accept that there is about $60 trillion in the global economy, then according to UNCTAD, about $6 trillion of this (i.e. 10%) is in intermediate products – i.e. goods that require a global brand or other buyer before being sold on the open market. South-South trade is growing significantly, but South-North supply chains are still twice as dominant in financial terms. They are also an increasingly important part of the global labour market with hundreds of millions of workers directly or indirectly involved. Tens of millions of these workers are low-skilled migrants – either within their own country or across international borders – and many of these workers can be vulnerable to exploitation through debt bondage, fraud, withholding of ID documents, non-payment of wages, and a host of other abuses.

Business has a critical role to play in the fight against smuggling of migrants, forced labour and trafficking of workers into the formal economy. According to the ILO, there are nearly 21 million people in forced labour around the world at any given time, over 14 million of these in activities such as agriculture, construction, domestic work and manufacturing. Forced labour and slavery are crimes punishable under international law, as we know. The growing concern over the rise in numbers of people being trafficked not only for sexual exploitation but also for labour exploitation led the international community to adopt in 2000 the UN Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children. The Protocol supplements the UN Convention against Transnational Organised Crime, and came into force in December 2003.

While states clearly have the legal duty to protect citizens and prosecute those involved in exploitation and trafficking, I want to turn our attention here to the role of the private sector in this area. What are the responsibilities of companies to respect human rights and combat forced labour and trafficking within their areas of operation and influence? To what extent can companies be deemed to be complicit in smuggling of migrants or trafficking offenses within their supply chains when they may well be unaware of these activities?

In 2011, the UN Human Rights Council took an important step forward in clarifying corporate human rights responsibilities when it unanimously endorsed the UN Guiding Principles on Business and Human Rights, the final product of Professor John Ruggie’s six-year mandate as the UN Secretary-General’s Special Representative on Business and Human Rights. Many of you will be familiar with its 3-pillar architecture, of the State duty to Protect, the Corporate Responsibility to Respect all human rights and the need to ensure Access to Remedy for victims of corporate related rights abuses.

With regard to migrant workers, and the risks of human trafficking, companies have a responsibility under the Guiding Principles to undertake ongoing due diligence to ensure the risks of exploitation are minimized and access to grievance mechanisms and remedy are in place. This is a huge challenge in the globalized economy. From the raw cotton in the fields of Uzbekistan supplying garment factories in Bangladesh to the mines in DRC producing coltan for mobile phones assembled in Malaysia, or the Thai fishing boats producing prawns for sandwiches consumed in London, supply chains are often complex and distant. Due diligence is required not only in the sourcing of commodities and components, but also in the sourcing of labour. Do apparel retailers know how the Bangladeshi workers in the factories they source from in Jordan or elsewhere were recruited? Do global hotel chains know how many of the South Asian construction workers building their hotels in Dubai or in other cities around the world are working as bonded labour due to the levels of debt accrued by recruitment fees charged by labour brokers?

For the last 20 years we have seen companies attempt to undertake due diligence and provide remedy at a distance through social auditing. This reliance on audits, often sub-contracted, has done little to enhance protection for workers or prevent forced labour and trafficking. A new approach by business is needed with an emphasis on responsible recruitment of migrant workers to combat the risk of bonded and forced labour and trafficking.

My colleagues and I at the Institute for Human Rights and Business has been working with a range of partners, including the ILO and the Office of the High Commissioner for Human Rights, to focus on the role of third-party labour providers present in many global supply chains. These labour providers can pose a significant risk to worker welfare and possible exploitation due to a range of all too common practices including excessive fees charged to workers, the retention of ID documents, and the lack of transparency around contracts. We are working to promote ethical recruitment whereby companies require their suppliers to use registered labour brokers only and to pay the recruitment costs instead of the workers paying those fees and thereby accruing onerous levels of debt.

In 2011, we launched the ‘Dhaka Principles for Migration with Dignity’, with the support of leading global companies and the ITUC. The Dhaka Principles for Migration with Dignity rest on two foundational principles:

First, that all workers are treated equally and without discrimination.

Migrant workers should be treated no less favourably than other workers performing the same or similar work. Moreover, migrant workers should be protected from any discrimination that would constitute a violation of human rights.

Second, that all workers enjoy the protection of employment law.

Migrant workers should have a legally recognised employment relationship with an identifiable and legitimate employer in the country where the work is performed. 

Following these broad statements, the Dhaka Principles are made up 10 implementation steps that can relate to any global supply chain and minimize the risk of trafficking and forced labour from occurring. Allow me to briefly explain these steps, as each are of critical importance and part of a growing international consensus on what is needed to wipe out human trafficking and migrant smuggling:

  1. No fees are charged to workers

The employer should bear the full costs of recruitment and placement. Migrant workers should not be charged any fees for recruitment or placement.

  1. All worker contracts are clear and transparent

Migrant workers should be provided with written contracts in a language each worker understands, with all terms and conditions explained clearly, and the worker’s assent obtained without coercion.

  1. Policies and procedures are inclusive

Migrant workers’ rights should be explicitly referred to in employer and migrant recruiter public human rights policy statements, relevant operational policies and procedures addressing human rights responsibilities.

  1. No workers’ passports or identity documents are retained

Migrant workers should have free and complete access to their own passport, identity documents, and residency papers, and enjoy freedom of movement.

  1. Wages are paid regularly, directly and on time

Migrant workers should be paid what they are due on time, regularly and directly.

  1. The right to worker representation is respected

Migrant workers should have the same rights to join and form trade unions and to bargain collectively as other workers. Let me say a few additional words on this point as they too often are left unspoken.

The biggest single factor in preventing forced labour and trafficking in supply chains is the active presence of trade unions. Where trade unions are able to operate effectively, incidents of modern slavery are demonstrably reduced. Increasingly, enlightened businesses are realizing that far from being something to be feared, trade unions are a key way of ensuring decent workplace standards and protection against exploitation and abuse.

And not just in relation to forced labour and trafficking. The positive role played by the Industriall union in the Bangladesh Accord, after the Rana Plaza tragedy just two years ago is an example of how working partnerships between the brands and trade unions can offer credible solutions to systemic problems. In fact it is the only credible solution. Business has nothing to fear from strong modern trade unions and a great deal to gain. The role of trade unions in helping ensure slavery- free workplaces will become increasingly significant as business realizes it is better to address systemic challenges within their operations than simply continue to face problem after problem in their supply chains. Collective agreements across entire sectors are key to transforming workplace standards, avoiding business risk and helping to deliver respect for rights including human rights.

  1. Working conditions are safe and decent

Migrant workers should enjoy safe and decent conditions of work, free from harassment, any form of intimidation or inhuman treatment. They should receive adequate health and safety provision and training in relevant languages.

  1. Living conditions are safe and decent

Migrant workers should enjoy safe and hygienic living conditions, and safe transport between the workplace and their accommodation. Migrant workers should not be denied freedom of movement, or confined to their living quarters.

  1. Access to remedy is provided

Migrant workers should have access to judicial remedy and to credible grievance mechanisms, without fear of recrimination or dismissal. Beyond the moral reasoning of offering protection for those working within a country or migrating to work, there are also sound economic reasons for governments to do so. We hear much of how laws and regulations strangle and stifle the dynamism of business. The suggestion is often made that if only law-makers would step aside, business and markets would establish themselves to overcome problems and design effective solutions. The experience of IHRB and the many businesses we speak with tells a very different story. If there is one thing that all business wants, and we hear this constantly, it is stability. A set of clearly defined stable conditions that enable them to compete fairly within the law.

  1. Freedom to change employment is respected, and safe, timely return is guaranteed

Migrant workers should be guaranteed provision for return home on contract completion and in exceptional situations. They should not, however, be prevented from seeking or changing employment in the host country on completion of first contract or after two years, whichever is less.

The good news is that a small but growing number of leading global companies have introduced a policy of ‘no worker fees’, such as Apple, HP and Coca-Cola. Others include policies on non-retention of worker passports. With bold corporate leadership this can become the industry norm. Coupled with strong legislation and enforcement by governments requiring companies to use registered labour brokers, these would be very significant steps to reducing the risk of forced labour and trafficking.

Governments are taking steps to require companies to report on how they are addressing the risk of forced labour and trafficking in their supply chains. In the US, the California Transparency in Supply Chains Act of 2012 and the UK’s very recently passed Modern Slavery Act are two such examples, and are being welcomed by responsible companies as a means of leveling the playing field and mitigating risk across industries.

The British Retail consortium and a collection of leading UK Businesses, including a number of leading supermarkets and retailers, made a submission to the UK government regarding the Modern Slavery Bill as it passed through Parliament. In it they stated:

“ we would like to see a clause in the Bill that calls for transparency in supply chains. We believe that smart legislation that requires all companies to be transparent about the steps they are taking to address modern slavery and child labour in their supply chain can help drive stronger and broader efforts to end exploitation and abuse of workers…”

They go on to say:

“ We know we can and must continue to do more to prevent modern slavery and the media and the public demand that we do this. But we can do so more effectively where clear, well designed regulation …. is in place.”

The strength of effective state legislation and enforcement to protect human rights, along with the collective actions and human rights leadership of responsible companies and adequate access to remedy, are all essential elements in tackling the rising tide of trafficking that we are seeing in so many industries and countries today. We at the Institute for Human Rights and Business stand ready to work with all of you who are committed to combating human trafficking and protecting the rights of all migrant workers around the world.

Thank you.

Magna Carta: Magna Negotium

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800 years after the signing of the Magna Carta (“the great charter”) in the water meadows of Runnymede, England, what would we include in a modern day version: businesses perhaps? Business, and other powerful non-state actors, risk being overlooked in the development of new international law despite recent efforts. This commentary argues that whilst working towards the next Magna Carta moment, we are missing some significant opportunities along the way.

As we approach May 2015, there will be increasing focus on what the Magna Carta meant in 1215. To misquote the Monty Python team: “What has the Magna Carta ever done for us?” I will leave it to historians to answer this question. Perhaps the elevator version is that it was a historic settlement between the English barons and their King (John), not honoured at the time but which has become symbolic for the rights of individuals more generally – largely because it was repeatedly evoked by reformers between the seventeenth and nineteenth centuries as “fundamental law”. This is nowhere more the case than in the 13 former English colonies in North America and as an inspiration for the US Constitution itself. Some comfort perhaps for the Eton educated British Prime Minister, David Cameron, who when asked on the David Letterman TV show in September 2012 to translate the words from Latin in English – failed, as many of us Brits would, to do so.

But perhaps the more important question is what would a modern fundamental law such as the Magna Carta include today, or is it already happening? In some ways we know the answer, as the 1948 Universal Declaration of Human Rights (and all that followed) delineates that which the Magna Carta did not – the rights of all peoples against the power of every state. But would we stop there? It is often said that there are others in society that have as much power as some governments and therefore they too need to be constrained in the same way as the barons did to King John. We might consider powerful non-state actors such as religious groups, de-facto sub-national governments, powerful NGOs or, of course, business enterprises. And here I don’t just mean accountability under existing national laws, I mean international standards that strengthen national legal and non-legal accountability, but also hold non-state actors to account when their own states cannot or will not. This is perhaps not what libertarians in the US have in mind when they evoke the Magna Carta, but from a social contract perspective the question needs to be asked and answered.

Lets take one of these powerful non-state actors: business. It is often stated that big businesses are more powerful than many governments – that business represents over half of the world’s top 100 economies outstripping the GDP of many states. This sounds impressive and in some ways it is true: some businesses can leverage significant capital, large companies can move markets and strategic business sectors (such as commodities, ICT, finance or labour providers) can indeed impact – positively or negatively – on the ability of governments to provide for the basic needs of their populations.

But it is easy to overstate the power of large business. Unlike in the days of the East India Trading Company, large companies today do not have unbridled power. They do not have their own armies and cannot easily annex territory or assets by force without the connivance of a government. Publicly listed companies are constrained by shareholders and markets. Private companies are more independent but are rarely of the size and scale needed to rank in the top 100 economies. And state-owned companies, such as many of the titans of China or India, are exactly that – controlled at least in part by governmental interests. No one can seriously maintain that the governments of the USA, China or Russia are run by big business – influenced, yes, but sovereign power is still firmly in place.

But the events of the past thirty years, and in particular following the financial crisis within OECD member states, suggests that big business does have a case to answer at least in part, and we might well expect CEOs to be at the table in Runnymede to account for their power. The Rana Plaza factory collapse in Bangladesh two years ago was one such moment, killing over 1,100, but so too was the Bhopal disaster in India thirty years ago and scores of others in between. Each time big business is asked to account for its actions, or its negligence, and then things move on, much as they were before. If the recent allegations against HSBC relating to tax avoidance are found to be true, then we can have little faith in the maxim that “we are all in it together” when it comes to austerity.

Lets be clear, there are many good CEOs out there, and many large companies trying to use their leverage for the good of society, but there also remain systemic problems including those to do with unaccountable power. It is an unavoidable fact that transnational companies have certain advantages due to their supra-national scale, when it comes to transfer pricing between markets or moving production or supply chains between low-cost sources – where perhaps social and environmental protections are not what they should be. Some of these advantages are borderline anti-competitive and privilege large companies over small. But, of course, small companies too can behave recklessly if they choose to do so with bad consequences – think about the power of ICT security providers (note the recent UK Government ruling on “Gamma International” in Bahrain), cut throat recruitment agencies worldwide or rogue mining exploration companies in unstable countries as examples.

At the moment, Governments are divided as to how best approach the thorny issue of extraterritoriality and business – the extent to which companies should be accountable in the legal systems of “home countries” for their actions across borders and particularly in “weak governance” zones around the world. For some, the central issue is impunity – how large companies can sometimes shift assets and money across borders to escape a particular national jurisdiction. For other governments, the central issue is the creation of a leveller playing field for all business – so that those companies registered in weaker or more corrupt jurisdictions are also held to the same environmental and social standards as those based in well-regulated markets. And for some other governments, it is more about hegemony and an effort to prise open market share from the existing main players.

It is unlikely that there will ever be special rules for large companies, but it is likely that we will see more and more international norms for business more generally, particularly those in high-risk sectors or operating in fragile states. It will not be so much “Magna Negotium” as “Omnibus Negotiis” – all businesses – and in particular those businesses that present the greatest potential risk to human welfare. And there will be no single “Magna Carta” moment – instead there are various Runnymede water meadows at which the role of non-state actors needs to be closely examined. Lets just take two examples.

The UK’s Modern Day Slavery Bill will hopefully gain parliamentary assent in March 2015 before Westminster closes for the forthcoming election. Given the undeniable importance of the market and supply chains in perpetuating many aspects of modern-day slavery it seems inconceivable that the original version of the Bill was first introduced into the House of Commons with no reference to business at all. The disclosure requirement that is now in the Bill is the result of committee work in Parliament, and not directly the UK Government itself – the first to develop a national action plan on business and human rights!

And, beyond the UK, the 2014 Protocol to the International Labour Organization’s Convention on Forced Labour, the first since 1930, was agreed by all but one government with only a very weak reference to business due diligence (a reference that some governments and business associations resisted). It will now be up to individual governments to interpret what the business due diligence requirement should actually look like in their domestic law, if they do so at all.

These two examples were important Runnymede moments where businesses were almost missing conceptually and where governments and much civil society seemed unwilling or unable to bring direct corporate responsibility into the tent.

So, for all of those that wait for the next Magna Carta, the time will come – such as in 1215 or 1948 – but things will need to get worse before power will shift in such fundamental terms. In the meantime, do not miss all the other water meadows along the way.