Forced Labor & Human Trafficking in Supply Chains · Forced Labor & Human Trafficking in Supply...
Transcript of Forced Labor & Human Trafficking in Supply Chains · Forced Labor & Human Trafficking in Supply...
Forced Labor & Human Trafficking in
Supply Chains
AIM Progress Responsible Sourcing Supplier Event
Dubai, UAEMarch 23, 2017
Overview of Issues and Best Practices
Agenda
• About Verité
• The Forced Labor Problem Up Close
• Key Systemic Challenges Implementing Anti-Forced Labor
Standards
• Emerging Supply Chain Compliance Regimes
• Best Practice Examples
• Questions & Answers
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Our vision is a world where people work undersafe, fair, and legal conditions.
• Global, Independent 501(c)3 non-profit providing Research, Consulting, Training,
Assessment, & Investigation services founded in 1995
• Based in Massachusetts with regional hubs in China, Europe, South Asia,
Southeast Asia, & Latin America
• 2011 Schwab US Social Entrepreneur of the Year & 2007 Skoll Award for Social
Entrepreneurship
• Working with governments, global brands, suppliers, & institutions to improve
working conditions and social performance in supply chains
• Recognized expert in forced labor & human trafficking working with:
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About Verité
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Saudi Arabia's Stranded Indian Workers
The Problem
When our migrant workers
are left to die
She had worked for a Lebanese
family as a domestic worker for
two years, but after they
cancelled her contract for no
apparent reason, she was
forced to remain there as an
undocumented worker.
• How does forced labor manifest in practice?
• What are some common risk indicators, clues,
signs, red flags that point to the possible
existence of forced labor?
Detecting Situations of Forced Labor
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Key Systemic Challenges in Implementing Anti-Forced Labor Standards
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The current labor broker system
facilitates situations where workers
subsidize the cost of labor migration ...
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The Labor Broker System
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Labor shortages in
receiving countries
Labor surplus in countries
with high unemployment
and underemployment
Labor migration
Receiving countries
keep businesses in-
country
Employers get skilled
workers
Workers get jobs, and
acquire and improve
skills
Sending countries earn
from foreign direct
investments
Risk or Unintended Outcome: continued growth of the labor
broker industry and the trend towards exacting payment of
placement fees from jobseekers rather than employers
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Causes, Benefits, and Risksof Labor Migration
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Job Applicant
Walk- in Applicants
ManpowerServices Providers
In Sending
Countries
UAE Labor Agency
Direct Hires (Migrant Workers)
Informal Intermediaries
Typical Labor Supply Chain(UAE)
Informalintermediaries
Sub-agent(s) insending country
Sending country
Recruitment Agency
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Employer/Agent Interactions with GovernmentOfficials with High Risk of Corrupt Payments
Nepalese Foreign Contract Workers
Nepalese
Manpower Agents
Undisclosed / Illegal Fees Post-Arrival
UAE Employer
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Training Medical Facility
Medical Certificate
520- 550 USD
200-300 USD
900-1700 USD
Total Cost to Worker:1620 – 2550 USD(5832 -9,180 AED)
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Illegal Kickback Commissions,
gifts, travel, entertainment.
$
$ $
Nepalese Dept. of
Foreign Employment
Power of Attorney
Orientation & Medical
Foreign Employment
Permits
Nepalese Ministry of
Foreign Affairs
Registration of Hired
Workers
Passports
$
Nepalese Sub-Agents
Illegal Fees Prior to Deployment
$$
$
The Cost of the Job: Nepal to the UAE
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Country of
Origin
Range of fees
paid (in local
currency)
Range of fees
paid in AED/
USD
Range of fees
paid in USD
Average
Monthly Basic
Wage based
on Audits
Bangladesh 212,000-
600,000 BDT
9,601.00-
27,175 AED
2,666 – 7548
USD
625 AED
(173.611 USD)
India 54,500 –
201,330 INR
2998- 11,075
AED
833 – 3076 USD
Nepal 104,811- 314,
433 NPR
3,562- 10, 689
AED
989- 2969 USD
Pakistan 166,500 –
600,000 PKR
5,802- 20,910
PKR
1,611- 5808 USD
Philippines 125,692 PhP 9,162 AED 2545 USD
The Cost of a Job in the UAE
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Bangladesh
India
Nepal
Pakistan
3 yrs/ 6 months
1 yr/ 5 months
Philippines
1 yr/ 5 months
2 yrs/ 7 months
1 yr/ 2 months
No. of Months that FMWs Work to Payfor the Cost of the Job
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Notice of Vacancy and
request tohire workers
Develop job
description
Complete
internal process
leading to
decision to hire
migrants
through a Labor
Broker
Complete
process and
requirements to
secure (host and
sending)
government permission to hire foreign
workers
Issue job order
to selected labor
broker
Select
successful
candidates
Narrow down
applicants
pool/
selection
process
Screen
workers for
basic
requirements
Labor Broker
Recruits
Worker
Successful applicants oriented to contractual conditions
Successful applicants
undergo gov’t required
medical exam
Successful
applicants that
pass M.E. sign
employme nt
contract
Process
work visas,
other
documents
Prepare to
deploy
workers
Workers arrive at
the workplace
Complete
on-boarding
process
Identifying Forced Labor RisksIn the Migrant Worker’s Experience
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Initial
Pooling
Pre-Deployment
• Recruitment
• Selection
• Hiring and Contracting
• Deployment
Employment
• Wages and Benefits
• Workplace Conditions
• Housing Conditions
• Other contractual conditions
Exit and Repatriation
• Resignation/ Termination/ Contract Completion
• Repatriation
• Re-integration
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The foreign worker’s risk to debt bondage and forced labor starts
before they reach the workplace, before they even get a job.
Worksite Practices:Challenges and Issues
• No minimum wage law/low contractual
wages
• Unpaid Training
• Withholding of passports/original identity
documents
• Punitive fines
• Poor Living Conditions
• Penalties for pre-termination of contracts
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• Sending and receiving countries have different requirements
• Ineffective grievance mechanisms in sending countries
• Corruption in International Migration
• “Demand” for Sale
• Dependence on Informal Middlemen
• Low incentive to change practice
• The immigration policy framework is much stronger than the
labor protection mechanism
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Other Systemic Challenges
The Result
Involuntariness indicators
Penalty indicators
FORCED LABOR
• Deception about the nature of work/
deceptive recruitment
• Recruitment linked to debt
• No freedom to resign
• Degrading Living Conditions
• Confiscation of Original Identity Docs
• Financial Penalties
• Imposition of Worse/Further
Deterioration in Working Conditions
• Exclusion from Future Employment or
Overtime
• Dismissal
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IT Services
Landscaping
Product DisplaysSecurity
Company
Distribution Centers
Cleaners
Logistics
Food serviceTransportationOrder Fulfillment
Retail Stores
Shipping & Receiving
Recyclers Waste disposal
Offices Production
Printing
Advertising
Labor Agent
Labor Agent
Labor Agent
Labor Agent
Maintenance
TransportationOrder Fulfillment Food service
Security
Recyclers Waste disposal Landscaping
Cleaners
Shipping & Receiving
Maintenance
Forced Labor
Risks
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Transportation
Shipping & Receiving
IT Services CleanersPrintingMaintenance
LandscapingLandscaping
Product DisplaysSecurity
Company
Distribution Centers
Logistics
Food serviceTransportationOrder Fulfillment
Retail Stores
Shipping & Receiving
Recyclers Waste disposal
Offices Production
Advertising
Labor Agent
Labor Agent
Labor Agent
Labor Agent
Order Fulfillment Food service
Security
Recyclers
Maintenance
Applies to the
Whole Business
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Policy
Risk Screening
Training
Monitoring
Remediation
Waste disposal
Cleaners
Forced Labor ‘Disclosure’ Regimes
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Public Disclosure of:
• Supply chain structure
• Policies related to human trafficking and
slavery
• Risk assessment and due diligence
processes
• Supplier audits & certification
• Internal accountability standards and
procedures
• Training
• Effectiveness of measures
Forced Labor ‘Enforcement’ Regimes
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Express prohibition of:
• Fees charged to workers
• Deceptive recruitment practices
• Identity document retention
Specific requirements include:
• Legally compliant recruiters
• Transportation and housing
• Mandatory violation reporting
• Stiff penalties
• Enhanced provisions for overseas contracts
Closes consumptive demand
loophole in Tariff Act 1930
Customs can deny U.S. entry to
goods if credible information they
were made with forced labor
Anti-Bribery Anti-Corruption Regimes
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• Endemic bribery & corruption in foreign
employment sector
• Payment of fees to foreign government
entities for ‘discretionary’ decisions
• Power of attorney to third party recruitment
agents & labor brokers
• ‘Improper advantage’ in the form of lower
labor costs through exploitation of migrant
workers
• Limited or no oversight of third party
recruitment agents & brokers
Components of an EffectiveDetection & Prevention Program
Examples of Best Practices
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Examples of Best Practices
• Forced Labor and Human Trafficking Policy
• Migrant Worker Employment Standards• Employer pays recruitment costs
• No fees or deposits to workers – supplier/agent reimbursement
• Direct employment where possible
• No identity document retention
• Labor agent screening/due diligence
• Pre-departure briefing & contract of employment execution
• Post-arrival orientation
• No restrictions on freedom of movement
• Accommodation standards
• Grievance mechanisms
• Robust Management Systems & Implementation – workshops will cover
• Internal Training & Labor Agent Workshops
• Remediation/Verification Protocols
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Links to free eLearning Modules & Resources
https://www.verite.org/free-e-learning-courses
http://www.responsiblesourcingtool.org
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http://helpwanted.verite.org
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Thank You!
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For more information contact:
DECLAN [email protected]