Abolish modern slavery!

Gabriela Ramos, OECD Chief of Staff and Sherpa to the G20

There are 45.8 million slaves in the world today according to the 2016 Global Slavery Index, nearly four times the total number of Africans sold in the Americas during the four centuries of the transatlantic slave trade. Modern servitude goes under a variety of names such as human trafficking or compulsory labour, fulfilling the prophecy of the great abolitionist Frederick Douglass, himself a former slave, that slavery “will call itself by yet another name; and you and I and all of us had better wait and see what new form this old monster will assume, in what new skin this old snake will come forth.”

One new form is child trafficking in India. It’s designed to meet the demand for household help from the expanding middle class by taking advantage of supply from impoverished rural communities. Deepti Minch was sold to a family in Delhi. “My life was tough. I worked from six in the morning until midnight. I had to cook meals, clean the house, take care of the children and massage the legs of my employers before going to bed.”

Child labour is one of the worst forms of abuse. In the Indian case, the OECD has partnered with Nobel Laureate Kailash Satyarthi on a range of issues related to promoting children’s welfare and well-being. Mr Satyarthi and the grassroots movement founded by him, Bachpan Bachao Andolan (Save the Childhood Movement), have liberated more than 84,000 children from exploitation and developed a successful model for their education and rehabilitation. Juliane Kippenberg of Human Rights Watch describes how children have been injured and killed in mining accidents, suffered poisoning from mercury used in gold processing, and developed respiratory disease from exposure to dust. She welcomes another OECD initiative to develop practical actions to help identify, mitigate and account for the risks of child labour in the mineral supply chains, for example carry out independent third party audits on the due diligence practices among smelters and refiners.

The issues go far beyond mining. Modern slaves may be sewing the clothes you wear, growing the food you eat, and producing the gadgets that keep you entertained and informed. Around 2 million of them are working for states or rebel groups, and can become trapped in a vicious circle in which militia fight for control of precious resources such as minerals, while the profits from controlling mines fund further conflict. Consumers, business leaders, policy makers, we all have a duty to tackle this crime. And we have the tools to do so.

The 2010 US Dodd-Frank Act obliges public companies to report on products containing minerals that may be benefiting armed groups in the Democratic Republic of the Congo. The UK government recognised the scale and seriousness of the problem by passing the 2015 Modern Slavery Act.  Prime Minister Theresa May set up a government task force on modern slavery and appointed an Anti-Slavery Commissioner. In an article promising that her government will lead the way in defeating modern slavery, the Prime Minister highlights the human suffering behind the headlines: “people are enduring experiences that are simply horrifying in their inhumanity. Vulnerable people who have travelled long distances believing they were heading for legitimate jobs are finding they have been duped, forced into hard labour, and then locked up and abused.”

The UK legislators are well aware of the complexity of the task facing them, and produced a Practical Guide for companies on transparency in supply chains that recommends the OECD Guidelines for Multinational Enterprises. They point out that although the OECD Guidelines are not specifically focused on modern slavery (although the Due Diligence Guidelines do include it), “they provide principles and standards for responsible business conduct in areas such as employment and industrial relations and human rights which may help organisations when seeking to respond to or prevent modern slavery”.

Ending slavery is made even more difficult by the size and complexity of supply chains that make it hard to identify who is responsible for ensuring rights are respected at all the locations involved in production. Workers are often employed by subcontractors or sub-subcontractors of MNEs in their own country, and unfortunately it may take a catastrophe like the collapse of garment factories at Rana Plaza in Bangladesh in 2013 to set change in motion. Following that tragedy, The OECD developed a Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. This Guidance, elaborated through an intense multi-stakeholder process, supports a common understanding of due diligence and responsible supply chain management in the sector. One of the most notable features is that it doesn’t allow multinationals to use the failings of local contractors as an excuse: “Enterprises should…seek to prevent or mitigate an adverse impact where they have not contributed to that impact, when the impact is nevertheless directly linked to their operations, products or services by a business relationship.”

It doesn’t always take a big disaster to change things though. The OECD and FAO produced due diligence guidance for the agriculture sector that will, among other things, help newcomers to the sector, such as institutional investors, to deal with ethical dilemmas and uphold internationally agreed standards of responsible business conduct, notably in markets with weak governance and insecure land rights. For instance the guidance recognises that regardless of the legal framework in which an operation takes place, indigenous people often have customary or traditional rights based on their relationship to the land, their culture and socio-economic status.

It’s easy to see how workers would benefit from improved conditions and why consumers would choose ethically-sourced products. But it makes good business sense too. The evidence on company performance shows that the ones that behave responsibly towards their employees, the environment, and society do better than the rest.

Modern slavery is a highly internationalised affair, and to end it we need to reinforce international coordination and cooperation. As more countries and sectors step up the fight against slavery and other abuses, our experience with the MNE Guidelines and due diligence guidance is likely to be called upon increasingly. We advocate the approach pioneered in the apparel industry where we work with industry, government, worker organisations, and civil society to elaborate strategies and we have to work together to implement them. We can all learn from each other and use our shared knowledge to expose slavery and help to abolish it. As Frederick Douglass said, “It flourishes best where it meets no reproving frowns, and hears no condemning voices.”

Useful links

Gabriela Ramos is moderating the first session of the 5th Global Forum on Responsible Business Conduct, “Responsible global supply chains through due diligence”, taking place at the OECD on 29-30 June. Watch the webcast here

What does “good” look like for companies trying to address modern slavery?

downloadAs the UN Forum on Business and Human Rights opens today in Geneva, Quintin Lake, Research Fellow at Hult International Business School, discusses modern slavery.

Addressing modern slavery is becoming a business-critical for companies – for credibility with customers, investors, NGOs and the public – according to new research by Hult International Business School and The Ethical Trading Initiative (ETI). 77% of companies think there is a likelihood of modern slavery occurring in their supply chains, up from 71% last year, and it is perceived to be more widespread – in particular in the UK, and at the farthest reaches of the supply chain.

Reputational risk, resulting from public exposure to worker abuse found in the supply chain or company operations, was the biggest driver for company action on modern slavery, cited by 97% of companies. The factors which underpin a company’s reputation such as the views of customers, investors, staff and the risk of litigation, have all significantly increased as drivers for action over the last year.

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Key modern slavery risks that companies are focusing on

So what are companies actually doing to address this challenge? The study particularly focused on understanding what ‘good’ looks like, by engaging 71 brands, retailers and suppliers in in-depth interviews and a detailed survey. The research found that the UK Modern Slavery Act is galvanising leadership engagement, with twice as many CEOs and senior leaders actively engaged with addressing modern slavery since the Act was passed.

It also found that engagement of senior leaders is seen by all companies as crucial in driving effective responses and overcoming critical challenges, with 79 per cent of companies citing senior leadership passion and engagement as a key driver of their modern slavery response. As a result, most companies have made modern slavery training and awareness-raising for senior leaders a priority.

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What is good practice in addressing modern slavery, and who is involved?

Among this group of companies with more experience in tackling labour exploitation, a high degree of consensus has emerged about the critical elements of an effective response to the risks and realities of modern slavery. More companies know what they need to do, but are finding some activities harder to put into practice than others. There was a high degree of convergence between companies in what they cited as corporate leadership and good practice in tackling modern slavery, including:

  • Addressing fundamental business models and sector specific challenges.
    82% of companies believe that addressing human rights within their core business model is the most significant strategic indicator of corporate leadership on modern slavery. Examples of issues being examined included sourcing decisions, pricing, last-minute changes to orders, short lead times and sector-specific issues such as seasonal labour recruitment practices. Companies are finding activities to address these issues particularly hard to put into practice.
  • Long-term, partnership-based relationships with suppliers.
    93% felt long-term relationships and working with suppliers to address issues would be far more effective in the long term than simply switching suppliers to manage short-term risk. The majority of companies were making significant progress on putting this type of approach in place
  • Due diligence.
    90% of respondents saw due diligence on core labour standards as crucial. Leading companies are increasingly conducting human rights risk analyses by country, sector or type of labour and prioritizing their salient risks accordingly. 71% had these processes formalized and embedded in their operations.
  • Involving workers in finding solutions
    All responding companies are increasingly trying to directly involve workers who are most at risk of modern slavery. This means recognizing that workers themselves need to be actively engaged in mitigating modern slavery risks. Whilst some companies are engaging with trade unions to raise worker voice, only 31% see trade unions as critical stakeholders in addressing modern slavery.
  • Corrective action and remediation
    Once an issue of modern slavery is uncovered, 93% of companies highlighted that they have a responsibility not only to do everything in their power to address it, but also to ensure that workers most affected are protected from further harm and compensated appropriately. While companies were making strong progress on corrective actions with suppliers, only 40% of companies had clear remediation plans in place.
  • Key performance indicators (KPIs) focused on impact rather than activity
    The majority of responding companies cited developing KPIs that are focused on impact rather than activity as key to improving conditions for workers, yet fewer than 37% of companies have managed to put these in place. All participants highlighted the need for greater effort to develop KPIs that drive the right kinds of outcomes.

Companies report greater levels of collaboration since the Modern Slavery Act was passed. Companies recognized their role as just one of many actors on modern slavery, and that they cannot deal with modern slavery risks alone. They are collaborating with, and want to partner more with other companies, suppliers, governments, trade unions

and NGOs to develop effective solutions to address modern slavery.

CEOs and other senior figures have a key role to play in engaging with these external stakeholders, whether with industry peers, governments or NGOs. In many cases, they are using this external engagement to refine the company’s own strategy – i.e., what are others doing? Where can we lead? Where can we support? Leaders are driving the discussion on what can be done on a strategic, industry level to address modern slavery challenges.

Companies strongly believe effective engagement and action in partnership with governments, NGOs and charities, and other local stakeholders is critical for significant change, as many of the systemic, underlying challenges of modern slavery are linked to a lack of government policy or enforcement i.e. insufficient regulation or enforcement of standards to protect migrant workers.

Ultimately, addressing the risk of modern slavery is about addressing the human rights risks to people – whether they are directly employed, agency workers, or are working in the supply chain. Though there is much more work to do, it is encouraging to see the steps, leading businesses are taking, and as more good practice emerges it is hoped that more companies will be able to make faster progress for those who are most at risk.

Useful links

Breaking the link between exploitative recruitment and modern slavery Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct (@nieuwenkamp_csr)

Tackling modern slavery in global supply chains Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct (@nieuwenkamp_csr)

Breaking the link between exploitative recruitment and modern slavery

i-bought-you
“I bought you…”

By Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct (@nieuwenkamp_csr)

Ahmed, from India, paid over 1,300 USD to a recruiter to accept a position as a driver in Saudi Arabia. However, upon arrival his employer confiscated his passport and refused to pay him although Ahmed worked 12 to 14 hour days. Benny, from the Philippines, invested over 2,000 USD in recruitment fees in exchange for the promise of a well-paid factory job in Taiwan. Upon arrival Benny’s wages were half of what was originally promised to him and after three years of working 12 to 17 hour days he barely managed to save enough to pay off his initial investment, returning home with no savings. These men’s stories are not unique. A quick scan of the website of Verité, an organization committed to promoting fair labour standards and combating exploitative recruitment practices, reveals many shocking histories of migrant workers who have been subject to abuse and fraud.

Exploitative recruitment of migrant workers often results in situations of de facto modern slavery. Recruitment can involve up to seven different middle men all charging a fee which means workers incur debts in the thousands of dollars before they even take up employment. Even in situations where employment is provided as promised, these upfront debts can mean that any wages a worker manages to save simply go back to paying off their debt to the recruiter.

Issues around recruitment of migrant workers have received particular attention in the context of the Gulf countries. In this region use of the Kafala system, a sponsorship-based employment system for migrant workers, is common. Under the Kafala system migrant worker’s legal residency is tied to their employer, giving employers power over working conditions and whether workers can change jobs, quit jobs, or leave the country. This system paired with exploitative recruitment practices leads to situations where workers, thousands of miles from home and severely indebted, are at the mercy of their employers.

However de facto modern slavery is by no means an issue limited to the Gulf region. Recent research produced by Verisk Maplecroft found that almost 60 percent of countries are at high risk of using slave labour.

slavery-index

Source: Modern Slavery Index, Verisk Maplecroft

In previous articles, I have highlighted some of regulatory approaches that nations are taking to combat modern slavery at home and throughout global supply chains, including through the UK Modern Slavery Act, trade regulations in the US prohibiting imports made with forced labour, and more generally regulations promoting increased due diligence and reporting across global supply chains to promote responsible business conduct including the EU Directive on non-financial disclosure. Additionally, earlier this year an executive order was a finalised by the Obama administration which prohibits companies from receiving US federal contracts if they recently violated labour laws. This regulation has provided even more impetus to companies to ensure that they are not linked to exploitative labour practices.

In addition, tools and standards are also being developed to target the issue of exploitative recruitment practices specifically. For example the Dhaka Principles for Migration With Dignity were launched in 2012 and provide a set of human rights based principles to enhance respect for the rights of migrant workers from the point of recruitment, during employment and through to further employment or safe return. The principles align with the UN Guiding Principles for Business and Human Rights and thus also with the OECD Guidelines for Multinational Enterprises.

Verité has developed a Fair Hiring Toolkit which provides targeted guidance around recruitment issues for various actors along the supply chain including for brands, suppliers, governments, advocates, auditors, and investors. This tool kit includes a list of red flags with regard to recruiter-induced hiring traps. For example one red flag is long ‘’supply chains’’ between the worker and employer in terms of intermediaries used in the hiring process and degrees of separation such as language barriers, cultural and social differences, and geographical distances.

Brands are also taking initiative to combat exploitative recruitment processes. Earlier this year five of the world’s largest multinationals, the Coca-Cola Company, HP Inc., Hewlett Packard Enterprise, IKEA and Unilever, launched the Leadership Group for Responsible Recruitment. This initiative focuses on promoting ethical recruitment, specifically through recognizing the employer pays principle. Under the employer pays principle, workers are never responsible for their own recruitment fees.

According to the Ethical Trading Initiative 71% of companies suspect the presence of modern slavery in their supply chains. Thus it is important to promote human rights due diligence that addresses recruitment issues throughout supply chains. In this regard the OECD has developed detailed guidance on carrying out supply chain due diligence in several sectors based off of the general principles of the OECD Guidelines for Multinational Enterprises. For example the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the global standard on mineral supply chain responsibility, provides a 5 step framework for due diligence to manage risks in supply chains of minerals including forced labour in the context of artisanal mining. This Guidance is now the leading standard for avoiding child and forced labour in mineral supply chains and has been integrated as an operating requirement in the DRC, Rwanda and Burundi.

The FAO and OECD recently jointly developed a Due Diligence Guidance for Responsible Agricultural Supply Chains which also provides due diligence recommendations to manage risks related to forced labour in high risk agriculture sectors including palm oil and cocoa. Such approaches could be applied in the context of the Thai shrimping industry as well. Additionally, the OECD is also developing a Due Diligence Guidance on Responsible Garment and Footwear Supply Chains, which provides specific recommendations for addressing risks of forced labour. This Guidance will be launched later this year and will be relevant to migrant workers in textiles factories.

Resources to help businesses identify responsible recruitment agencies are also needed. This has been one of the objectives behind the International Recruitment Integrity System (IRIS) an initiative of the International Organization for Migration. As part of its principle activities IRIS is planning to develop an accreditation framework under which members can be recognized as fair recruiters. This will be based, among other criteria, on the fact that no fee is charged to job seekers, worker’s passports of identity documents are not retained and there is transparency in labour supply chains.

A strong relationship exists between exploitative recruitment practices and forced labour. Breaking this link through promoting ethical recruitment will be very important given the vast scope of the issue as well as increasing regulation seeking to prevent these practices.  The initiatives discussed in this article provide promising ways forward. In order to effectively eradicate abusive recruitment practices companies should engage in supply chain due diligence processes which take into account these risks. Commitments to the ‘’employer pays’’ principle must be scaled up. Companies faced with significant risks with regard to these issues should follow the recommendations of the Leadership group for Responsible Recruitment and use the resources being developed through the IRIS initiative.

Useful links

OECD Guidelines for Multinational Enterprises

OECD CleanGovBiz initiative

Roel Nieuwenkamp maintains a blog where all of his articles are archived. Please visit https://friendsoftheoecdguidelines.wordpress.com/

 

Game Changing Trade Regulations in US Shake Up Corporate Supply Chain Responsibility

FORUM2016Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct (@nieuwenkamp_csr)

In July 2015, The New York Times published an article about forced labor on Thai fishing boats. In the article they follow the story of Lang Long, a man who was shackled by the neck, working for 3 years as a slave at sea. He was one of the many Cambodian migrant boys and men working on Thai boats that supply fish to consumers worldwide. The men featured in the article are fortunately now free, but many slaves are still involved in the production of goods for global supply chains.

Indeed modern slavery is endemic within global supply chains. In recent conversations I had with some sourcing directors of large multinational enterprises, they admit that if you look closely and deeply enough, in every major global supply chain you are likely to find modern slavery. This has fuelled political moves to fight slavery in supply chains and also created serious challenges for companies dedicated to responsible sourcing.

In previous articles I have covered some of the innovative regulatory initiatives taken to promote supply chain responsibility (e.g. the UK Modern Slavery Act, the proposed law on due diligence in France, the Swiss referendum for a due diligence, and the EU non-financial reporting directive). Currently 8 Parliaments in the EU are calling on European Parliament to follow the French example.

Some recent developments in the United States may have even more impact on supply chain responsibility with global trade implications.

This February, President Obama signed in the Trade Facilitation and Trade Enforcement Act (H.R. 644). Section 910 of this law strengthened restrictions on the import of goods into the United States produced with forced labor, closing a loophole that existed in the Tariff Act of 1930 which allowed import of such goods if the product was not made in high enough quantities domestically to meet the U.S. demand.

This law accompanied two other moves to tackle modern slavery, particularly in the fishing industry, by the Obama administration. In addition to the new act, the administration has also enacted the Port State Measures Agreement which bars foreign vessels from accessing ports if suspected of illegal fishing. Furthermore the National Oceanic and Atmospheric Administration, which regulates fishing, announced new reporting requirements aimed at developing a better understanding among US companies of where seafood imports are sourced from.

While regulation is important, enforcement is arguably even more so. Indeed the Trade Enforcement Act is already being enforced. Recently the U.S. Customs authority issued two “withhold release” orders, preventing goods from entering the country because of suspicions that they were made using forced labor.

The first order came on March 29th against imported soda ash, calcium chloride, caustic soda, and viscose/rayon fiber that was manufactured or mined by Chinese company Tangshan Sunfar Silicon. U.S. Customs and Border Protection (US CBP) believes that these products were made by forced convict labor. The second order, on April 13th, was against imported potassium, potassium hydroxide, and potassium nitrate that is believed to be mined and manufactured by the same company using convict labor.

According to CBP Commissioner Kerlikowske: “CBP will do its part to ensure that products entering the United States were not made by exploiting those forced to work against their will, and to ensure that American businesses and workers do not have to compete with businesses profiting from forced labor.”  The Business & Human Rights Resource Center is tracking enforcement of the Act on their site.

These orders are an important part of enforcing the new ban and ensuring criminals that profit from human trafficking are not supported. Effective enforcement of this provision also provides incentives to business to protect their supply chains from forced labor to guarantee all of their imports are cleared for entry into the United States.

Recently Turkmenistan News (ATN) and International Labor Rights Forum (ILRF), partners in the Cotton Campaign, filed a complaint with the US CBP. The complaint concerns the import of cotton goods made using forced labor from Turkmenistan by companies, including retail giant IKEA. The government of Turkmenistan engages in a practice where annually farmers are forced to deliver cotton production quotas and thousands of citizens are required to pick cotton or are faced with a penalty. The complaint calls on U.S. Customs to classify cotton goods, such as the IKEA products, from Turkmenistan as illicit, issue a detention order on all imports of them, and direct port managers to block their release into the United States. CBP has yet to respond.

If the U.S. government and American businesses set a precedent that forced labor will not be tolerated, other countries are likely to follow suit. However, how U.S. government follows through on implementing the new ban, is essential to this effort.

child labor

Furthermore, given the extensive pervasiveness of modern slavery in global supply chains companies must be armed with tools to protect themselves and their supply chains from liabilities under these regulations.

Strong supply chain due diligence processes should in my opinion be an accepted defence under these new laws. This should include the notion that supply chain responsibility means often not ‘cut and run’ from risky suppliers, but ‘stay and improve’. Else these regulations could have devastating negative impacts on livelihoods of legitimate businesses operating in high risk areas. The OECD has provided guidance to companies in designing such due diligence processes. The OECD Guidelines for Multinational Enterprises (the OECD Guidelines) recommend that companies carry out supply chain due diligence to identify, prevent, mitigate and account for all adverse impacts that they cover, which include child labour and forced labour issues. For negative impacts arising within a company’s supply chain the Guidelines recommend that companies acting alone or in cooperation with others use their leverage to influence the entity causing the impacts to prevent or mitigate the harms.

The OECD Guidelines are referenced in the statutory guidance of the UK Modern Slavery Act, which note that “they provide principles and standards for responsible business conduct in areas such as employment and industrial relations and human rights which may help organisations when seeking to respond to or prevent modern slavery.’’

In addition to general recommendations the OECD has developed more detailed guidance on how these expectations can be responded to in specific sectors. For example the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the global standard on mineral supply chain responsibility, provides a 5 step framework for due diligence to manage risks in supply chains of minerals including forced and child labour in the context of artisanal mining. This Guidance is now the leading standard for avoiding child and forced labour in mineral supply chains and has been integrated as an operating requirement in the DRC, Rwanda and Burundi.

The FAO and OECD recently jointly developed a Due Diligence Guidance for Responsible Agricultural Supply Chains which also provides due diligence recommendations to manage risks related to forced labour and child labour in high risk agriculture sectors including palm oil and cocoa. Such approaches could be applied in the context of the Thai shrimping industry as well. Lastly the OECD is also developing a Due Diligence Guidance on Responsible Garment and Footwear Supply Chains, which provides specific recommendations for addressing risks of forced and child labor. This Guidance will be launched later this year and will be relevant to migrant workers in textiles factories

Regulation of global supply chains to combat forced labour is becoming increasingly common and impactful. Recent developments in the EU followed by new regulations and enforcement by the US customs authority are putting pressure on companies to monitor their supply chains more closely than ever. As the US and EU represent that world’s most important consumption markets these pressures will extend to companies globally, and have already been felt by Chinese and Swedish enterprises in the context of the recent US detention orders.

Supply chain due diligence and transparency will be increasingly important tools for global companies in safeguarding themselves from liability in light of these new regulations. The OECD has developed guidance on supply chain due diligence processes which address a range of issues including forced labour. In order to strengthen their global supply chains, companies would do well to step up and speed up implementation of due diligence in their global supply chains.

Useful links:

Global Forum on Responsible Business Conduct, 8-9 June

Roel Nieuwenkamp maintains a blog where all of his articles are archived. Please visit https://friendsoftheoecdguidelines.wordpress.com/

Tackling modern slavery in global supply chains

How many slavesRoel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct (@nieuwenkamp_csr)

The recent migrant crisis paired with shocking exposes of labour issues in global supply chains has heightened public attention to modern slavery, forced labour and human trafficking. Children working in cobalt mines for the Apple and Samsung supply chains, Syrian refugees working under terrible circumstances for garment supply chains in Turkey, Rohingya refuges working as slaves in the Thai fishing industry and North African migrants working in agriculture in Italy and Spain.

The International Labour Organization estimates that 21 million people are victims of forced labour, of which 44% are migrants. In total, forced labor generates an estimated $150 billion in illegal profits every year. A recent ETI survey found 71% of companies suspect the presence of modern slavery in their supply chains.

In response, a number of binding regulations regarding modern slavery in supply chains have been introduced. On an international level, the ILO has adopted the Forced Labor Protocol that requires States to take measures regarding forced labor. Domestically, the California Transparency in Supply Chains Act of 2010 is intended to ensure consumers are provided with information about the efforts to prevent and eradicate human trafficking and slavery from their supply chains. President Obama also launched a far reaching executive order to avoid human trafficking in federal contracts and passed a law allowing for stronger enforcement of the Tariff Act of 1930, which aims to block the import of products to the US produced using child labour.

Currently two lawsuits related to slave labour in supply chains of Thai shrimp are pending against well-known multinationals in US federal courts. Likewise earlier this year the US Supreme Court declined to hear an appeal for the dismissal of a lawsuit alleging that three large multinational enterprises aided and abetted child slave labor on cocoa plantations in Africa.

The recent UK Modern Slavery Act applies to all companies that do any part of their business in the UK if they have annual gross worldwide revenues of £36 million or more each year. These companies have to publish an annual slavery and human trafficking statement. The OECD Guidelines for Multinational Enterprises are referenced in the statutory guidance of the Act, noting that “whilst not specifically focused on modern slavery, they provide principles and standards for responsible business conduct in areas such as employment and industrial relations and human rights which may help organisations when seeking to respond to or prevent modern slavery.’’

The OECD Guidelines are recommendations to companies backed by 46 adhering governments and recommend that companies carry out supply chain due diligence to identify, prevent, mitigate and account for all adverse impacts that they cover, including child labour and forced labour. The OECD has developed more detailed guidance on how these expectations can be responded to in specific sectors. The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the global standard on mineral supply chain responsibility, provides a 5 step framework for due diligence to manage risks in the minerals supply chain including forced and child labour in the context of artisanal mining. The FAO and OECD recently jointly developed a Due Diligence Guidance for Responsible Agricultural Supply Chains which also provides due diligence recommendations to manage risks related to forced labour and child labour in high risk agriculture sectors including palm oil and cocoa. Such approaches could be applied in the Thai shrimping industry as well. The OECD is also developing a Due Diligence Guidance on Responsible Garment and Footwear Supply Chains, which provides specific recommendations for addressing risks of forced and child labor. This Guidance will be launched later this year and will be relevant to migrant workers in textiles factories and cotton fields.

Although the OECD Guidelines are a non-binding mechanism they are accompanied by a unique grievance mechanism, the National Contact Points (NCPs). NCPs in the 46 countries that adhere to the Guidelines facilitate dialogue and mediation with companies who allegedly do not observe their recommendations. Several issues regarding forced or child labor in supply chains have been brought to the NCP mechanism and some have resulted in successful outcomes.

For example, in 2011 complaints were submitted to the NCP mechanism regarding sourcing of cotton from Uzbekistan cultivated using child labour. NCP mediation led to several agreements with companies involved in sourcing the products as well as heightened industry attention to this issue. In a follow up to the NCP processes several years later the European Center for Constitutional and Human Rights (ECCHR) concluded that the submission of the cases had encouraged traders to take steps to pressure the Uzbek government to end forced labour, although company commitment and media attention around the issue diminished over time. Nevertheless the report also noted that the NCP cases triggered investment banks to monitor forced labour issues in Uzbekistan in the context of their investments.

Other NCP cases, while not resulting in agreements between the parties have led to statements determining that certain companies were not observing the recommendations of the OECD Guidelines in the context of forced labour impacts, resulting in reputational harm to those enterprises (e.g. see DEVCOT) . Currently the Swiss National Contact Point is overseeing mediation between the Building and Wood Worker’s International (WWI) and FIFA regarding forced labor issues in Qatar. The results will have important implications for global sporting events and for managing risks of forced labour in large scale infrastructure projects.

Companies themselves have been proactive in addressing these issues. For example Nestlé, despite currently being subject to a lawsuit related to slave labour in its supply chain, participated in and released a report developed with the non-profit organization Verité which identified labour abuses in its supply chain with regard to Thai-sourced seafood.  Within the report the company outlined plans to tackle the problem, and notes that other companies that do business in this sector likely face the same risks.

Several MNEs also participate in the Shrimp Sustainable Supply Chain Task Force set up in 2014 by retailers such as Costco. This brings together manufacturers, retailers, governments and CSOs to conduct independent audits on Asian fishing vessels to ensure seafood supply chains are free from illegal and forced labour. The first round of audits is expected to be complete by July 2016.

In February this year, H&M asked all of its suppliers to sign an agreement prohibiting the use of cotton from Turkmenistan and Syria, on pain of termination in order to avoid sourcing of cotton from ISIS controlled territories, produced through forced labour. H&M also terminated a sourcing relationship with a Turkish supplier after discovering a Syrian migrant child working in its factory, responding to documented abuses against Syrian refugees in the Turkish textile industry.

Labour issues in global supply chains present a serious and pressing problem, therefore it is encouraging to see they are being taken seriously. In addition to regulatory approaches non-binding mechanisms such as the OECD Guidelines, accompanied by the NCP system, and industry initiatives have resulted in important progress and provide alternative models for managing forced labour risks throughout global supply chains. While litigating these issues can be a forceful tactic in bringing companies to account, non-judicial grievance mechanisms can provide a more affordable and more accessible platform for tackling forced labour issues.

In the context of modern slavery, all stakeholders must step up their efforts. Governments should promote due diligence in global supply chains among their companies as outlined in the OECD Guidelines and its related industry-specific instruments. Civil society can continue to be instrumental in reporting upon and exposing these issues and furthermore should rely on the NCP platform for reaching resolutions on supply chain issues with MNEs. Finally, as the current migrant crisis will last many years, companies should conduct heightened due diligence to ensure that they are not linked to forced labour throughout their supply chains, particularly in contexts with large migrant populations.

Useful links

Anti bribery ministerial

Two hundred girls for sale, millions already sold

Anti-Slavery International was founded 175 years ago
Anti-Slavery International was founded 175 years ago

The announcement by the lunatic who claims to lead Boko Haram that he’s going to sell hundreds of captured Nigerian schoolgirls into slavery shocked most of the world. I say “most” because what he’s proposing isn’t in fact unusual. In Nigeria and across the border in Niger, young girls are sold to men who’ve used up their authorised quota of four wives or who simply want slaves to advertise their prestige. A report by Anti-Slavery International and Association Timidria explains: “‘Wahaya’ are girls and women bought and exploited as property by many dignitaries (mostly religious leaders or wealthy men who bear the title ‘Elhadji’). The women are used for free labour and for the sexual gratification of their masters, who assault them at will when they are not with their legitimate wives.”

A wahaya costs $300 to $800, and 43% of the girls interviewed for the report were sold between the age of 9 and 11 years old, 83% before the age of 15. The girls say it is common for the “master” to force sexual relations on them as soon as they reach puberty. They receive no pay, and are never allowed to leave their family home except to work. Many are also forced to wear a heavy brass ankle ring to signify their slave status.

Tabass Aborak for example was sold three times to three different masters over 12 years, the first time when she was just seven years old. “We had to carry out orders from the master and his wives. Night and day were just the same; each moment that passes brought more work. Only speed and skill in carrying out orders allowed us to avoid the master’s punishments, especially if he was angry at us because of the tales his legitimate wives had been telling him. When this happened we’d be called ‘chegiya’, which means ‘bastard’, or ‘bouzoua’ – ‘useless slave.’” When the family travelled to visit relatives, Tabass followed the horses on foot, carrying the children on her back.

West Africa isn’t the only place where slavery still exists. The 2013 Global Slavery Index estimates that 29.8 million people worldwide are victims of human trafficking, forced labour, slavery or slavery-like practices (debt bondage, forced or servile marriage, sale or exploitation of children, including in armed conflict). Over three-quarters of the slaves live in just ten countries, mainly in Asia and Africa (in descending order: India, China, Pakistan, Nigeria, Ethiopia, Russia, Thailand, DRC, Myanmar, Bangladesh) but it’s a problem everywhere – nearly 2% of those 29.8 million are in Europe for example.

According to the FBI, an estimated 293,000 American youths are at risk of becoming victims of commercial sexual exploitation. The children generally come from homes where they have been abused or from families who have abandoned them. The girls first become victims of prostitution at age 12 to 14 on average, while for boys and transgender youth, it’s at age 11 and 13 on average.

The modern slave trade takes advantage of the increased mobility, cheaper travel and the ease of organising international networks that technology and globalisation make possible. It is reinforced by economic misery and absence or removal of social protection, and the illusions engendered by images of a better life elsewhere. How can it be fought?

The “Protocol to Prevent, Suppress and Punish Trafficking in Persons” is the leading international instrument. It goes beyond trafficking for forced prostitution and takes into account forced domestic work and commercial marriage. It recommends that governments allow victims to remain in the destination country, temporarily or permanently, ensure their safety and protect their privacy and identity. It also recommends that governments establish legal measures to award victims compensation. The authorities can help victims by protecting them even if they are not prepared to help the investigation of trafficking networks, and they can help migrant victims by not deporting them back to the country they were trafficked from.

The OECD is trying to play a part too. In 2001 already, Trends in International Migration warned that “Organised prostitution networks and illicit immigration rackets are at the root of a modern form of slavery, affecting women in particular. International measures of co-operation need to be stepped up to counter and prevent such exploitation.” However, every study into trafficking (of people, drugs, arms or anything else) states how hard it is to evaluate the scale of the problem. The OECD Task Force on Charting Illicit Trade (TF-CIT) was set up to “co-ordinate international expertise in the quantification and mapping of illicit markets”. This year the TF-CIT is focusing on three areas: mapping the economic activities of transnational criminal networks; examining the conditions and policies that encourage or inhibit different sectors of illegal trades, whether at the level of production, transit or consumption; and developing visualisation tools to help decision makers better target prevention and mitigation efforts.

In the meantime, here’s how one of the slave owners interviewed by Timidria sees things: “To be honest, because I had bought them, I strongly felt that they were slaves that I had paid for and that it was their duty to obey my orders under all circumstances. They are always visible because they are always busy, while my legal wives are housed at the back of my compound and are not accessible to just anyone, as our religion prescribes. No one is surprised by this, and everyone was happy with their situation.”

Useful links

OECD work on gender