Human Trafficking in Supply Chains

Human Trafficking in Supply Chains

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January 13, 2014

In honor of National Human Trafficking Awareness Day, January 11, TRACE wants to make you aware of the dangers of using trafficked labor in business.

Labor trafficking—the forced or coerced labor of vulnerable persons—can enter the supply chain through recruiters that provide workers for low-level facilities or labor.  As some companies have had to learn the hard way, the risks of labor trafficking increase exponentially as a company’s operations become more decentralized.  U.S.-based shipbuilder Signal International is currently standing trial in eighty-four individual cases alleging labor trafficking.  According to the complaints, the guest workers hired by Signal were charged “recruitment fees” of up to $20,000 in exchange for assistance in applying for and obtaining permanent residence in the U.S., but once the workers were in the U.S., agents threatened them with financial ruin and adverse immigration action if they attempted to leave.

While Signal is an egregious example, it is hardly the only company that has faced serious consequences from lack of oversight in labor recruitment.  The risks of using trafficked labor are widespread. Labor trafficking is a risk pervasive to all industries that use low-skilled laborers in their supply chains.  According to the Office of the High Commissioner for Human Rights, the sectors most at risk for trafficked labor include agriculture, construction, textiles, hospitality, and transportation.

There are two forms that trafficked labor generally takes—forced labor and debt bonded labor.  While forced labor, in which victims are forced to work against their will, is the common perception of trafficked labor, debt bonded labor is in fact the most widely used method used in labor trafficking.  Victims become bonded laborers when their labor is demanded as a means of repayment for a loan or service, for which the terms and conditions have not been defined or in which the reasonable value of the victims’ services is not applied toward the liquidation of the debt.  Because debt bonded laborers are not physically coerced into labor, they are more difficult to identify and prevent. Therefore, it is imperative that companies invest in adequate channel management.

Because regular training of staff is so important to make employees aware of the issues and to identify potential weak points for trafficked labor within channels, TRACE is launching a new online training module, free for TRACE member companies, that introduces employees to the risks of human trafficking. The TRACE Avoiding Trafficked Labor training module aims to help reduce trafficked labor in global supply chains as the first-ever training designed for the business community.

“Apart from its obvious horrors for its victims, human trafficking poses a real and serious threat to international business and the ethical and transparent practices that lead to a prosperous and healthy society. TRACE can help reduce trafficked labor in global supply chains with this first-ever online training course designed for the business community;  this practical training will help elevate awareness of the issue and will help employees identify the red flags associated with this hidden risk," said TRACE President Alexandra Wrage.

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