Corporate Social Responsibility and Human Trafficking (Denial and Benign Neglect)

“It ought to concern every person, because it’s a debasement of our common humanity.  It ought to concern every community, because it tears at the social fabric.  It ought to concern every business, because it distorts markets.  It ought to concern every nation, because it endangers public health and fuels violence and organized crime.  I’m talking about the injustice, the outrage, of human trafficking, which must be called by its true name—modern slavery.” 

Barack Obama

I had the good fortune to attend the Society of Corporate Compliance and Ethics Regional Compliance and Ethics conference in Chicago. The day’s events were moderated by Ted Banks, one of the leading legal and compliance professionals in the country and there were many excellent speakers. To report that I was enlightened by the presentation on Human Trafficking given by Matt Friedman of The Mekong Club would be a gross understatement. I never could have imagined the depths to which human beings will stoop to prey upon their fellow human beings in exchange for money.

Matt told stories of child “Camel Jockeys”, where Pakistani children are sold into Gulf State countries to toil and moil on the backs of camels, their screams and yelling spurring the camels to run faster, until the age when they are too heavy for the camel to bear. He told of 14-year-old girls from rural villages, believing they were marrying into a better life, being sold for cash to a brothel in a faraway city by their new “husband” and systematically raped into submission, forced to service ten men per day and having their families threatened with death if the young girl tried to escape. He told of naïve villagers, being lured by the promise of triple the typical daily wage, moving to the city, living under lock and key in company “housing” for which they were charged a fee that exceeded their wages. Finally, he told of legitimate factories in Asia which, by day, employed local people for fair wages. But under cover of darkness, the child slaves were brought in to finish the work the day shift started - this being the only way the factory could compete in a highly competitive marketplace.

Why does any of this matter to you as an in-house lawyer or compliance professional? Approximately 20% of global human enslavement involves labor exploitation. Matt’s presentation underscored that otherwise legitimate, well-intentioned businesses, play an important role in enabling the use of slaves – simply by ignoring the issue. Many of the goods and services that we rely on in our day to day lives may have been produced by the use of forced labor somewhere in the supply chain.

It is very popular today for business folks to talk about Corporate Social Responsibility.  The topic occupies significant real estate on most company websites these days. There is no shortage of consultants willing to help your business create a nice looking CSR program (for a price).  But CSR has to be more than a marketing program! It must, according to Karen Quintos at Dell Computers, be more than a feel-good campaign or series of projects; CSR must be "a mindset that's part of [the company] culture." Why wouldn’t a scrupulous company include supply chain slavery as an integral part of its compliance regime?

Mandating responsible supply chain management is good business from both a risk management perspective and a corporate social responsibility standpoint. Not only are consumers demanding transparency in their producers’ supply chains as they become more aware of the issue, but lawmakers are also getting more involved. The National Conference of Commissioners on Uniform State Laws has approved and recommended for enactment in all states, The Uniform Act on Prevention of and Remedies for Human Trafficking.  Without getting into the weeds about what may constitute knowledge, the Act allows prosecution of a business when an employee or nonemployee agent of the entity engages in conduct that constitutes human trafficking and the commission of the offense was part of a pattern of illegal activity which the entity knew was occurring and failed to take effective action to stop.

The United Kingdom’s Modern Slavery Act requires every company doing business in the UK with global revenue in excess of roughly 54 million in US dollars, to publish a slavery and human trafficking statement on its website. Failing to have a policy is a shameful position to be in as a modern day conscionable business concern. Having a statement in turn requires compliance auditing to ensure employees and vendors abide by the policy. The mandatory reporting[1] encourages companies to detail steps taken to ensure there is no slavery or human trafficking in any aspect of its supply chain.

The California Transparency in Supply Chains Act focuses solely on human trafficking and slavery. The Act requires large retailers and manufacturers doing business in California to disclose on their websites the efforts the company is making to eradicate slavery and human trafficking from the company’s direct supply chain for tangible goods. The law applies to any company doing business in California that has global revenue of at least $100 million and that identifies itself as a retail seller or manufacturer on its California tax return.

In 2012, President Obama issued an Executive Order outlining prohibitions on trafficking-related activities that applies to all federal contractors and subcontractors, requires compliance measures for large overseas contracts and subcontracts, and provides federal agencies with additional tools to foster compliance.

While not positioned as a change in law, the objective of the United Nations Guiding Principles on Business and Human Rights, issued in 2011, is to enhance business and human rights standards and practices in a tangible way, which in turn contributes to a socially sustainable globalization. The Principles cast a wide net so that a business’ activities include both actions and omissions and business relationships include those with supply chain vendors. In other words, ignorance and intentional disregard for the facts is not permissible – there is an affirmative obligation to assess all business relationships to mitigate against the use of forced labor.  

Demonstrating a commitment to human rights means companies must have policies and procedures in place that include communicating a “tone from the top”, verification, audits, certification, internal accountability, and training. Thus bringing slavery/human trafficking into the same compliance regimes as environmental issues, social and employee-related matters (eg. diversity), and anti-corruption efforts. The difference between conventional compliance assessments and those conducted to assess human trafficking is that in the context of human rights, risk management goes beyond identifying and managing risks to the company itself, to include risks to rights-holders.

Matt Friedman is currently touring the United States in an effort to bring his message to companies, religious organizations, law firms and assorted compliance and legal professionals. If you are interested in hearing what he has to say, you can reach Matt via The Mekong Club website, or feel free to reach out to me via LinkedIn and I will be happy to put you in touch with him. In addition to the resources already mentioned, I recommend that you explore the issue further by visiting one of the following additional resources: Verite.org, the ACC website, Kelley Drye.

Finally – we must take what we have learned and act upon it. Lawyers and compliance professionals are uniquely situated to influence our clients to forward thinking action, in ways that will make our work places better, our companies socially responsible and in ways that enhance the value of our products by making them sustainable and more attractive to consumers.

“An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.”

Jack Welch

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[1] A company must report – even if the report says “we don’t have a human trafficking policy”.

Big Law Implicit Bias – How Can it be Fixed?

“Never judge someone

By the way he looks

Or a book by the way it's covered;

For inside those tattered pages,

There's a lot to be discovered.”

Steven Cosgrove

As a member of the board of directors of the Association of Corporate Counsel, I am privileged to have the opportunity to participate in a fair share of ACC sponsored events. I recently attended the ACC Foundation GC Dinner in Chicago where twenty-four in-house counsel and law firm lawyers, gathered together in an intimate and “safe” environment to discuss how to improve the relationship between in-house lawyers and their law firm counter-parts. Assembled in the room were some of the best and brightest private practitioners in the country and their in-house counterparts.

The dinner was extraordinarily successful on many fronts. Everyone in attendance appreciated the need for outside counsel to develop close relationships with their in-house counterparts in order to build trust. Another hot topic was the need for in-house lawyers to bring “value” to their companies through the relationship with outside counsel. I’ll discuss these topics in future posts.

What really struck me as something that requires immediate comment was the experience of a young African American lawyer regarding a situation he faced while attempting to broker a deal between a client and the management team of his law firm. At the time, the young African American lawyer was pursuing a large client with potential for significant future billings. In order to help bring the client into the firm, he offered an attractive alternative fee arrangement to the client – subject to approval of firm management. As related by the young lawyer, he pitched the alternative fee arrangement to firm management and the idea was immediately dismissed out of hand. However, several months later, a lawyer who was not African American pitched a very similar proposal on behalf of the same client and the deal was accepted. The implication was very clear – the business deal was rejected in the first instance because the lawyer pitching it was African American.

I was flabbergasted. I found it very difficult to fathom that, in the enlightened world in which we live today (especially in the legal profession), a good business deal would be quashed simply because the pitch was made by a black lawyer. Of course, I have no idea what went through the mind of firm management as they made their decision. If, in fact, the conscious decision was made not to accept the proposal based on the race of the person making it then this would be a case of outright racism. However, I posit that this was not the case[1].

I cannot speak from a first person perspective when it comes to this lawyer’s experience as I am not a “big law” African American mid-level associate trying to build a book of business. However, as circumstances allow, I make it a point to seek to understand the perspectives of those who do not share my background. After the dinner ended, I reached out to another in-house lawyer who was African American. He confirmed that the experience related by the firm lawyer was not uncommon. While we did not have time to delve into the topic on a deeper level (nor do I have the space to do so here), I hope to continue the conversation soon and to follow up in an additional post on the subject. The question thus remained – “Why did this happen?”

In trying to answer the question, I circled back to some reading I had done on the topic of “Implicit Bias”. Implicit Bias (also known as “Unconscious Bias” or “Hidden Bias”) has been described as negative associations that ordinary people are found to harbor in relation to various social groups – even while honestly reporting that they regard themselves as lacking these biases. Stated another way – it is believing that one is impartial, but behaving as if one is not[2]. Experience shows that one is most likely to be implicitly biased in favor of those with whom one identifies and biased against those who are “different”. I suppose this makes sense, after all, if someone is “like me”, I can trust them – right?[3]

It is particularly important for lawyers to understand implicit bias because, once understood, it becomes an important tool for the manner in which we approach our day-to-day jobs. A study by Harvard researchers shows that implicit biases vary from person to person and that implicit attitudes are modified by experience.  And the good news is that implicit bias can be overcome through awareness, acknowledgement and conscious effort. The Harvard researchers tell us that one who wishes to rid oneself of an implicit bias can seek experiences that might reverse or undo the patterns that created the unwanted preference. A great example of a step that lawyers can take to help rid themselves of implicit bias is to interact with people or learn about people who counter the implicit stereotypes.

Once we understand that we may have a bias for a particular group or groups over others, we can attempt to manage our bias, check it at the door when making decisions or giving advice that pertains to or affects that group or a person within that group. For example, a lawyer or compliance professional must consciously discard implicit biases when assessing the credibility of a manager during an investigation or, when making decisions about accepting another lawyer’s proposal to offer a deal to a new client to bring in new business.

How do you know if you harbor implicit biases? I invite you to test your self-awareness of bias against the actual bias shown by your behavior by taking the brief Harvard Implicit Bias Test. While not perfect or absolute, the test results should move one to serious self-reflection and openness to the possibility that one’s thinking is not as objective as one might hope or believe – you will likely be very surprised by the delta between what you believe about yourself and the objective results of the test. I also urge you to recommend the test to your colleagues and friends. Implicit biases can be weakened, but only through awareness and open-mindedness to the possibility.

“Strength lies in differences, not in similarities”

Stephen R. Covey

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[1] “Social psychologists use the word prejudice to describe people who report and approve negative attitudes toward outgroups. Most people who show an implicit preference for one group (e.g., White people) over another (e.g., Black people) are not prejudiced by this definition. The IAT shows biases that are not endorsed and that may even be contradictory to what one consciously believes. So, no, we would not say that such people are prejudiced. It is important to know, however, that implicit biases can predict behavior. When we relax our active efforts to be egalitarian, our implicit biases can lead to discriminatory behavior, so it is critical to be mindful of this possibility if we want to avoid prejudice and discrimination.” Harvard Study, visited 5/30/16.

[2] It should be stressed that the study of Implicit Bias is not limited to racial bias – there are many biases that exist, for example biases based on age, physical appearance, gender or occupation.

[3] African Americans are not immune to negative implicit biases – about one-half of African Americans prefer Whites, the other half prefers Blacks.  National Center for State Courts paper, visited 5/30/16.

Focus on Your Big Picture to Thrive, not Just Survive!

Focus:  a point upon which attention, activity, etc, is directed or concentrated;  to fix attention (on); concentrate. Dictionary.com

I often start a column with a definition because it helps me stay focused on the message I am trying to convey. I am reminded of the need to focus every time I walk into the office and see the pile of papers on my desk and the ever present reminders popping up on my calendar; when I experience the constant interruption of phone calls and walk-ins. What do I have to do today to stay focused on the tasks at hand? However, the concept of staying focused begs an even larger question – What is the goal upon which my efforts should be focused?

We can have no focus unless we have clearly defined goals. How can one define tasks upon which to focus when one does not have goals established that allow for a strategic setting of tasks to achieve those goals? In other words, how can we figure out how to get from Point A to Point B unless we understand the location of Point B. Once we know, we can map a route to get there.

I am sure that most of you have seen the SMART acronym.  Goals must be:

S = Specific

M = Measurable

A = Attainable

R = Realistic

T = Timely

While the SMART method is useful, I am "focused" on goal setting at an even more basic level. I was vividly reminded of the need to have goals when I was recently in a meeting with a group of volunteers who assist in the leadership of a charitable organization. Many ideas on programming and how to improve the group were bantered about, all ideas were good, some were excellent! However, the unfamiliar observer might have noticed that the ideas, bright as they were, were also disparate and  non-cohesive in the sense that they did not seem to point to a common interest. One of the participants finally took a step back and interjected: What is the goal of [our organization]? We were flummoxed. All the brainstorming was taking place in a vacuum!

How does this relate to in-house counsel?  Many of us plod through life, day by day, hoping for better, thankful for what we have (as we should be), working hard at our jobs. We consider it a good day when we give some good advice, help a client out of a pickle, solve a problem, proactively manage the company away from trouble, help a friend, whatever. The next day is the same thing. You might call this “surviving” as opposed to thriving. Many of us are fine with just getting by, others need to thrive.

What do you want out of your career? Do you want to be a specialist in a particular area of the law? Are you looking to be the next general counsel of General Electric? Do you want to strike out on your own and use your in-house experience in the private firm setting? Are you looking to back down on the hours and spend more time with the family? Each of these goals demand specialized, differentiated strategies. The tasks required of one goal do not fit within the scheme of tasks required to achieve the other goals.

When goals are clearly identified, we can develop task-oriented strategies to achieve them. By knowing the big picture and focusing on the tasks required to get us there, we have purpose. With each task completed comes a sense of accomplishment, a sense of having done something concrete and worthwhile – because we have inched closer to our goal.

So while the pile of paper may not seem to get any shorter, you can thrive in your career as you accomplish tasks and move forward to your end game. By focusing on the smaller tasks necessary to the achievement of your longer term goals, you make progress. Progress in turn brings a sense of well-being. A cycle is created whereby your goals are affirmed through progress and satisfaction which brings forth more effort to accomplish the next set of tasks and so on and on. Now – stop reading and get back to that stack of paper…..

“People with goals succeed because they know where they’re going.“ Earl Nightingale