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