Forced Labor & Human Trafficking in Supply Chains · Forced Labor & Human Trafficking in Supply Chains ... Manpower Services Providers In Sending ... Recruitment Agency

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

Verité © 2017 - Not for Distribution2

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:

Verité © 2017 - Not for Distribution

About Verité

3

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


Key Systemic Challenges in Implementing Anti-Forced Labor Standards


The current labor broker system

facilitates situations where workers

subsidize the cost of labor migration ...


The Labor Broker System

7

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


Causes, Benefits, and Risksof Labor Migration

8

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


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


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)

10

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


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

11


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


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

13

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


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


• 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


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


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


Maintenance

Forced Labor

Risks


Transportation


IT Services CleanersPrintingMaintenance

LandscapingLandscaping

Product DisplaysSecurity

Company

Distribution Centers

Logistics

Food serviceTransportationOrder Fulfillment

Retail Stores


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


Policy

Risk Screening

Training

Monitoring

Remediation

Waste disposal

Cleaners

Emerging Supply ChainCompliance Regimes


Forced Labor ‘Disclosure’ Regimes


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


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


• 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


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


Links to free eLearning Modules & Resources

https://www.verite.org/free-e-learning-courses

http://www.responsiblesourcingtool.org


http://helpwanted.verite.org

26

https://www.verite.org/free-e-learning-courses

http://www.responsiblerecruitment.org/

http://helpwanted.verite.org/

Thank You!


For more information contact:

JET [email protected]

DECLAN [email protected]

mailto:[email protected]

mailto:[email protected]

Documents

Forced Labor & Human Trafficking in Supply Chains · Forced Labor & Human Trafficking in Supply Chains ... Manpower Services Providers In Sending ... Recruitment Agency