The role of large companies in human trafficking

20 million people are enslaved

At any given time, 20 million people are in this modern form of slavery. One person in 400 people. The vast majority of these are forced into exploitative employment through human trafficking, often involving the sex trade. A country such as Switzerland or Germany can be a source country, transit country and destination country at the same time. Where a victim is transported from and to depends solely on the trafficking market segment to which she or he is sold and where the end customer is waiting. Among others, there are the following markets for human trafficking independent of human smuggling, which are not addressed here.

• Sex trade: illegal prostitution, commercial private sexual exploitation
• Labour exploitation (construction, industry and manufacturing)
• Exploitation for criminal purposes: begging, stealing, burglary, drug-related crime

The offense of "trafficking in persons" must meet at least one of each of the components within the following three elements:

1. Element of the action: recruitment, transport, transfer, accommodation, reception of persons.
2. Element of means: threat or use of force, coercion, abduction and deprivation of liberty, fraud, deception, abuse of power or vulnerability, financial inducement or goods
3. Element of purpose: Exploitation, prostitution of others, sexual exploitation, labour exploitation and forced labour, slavery, removal of organs and all other types of exploitation.

The slave girl is on the plane

In order to recruit the enormous number of victims, transport them to their target market, control them throughout and exploit them, the business model requires extremely flexible global networks and logistics through which to serve any market. This is where further points of contact with Western companies arise. Traffickers use the same travel routes and means of transportation with victims that we use on our business trips, such as flights.

The target markets for the human commodity are either within the legitimate supply chains such as raw material mining, manufacturing or on the periphery such as entertainment for customers. However, human trafficking can also take place within the organisation, for example in the production area, as the following example shows.

International companies are key players when it comes to human trafficking.

Example company W. (name changed)

The local management of a subsidiary of W. in an East Asian country of a client developed a creative idea to reduce production costs. She suggested to the management in Europe to hire Filipinos for production as they would work much cheaper.

The management in Europe was told that special arrangements for foreign workers on temporary contracts made it possible to hire the workers under the normal legal minimum requirements of the local labor law. The only condition would be that the hiring would not be done through the company's branch in the Philippines, but through an agent, so that the special exemption could be used.

The European management agreed without checking the facts. Had they done so, it would have immediately become clear that local labour law does not provide for such an arrangement, nor that there are exceptions regarding wages and social security. This led to the following situation:

Filipino factory workers were recruited through an agent in the Philippines. The applicants had to pay a high recruitment fee. They signed a contract promising an attractive wage, free accommodation, free food and the (compulsory) local social security contributions and health insurance. Upon arrival, their documents and passports were taken from them. They were housed in unacceptable accommodation (ice on the ceiling in winter, rain and mould in summer). For this they were deprived of a considerable part of their wages. They were charged for meals, unlike their colleagues on site. Social contributions were not paid into the fund and the local management divided the amounts among themselves.

There were different reports of violence by the foremen against the Filipino employees. They were told that they could not go to the authorities because they did not have their papers. They could thus be arrested as illegally present and the police would not believe them anyway. All three offences of human trafficking were fulfilled.

The crux of the entertainment budget

Thomas Roth has been advising European companies in Asia for 20 years and has so far not encountered any Western company - with the exception of very small firms - that could manage without a so-called entertainment budget for its local sales team. Even if the budget is officially approved, it directly stimulates the market for the human commodity. This is not in line with the Corporate Guiding Principles, but changing them triggers internal conflicts. The company's own salespeople protest vehemently that nothing can be sold without entertainment. Whether this is true remains an open question. Because managers from the West cannot or do not want to assess the risk, nothing is changed.

Interestingly, many Asian companies have managed to effectively minimize entertainment without losing sales and even with growing success. Not entirely voluntarily, because compliance requirements in various countries are being implemented ever more strictly by the authorities, and the legal risk simply became too great. Western companies have some catching up to do in this regard.

Black holes as a risk factor

The above examples show situations that arise due to so-called black holes (distance, context, transparency, communication, routine) in organizations. An auditor cannot detect them. It is obvious that many offence involvements of a management arise completely unintentionally and would never be tolerated for moral and legal reasons. Nevertheless, such situations are common and pose a tremendous compliance risk.

At any given time, 20 million people are in a modern form of slavery.

Interpol needs the cooperation with global companies

In November 2014, the third Interpol Conference on Human Trafficking took place in Lyon, France. The various police organisations from Europe, America, Asia and Africa were invited to the conference. Also present were representatives of various non-profit organizations and, among others, the International Organisation for Migration (IOM) was invited. It was about the cooperation of the most diverse players to fight human trafficking on a global level. The globally active companies were absent from the conference. Only one American bank had accepted. International companies are key players when it comes to human trafficking. Their absence allows for several conclusions. Either the issue of human trafficking is latently feared and therefore avoided, or it is considered non-existent because knowledge about it is lacking.

Ignorance does not protect from harm

Apparently, it is not yet known that legislators around the world are drafting new regulations regarding human trafficking that must be implemented by companies. This would even make them a basic requirement for obtaining an ISO-9001 certificate.

Education on human trafficking would massively improve sustainability without much effort. Human trafficking takes place everywhere in the organization where there are still holes in terms of internal and external compliance. This would make it clear that global companies can no longer do without an ISO 26 000 - and a way must be found to verify this.

bb-com GmbH http://www.bb-com.ch

International Organization for Migration https://www.iom.int/

Humanrights http://www.humanrights.ch/de/

Interpol http://www.interpol.int/