The role of large companies in human trafficking

Business travellers who regularly visit their subsidiaries in Asia are usually unknowingly confronted with human trafficking. Where local customs dictate how guests (customers or even guests of the parent company or other subsidiaries) are treated, e.g. in the form of dinner, a visit to a karaoke bar with entertainers, this quickly leads to ethically questionable environments that can be built up by human trafficking. If the whole thing is paid for as an entertainment budget by the company itself, it is already participating in human trafficking. In East Asia (China, Taiwan, Korea, Japan), for example, it can be assumed that at least 80 % of the female entertainers and depending on the category of the location in bars, karaoke bars or massage shops are forced to perform the activity by an artificially constructed debt relationship controlled by extreme force.

20 million people are enslaved

At any given time, 20 million people are in this modern form of slavery. That's one person in 400, the vast majority of whom are forced into exploitative employment through human trafficking, often involving the sex trade. It is important to understand that a country such as Switzerland or Germany, for example, 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. There are, among others, the following markets for human trafficking independent of human smuggling, which is 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, transportation, 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, transport to their target market, control and exploit this enormous number of victims, 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, etc. or on the periphery such as entertainment for customers. However, human trafficking can also take place within the organisation, e.g. in the production area, as the following example shows.

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.

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

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 for this would be that the hiring would not be done through the company's branch in the Philippines, but through an agent, so that this 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 are there any exceptions regarding wages, social security, etc. This led to the following situation:

Lawmakers around the world are drafting new regulations on human trafficking.

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 (obligatory) local social contributions and health insurance. Upon arrival, their documents were taken from them, as well as their passports. 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. Furthermore, unlike their local colleagues, they were charged for their meals. The social contributions were not paid into the fund and the local management divided these amounts among themselves.

Furthermore, 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 the papers, that this could get them arrested as being there illegally, and that the police would not believe them anyway. All three offences of human trafficking were fulfilled.

The crux of the entertainment budget

Thomas Roth (see box) 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. While this is not in line with the Corporate Guiding Principles, changing them triggers internal conflicts. The company's own salespeople protest vehemently that nothing can be sold without entertainment. Whether this is true, however, 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. This is not entirely by choice, as compliance requirements in various countries are being implemented ever more strictly by the authorities, and the legal risk simply became too great for the locals. 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 the organization. An auditor cannot detect them. It is obvious that many offences of a management arise completely unintentionally and would never be tolerated for moral and legal reasons. Nevertheless, such situations are common and they pose an enormous compliance risk.

Interpol needs the cooperation of global companies

In November 2014, the 3rd Interpol Conference on Human Trafficking took place in Lyon, France. Invited to the conference were the various police organizations from Europe, America, Asia and

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

Africa. Representatives of various non-profit organizations such as global companies and the International Organization of Migration (IOM) were also invited. It was about the cooperation of different players to fight human trafficking on a global level. However, it was noticeable that the global companies were missing from this conference. Only one American bank had agreed to attend. International companies are key players when it comes to human trafficking. Their absence suggests several things. 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 will soon have to be implemented by companies. This would even make them a basic requirement for obtaining an ISO-9001 certificate.

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