Preventing Issues in the Supply Chain
The consequence of doing business with a supplier involved in human trafficking is dire from a regulatory standpoint. But how do you know if your supply chain is compromised? Robust due diligence is imperative, and there are a number of tools and technologies available to help.
Human trafficking is not a new scourge. But a recent slate of laws have changed the calculus by forcing companies to address the risk of trafficked labor in their supply chains. Some laws require that companies disclose efforts to eliminate human trafficking from their supply chains. Another requires companies to implement compliance programs that focus on human trafficking.
The subject of human trafficking evokes varied images. Fisherman chained to boats. Women forced into prostitution. Children sold into slavery by impoverished parents or workers locked in factories. But trafficked labor takes forms that are less obvious. An Idaho company that cuts Christmas trees allegedly recruited workers with promises of high wages and paid expenses. Instead, the company allegedly forced the workers to work more than 70 hours a week, sometimes at gunpoint, for as little as $50 a week. A shipyard allegedly promised workers jobs as welders and pipe fitters to repair oil-and-gas equipment and rigs that were damaged by Hurricane Katrina. When the workers arrived, they allegedly were forced to pay $35 a day to live in cramped quarters without adequate food or toilet facilities. One recruiter allegedly promised workers jobs in a luxury hotel in Jordan. When the workers arrived in Jordan, their passports were allegedly taken and they were driven into Iraq to work on a base for a U.S. defense contractor.
How can companies recognize and prevent human trafficking in their operations or supply chain? There are a number of tools companies already use. Risk assessments will help identify risks in certain sectors or countries. The U.S. State Department’s Trafficking in Persons Report provides analyses of trafficking by country, and the organization Made in a Free World has created a software program called FRDM that identifies risks of trafficked labor in the supply chain.
Due diligence is key. Companies must be careful when working with labor brokers or recruiters. Third parties should be vetted for red flags, like prior allegations of human trafficking or recruiting efforts focused on high-risk locations. And companies can include triggered audit rights in contracts with suppliers and recruiters.
Companies with robust compliance programs will find that many of the tools to identify and prevent trafficked labor are already available to them. As with bribery, it’s all about transparency.