prison-162885_960_720For companies selling engineered goods produced within complex, multi-tiered global supply chains, forced labor and human trafficking present thorny issues. While it may be possible for a company to say that its operations are free of both, and it may even be possible for it to say the same of the operations of its direct suppliers, it is a lot more difficult to assert no involvement across an entire supply chain. The chief reason for this is that end-to-end supply chains for engineered goods are typically very difficult to map, largely because numerous businesses are involved in the fabrication of parts and materials and sub-contracting can occur at various stages. Nevertheless, drivers do exist for companies to investigate, manage and report upon the issues. Such drivers include an ethical imperative but, increasingly, legislation is also of significance.

Indeed, the regulatory landscape has become more populated in recent years with the likes of South Africa’s Prevention and Combating of Trafficking in Persons Bill, Qatar and UAE’s respective “Combating Human Trafficking” laws and the UK’s Modern Slavery Act being introduced alongside the long-standing legislation of, notably, the USA with its Foreign Corrupt Practices Act, Trafficking Victims Protection Act and Racketeer Influenced and Corrupt Organisations Act dating back many years (by comparison, the California Transparency in Supply Chains Act of 2012 is far more recent).

The changing landscape makes monitoring important, particularly for global businesses. In this regard, a report by the Institute for Human Rights and Business and co-authored by legal practice Hogan Lovells LLP is of note. Published in October of last year, it assesses relevant legislation in eight countries – UK, USA, Qatar, UAE, Japan, Brazil, Russia and South Africa – to give an indication of what, in regulatory terms, both exists and is evolving across the Americas, Europe, Middle East and Asia. These eight countries include some of the global front-runners in setting legislation that, for at least some (e.g. Qatar), has been spurred by winning the hosting duties for international sporting events and the associated influx of people this will bring for stadium construction and other such work.

The report contextualizes the issues to begin with, providing definitions of both forced labor and human trafficking. It also presents an international dimension drawing on, for example, UN and International Labour Organisation (ILO) declarations and conventions for the principles that underpin national laws. Both the definitions and international dimension are worth touching upon.


The report states that “forced labor” refers to “extracting work or service from another under threat of penalty and for which that other person has not offered themselves voluntarily”. The report then goes on to state the ILO indicators of forced labor, these being:

  • Abuse of vulnerability
  • Deception
  • Restriction of movement
  • Isolation
  • Physical and sexual violence
  • Intimidation and threats
  • Retention of identity documents
  • Withholding of wages
  • Debt bondage
  • Abusive working and living conditions
  • Excessive overtime

The report invokes the UN definition of human trafficking, something that comprises three components: (i) an act of movement (i.e. recruitment, transport, transfer, harboring and/or receipt of persons), (ii) by certain means (i.e. coercion, abduction, threat or use of force and/or giving payments or benefits); and (iii) for a certain purpose (exploitation, forced labor, prostitution of others, slavery or removal of organs).

International Dimension 

As the report explains, there are several international protocols, treaties and conventions that provide a global framework for efforts to curtail human trafficking. Of these, the most important is the Palermo Protocol. Adopted in 2000 and effective from 2003, the Protocol seeks to criminalize any activity which promotes or aids trafficking in any form whatsoever. While the Protocol does not mention corporate liability for complicity in supply chains, it includes obligations to raise awareness of trafficking as well as an obligation to criminalize anyone acting as an “accomplice” to any trafficking offence.

In addition to the Palermo Protocol, the UN Guiding Principles on Business and Human Rights set guidelines for governments and companies to prevent, address and remedy human rights abuses committed in business operations. One pillar of the Guiding Principles is the corporate responsibility to respect human rights. There is also the ILO Declaration on Fundamental Principles and Rights at Work. This was adopted in 1998 and declares that relevant states, even if they have not ratified particular conventions, have obligations arising from their membership to respect, promote and realize the elimination of all forms of forced or compulsory labor.

The Legislation 

The legislation documented in the report varies between the countries assessed (please refer to the report for precise details). However, the report suggests reporting obligations are increasingly common, stating that:

…direct corporate liability for instances of forced labor and trafficking in supply chains is limited; rather the trend internationally is very much towards companies reporting risks and steps required to mitigate risks of violations occurring down the chain. The reputational risk is… high 

This is interesting comment, particularly for bringing in reputational risk and making a link to investor concerns (something commented upon at some length in the report). In this regard common ground can certainly be found with the topic of conflict minerals, and, while still voluntary, corporate reporting on environmental and sustainability issues.

What Next? 

Knowledge of the legislation is one thing; taking action to comply with it is another. For affected companies, the perhaps obvious first steps towards compliance include obtaining and reviewing relevant guidance and integrating the principles of such documents alongside existing management practice. Screening tools exist too, and something like the US Department of Labor’s list of “Goods Produced by Child Labor or Forced Labor” ( may be worth consulting, perhaps for use in risk assessment. Another point is not to consider such compliance in isolation. Rather, consider whether any existing company efforts to comply with RoHS, REACH, conflict minerals, etc. can be extended to bring in anti- forced labour and human trafficking actions. The report is available at:


Author: Dr Alex Martin

Senior Regulatory Consultant, Edif ERA

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