Human Trafficking and Supply Chain Compliance European Compliance & Ethics Institute May London, UK

Transcription

1 Human Trafficking and Supply Chain Compliance European Compliance & Ethics Institute May London, UK Thomas Firestone Of Counsel Baker & McKenzie LLP Priority for U.S. Government President Obama: It ought to concern every person, because it is a debasement of our common humanity. It ought to concern every community, because it tears at our social fabric. It ought to concern every business, because it distorts markets. Strong bipartisan support Wave of legislation from 2000 to the present and more can be expected 2 1

2 Trafficking Victims Protection Act (2000) Created federal crime of human trafficking Established Office to Monitor and Combat Trafficking in Persons (TIP) Requires publication of annual TIP report assessing efforts of countries to combat TIP and ties foreign assistance to the assessment 3 Labor Trafficking Defined by International Organization for Labor as work or service extracted from a person under threat of penalty, including penal sanctions and the loss of rights and privileges, where the person has not offered himself or herself voluntarily Examples include slavery and abduction, misuse of public and prison works, forced recruitment and debt bondage and domestic workers under forced labor conditions Often involves recruiters and transporters 4 2

3 Labor Trafficking Varieties Debt bondage using debt or bond to keep a person in forced labor Involuntary servitude fear of physical harm or legal punishment (i.e. deportation) prevents attempts to leave Domestic servitude domestic workers kept in servitude through force. coercion, emotional abuse Child labor underage workers/conscription 5 State Department TIP Report 2013 Central Asian men exploited in forced labor in Russia; Boys in forced labor in illegal drug production and transportation in the United Kingdom and Mexico. Entire families in South Asia enslaved in debt bondage in agriculture, brick kilns, rice mills, and stone quarries. In South America and Africa, victims exploited in agriculture, construction, mining and logging, among other industries. Forced labor in Burma and Cambodia on Asian fishing vessels 6 3

4 18 USC 1581 Peonage Makes it unlawful to hold a person in "debt servitude," or peonage, which is closely related to involuntary servitude. Section 1581 prohibits using force, the threat of force, or the threat of legal coercion to compel a person to work against his/her will. In addition, the victim's involuntary servitude must be tied to the payment of a debt USC 1584 Involuntary Servitude Makes it unlawful to hold a person in a condition of slavery, that is, a condition of compulsory service or labor against his/her will. Requires that the victim be held against his/her will by actual force, threats of force, or threats of legal coercion. Also prohibits compelling a person to work against his/her will by creating a "climate of fear" through the use of force, the threat of force, or the threat of legal coercion [i.e., If you don't work, I'll call the immigration officials.] 8 4

5 18 USC 1589 Forced Labor Makes it unlawful to provide or obtain the labor or services of a person through one of three prohibited means. Congress enacted 1589 in response to the Supreme Court s decision in United States v. Kozminski, 487 U.S. 931 (1988), which interpreted 1584 to require the use or threatened use of physical or legal coercion. Section 1589 broadens the definition of the kinds of coercion that might result in forced labor USC Trafficking Section 1590 makes it unlawful to recruit, harbor, transport, or broker persons for labor or services under conditions which violate any of the offenses contained in Chapter 77 of Title

6 18 USC 1592 Documents Makes it illegal to seize documents in order to force others to work. By expanding its coverage to false documents as well as official documents, 1592 recognizes that victims are often immobilized by the withholding of whatever documents they possess, even if the documents are forged or fraudulent. Section 1592 expands the scope of federal trafficking statutes to reach those who prey on the vulnerabilities of immigrant victims by controlling their papers. 11 Other Legal Risks RICO FCPA risks if payments to immigration officials, border guards, local labor offices, for necessary documents Potential civil liability under TVPA, Fair Labor Standards Act and RICO Reputational damage Government contracting rules 12 6

7 2012 Executive Order Strengthening Protections Against Trafficking in Persons in Federal Contracts Amend Federal Acquisitions Regulation (FAR) to require companies to comply with basic conduct mandates prohibiting: Fraudulent or misleading recruitment practices Charging recruitment fees from employees Destroying, confiscating or otherwise denying access to employee identification documents Executive Order For contracts performed outside the U.S., requires contractors and subcontractors to pay return transportation costs for employees travelling to expatriate jobs, permit full audits and inspections and, and notify the Inspector General of the pertinent agency of any non-compliance 14 7

8 2012 Executive Order Requires contractors and their subcontractors, by contract clause, to agree to cooperate fully in providing reasonable access to allow contracting agencies and other responsible enforcement agencies to conduct audits, investigations, or other actions to ascertain compliance with the TVPA, this order, or any other applicable law or regulation establishing restrictions on trafficking in persons, the procurement of commercial sex acts, or the use of forced labor Executive Order For contracts worth more than $500,000 USD to be performed outside the U.S., contractors and sub-contractors must maintain a compliance plan during the term of performance of the contract to include: an employee awareness program a process for employees to report, without fear of retaliation, trafficking violations or acts inconsistent with this order 16 8

9 2012 Executive Order a recruitment and wage plan that only permits the use of recruitment companies with trained employees, prohibits charging recruitment fees to the employee, and ensures that wages meet applicable host country legal requirements or explains any variance a housing plan, if the contractor or subcontractor intends to provide or arrange housing, that ensures that the housing meets host country housing and safety standards or explains any variance; and procedures to prevent subcontractors from engaging in trafficking 17 National Defense Authorization Act 2013 Allows USG agencies to terminate any contract or grant with any organization or individual that engages in human trafficking and requires all grants and contracts worth more than $500,000 to include a written certification that no party in the transaction will engage in or support human trafficking 18 9

10 California Transparency in Supply Chains Act Passed in 2010, took effect in 2012 Applies to companies that do business in California and have more than 100 million USD in worldwide gross receipts Requires an annual public statement from companies certifying their efforts to eliminate forced labor from their direct supply chains 19 Human Trafficking the EU Regime Excerpt of the definition of human trafficking : The recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion for the purpose of exploitation". Article 3 of the UN Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children 1. Directive 2011/36/EU sets out the minimum EU-wide standard for the protection of victims of human trafficking and for the prevention of the crime itself. Requires Member States to criminalise human trafficking. 2. Directive 2012/29/EU ensures that victims receive appropriate information, support and protection and are able to participate in criminal proceedings. 3. Directive 2004/80/EC requires compensation to be given to victims of this crime. 4. Council Directive 2004/81/EC gives assistance and obliges the member state to provide residence permits to victims of human trafficking who are non-eu nationals

11 Supply Chain Management Poor supply chain management poses legal, reputational, trade-related and future financing risks Suggested preventative measures Staff training, particularly in high risk jurisdictions Conduct regular supply chain risk assessments ensuring to assess the entire business including its sub-contractors and/or business partners Design and implement a strategy to respond to any identified risks Suggested protection measures Implement corrective action as soon as a weakness is identified Companies may consider publicly reporting on their supply chain due diligence policies and practices 21 Best Practices in Compliance Due diligence on suppliers and labor agencies Risk assessments based on product and location Consult TIP report Supplier Code of Conduct and compliance plan modelled on Executive Order requirements Compliance language in contracts Supplier certifications of compliance On site visits and third-party audits Termination upon finding of violation 22 11

12 Supplier Code of Conduct Ensure that workers meet all minimum age requirements and are over the age of 16 Comply with all applicable child labor laws Not use any indentured or forced labor Set working hours and wages in compliance with all applicable laws. Pay at least the minimum legal wage or a wage that meets local industry standards, whichever is greater 23 Supplier Code of Conduct Treat all employees with dignity and respect and not engage in or permit corporal punishment, threats of violence or other forms of harassment whether based on gender, race, color, religion, ethnicity, age, sexual orientation, national origin, disability, or any other legally protected characteristic Employ workers on the basis of their ability to do the job, not on the basis of their personal characteristics or beliefs (including race, color, gender, nationality, religion, and age, maternity or marital status 24 12

13 Supplier Code of Conduct Respect employees right to join or not join any lawful organization, including trade unions and works councils, and comply with all applicable local and national laws pertaining to freedom of association and collective bargaining Compliance plan modelled on requirements of Executive Order including: employee awareness program; reporting procedures due diligence on 25 Supplier Code of Conduct Compliance plan modelled on requirements of Executive Order including: employee awareness program; reporting procedures standards for recruitment companies a housing plan that meets host country housing and safety standards 26 13

14 Human Trafficking and Supply Chain Compliance European Compliance & Ethics Institute May London, UK Thomas Firestone Of Counsel Baker & McKenzie LLP 14