No consumer wants to buy products made by slaves. And no investor wants to support companies that use slave labor. But it’s extraordinarily difficult for shoppers or stockbrokers to know which products or companies may be tainted by trafficking.
The bipartisan bill requires major U.S. companies to publicly disclose measures they are taking to prevent human trafficking, slavery and child labor in their supply chains. Publicly held companies with more than $100 million in global gross receipts would make annual disclosures to the Securities and Exchange Commission.
“Human trafficking, child labor and slavery are, unfortunately, not relics of the past but very much present in the 21st century,” Maloney said in a statement released today. “Every day, Americans purchase products tainted by forced labor and this bill is a first step to end these inhumane practices.” (Read the full statement here.)
The bill is supported by the Alliance to End Slavery and Trafficking (ATEST), a coalition of leading human rights organizations, including Free the Slaves, working to eradicate slavery.
“Enactment of supply chain transparency legislation will provide consumers with information about companies that are – and are not – taking substantial steps to address slavery. It will also help investors better understand the reputational and other risks of investing in particular companies,” ATEST said in a statement released today.
“The legislation recognizes a company’s ability to positively impact human rights around the world. Federal legislation can even help American businesses by establishing clear federal standards and a level playing field, avoiding the need for companies to comply with differing state laws on supply chain transparency, such as California’s transparency law,” ATEST notes. (Read the full ATEST statement here.) (Learn about California’s transparency law and corporate compliance here.)
“By requiring companies with more than $100 million in worldwide receipts to be transparent about their supply chain policies, American consumers can learn what is being done to stop horrific and illegal labor practices,” said FTS Programs Director Karen Stauss. “This bill doesn’t tell companies what to do, it simply asks them to tell us what steps they are already taking. This transparency will empower consumers with more information that could impact their purchasing decisions.”
The U.S. is the world’s largest importer, and the public is increasingly demanding information about the human rights impact of products in American stores. In 2012, the U.S. Dept. of Labor identified 134 goods from 74 countries made by forced and child labor.
“Businesses shouldn’t turn a blind eye to the working conditions of people who make their products, and the supply chain transparency act is a great step toward making sure they can’t. American consumers want and deserve to know what’s behind the food, clothing, and other goods they use every day. Having companies report what they are doing to prevent trafficked or forced labor isn’t asking much; and for tens of millions of people working in conditions of modern slavery it is absolutely urgent,” said Melysa Sperber, director of ATEST.
Transparency legislation is being welcomed by investors as well as by anti-slavery activists.
“Given the complexity of global supply chains and the multitude of contractors, recruiters, and suppliers used throughout a production process, companies without comprehensive anti-trafficking and slavery protocols are exposed to a host of financial, regulatory, legislative, legal and reputational risks with the potential to adversely impact shareholder value,” said the Interfaith Center on Corporate Responsibility (ICCR), a coalition of 300 investors with assets under management of over $100 billion, in a statement today.
“Proactively addressing these risks can guard against the negative publicity, business interruptions, potential lawsuits, public protests, and reputational damage that may result from undetected human rights violations. As concerned investors, we believe that companies with formal human rights due diligence processes are better positioned to safeguard against these adverse human rights impacts and hence, better able to protect shareholder value.” (Read the full ICCR statement here.)
One of the most important challenges for the anti-slavery movement is to ensure that survivors receive the support they need to reclaim their dignity and restart their lives. And to do that, it’s vital that the people who know slavery best – trafficking survivors themselves – help guide the work.
One such leader is Timea Nagy, who received a Free the Slaves Freedom Award last Friday at the “Stolen Lives” anti-trafficking conference at Quinnipiac University. FTS Executive Director Maurice Middleberg presented Timea with her award during an emotional closing event that featured the premiere of a video minidocumentary of Timea’s ordeal in slavery.
Timea was working as a television producer in Hungary, and flew to Canada to earn some quick cash to finish a TV show. The job offer was a trick; she was trapped in sex slavery in Toronto.
Since her escape, Timea has become a leader in Canada’s anti-trafficking movement. She created the country’s first mobile hotline and safe house for sex trafficking victims. Her team at Walk With Me has received more than 800 calls for help and has sheltered more than 250 survivors. Timea trains police to recognize that women and girls in forced prostitution are victims and not criminals. She frequently raises awareness in the media that modern-day slavery exists in Canada. Her book is called Memoirs of a Sex Slave Surviror.
Our congratulations to Timea on receiving her Freedom Award. FTS periodically awards heroes like Timea for their courage and determination. It’s a way to shine a light on what some of the best anti-slavery work in the world looks like, and to underscore that slavery can be overcome through the kind of courage, innovation and determination that Timea exemplifies. Thank you, Timea!
And our thanks to Quinnipiac University for inviting Timea to present her first-person perspective on slavery’s psychosocial impacts to a prestigious gathering of 200 anti-slavery activists, academic researchers, government policymakers and health care professionals.
The House of Representatives approved a range of proposals Tuesday to combat sex slavery in the U.S., including training for police to recognize trafficking cases and treat victims appropriately, a ban on advertising sex for sale with children, and an initiative for sex slavery survivors to receive restitution from pimps.
“While an interest in human trafficking has long been a focus of conservatives, the issue has attracted significant bipartisan interest in recent months,” reports the New York Times. “Representative Eric Cantor, Republican of Virginia and the House majority leader, held a news conference on Tuesday to push the legislation, an usual amount of attention for low-profile measures.”
Cantor has launched a webpage dedicated to modern-day slavery. “The scourge of human trafficking remains one of the most horrific crimes that plagues our world,” the webpage notes. House Republicans have also created a YouTube video called “Together, Let’s End Human Trafficking.”
“Measures to combat human trafficking were already listed as part of the House’s spring agenda, but they gained momentum amid reports of the abduction of Nigerian girls by extremist group Boko Haram,” reports The Hill.
Five bills passed the House with broad bipartisan support, along with a resolution condemning the Boko Haram kidnappings, according to CNN:
- H.R. 4058: Requires states to identify and address sex trafficking of minors in foster care.
- H.R. 4573: Directs the State Department to give “advance notice of intended travel” of those convicted of sex offenses against children and asks other nations to reciprocate.
- H.R. 3530: Imposes additional financial penalties on sex traffickers and helps increase the amount of restitution victims could receive.
- H.R. 3610: Encourages states to put in place laws that treat minors who have been sex trafficked as victims rather than criminals.
- H.R. 4225: Makes it a federal crime to knowingly advertise for the commercial sexual exploitation of minors and trafficking victims.
The 2013 Walk Free Global Slavery Index estimates that there about 60,000 people in various forms of slavery inside the U.S. You can learn more about slavery in America in the State Department’s annual Trafficking in Persons Report.
A new report underscores how profitable and widespread modern-day slavery has become. The U.N. International Labor Organization (ILO) this morning estimates that trafficking generates $150 billion in illicit profits each year. The figure is three times more than previously estimated.
The ILO report, Profits and Poverty: The Economics of Forced Labor, says two thirds of the profits – about $99 billion – comes from sex slavery, while another $51 billion comes from forced labor slavery such as domestic work, farming, mining, fishing, construction and logging.
“This new report takes our understanding of trafficking, forced labor and modern slavery to a new level,” said ILO Director-General Guy Ryder.” Forced labor is bad for business and development and especially for its victims. Our new report adds new urgency to our efforts to eradicate this fundamentally evil, but hugely profitable practice as soon as possible.”
The ILO says “income shocks and poverty” are the main economic factors that push individuals into slavery. Other factors include a lack of education, illiteracy, gender and migration.
“We must now focus on the socio-economic factors that make people vulnerable to forced labor in the private sector,” said Beate Andrees, head of the ILO’s Special Action Program to Combat Forced Labor. Andrees called for a series of measures:
- Bolstering social protection floors to prevent poor households from abusive lending or indenture in the event of sudden income shocks;
- Investing in education and skills training to fortify job opportunities for vulnerable workers;
- Promoting a rights-based approach to migration to prevent irregular employment and abuse of migrant workers; and
- Supporting the organization of workers, including in sectors and industries vulnerable to forced labor.
“If we want to make a significant change in the lives of the 21 million men, women and children in forced labour, we need to take concrete and immediate action,” the ILO Director-General said. “That means working with governments to strengthen law, policy and enforcement, with employers to strengthen their due diligence against forced labour, including in their supply chains, and with trade unions to represent and empower those at risk.”
Free the Slaves Programs Director Karen Stauss says the new report underscores the need to increase funding to combat modern-day slavery. “Trafficking is one of the world’s largest criminal enterprises and the estimate of its profitability continues to rise, yet the level of funding to combat it has not kept pace and remains remarkably low,” Stauss says. “Slavery can be conquered if governments, international institutions, foundations, corporations and civil society join together to marshal the funding and political will to get the job done.”
Many U.S. companies must soon disclose if their products are tainted by minerals often mined by slaves in central Africa. A federal appeals court panel has upheld most elements of the “conflict minerals rule,” which is a new corporate transparency regulation that can help consumers and investors, as well as people in slavery.
The rule was authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and formally issued by the Securities and Exchange Commission (SEC) in 2012. Publicly held companies must determine if their products contain tin, tungsten, tantalum or gold from mines that benefit armed groups in the eastern Democratic Republic of the Congo (DRC) and surrounding areas. The goal is to inform people who might want to avoid buying these products or investing in the companies that make them. Free the Slaves has demonstrated that slavery is common at mines producing these minerals.
Three business associations challenged the reporting requirement in court, saying the SEC did not conduct a proper cost-benefit analysis and the specific disclosure language violates corporate free-speech rights.
“The court affirmed the SEC’s right to require corporate human rights disclosures – roundly rejecting the arguments of business groups that the SEC rule was issued without the requisite cost-benefit analysis,” says FTS Program Director Karen Stauss. “In fact, the court declined to monetize the ‘benefits’ of the law, which it rightly pointed out involve lives saved and crimes averted.”
The court struck down one piece of the rule that requires companies to state when their products are not “DRC conflict free.”
“That component of the decision represents a potential setback for groups advocating for corporate disclosures on human rights, but not a fatal one,” Stauss says. “That part of the court’s opinion is fairly limited; the rest of the rule remains intact. The court upheld disclosure to investors.”
“Sustainable and responsible investors commend the court’s preservation of the conflict minerals reporting rule and its general support for the SEC’s authority,” the investment groups of the Responsible Sourcing Network said in a joint statement. “We applaud the companies that are already implementing comprehensive due diligence…and call on all covered issuers [of stock] to continue preparing the required disclosures, which remain essentially unaltered by the court’s opinion.”
Business advisors are telling clients to focus on compliance rather than resistance in court. “Conflict minerals requirements are here to stay,” according to Jane Luxton, a partner at the Washington law firm Clark Hill. The court decision on corporate free-speech rights “only delays the inevitable,” she wrote on the Corporate Social Responsibility Wire. The same information “will soon be widely available in the form of government reports,” Hill says.
The lawsuit against the conflict minerals rule was filed by the National Association of Manufacturers, the Business Roundtable and the U.S. Chamber of Commerce. It is one of several cases where businesses are asserting they have a constitutional right to not reveal negative aspects of their products to the public, according to Reuters. Another case, involving labels on meat, is headed to court in May. Experts say the ruling in that case could ultimately change the impact of the recent ruling on conflict minerals.
Read more about FTS programs in the DRC on our Congo webpage.