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Modern day slavery in the global economy, and how to solve it

Source: Skoll World Forum - Tue, 11 Mar 2014 17:33 GMT
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In Taiwan we met a college-trained Filipina named Edz. She was working cleaning toilets at a factory, despite having been promised a $600/month job at a cell phone plant. How she got there, and why she couldn’t leave, is the story of forced labor in the global economy. Importantly, the problems that she and others face can be solved.

In the Philippines traveling abroad for a job is both big business and a desirable career path. Edz has a big family and wanted to help them out. She met a recruiter who promised her a good job in Taiwan. She borrowed close to $3500 from a money lender to pay this labor broker. After a bunch of paperwork, a medical exam and a few bus trips, she flew to Taiwan.

When she reported for work, she found out the job was about $325 a month, or $1.15 an hour. From that income, she had to pay $185 monthly – over half her income -- to service her debt. She was charged $50/month to share a room in a decrepit and dangerous house. Another $40 went to pay the fees for the Taiwanese labor broker. This left her with just over $50 to cover food, transport and any other expenses per month. She didn’t have enough money to send home.

Why didn’t Edz leave? Why don’t workers like her simply find other jobs? The answer is the heart of what makes these paid laborers modern-day slaves. Their debt acts as an instrument of control, binding workers to this facility and this employer. Leaving this job means they will have violated the terms of their visa and become illegal immigrants, subject to detention and deportation. In the vast majority of cases like hers, employers keep passports and identity documents – and frequently charge workers hundreds of dollars to retrieve them. If workers do leave -- or lose their jobs because they asked for safer conditions or more overtime hours, or otherwise advocated for themselves beyond the patience of the employer --  they will have no way to pay back the loans that they took.  In many cases, the people who helped facilitate their migration have connections to organized crime, so they have to keep paying their debt or risk the safety of their family back home. Indeed, the connection between modern-day slavery and corruption is a risk not only for workers, but also for the companies that employ them.

The story of Edz is a common one in multinational supply chains. In the US, we met Fernando, who had paid $2000 for a job doing forestry work in North Carolina, and then had his passport taken away and was trucked to work at a tree nursery in Connecticut, where he was paid $1.20/hour. It took him almost 2 years just to make enough money to repay the loan.

Rafiq was a farmer from Indonesia who sought work in palm plantations in Malaysia. He was offered a job paying US$444 a month with the potential for overtime, and promised a work visa on arrival. When he got to the site, his passport was taken away, he was presented with unreachable quotas and forced to live in squalid conditions. When he and a group of workers objected to their treatment, the labor contractor had them arrested for improper work visas. He spent 10 months in a detention camp before finally being sent home, at a total loss to him of over $2500.

It is not just businesses that face these risks. Migrant workers build universities and museums in Abu Dhabi, Olympic and World Cup infrastructure in Russia and Qatar, and provide services at US government facilities abroad. Any sector that employs migrants runs a serious risk of employing slaves.

Behind these stories are statistics. According to the ILO, around 14M people are in conditions of forced labor for economic (as opposed to sexual) exploitation; 9M of them entered forced labor after they migrated either domestically or internationally.

The good news is that these problems can be solved, but not by standard ‘corporate social responsibility’ practices. Forced labor is a hidden problem – employers don’t want you to know about it, and workers are afraid to speak up lest they lose their jobs and are forced home deeper in debt than when they arrived. For multinationals and their suppliers, the steps to resolution are clear:

  • Identify where migrants are working, how they got there and what conditions they face: what recruitment agents were used? How much debt are they carrying? Were government officials bribed to facilitate their migration? Do they have access to their passports?
  • Set clear policies that prevent workers from paying fees to get a job and providing full access to passports.
  • Build understanding and capability among employers on how to meet those policies.
  • Ensure that employers only recruit through labor brokers who can demonstrate the understanding and capability to treat workers fairly and lawfully.

This can be done. Through concerted effort and focus over four years in partnership with Verité, Apple has facilitated the reimbursement of over $16 million to workers who paid excessive fees to work in Apple suppliers in Asia. Walmart has committed to piloting Verité’s framework for ethical recruiting among their US agriculture suppliers. In doing so, both companies are eliminating the terrible risks faced by workers, supporting better human resources management among their suppliers, and eliminating a host of illegal and unethical middlemen – the recruiters – from their operations.

Dan Viederman is CEO of Verité, and has worked closely with NGOs, governments, investors, and the biggest multinational brands in the world to improve working conditions and eliminate human rights violations across geographies and business sectors.

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