Forced Labor and Trafficking Risks in Global Supply Chains

1. Forced Labor and Trafficking Risks in Global Supply Chains

2. Mission: Make fair and accountable recruitment an accessible commodity – the rule rather than the exception, by

3. Scope of this Presentation

4. Causes, Benefits and Risks of Labor Migration Labor shortages in receiving countries Receiving countries keep businesses in-country Employers get skilled workers Workers get jobs, and acquire and improve skills Sending countries earn from dollar remittances Labor migration Labor surplus in countries with high unemployment and underemployment Unintended outcome: Debt bondage, forced labor trafficking; labor broker abuses

5. Workers subsidize the cost of labor migration, fall into debt bondage Recruitment & Selection Return/Reintegration On-Site Conditions • Commitment/ Reservation Fee • Placement Fee • Direct Costs • Deductions (Run away insurance, other deductions) 5. Cost of repatriation • Risks to workers • Forced labor • Excessive, forced overtime • Harassment and abuse • Pregnancy testing, forced contraception/abortion • Workers who run-away • Risks to employers • Worker dissatisfaction and unrest • Runaway workers • Litigation • Public censure: stakeholder action, dissatisfied customers

6. Primacy of immigrations policies Entry and exit barriers Receiving Country Governments Poor to no regulation, low penalties for malpractice Labor Brokers Corruption and collusion Poor ability to negotiate with receiving countries for better worker protection Sub-contract recruitment, selection and hiring, and even on-site management of foreign workers, but have no visibility or control over the process Sending Country Governments Employers Imperfect information Workers Poverty and Unemployment Factors that increase vulnerability of the labor migration system to forced labor issues

7. Where the risk to forced labor, debt bondage and trafficking are most likely

8. The worker’s risk to debt bondage and forced labor starts before they even reach the workplace - even before they get the job

9. Range of Total Recruitment Fees & Expenses Paid by Workers (in USD)

10. Breakdown of a Filipino Worker’s Wages for a 2-year Contract in Taiwan (NT414,720), 2009 Source: Verité, 2009

11. Employers need to pay for recruitment services if they want to eliminate forced labor in supply chains

12. Fees Paid by Contract Workers for Taiwan Deployment

13. Actual Fees Paid by Taiwan-Bound Workers (Philippine Example) **

14. Sample cost comparison $3,000 – $3,500 …excluding Passport, Medical, Clearances to cover recruitment hiring, pre-employment training and life-planning, personality testing, worker hot-line, monitoring visits Actual Cost of Services: $750 (+/-) actual costs paid by worker +$400 Note: “Actual cost of services” can vary depending on type of workers being recruited and the nature of the supply market. $1,150

15. Challenges in Auditing Labor Brokers

16. What Business Needs to Do

17. Challenges

18. Thank You!For questions, contact me at:Marie Apostolmarie@fairhiringinc.com