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Forced Labor and Trafficking Risks in Global Supply Chains.

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Presentation on theme: "Forced Labor and Trafficking Risks in Global Supply Chains."— Presentation transcript:

1 Forced Labor and Trafficking Risks in Global Supply Chains

2 Increasing the percentage of workers deployed to foreign jobs through safe, legal and fair means Increasing the number of ethical and accountable enterprises working in the private recruitment space Increasing the number of employers paying for recruitment services Mission: Make fair and accountable recruitment an accessible commodity – the rule rather than the exception, by

3 Scope of this Presentation Formal sector Regular migration

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

5 Recruitment & Selection 1.Commitment/ Reservation Fee 2.Placement Fee 3.Direct Costs On-Site Conditions 4.Deductions (Run away insurance, other deductions) Risks to workers Forced labor Excessive, forced overtime Harassment and abuse Pregnancy testing, forced contraception/abortion Workers who run-away Return/Reintegration 5. Cost of repatriation Risks to employers Worker dissatisfaction and unrest Runaway workers Litigation Public censure: stakeholder action, dissatisfied customers Workers subsidize the cost of labor migration, fall into debt bondage

6 Labor Brokers Entry and exit barriers Poor to no regulation, low penalties for malpractice Employers Sub-contract recruitment, selection and hiring, and even on-site management of foreign workers, but have no visibility or control over the process Receiving Country Governments Sending Country Governments Workers Poverty and Unemployment Primacy of immigrations policies Poor ability to negotiate with receiving countries for better worker protection Imperfect information Corruption and collusion 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 Guest worker programs in countries where there is tension between labor market requirements (worker shortages) and strong immigrations regimes Workplaces that are isolated and not easily within reach of inspectors/monitors/authorities Jobs that are highly dispersed, and where commercial relationships are informal (fisheries) Froeign jobs that are brokered by 3 rd party agents (PRAs) Low-value, labor-intensive Jobs on the fringes of the industry, esp. those which can be done as home-work

8 Recruitment Selection Hiring and Contracting Deployment Pre-Deployment Wages and Benefits Workplace Conditions Housing Conditions Other contractual conditions Employment Resignation/Termination/Contract Completion Repatriation Re-Integration Exit and Repatriation The workers risk to debt bondage and forced labor starts before they even reach the workplace - even before they get the job

9 IndonesiaPhilippinesVietnamThailandBangladeshChinaNepalCambodiaMyanmar Malaysia630 - 9801,1002,400No data3,500NA1750 – 2100 1200 – 1500 1,500 – 1700 Taiwan3,200 – 4,000 1,700 – 3,000 5,000 – 8,000 3,200 – 4,900 NA No Data SingaporeNo dataNo Data3,600 – 5,000 No dataNA7,000 - 12,400 No Data Japan6,000 – 9,000 3,000 – 5,000 8,000 – 15,000 6,000 – 8,500 No Data Korea5,000 – 8,000 3,000 – 4,000 7,000 – 12,000 5,000 – 7,500 No Data Range of Total Recruitment Fees & Expenses Paid by Workers (in USD)

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

11 Employers need to pay for recruitment services if they want to eliminate forced labor in supply chains Workers Pay Employers pay LeverageVisibility to practicesQuality of workers First level of selection is ability to pay Debt bondage, etc

12 Fees Paid by Contract Workers for Taiwan Deployment

13 Item (*Should be paid by Employer) Fees paid by workers (PHP) *Processing fees 2,177.63 OWWA Contribution 1,088.63 *Medical examination 2,500.00 *Visa3,100.00 *Air Ticket 7,000.00 passport900.00 NBI115.00 Birth Certification 115.00 *Pre-departure Seminar (PDOS) 100.00 TOTAL PHP 17,096.26 (US$400.00) Actual Fees Paid by Taiwan-Bound Workers (Philippine Example)

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

15 Challenges in Auditing Labor Brokers Competency Tracking informal middlemen in labor supply chain Workers afraid to talk, forced to lie No paper trail, no receipts, no breakdown of amounts workers paid Logistical challenges (cross-border), Costs Results are temporary, do not change broker practices

16 What Business Needs to Do Get clear details of the problem Assess broker practices Assess employment practices Gather information from workers Know overseas employment laws (sending) and foreign working employment laws (receiving) Manage On- site conditions Effective grievance mechanisms Dont keep passports No forced savings, deposits Meet contractual conditions Protect workers from harassment Humane living and working conditions Return Overcharges Determine judiciously: How much? How far back? Who are in scope? How do you know when objectives have been met? Enforce Ethical Recruitment Regime Pay for recruitment services Work with an ethical recruitment agency

17 Challenges Competency Collusion (Entrenched Relationships, Vested Interests) Cost (perceived or real) Determining good from bad recruiters

18 Thank You! For questions, contact me at: Marie Apostol

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