Mark P. Lagon, Director, Office to Monitor and Combat Trafficking in Persons
Hosted by The Coca-Cola Company
One Coca-Cola Plaza, Atlanta, Georgia
February 19, 2008
Sponsored by the U.S. Council for International Business, the U.S. Chamber of Commerce, and the International
Organization of Employers in Cooperation with the International Labor Organizations
Government's Expectations of Business as a Partner in Addressing Forced Labor
Good Afternoon. I'd like start by thanking the U.S. Council for International Business, the U.S. Chamber of Commerce,
the International Labor Organization, the International Organization of Employers and of course Coca-Cola for hosting
this important forum which provides an opportunity for the private and public sectors to engage on the issue of forced
labor, and explore areas where we can find common cause and partner in this work. These are complex issues and we all
approach them from diverse vantage points be they government, business or NGO--but what we have in common far exceeds
any differences--namely a shared commitment to human dignity.
Our success in confronting exploitation, abuse and coercion in the context of labor and supply chains will be found in
our ability to work toward that end in partnership--for as Secretary of State Rice has said, "The solutions to the
challenges of the 21st century are not going to be met by government alone. They come from all sectors of American
society working together."
I am delighted to be here in my capacity as Director of the State Department's Office to Monitor and Combat Trafficking
in Persons. Human trafficking is a dehumanizing crime which turns people into mere commodities. Globalization fuels not
only sex trafficking but also slave labor Goods enter the global market place while consumers have little or no
knowledge of the supply chains and work conditions that resulted in their production. This is problematic for both the
consumer and businesses which are increasingly faced with the challenge of ensuring that complex supply chains are
untainted by forced labor. But American businesses are steadily moving to address this challenge in their quest to be
socially responsible corporate citizens.
This Fall the Gap withdrew a line of embroidered blouses and ordered an internal investigation after news reports
revealed apparent child labor in a Delhi sweatshop. One child, Jivaj, from West Bengal described his experience this
way, "Our hours are hard and violence is used against us if we don't work hard enough. This is a big order for abroad,
they keep telling us that...I was so tired I felt sick."
Gap has publicly reiterated their unequivocal opposition to child labor. In a public private partnership, Gap is now
partnering with the Global March Against Child Labor to establish an independent monitoring system for future production
of its products, and to examine industry-wide solutions to child labor issues. While Gap's response was swift, the
frenzied media attention presents a nightmare scenario for even the best public relations specialist. But more
importantly it gives us a glimpse of a nightmare scenario of a different sort--that of child and forced labor.
As more labor is outsourced to developing country markets, there is a greater likelihood that human rights violations
will occur with corporate headquarters possessing little to no knowledge before it is too late Multiple layers of
contractors and subcontractors in a production chain present major challenges for accountability. Gap for example
reportedly has 90 people located around the world whose job is to ensure compliance with their Code of Vendor Conduct.
The reality, which many of you know well, is that most major companies--whether they are part of the apparel industry or
food production or other sectors--could find themselves in Gap's shoes overnight. Is this the natural product of
globalization? Is it the fruit of capitalism run amok? I think not. Many of you have dedicated your time and
professional energy to advancing the field of corporate social responsibility--a field which seeks to take steps to
better the lives of employees and the communities where your companies operate. You recognize what our nation's founders
recognized--namely that liberty, and I would argue capitalism, must be tempered by virtue and with it the common pursuit
of human dignity. You acknowledge that any challenge to public image or profitability associated with securing supply
chains and guaranteeing the absence of forced labor in production is minimal when compared to what is at stake legally
and ethically if such ends are not pursued. Corporate social responsibility often involves doing what's right beyond
what's required by the letter of the law. But forced labor is not just a moral matter but legally prohibited--under U.S.
law and international law, not least under the 2000 Palermo Protocol to the UN Crime Convention dealing with Trafficking
in Persons.
The 'case study' of the Gap gives us a glimpse of the complexity of the challenge and the need for creative thinking on
the part of business and government for that matter. One of today's sponsors, the ILO, is leading the way in bringing
together businesses, NGOs and governments to tackle forced labor. My office funded one of their programs in China which
mobilized business actors to join the international community's efforts in preventing exploitative and abusive practices
in supply chains. They have witnessed tangible results. The Chinese Government has for the first time presented a plan
for ratification of the International Labor Organization Forced Labor Conventions. This is a remarkable development, and
evidence of the power of collaboration, given that men trafficked for labor are presently not considered victims of
trafficking under Chinese law.
Before further exploring the responsibility and the opportunity that the private sector has in these areas, I'd like to
give you a sense of the scope of work of my office, recent legislative developments related to forced labor, and trends
that we are seeing globally in this realm.
The United States Government has confronted human trafficking on a multitude of levels. In late 2000, the Congress
passed and the President signed into law the Trafficking Victims Protection Act. This legislation created the office I
direct and mandated the annual release of the Trafficking in Persons Report, which is our prime tool for diplomatic
engagement and international awareness needed to achieve prevention. It institutionalized a cabinet-level taskforce,
chaired by the Secretary of State, to improve coordination and implementation of our anti-trafficking efforts.
This legislation, which has been reauthorized twice, directs the work of my office, including our annual report. The
2005 reauthorization gives new attention to labor trafficking by requiring the U.S. Department of Labor to develop and
make available to the public a list of goods from countries that the Department has reason to believe are produced by
forced labor or child labor in violation of international standards. The list is anticipated to be published in 2009,
though there may be an interim report to Congress before then. The list will serve as an awareness-raising tool for U.S.
enforcement agencies, for the public, for governments, for NGOs and ultimately for the business community. It is also
consistent with U.S. government efforts to deny specific items produced, in part or wholly, by forced labor access to
the U.S. market given the U.S. Tariff Act of 1930.
The House of Representatives passed its version of the latest reauthorization late last year. That bill places more
emphasis on forced labor, in addition to sex trafficking -- emphasis on victimization in the United States, emphasis on
tracking imports, and emphasis on assessing other nations in my office's annual global report. As a former Senate
staffer, given what I've been hearing, I have every reason to believe the Senate version of the reauthorization, to be
introduced imminently, will do the same.
Even before this recent Congressional action, last year, our Trafficking in Persons Report shed light on the alarming
trend of trafficking for forced labor purposes--specifically the use of debt as a tool of coercion. Illegal debt is
increasingly used to keep people in servitude and is employed by traffickers as an instrument of coercion, especially
among migrant laborers--many of whom are legally contracted to perform low-skilled work for the production of export
items in more developed countries, only to later be subjected to fraudulent misrepresentation of work conditions, debt
bondage and ultimately forced labor. Many, though not all, of the products resulting form this extreme exploitation end
up in the United States.
From our admittedly anecdotal observations (though others are doing serious research, like the ILO and the NGO Verite),
a significant percentage of workers in key labor source countries are paying pre-departure fees that are equivalent to
at least 10 months of their salaries to be earned from a two-year contract. This money is extracted by unscrupulous
labor recruiters who often also receive commissions from the employers--a form of 'double-dipping.' The value of the
service these recruiters provide is nowhere near the amount the workers are forced to pay, all in advance and usually
through the use of high-interest informal loans. Given what we know about the unique vulnerabilities of some migrant
laborers, and the exploitative recruiters that often prey on them, it begs the question: what percentage of the $300
billion that migrant workers remit home annually is being siphoned off by predatory recruiters, by traffickers? [1]
Many multinational producers have come to rely on low labor costs in their supply chains. Two of the three cases studies
before you (Jordan and Brazil) show evidence of the phenomenon in which debt from recruiters' excessive fees fed
directly into forced labor and made workers vulnerable to further exploitation in destination countries where rule of
law may be weak and labor rights not fully respected. As we better understand the processes which allow human
trafficking to flourish, it becomes clear that it is not enough to simply monitor the conditions of work in your supply
chains. To get at the root of this problem you must begin asking HOW the workers arrived in the work place. The
implications for companies, as the purchasers, are very real.
The ILO has a worthy structure for dealing with these recruitment problems. They have developed a "Multilateral
Framework on Labor Migration" for governments, employers and workers to address the conditions that lead these migrant
workers into forced labor. There is a dialogue underway among labor source governments and labor destination governments
in Asia and the Middle East called the "Colombo Process." It just met in Abu Dhabi and became known as the "Abu Dhabi
Dialogue." While the framework shows promise, it critically needs the involvement of both the ILO and the corporate
world. Ultimately the U.S is committed to addressing forced labor with an equal sense of urgency and attention,
including the prosecution of labor crimes with equally tough penalties as sex trafficking crimes. Fines, other
administrative sanctions, and suspended sentences do not reflect the gravity of these slavery-like offenses--and they do
not sufficiently deter them.
It is important to bear in mind that the work of our office is motivated by mistreatment of real people. Let me share
one case of forced labor that I encountered in Southeast Asia this past summer.
On my trip, I learned that an estimated 800 Burmese men, women, and children, desperate for employment, had been lured
to a shrimp processing plant in the middle of a jungle in a neighboring country. The factory complex was surrounded by
high walls and barbed wire. Workers weren't allowed to leave the compound. They couldn't have or use cell phones They
also weren't paid.
I met a woman who tried to escape this labor camp in a victim shelter. Aye Aye Win was caught, dragged back, beaten,
tied to a stake in the middle of the common yard, refused food and water, and had her head shaved. All this to
demonstrate to her colleagues what would happen to those who dared to try to escape.
This is forced labor. This is slavery. And what makes it particularly unacceptable is that the demand for shrimp is
strong in part because it is the number one type of seafood consumed by Americans.
It is the responsibility of the "buyer"--in this case the larger companies that package the shrimp for export to
international seafood wholesalers--to ensure that the products they provide for consumers are not derived wholly or in
part from forced labor. Again, we must ask the question, how did Aye Aye Win and others like her end up where they are?
Demand is of course also a factor in labor trafficking. Denying products made with forced labor access to markets
reduces incentives for exploitative employers and encourages ethical business behavior. This is only possible when
governments and businesses share information on export products and production chains.
Screening based on this premise is unlikely to disrupt the breadth of business activity. The small interruptions of
imports would be well worth the strengthening of consumer confidence that supply chains are pure of the products of
slave labor.
Fortunately the news is by no means all bad. There are challenges, yes, but there is also progress.
Some businesses are taking an active role in attempting to cleanse production chains of forced labor. As my valued
colleague Jeff Krilla addressed this morning, a promising example of such a voluntary effort is the move by the pig-iron
producers of Brazil--the Charcoal Citizen's Institute--to monitor the pig iron production chain for evidence of forced
labor.
There are also notable corporate actors who are using their individual expertise, corporate strengths and core
competencies to counter trafficking and affect change. This effort benefits the victims but it also benefits the
companies in that it builds trust and legitimacy, often garners positive publicity and earns the support of increasingly
socially-conscious buyers and investors.
Another company, Columbia Gem House, stands out for its assurances that its vendors do not employ child labor, slave
labor, or any unfair labor practices to produce the gemstones it sells. In conjunction with a local mine and church
group, Columbia Gem House has helped to create a school in southern Malawi, build teacher housing units, and refurbish
the local hospital with anti-AIDS and malaria drugs.
While many of these activities exemplify good corporate citizenship, generally speaking, they are also preventative
anti-human trafficking measures.
Microsoft, for example, is a corporation that believes that supporting anti-trafficking initiatives is both ethical and
smart public relations. Microsoft has a regional initiative to combat human trafficking, both in the area of forced
labor and the sex trade, in Asia, which supports the efforts of local NGO partners and provides basic information
training to trafficking victims and those "at-risk" of trafficking. Microsoft is also conducting law enforcement
training on computer crimes involving the commercial sexual exploitation of children.
Manpower is a corporation that is actively engaged in promoting the End Human Trafficking Now Campaign designed to
energize the business community globally to play a critical role in eliminating human trafficking. As you know, David
Arkless will be speaking later this afternoon and sharing more information on Manpower's commendable efforts.
Whether in human resources or extractive sectors or high technology industries, the commitment to CSR in the area of
human trafficking ultimately rests with individuals--ranging from CEOs to middle-level management to line officers
personally investing themselves.
The field is still wide open. There are steps, both big and small that companies can and must take to combat forced
labor.
We know that different industries have unique and invaluable corporate strengths to contribute. As a starting point, I
hope that each of the businesses represented here today will ensure that you have a code of ethical conduct, centered on
zero tolerance for trafficking in persons, any form of commercial sexual exploitation of children, and forced labor.
Such policies should be well publicized within the organization and--of paramount importance--distributed to all
contractors and suppliers. I urge you, if you are not already doing so, to train your staff, including auditors, human
resource and compliance officers, to recognize, monitor and report on human trafficking.
The anti-human trafficking movement is burgeoning in international organizations, non-government organizations, and the
public - if the movies we see, the Dateline NBC profiles, and the UN conference I attended last week are any evidence.
Taking such steps can only win kudos. I intend to call attention to good corporate citizens, to raise you up as
exemplars for others, from our website to our annual report to my remarks to groups and the press. I pledge to make your
good work well known.
I appeal to you on the diplomatic front as well. Many of you represent multinational companies. Do not underestimate the
power of your "economic voice" in letting foreign business and political leaders know that your company cares about
human trafficking and chooses to do business in countries where strong anti-trafficking policies are in place.
Our message must be unambiguous and clear; both the public and private sector have zero tolerance for forced labor of
any kind. The unprecedented movement of labor and capital in chains of production of exportable goods promises many
advances. But without rule of law and good corporate citizenship, it also could lead to modern day slavery. I hope this
conference paves the way for increased partnership with the private sector, the ILO, and civil society so that we might
extend the positive gains of globalization and curb the potential for the most extreme forms of exploitation before it
occurs. We're not talking about holding you responsible for situations of cheap labor. We're talking about standing
together morally and developing strategies practically to stop slave labor in the dark shadows of the world economy. We
can afford to. We must afford to.
[1] UN International Fund for Agricultural Development, together with the IDB (October 2007)
ENDS