"How can a company practically and responsibly identify and address problems of forced labour in lower tiers of its supply chain, particularly when it extends into areas or sectors known to use forced labour?"

The dilemma for business is how to address the presence of forced labour within its supply chain responsibly as it is can be difficult to define as well as detect. Forced labour often does not occur within a company's operations as stringent procedures will be in place to ensure good working practices. However, forced labour can be found further down the supply chain, especially when multi-national companies (MNCs) source from countries where there is a high amount of poverty and a lack of legal protection and/or where it is common practice to use recruitment agencies and labour providers, where there is no legal requirement for such businesses to be registered or meet certain standards.

A factor that makes forced labour difficult to detect relates to the presence of migrant workers, particularly those with no or false documentation as they are vulnerable and reluctant to admit to or report their forced labour status. More challenging circumstances arise where labour is trafficked and transported from their home countries, especially where families rely on victims for financial support.

According to Anti-Slavery International, discrimination is one of the root causes of slavery in the 21st century. However, it is also the vulnerable and poorest members of the community, including immigrants, minorities, children and women who are victims of forced labour. People in these groups are often easily exploited as it can be difficult for them to find employment opportunities and they are often forced to work in sub-standard working environments.

Furthermore, forced labour can take different forms: workers may still be paid but are bonded to debts that they cannot work their way out of; some are trafficked for both sexual exploitation and forced labour abroad without means to return to their home state and some are forced by the state to undertake labour vital to the country's economy.

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Business and forced labour

According to the International Labour Organization (ILO), forced labour exists in both the developing world and in industrialised countries. International standards prohibit forced labour and it is illegal in most countries. The occurrence of forced labour and its prevalence is often hidden, occurring at the margins of society, and amongst vulnerable groups.

High risk sectors include those that are labour-intensive with rapid turnover rates and seasonal shifts such as agriculture, construction, fishing, mining, the making of textiles and garments and some parts of the service sector.

Companies may come across this dilemma in their supply chain where:

• Domestic labour laws are poorly enforced. Lack of adequate resources can result in inadequate training of labour investigators, and high levels of corruption can result in improper payments made by employers to these investigators to overlook forced labour violations. Improper payments are most likely to occur if investigators are not being adequately compensated. There may be other obstacles to adequate oversight, such as a high proportion of informally employed workers or informal businesses, which fall outside the scope of investigations.
• Laws prohibiting forced labour are weak or non-existent. Angola, for example does not have a comprehensive law for prohibiting trafficking, therefore those trafficked for the purposes of forced labour are not protected. Iran has laws protecting trafficked victims used for forced labour however these have not been adequately enforced. Indeed, the US Department of State reports that the Iranian government punishes victims of trafficking for unlawful acts
• A country has large agricultural sectors which are often found in isolated rural areas, making it difficult for labour agencies to inspect. The use of forced labour in isolated areas of Brazil close to the Amazon, for example, is difficult to detect
• A country has Economic Processing Zones, which are often not bound by national labour laws, and therefore often cannot be inspected by labour officials to detect such labour abuses, such as China
• Public corruption is prevalent, especially within labour inspectorates and police forces
• There is intense competition between suppliers, placing them under increased pressure to reduce their production costs, which may lead to pressure to squeeze labour costs. Suppliers and subcontractors may resort to exploitative practices, such as a reliance on forced labour
• They source goods from regions and countries where there are high levels of poverty and unemployment. Often these conditions result in workers being tricked into taking jobs by employers who end up exploiting these workers. From early on, for example, some employees become indebted to the employer as they are forced to pay for transportation to the workplace, accommodation and food. This can amount to bonded labour if employers do not provide enough income to the employees to enable them to alleviate their debts resulting in the workers not being allowed to leave. Payment of excessive recruitment fees is most common where the workforce includes a large number of migrants, external or internal, who have moved to find work, and where workers are hired through unscrupulous third-party employment agencies.
• A company partners with states to implement large infrastructure projects where the government has a history of recruiting compulsory labour for such ventures. There are numerous reports of Myanmar's government forcing villagers to work on large infrastructure projects within the country. As a consequence, companies such as Total have been accused of being complicit in the use of forced labour

Forms of forced labour

The hidden nature of forced labour and its many forms can add to the difficulty that companies face in addressing this dilemma. Forced labour can take several different forms, including:

Bonded labour:Where workers' wages are forcibly channelled into paying for work-related goods and services, such as transportation, food and shelter. As a result they are "locked" into accumulating debt by exploitative job recruiters and/or landowners, and are forbidden from leaving the workplace. Workers' wishing to leave are often threatened by the employer, or find it difficult to leave due to the remoteness of the worksite. This occurs in many countries including Bolivia, Brazil, Côte d'Ivoire, Guatemala, Mexico, and Togo.

Compulsory work: Where people are required, often by the government, to work on certain projects. In Uzbekistan, for example, children are forced to harvest cotton by the government with little or no compensation. Schools are often closed down during this time. The Environmental Justice Foundation claims that companies including H&M, Marks & Spencer and Zara have all purchased clothing made from Uzbek cotton. Similarly, Myanmar's regime also forces villagers into working on large infrastructure projects.

Prison labour: Where convicts are forced to undertake certain labour projects such as road building, maintenance, etc. or work for private enterprise for no or little compensation. Individuals in this category may include prisoners of conscience or prisoners being "re-educated" to manufacture garments or components for electronic goods. On 17 August 2005, the China Labour Bulletin alleged that Deutsche Bank, HSBC, ING Merrill Lynch, Morgan Stanley and UBS hold shares (on behalf of clients) in a wig making company in China using prison forced labour.

Trafficking: Where individuals are forced or tricked into going somewhere, often to other countries, by exploitive recruiters or companies with the promise of work. Once they are taken out of the country they either find themselves working in a completely different job or the terms of their contracts have unilaterally changed. Often, in these situations, employers hold identity papers or wages, creating a situation where workers cannot leave. In many instances, victims of trafficking are afraid of the consequences of approaching authorities due to their immigration status and/or threats and misinformation conveyed by the traffickers.

Modern slavery: Although this term is used as an umbrella term that covers forced labour, trafficking, domestic servitude and slavery, the practice of forced labour is a common denominator to all forms of slavery.

Identifying forced labour in practice

The provision of wages or other compensation does not necessarily indicate that labour is not forced. In Brazil, for example, workers are often recruited by prospective employers who promise them jobs in other areas of the country. Typically, in the agricultural and manufacturing sectors, the contracts require that the worker pay for the transportation to the work site which may be hundreds of miles away, creating a debt. Because the wages are very low, the worker is often unable to repay the debt and is stopped by force or threat from leaving the job.

The following chart from the ILO is useful in identifying forced labour:

Lack of consent to work (the route into forced labour):

Birth/descent into "slave" or bonded status

Physical abduction of kidnapping

Sale of person into the ownership of another

Physical confinement in the work location, in prison or in private detention

Psychological compulsion, i.e. an order to work, backed up by a credible threat of a penalty for non-compliance

Induced indebtedness (by falsification of accounts, inflated prices, reduced value of goods or services, excessive interest charges, etc.)

Deception or false promises about types and terms of work

Withholding and non-payment of wages

Retention of identity documents or other valuable personal items

And

Menace of penalty (the means of keeping someone in forced labour):

Physical violence against worker or family or close associates

Sexual violence

Threat of supernatural retaliation

Imprisonment or other physical confinement

Financial penalties

Denunciation to the authorities (police/immigration) and deportation

Exclusion from future employment

Exclusions from community and social life

Removal of rights or privileges

Deprivation of food, shelter or other necessities

Threat to impose even worse working conditions

Loss of social status

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Real world examples

H&M and Zara purchased garments made from Uzbek cotton picked by forced child labourers

An Anti-Slavery International campaign has accused large retailing companies, including Tesco, Walmart-Asda, H&M and Zara of being complicit in purchasing products made from Uzbek cotton which is picked by forced child labourers. An estimated two million children between the ages of 11 and 17, harvest cotton in Uzbekistan under conditions described as forced labour. Unlike cases where children work on family farms, the Uzbek case is different in scale, organisation and government complicity. Each year, for example, the government closes schools, hospitals and offices for three months in order to boost the workforce available for the annual cotton harvest with student, teachers and government employees participating in the process.

The Responsible Cotton Network says some school administrators have used physical abuse and public humiliation to ensure that the government-imposed quota of 30-60 kilograms of cotton is picked per child per day, depending on their age. Children receive little or no pay for their work, and are often only provided with food. Uzbekistan is the world's third largest cotton exporter and earns approximately US$1 billion annually.

As yet, there is no international mechanism to properly trace the source of cotton, although such a process is in the development stages. This makes it a complicated undertaking for any company that has a policy stating that it will not knowingly source cotton to practically address this policy.

IFC named in a complaint about providing loans to an Uzbek cotton company

In July 2016, four Uzbek nationals filed a complaint with the International Finance Corporation (IFC) seeking an investigation into the Uzbek company, Indorama Kokand Textile. The complainants argue that a US$40 million loan given to the Uzbek company is contributing to the practice of forced labour in the country. In response, the IFC noted that Indorama Kokand Textile could trace its sources of cotton to areas covered by third-party monitoring against child and forced labour. The complaint illustrates the challenges facing international development organisations in Uzbekistan's cotton sector and the importance of supply chain traceability to provide assurance to investors.

Major western companies accused of purchasing Malaysian hard-disk drives made by forced labourers

On 21 April 2008, a Newsweek article, entitled Lured into Bondage, reported that foreign workers at a Malaysian company, Local Technic Industry were subject to bonded labour conditions. This company makes cast-aluminium bodies for the hard-disk drives, which are purchased by western companies (including Western Digital) who distribute them onto the US market. It is reported that many major computer companies purchase these hard-disk drives.

According to the report, migrant workers were lured into working in Malaysia. Upon arrival these workers (by law) are forced to sign multiple year contracts and surrender their passports to their employers. If these migrant workers try to leave work during their employment they may be arrested and imprisoned by the authorities. These workers' living expenses are deducted from their wage leaving very little at the end of the pay period. One worker, for example, made US$14 a month after all living expenses and taxes were deducted. This amounted to an annual salary of US$504.

Approximately 28% of electronics workers in Malaysia who were surveyed by the US based civil society organisation Verite, were found in situations of forced labour. The prevalence of forced labour increased to 32% of workers, when the survey sample was narrowed only to foreign nationals, Verite's 2014 report, ‘Forced Labor in the Production of Electronic Goods in Malaysia: A Comprehensive Study of Scope and Characteristics' concluded that forced labour was widespread in the electronics industry. Their study made some important findings about the key role played by charging recruitment fees. They found that 77% of workers who were charged fees had to borrow money in order to repay the costs and this left them indebted. Workers surveyed also reported having their passports confiscated and being deceived about the terms of their employment. The report found that in the electronics sector, third-party employment agents are often responsible for all elements of recruitment and employment. Verite concluded that outsourced workers were more vulnerable to forced labour than those who were directly employed by factories.

The dilemma for an electronic company is how it can trace the use of its many electronic components to ensure that it does not source from companies that are likely to hire forced labour.

Zara found to be sourcing garments from Brazilian sweatshops

In May 2011, Brazilian workshops run by the supply chain partners of global fashion brand Zara were investigated by the Ministry of Labour and Employment as part of the Program for the Eradication of Slave Labour. Inditex, Zara's parent company, was subsequently charged with 52 infractions of labour rights, including substandard working conditions and forced labour. The investigation found that in several workshops run by contractor AHA Indústria e Comércio de Roupas Ltda, workers were forced to work 16-hour shifts in windowless rooms and were prohibited from leaving unless it was an emergency. Exposed wiring, faulty equipment and unsanitary living conditions constituted severe health and safety risks. Labour inspectors also found that 15 immigrants from Bolivia and Peru, who had been trafficked into the country, were illegally employed in the workshops where they were struggling to earn enough to pay off their debts to the traffickers. One of the workers was 14 years old. The workers were earning between BRL274 (US$152) and BRL460 (US$256) per month, well below the 2011 minimum wage of BRL545 (US$303).

Inditex denied knowledge of the employment of the 15 trafficked individuals, but stated that it has a zero tolerance police for violations of this kind. It also stated that AHA had failed to comply with the Inditex Code of Conduct for External Manufacturers and Workshops, to which it was contractually bound. AHA accepted responsibility for the violations and paid financial compensation to the workers and improved their working conditions. Giuliana Cassiano Orlandi, one of the labour inspectors involved in the investigation, said that ‘it is the duty of a company to be aware of how its merchandise is being produced.

In a 2015 report by SOMO and Reporter Brazil, Zara once again faced allegations that oversight of its supply chain in Brazil was still inadequate. According to the report, the company agreed with the Brazilian authorities that it would carry out better and more frequent inspections of suppliers. However, inspections by the Brazilian authorities – part of a programme designed to detect and eradicate modern slavery - found violations among the 67 suppliers that were checked, such as excessive overtime and occupational health and safety violations. Although the SOMO report notes efforts undertaken to improve oversight, such as increased auditing and a better hotline, they note that the high incidence of outsourcing and subcontracting renders these measures often ineffective. The SOMO report also criticises Zara for filing a lawsuit that claims publishing a ‘dirty list' of companies associated with modern slavery is unconstitutional.

Nestle admits to forced labour in Thai seafood supply chains

In February 2016, Nestle broke ranks by independently disclosing that it had found forced labour in its supply chains in Thailand. A year-long investigation by the company confirmed that forced labour was endemic in Thai seafood production, and in particular, sea fishing. High-profile media investigations, such as Ian Urbina's ‘Outlaw Ocean' series in the New York Times, had revealed grave abuse of fishers on Thai vessels. As so-called ‘trash fish' caught by wild-catch fishers are regularly used as feed for shrimp farming, reports indicated that the farmed shrimp supply chain was also linked to modern slavery. Given Thailand's position as a major exporter of seafood, the case illustrated the risks facing supply chains to multiple companies.

Nestle's decision to disclose the issue publicly was seen by NGOs as a ground-breaking effort to encourage more transparency about the reality of challenges within supply chains. Nestle also published a detailed action plan to support responsible sourcing from Thailand, involving supply chain mapping, training and partnerships with Thai NGOs, like the Issara Institute, to eradicate modern slavery. Nestle's response will be scrutinised by NGOs over time as a test case for the effectiveness of collaborative efforts to eradicate modern slavery.

Multinational brands meet Indian garment industry body to discuss bonded labour allegations

In October 2012, a number of the world's largest garment retail companies, including Walmart, Carrefour, C&A, Primex and Gap met with the Southern Indian Mills' Association to discuss allegations of use of bonded labour in the Indian textile industry. The principal source of allegations was a report by the Indian Committee of the Netherlands and the Centre for Research on Multinational Companies, which implicated four textile mills in Tamil Nadu in the exploitation of young Dalit girls for cheap labour. The report also focussed on the ‘Sumangali' scheme, whereby girls and young women are recruited for three-year contracts, upon completion of which they are promised lump-sum payments to be used to contribute to their marriage dowry. Although the term ‘Sumangali' refers to contented married life, the report alleged that conditions under the scheme include excessive working hours, low and withheld wages, restrictions on freedom of movement and privacy, and overcrowded and hazardous accommodation. These conditions have been described by a variety of stakeholders as tantamount to bonded labour.

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Legal Risks

On an international level there are instruments that prohibit international forced and bonded labour which are used by most countries as guidance in their own national laws. Instruments include ILO Convention No. 29, on Forced Labour (1930) and ILO Convention No. 105, on the Abolition of Forced Labour (1957). A recent addition to the international legal framework includes the Protocol of 2014 to the Forced Labour Convention (2014). Interestingly for business, this Protocol encourages governments to support due diligence by the public and private sectors in order to prevent modern slavery.

These covenants define the conditions and circumstances that amount to forced labour, and serve as point of reference for national legislation that conforms to international standards.

There is also a growing trend toward mandatory disclosure laws for business on human rights. For example, the California Transparency in Supply Chains Act (2010) and UK Modern Slavery Act (2015) both require companies to disclose their efforts to eradicate modern slavery in their supply chains.

Forced labour is illegal in most countries and breaking national law may carry civil and/or criminal sanctions for a company. MNCs are not as likely to face criminal sanctions as forced labour is usually found further down the supply chain. However, MNCs could be sued for being complicit in the use of forced labour.

Legal action, either civil or criminal, not only negatively affects a company's brand image but may also result in high legal costs as well as fines or compensation, as well as the use of valuable management time. Some cases include:

John Doe I et al. v. Unocal Corp: This case was brought against the US Company Unocal, for alleged complicity in the use of forced labour in Myanmar during the 1990s. Unocal was part of a joint venture with the government of Myanmar to build a US$1.2 billion pipeline through Myanmar and neighbouring Thailand. Troops from Myanmar provided security and built infrastructure, using forced labour from local communities.

In 2005, a US$7.2 million settlement was reached whereby Unocal agreed to compensate the victims and set up a fund for human rights projects. Such projects included establishing health care, education and other improvements contributing to the standard of living of the general population.

Ramchandra et al. V. Daoud & Partners, KBR et al.: In August 2008 a joint action was filed by family members of 13 men who were killed in Iraq in 2004 after being trafficked into the country through an agency. According to family members, all men believed that they were being recruited to work in hotels and restaurants in Amman, Jordon.

Instead it is alleged that a Daoud & Partners, a Jordanian security company, confiscated their passports after they arrived in Jordan. Later they were trafficked to Iraq to work on a US military facility associated with US company, Kellogg Brown & Root (KBR). It is claimed by the plaintiff's that KBR and Daoud were responsible for the trafficking scheme – from recruitment in Nepal until their arrival in Iraq. This case is still pending before the court.

This federal case followed a 2006 action filed against Daoud and its insurance company by nine of the victims' families in the administrative court. This court has jurisdiction over cases that involve workplace injuries and deaths at overseas military bases. In April 2008, the judge found that the men's families were entitled to death benefits.

Private consumers v Nestle USA, Hershey and Mars. In March 2016, a district court in California rejected lawsuits claiming that chocolate companies including Nestle, Heshey and Mars had mislead consumers by failing to disclose in labels that cocoa may have been produced by slave labour. The judge said that the courts were not suited to determine what information should be included on a chocolate bar label.

Reputational and commercial risks

Even where allegations of complicity do not result in legal action, companies can still face a range of non-legal risks if perceived to be complicit in using forced labour.

These include:

• Campaigns by NGOs, trade unions and other stakeholders against MNCs, resulting in brand contamination. Tomato growers in Florida, for example, have been subject to a sustained anti-slavery campaign led by the Coalition of Immokalee Workers. This campaign has recently resulted in the Florida Tomato Growers Association implementing a growers' code of conduct outlining minimum employment standards
• Consumer boycotts against companies that are found to have forced labour in their supply chain resulting in reduced sales. The Burma Campaign UK, for example, calls for the boycott of Total and Unocal products. Both these companies are working with Myanmar's regime to build a billion dollar gas pipeline reportedly constructed with the aid of forced labour
• Divestment by ethical and mainstream investors resulting in reduced access to capital. Many large investors, including the largest pension funds in the world (such as the Norwegian pension fund), only invest in companies that meet certain ethical standards. This includes a company's labour practices and whether it breaches core international labour standards. Where a company is found to be complicit in forced labour, it risks divestment from such investors
• Loss of future business opportunities due to other organisations and companies not wishing to associate with the offending company
• High employee turnover rates. The retention and recruitment of employees may be more difficult if the company is involved in, or linked to, the use of forced labour. Employees may not wish to be associated with a company that is complicit with bad working environments not least because they are concerned about their personal treatment

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The UN ‘Protect, Respect and Remedy' Framework for Business and Human Rights provides guidance on how to protect individuals and communities from corporate related human rights harm.

The framework is comprised of three key principles:

• Protect: The state duty to protect against human rights abuses by third parties, including business;
• Respect: The corporate responsibility to respect human rights; and
• Remedy: Greater access by victims to effective remedy, both judicial and non-judicial.

The framework states that in addition to complying with national laws businesses have a responsibility, in the context of the countries where they operate, to respect human rights through their own business activities and through their relationships with third parties – such as business partners and entities in their supply chains. To meet this responsibility, the framework notes that businesses should engage in human rights due diligence and specifies the main components of the process:

Policies: Including a human rights policy containing broad commitments, supported by more detailed guidance in specific functional areas

Impact assessment: Including assessments that explicitly reference internationally recognised human rights and are used by companies to avoid potential negative human rights impacts on an ongoing basis

Integration: Including the embedding of respect for human rights throughout a company

Tracking performance: Including regular updates of human rights impact and performance

The Guiding Principles for the Implementation of the UN "Protect, Respect and Remedy" Framework aim to provide "concrete and practical recommendations" about how businesses can operationalise their responsibility to respect human rights. According to the Guiding Principles, the responsibility to respect human rights requires responsible companies to:

• Implement a human rights policy
• Apply human rights due diligence
• Provide for remediation

The UNGPs apply to all States and to all business enterprises, both transnational and others, regardless of their size, sector, location, ownership and structure.

The UNGPs have experienced widespread uptake and support from both the public and private sectors, and numerous companies have publicly stated their commitment to the Guiding Principles. The UN Guiding Principles Reporting Framework is also used by companies to report on how they respect human rights.

Companies can seek specific guidance on this and other issues relating to international labour standards from the ILO Helpdesk. This aims to help company managers and workers understand the ILO approach to socially responsible labour practices and to assist in the development of good industrial relations.

Other actions that responsible business might take include:

1. Policies and procedures

Having an explicit policy prohibiting the use of forced labour is a solid point of departure. As forced labour is often found further down supply chains it may be advisable to integrate these policies into supplier codes of conducts or to make the prohibition of forced labour a contractual obligation of business partners and suppliers. A human rights policy may commit the company to:

• Compliance with national laws on forced labour. If there are no national laws in relation to forced labour, or these laws are weakly implemented, a company may commit to adhere to international standards, including ILO Convention No. 29, on Forced Labour (1930) and ILO Convention No. 105, on the Abolition of Forced Labour (1957).
• Not engaging in, or supporting worker exploitation amounting to forced labour (in hiring, termination, remuneration, training, promotion or retirement)
• Responsibly eliminating forced labour from the supply chain
• Supporting former forced labourers that have been released, enabling them to reintegrate back into society
• Setting clear guidelines in relation to recruitment practices, including in relation to recruitment and other fees paid by migrant workers
• Not retaining a worker's identity papers or other important possessions
• Giving workers the right to freely terminate employment voluntarily, as long as they give adequate notice
• Compliance with international and sector good practice standards such as the International Council on Metals and Mining
• If and where relevant, to undertake due diligence, including human rights impact assessments with a particular focus on forced labour. It may be both helpful, and beneficial, to commit to use independent third parties with expertise in forced labour detection and responsible management

The company should:

• Effectively communicate the policy and associated guidance and procedures to personnel and other interested parties, including business partners, suppliers and other stakeholders where appropriate
• Continually review and improve the policy in-line with best practice advancements, regarding it as a ‘living document'
• Provide all new employees with a copy of the policy and conduct formal training as part of the induction process or apprenticeship scheme
• Continue to provide employees with regular training and awareness around the policy, particularly when and if they are updated. Training should aim to foster an awareness of shared responsibility and accountability
• Effectively communicate to employees and suppliers how this policy complements and builds upon other company policies

2. Require suppliers to provide workers with legitimate contracts

As well as ensuring that there are legitimate contracts for its own employees, a company may choose to include specific requirements in codes of conduct requiring that suppliers and business partners provide their employees with legitimate labour contracts, in a language workers can understand.

A company may provide suppliers with a standard employee contracts, which:

• Details the length of employment, remuneration and other workers benefits
• Includes a clear termination clause that is not too onerous
• Provides a clause prohibiting the lodgement of essential documents, such as passports with the employer
• Provides clear guidance on any costs associated with employment, including, if relevant, food and/or accommodation. These costs should be reasonable and in combination not amount to a bonded labour situation

It is important to note that employment contracts presented by the supplier to a company may be fictitious or fraudulent. It may be advisable for a company to audit these contracts regularly, ensuring that they are in-line with other employment records. Furthermore, a company should be able to privately question suppliers' employees on the status of their contracts to seek clarification and allay any suspicions of fraudulent practices.

3. Training of suppliers and business partners

A company can train suppliers and business partners on the company's policy and procedures in relation to forced labour. It can also join sector organisations that provide training programmes, as it often can be more commercially expedient for the company.

Training can include:

• How to identify the existence of forced labour. Due to the complexity and opaque nature of the problem, the provision of working examples and cases could be helpful
• Outlining procedures suppliers are required to follow in order to ensure that working conditions do not amount to forced labour
• Training suppliers to assist them in detecting when forced labour is being used by their subcontractors or any recruitment agencies hired by the supplier

Sector organisations, such as the International Cocoa Initiative (ICI), provide training to workers and suppliers, and expenses can be shared across a group of companies. This training sensitises suppliers and workers to change their perception of forced child labour as well as practical skills to help combat labour problems on the ground. The ICI operates in Ghana and Côte d'Ivoire and is led by the cocoa producing communities in the countries. Its training activities include people from civil society and the public and private sectors on the practical skills needed to combat the issues on the ground.

NGOs are also leading providers of training on forced labour. Stronger2gether is a multi-stakeholder initiative that aims to reduce modern slavery and particularly forced labour and human trafficking. They provide guidance, resources and a network for employers, labour providers, workers and their representatives. The organisation provides open workshops and e-learning modules as well as in house training sessions all over the UK.

4. Conduct social audits

Social audits can be a useful tool to investigate whether suppliers are abiding by their contracts and the supplier code of conduct. These audits could include interviews with workers and managers, a review of company documents and an inspection of the workplace. When problems are found, corrective action should be taken by the company.

Audits of suppliers can be undertaken by company employees or third-party auditors to determine whether:

• Employees are free to leave the premises
• There is evidence of security measures aimed at prohibiting the workers from leaving the work site
• There are signs that employees are being evasive and scared to answer questions. Employee interviews should be anonymous and private. Questions, for example, could cover whether the employer has to pay a penalty if they wish to leave the job, whether they have been threatened or harassed in anyway, if they have been forced to repay an inherited debt, or are incurring unauthorised deductions from wages
• There is a recruitment agency in another country that is being evasive, or are delaying the production of requested materials
• The payment of wages are irregular, delayed, deferred or just have not been paid

Audits could include:

• Interviewing management on policy and practices to prevent forced labour. The auditor should ascertain, for example, whether the supplying company requires workers to provide identification documents confirming workers' age
• Interviewing employees to uncover any cases of the use of forced labour
• Inspecting the factory/workplace for any signs of forced labour, such as workers being faced with financial penalties for minor offences (such as making a mistake on a garment), reports of threats and harassment and signs of security limit freedom of movement
• Inspecting contracts, identity papers and documents held by the employer

5. Facilitate rehabilitation of victims

When forced labour is found within the supply chain, a company acting responsibly can ensure that freed workers receive enough support in order to reintegrate into society in a positive way. Often these workers are the most vulnerable members of the community - poorly educated, disabled, migrants or victims of trafficking that cannot speak the language or fear deportation if they report human rights violations to the authorities. With the cooperation of local partners and/or the government, a company can assist released forced labourers in finding alternative sources of income and employment.

A company could do this by providing:

• Shelter and support when they are initially freed
• Medical care
• Support to enable them to return home and contact their families
• Training to assist in re-employment
• Support for placement into new positions

The Citizen's Charcoal Institute in Brazil rehabilitates workers that had been subjected to forced labour and provides them with skills training. It also works with the Ministry of Labour and Employment to find jobs for rescued workers. Rehabilitation may include attending to any medical conditions that these workers may have sustained while working as well as working with local partners to find other forms of opportunities for employment.

6. Participate in multi-stakeholder initiatives

MNCs can sign up to multi-stakeholder initiatives designed to develop a broader, more comprehensive response to the problem of forced labour.

Multi-stakeholder initiatives such as the International Cocoa Initiative, Responsible Cotton Network and the Citizen's Charcoal Institute, serve as forums where a wide range of stakeholders, including trade unions, law enforcement authorities, NGOs, labour inspectorates and other groups can collaborate to resolve issues related to forced labour. These initiatives are designed with efficiencies of scale in mind and are often supported by local/state government, which effectively reduces costs and any associated risks.

The Responsible Cotton Network is an example of a stakeholder initiative set up by brands, retail associations, investors and civil society working collaboratively to halt the use of child forced labour in Uzbekistan. It has attempted to achieve this objective by seeking to influence policy makers in Uzbekistan through diplomatic channels. However, it has also resulted in retail and clothing companies ceasing to purchase Uzbek cotton.

See Forced Labour case studies

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International law on forced labour

Almost all member states of the ILO have ratified ILO Convention No. 29, on Forced Labour (1930) and ILO Convention No. 105, on the Abolition of Forced Labour (1957). It is important to note that both Convention No. 29 and No. 105 form part of the ILO's "core conventions". Convention No. 29 establishes the fundamental principle that forced labour is punishable as a criminal offence. Convention No. 105 prohibits forced or compulsory labour in certain situations, such as forced prison labour. Finally, ILO Convention No. 182, on the Worst Forms of Child Labour (1999) defines what constitutes this category of child labour, such as subjecting children to slavery, serfdom or debt bondage, and exposing them to work. These forms of labour are likely to harm their health, safety and sense of morality.

ILO Convention No. 29, on Forced Labour

According to Convention No. 29, forced labour is "work or service that is exacted from any person under the menace of any penalty, and for which that person has not offered him or herself voluntarily." The "menace of any penalty" does not have to be physical punishment or constraint; it can take other forms, such as the loss of rights or privileges. Victims of forced labour are often prevented from terminating employment at their discretion.

ILO Convention No. 29 excludes certain forms of labour which is not offered voluntary, including work:

• Exacted in virtue of compulsory military service, which is purely military in character
• That forms part of normal civic obligations
• Exacted from a person as a consequence of a legal conviction. That is provided that the work is carried out under the supervision and control of a public authority
• That is carried out in case of emergencies, such as in the event of war, fires, flood, famine, earthquake or violent epidemics
• That provides minor communal services that are of direct interest of the said community

This Convention has been ratified by 177 countries, with the notable exception of South Korea.

The Protocol of 2014 to the Forced Labour Convention, No. 29 (1930) requires states to take measures to prevent and eliminate forced labour and to provide protection to victims, access to effective remedy and to prosecute perpetrators. The Protocol requires members to develop a national policy and action plan in consultation with employers' and workers' organisation. With regard to the measures taken to prevent forced labour, the Protocol includes:

1) Educating and informing people about forced labour, and especially those most vulnerable to exploitation

2) Educating and informing employers about forced labour

3) Ensuring that the country's laws and enforcement, including labour inspections, are effective

4) Protecting workers and especially migrants from abusive and fraudulent recruitment practices

5) Supporting due diligence by the public and private sectors to prevent and respond to risks of forced labour

6) Addressing the root causes and factors that heighten the risk of forced labour

The convention has been ratified by 7 countries (as of July 2016).

ILO Convention No. 105, on the Abolition of Forced Labour

ILO Convention No. 105 on the Abolition of Forced Labour prohibits the use of compulsory or forced labour in the following situations:

• As a means of political coercion or education as a punishment of expressing political views
• As a method of mobilising labour for the purposes of economic development
• As a punishment for participating in strikes
• As a means of racial, social, national or religious discrimination

ILO Convention No. 105 has been ratified by 174 countries. Interestingly it has been denounced by Malaysia and Singapore. Other countries that have not ratified this Convention include China and South Korea.

National disclosure laws on modern slavery

In the UK and the US, there is a trend toward national legislation that requires companies to disclose their efforts to eradicate modern slavery in supply chains. Given the reputational impact of forced labour on brands, disclosure laws aim to stimulate positive competition among business and to increase transparency around challenges in key areas of risk.

California Transparency in Supply Chains Act (2010)

What do businesses have to do?

Annual public disclosure of efforts to eradicate modern slavery from direct supply chain for tangible goods offered for sale, including information about:

• Verification of product supply chains

• Audits of suppliers

• Certification by suppliers that products comply with laws on slavery

• Internal accountability with company standards Training on mitigating risks of slavery and trafficking

Scope of the Act:

Retailers and manufacturers doing business in California, with annual global turnover (US$100 million (UK£64,926,632))

UK Modern Slavery Act (2015)

What do businesses have to do?

Report annually about steps taken to eliminate slavery & trafficking from direct business operations and the supply chain, including information about:

• Map supply chain and business operations

• Policies on slavery and trafficking

• Risk assessment identifying key risk areas

• Risk management

• Performance tracking, using KPIs

• Training on slavery and trafficking

Scope of the Act:

Business selling goods or services to the UK, with annual global turnover (GBP£36 million (US$55,447,200))

The scale of the challenge

Companies operating in emerging economies may encounter forced labour. According to the Maplecroft Forced or Involuntary Labour Index 2015, the 10 highest risk countries are:

Figure 1: 10 highest risk countries for forced or involuntary labour

North Korea	Benin
South Sudan	Sudan
Syria	Guinea
Uzbekistan	Somalia
Cuba	DR Congo

According to ILO estimates, globally there are 21.9 million people who are victims of forced labour. Ninety percent of those are exploited by private individuals and enterprises. Children under 18 are thought to represent 26% of all forced labour victims.

The poor and vulnerable are the most susceptible to forced labour, such as migrants, children, indigenous peoples, women and the disabled. Women and girls, for example, represent 55% of victims forced into economic exploitation.

According to Anti-Slavery International, discrimination is one of the root causes of slavery in the 21st century. "For example, the vast majority of bonded labourers in India, Nepal and Pakistan are those who are considered to be of "low" caste, indigenous people or those from other minority groups, including religious minorities. Similarly, caste and ethnic status underpins the use of slavery in Niger, Mauritania and Mali, where tens of thousands of people are ascribed a slave status at birth and are then considered to be the property of their "masters" who force them to work without pay. In the Republic of the Congo, Paraguay, Bolivia and Peru it is indigenous groups who are mainly affected by forced labour."

Human rights impact

Other human rights that are typically associated with forced labour include the:

Right not to be subjected to torture, cruel, inhuman and/or degrading treatment or punishment (ICCPR, Article 7): By its very nature, forced labour often involves the use of degrading treatment and the "menace of penalty" forcing people to work. Security forces employed by the company may be using abusive practices or threats to coerce people into undertaking forced labour.

Rights of protection of the child (ICCPR, Article 24): Forced labour may involve entire families working to pay off a debt. There are also cases where children are trafficked for the purpose of forced labour.

Right to enjoy just and favourable conditions of work (ICESCR, Article 7): People working under conditions of forced labour regularly work excessive hours, often for little or no pay. They also are often forced to work under dangerous and unsafe conditions. Due to the very circumstances in which they are employed, their working conditions are unlikely to be just or favourable.

Right to an adequate standard of living (including access to adequate food, clothing, housing and water) (ICESCR, Article 11): Workers who are victims of forced labour often encounter limited access to adequate food, clothing, housing and living conditions (including water and sanitation). This is particularly the case because many workers will be kept in closed facilities subject to the control of the owners of the facility who show little regard for their wellbeing.

Right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay (UDHR, Article 24): Given the nature of forced labour, workers who are coerced into employment are often denied access to rest and leisure.

See Forced Labour case studies

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