Forced labour

Forced labour is work or service that is exacted involuntarily and under the menace of penalty, with employees being prevented from terminating employment at their discretion. Forced labour can take a number of forms and the provision of wages or other compensation does not necessarily indicate that labour is not forced or compulsory. Bonded labour may include work done to pay off a debt, including that incurred by another person, rather than for compensation. Indentured labour, where an employer forbids workers from terminating employment, may involve the use of security forces to prevent freedom of movement or the retention of identity documents, particularly where migrant or illegal workers are involved. Other forms of forced labour include situations in which labour contracts or workplace practices create unreasonable legal or practical limitations on a worker's ability to leave employment. The ILO estimates 12.3 million people are victims of forced labour worldwide.

Implications for business

Forced labour is generally rooted in poverty, inequality and discrimination. Businesses risk allegations of complicity in the use of forced labour in their value chains. Allegations of direct responsibility can occur if the company itself uses forced or bonded labourers. However, most allegations arise in the context of companies benefitting from the use of such labour by suppliers, subcontractors and other business partners. The most frequent accusations involve violations relating to indebtedness as a result of the high burden of recruitment fees or wage deductions for board and lodgings, where no adequate policies and monitoring systems exist. As a result, all managers should be aware of the forms and causes of forced labour, as well as how it might occur in different industries.

The following examples were identified through background research:

  • In 2009, the ILO estimated that the total income lost as a result of forced labour (excluding victims of commercial sexual exploitation) is approximately US$19.6 billion.
  • In May 2009, Guy Ryder, General Secretary of the International Trade Union Confederation, claimed: “The fact that forced labour still exists, and especially on such a huge scale, is an absolute scandal which the international community simply should not tolerate. Governments must work together, especially to combat the scourge of human trafficking, through effective laws and proper enforcement.”
  • In 2008, the Brazilian government’s anti-slavery taskforce freed 4,634 workers from slave-like conditions. Most workers were found in the sugarcane sector. Around 26,000 forced labourers have been freed since 1995.
  • NGOs estimate there are between 20 and 65 million bonded labourers in India, including a large number of children. The UN Special Rapporteur on food reports that around 85% of bonded labourers belong to the ‘scheduled castes.’

Identifying the dilemma

How does a company minimise the risk of the use of forced or compulsory labour in its value chain when business partners or suppliers are based in a country where forced labour is a serious problem that is inadequately dealt with due to the poor enforcement of labour laws?

The following have been identified as possible components of this dilemma:

  • Supply-chain management
  • Root causes and embedded practices
  • Economic and social consequences
  • Recruitment practices
  • Labour laws inadequately enforced
  • Workforce productivity
  • Migrant workers

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