The Business Case for Lawyers to Advocate for Corporate Supply Chains Free of Labor Trafficking and Child Labor
68 Am. U. L. Rev. 1555 (2019).
* CEO and Co-Founder, Center for Justice, Rights & Dignity; Retired General Motors North America Vice President and General Counsel. He attributes his success to the supportive family members, colleagues and friends that Jesus Christ has brought into his life including those mentioned below.
** Senior Director, Ethics and Compliance, Cummins Inc, She has direct accountability for the company’s corruption prevention, third party compliance program, anti-money laundering and anti-slavery programs and implementation of compliance program globally, including developing global compliance strategy.
*** Partner and Chair of the International Trade and Supply Chain practice, Quarles & Brady, LLP. He has a great depth of experience in supply chain matters and compliance program creation, improvement and related training, counseling and assessment.
**** A former associate at Green and Spiegel LLC., advises companies on immigration and labor compliance. She also writes and speaks on forced labor in the supply chain and human trafficking and will be joining Morais Law.
***** Co-Founder and Partner of Antheil Maslow & MacMinn LLP, is Vice-Chair of the UCC Committee’s Working Group to Draft Human Rights Protections in International Supply Contracts, and the CSR Subcommittee Implementing the ABA Model Principles on Labor Trafficking and Child Labor.
The Authors jointly thank their colleagues on the aforementioned UCC Working Group and CSR Subcommittee, the following contributors to this article: Elise Groulx Diggs, Alisia Jones, Erin Preston-Johnson Bevel, Reginald Turner, Stephanie Romeo, Nelson Miller, Margaret Cassidy, Alan Gutterman, and the editorial staff of the American University Law Review of the American University Washington College of Law.
This Article considers the legal and ethical obligations that should propel lawyers to advocate for a corporate supply chain free of labor trafficking and child labor—both of which this piece will expose as an extension of the workforce of many corporations. By embracing the business case supported in the Carrol Corporate Social Responsibility Model, this Article continues to champion the Corporate Social Responsibility Model’s economic groundings. Why lawyers? Because lawyers are the guardians of the rule of law, and both human trafficking and child labor are gaps in the rule of law that taint a client’s supply chain and its goods. Despite many excellent laws in this area, the lack of enforcement contributes to this gap in the rule of law. As such, this Article illustrates why lawyers need to be on the vanguard of eradicating human trafficking and child labor in supply chains. It does so by describing, as noted by Professor David Snyder in The New Social Contracts for International Supply Chains, a set of Model Clauses designed to incorporate human rights protections in supply contracts developed by the ABA Business Law Section Working Group to Draft Human Rights Protections in International Supply Contracts. This Article also discusses why other ethical business case rationales such as the rule of law, moral, and legal ethics considerations likewise support the legal profession taking the lead on eradicating labor trafficking and child labor. Finally, the issue of diversity is advanced as a new way to think about solutions to this problem.
Labor trafficking, forced labor, and child labor exploit almost 200 million men, women, and children around the world. Such large numbers make it likely that everyone is indirectly capitalizing on this exploitative labor—anywhere from the supply chain fueling a client’s business profits to the clothes, food, technology, and other products one uses on a daily basis.1Int’l Labour Org., Global Estimates of Modern Slavery: Forced Labour and Forced Marriage—Executive Summary7 (2017) [hereinafter Global Estimates of Modern Slavery], www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/publication/wcms_575540.pdf; Child Labor, Int’l Labour Org. (2018), https://www.ilo.org/global/topics/child-labour/lang–en/index.htm. However, these numbers all represent people. As such, there is a human toll because many of these men, women, and children are suffering without pay to help us live our relatively comfortable lives. This Article will discuss how, in addition to an economic basis,2See infra Section II.D. legal3See infra Section II.C. and ethical4See infra Section II.B. principles should encourage lawyers to be on the vanguard of ending these and other exploitative practices in supply chains. With respect to the latter, at the top of this list is a wonderful new tool introduced by the ABA Business Law Section Working Group to Draft Human Rights Protections in International Supply Contracts (the “Working Group”) consisting of Model Contract Clauses (“MCCs”) that will allow businesses to incorporate human rights protections into purchase orders and other supply contracts.5See generally David Snyder & Susan Maslow, Human Rights Protections in International Supply Chains—Protecting Workers and Managing Company Risk: 2018 Report and Model Contract Clauses from the Working Group to Draft Human Rights Protections in International Supply Contracts, ABA Business Law Section, 73 Bus. Law. 1093 (2018) [hereinafter Model Contract Clauses]. These MCCs are discussed at length by many of the contributors to the American University Law Review Symposium Issue, including in the articles by Professor David Snyder,6David V. Snyder, The New Social Contracts in International Supply Chains, 68 Am. U. L. Rev. 1869 (2019). Jennifer Martin,7Jennifer S. Martin, Private Law Remedies, Human Rights, and Supply Contracts, 68 Am. U. L. Rev. 1781 (2019). and Ramona Lampley.8Ramona L. Lampley, Mitigating Risk, Eradicating Slavery, 68 Am. U. L. Rev. 1707 (2019). In this respect, the MCCs are different from other excellent tools such as the ABA Model Principles on Labor Trafficking and Child Labor,9See generally The Principles, Am. Bar. Ass’n, (Jan. 14, 2019), https://www.americanbar.org/groups/business_law/initiatives_awards/child_labor/principles (listing the ABA’s Model Principles under the Model Business and Supplier Policies on Labor Trafficking and Child Labor). the UN Guiding Principles on Business and Human Rights,10See generally UN Human Rights Council, UN Guiding Principles on Business and Human Rights, U.N. Doc. A/HRC/17/31 (June 16, 2011) [hereinafter UN Guiding Principles], https://www.ohchr.org/Documents/Issues/Business/A-HRC-17-31_AEV.pdf. the Organisation for Economic Co-Operation and Development (OECD) Guidelines for Multinational Enterprises,11See generally OECD, OECD Guidelines for Multinational Enterprises (2011), http://www.oecd.org/daf/inv/mne/48004323.pdf. the Ethical Trading Initiative Base Code,12See generally Ethical Trading Initiative, The ETI Base Code (2018), https://www.ethicaltrade.org/sites/default/files/shared_resources/ETI%20Base%20Code%20%28English%29.pdf. and other similar norms and guidelines that offer excellent directions on the policy side.13See infra Section II.B.5 (summarizing some of the voluntary norms and guidelines that help corporations develop ethical principles). Only the MCCs are agnostic to the precise human rights protections that different businesses within different sectors may elect to incorporate in Schedule P, which could be any of the foregoing, a company code of conduct (“Code of Conduct”), or other protections chosen by the issuer of the purchase order or buyer on the supply contract.14See supra notes 6–8. In addition, there are strong rule of law arguments concerning a situation where there are many laws on the books that countries are not fully enforcing or, in some cases, that are not enforced at all.15See infra Section II.B.2 (addressing the rule of law and the role of corporations within the enforcement realm); see also infra notes 183–87 and accompanying text (acknowledging the lack of enforcement of anti-trafficking laws globally). As one might also expect, there is a strong moral case surrounding these issues of labor exploitation.16See infra Section II.B.4 (discussing the moral case for anti-trafficking laws and regulations in global supply chains). Further the Model Rules of Professional Conduct (MR) support lawyers being proactive in this area,17See Model Rules of Prof’l Conduct r. 1.6, 1.13, 1.16, 2.1. (Am. Bar. Ass’n. 1983); see also infra Section II.B.3 (examining the ethical obligations of corporate lawyers to push back against trafficking practices). Finally, the concept of diversity, which has done much to further the inclusion of minorities, women, lesbian, gay, bisexual, and transgender (LGBT) personnel, as well as other marginalized groups, could also form a basis for cooperation between multinational enterprises and overseas entities by expanding programs like minority and women supplier development programs.18See infra Section II.B.6 (discussing the impact of diversity programs on exploitative corporate behavior). These are just some of the ways that lawyers can be vigilant in trying to bring attention to and eliminate exploitative practices in global supply chains.
This Article begins with background that sets the stage for the discussion by defining human trafficking, forced labor and child labor, and the startling number of people who are caught in the web of those human rights atrocities.19See infra Section I.A (defining the terms “human trafficking” and “child labor”). It continues with describing what is a supply chain and how labor exploitation taints supply chains, and presents the evidence of pervasive labor trafficking and child labor in particular supply chains. This section closes by discussing examples of ruthless practices accompanying labor exploitation, which reveal the abusive working conditions and unjust recruitment practices that are the hallmarks of this exploitation.20See infra Section I.B (addressing labor exploitation in supply chains).
This Article then moves on to discussing the business case and Corporate Social Responsibility (CSR). First, this section defines CSR as the economic, legal, ethical, and discretionary or philanthropic expectations that society places on an organization.21See infra Section II.A (examining the concept of Corporate Social Responsibility). This is certainly the underpinning of the Author’s thesis that lawyers should be on the vanguard of ending exploitative labor practices in supply chains.
This is followed by the ethical business case, rather than starting at the base of the CSR pyramid with the economic and legal cases,22See generally E. Christopher Johnson, Jr., Business Lawyers Are in a Unique Position to Help Their Clients Identify Supply-Chain Risks Involving Labor Trafficking and Child Labor, 70 Bus. Law. 1083 (2015) [hereinafter Johnson, Business Lawyers are in a Unique Position]; E. Christopher Johnson, Jr. & Nathan J. Chan, The ABA Model Principles: Not Only a Tool for Compliance, but Also One to End Slavery and Child Labor in Supply Chains, Am. Bar Ass’n: Bus. L. Today (June 29, 2017), https://www.american bar.org/groups/business_law/publications/blt/2016/06/02_chan; E. Christopher Johnson Jr., The Important Role for Socially Responsible Businesses in the Fight Against Human Trafficking and Child Labor in Supply Chains, Am. Bar Ass’n: Bus. L. Today (Sept. 19, 2018) [hereinafter Johnson, Important Role for Socially Responsible Businesses], https://www.americanbar.org/groups/business_law/publications/blt/2015/01/02_johnson; E. Christopher Johnson, Jr., The Corporate Lawyer, Human Trafficking and Child Labor: Who’s in Your Supply Chain?, 30 Thomas M. Cooley L. Rev. Symp. 27 (2013) [hereinafter Johnson, The Corporate Lawyer]. because of the importance of the MCCs. The MCCs, are a ground breaking initiative in this space because they move the commitments that companies require of their suppliers from corporate policy statements to the actual contract documents where those policies may have legal implications. This section continues with a discussion of the rule of law recognizing that the failure of many countries to enforce the laws in this area has led to labor trafficking and child labor being a gap in this institution of which we as lawyers are guardians.
The Article next discusses the area of legal ethics under this ethics prong of CSR, recognizing that the Model Rules provide lawyers with opportunities to raise the many issues that arise from labor exploitation not only from a legal perspective but from an ethical one as well. This leads to the Article’s next discussion area—the moral case—which is one of the issues lawyers can raise with clients under Model Rule 2.1. Next are the discussions of those voluntary norms and guidelines such as the UN Guiding Principles on Business and Human Rights, OECD Guidelines for Multinational Enterprises, and ABA Model Principles on Labor Trafficking and Child Labor, which not only can help companies design the right framework around codes of conduct, but also help lead to the eradication of labor exploitation in their supply chains.
The Article next discusses diversity, embraced by corporate America since the late 1960s, and its birth of minority and women supplier development programs which the Authors feel, based on some examples from interactions with Fair Trade, could be used to develop some of the downstream suppliers that now may harbor some of the exploited workers.23See infra Section II.B (explaining the reality of forced labor and the methods aimed at remedying these issues).
The next prong of CSR is legal expectations. After pointing out that labor trafficking and child labor are illegal virtually everywhere, this Article discusses and depicts with a diagram, the increasing and uncertain legislative trend describing many of the laws in this area from the Trafficking Victims Protection Reauthorization Act (TVPRA),24William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008, Pub. L. 110-457, 122 Stat. 5044 (codified as amended in scattered sections of the U.S.C.). Foreign Corrupt Practices Act (FCPA),25Pub. L. No. 95-213m 91 Stat. 1494 (1977) (codified as amended in scattered sections of 15 U.S.C.). Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act,26Pub. L. No. 111-203, § 1502, 124 Stat, 1376, 2213 (2010) (codified at 15 U.S.C. § 78m note (2012)) (creating disclosure requirements for the use of “conflict minerals”). the Trade Facilitation and Trade Enforcement Act,27Pub. L. No. 114-125, 130 Stat. 122 (2016) (codified at 19 U.S.C. §§ 4301–4454 (Supp. IV 2016)). the Federal Acquisition Regulation (FAR),28See FAR ch. 1 (2018). the UK Modern Slavery Act,29Modern Slavery Act 2015, c. 30, § 54 (UK). the French Law of the Duty of Vigilance,30Loi 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétiés des mères et des entreprises donneuses d’ordre [Law 2017-399 of March 27, 2017 on the corporate duty of vigilance for parent and instructing companies]. and many others. Given the proliferation of laws, enforcement is not where one might expect, but is increasing in some areas, such as with the FAR. This Article reminds the reader that lack of enforcement is not a safe harbor. Quite the contrary, it is a trap for the unwary and could certainly sink a business when storms arise. One of those storms of course is litigation, especially since the TVPRA includes a private right of action. This leads us to the next legal trend which is the increasing and uncertain litigation trend. This trend, driven in part by a strategic litigation initiative consisting of human rights lawyers, civil litigators, NGOs and others, is designed to fight human trafficking. The Article then summarizes the work of fellow Working Group member, Professor Ramona Lampley, and chronicles a number of cases in the consumer and employment areas. While most cases have been unsuccessful, a recent settlement and some promising rulings on some key points under the TVPRA suggest this trend may have some viability.31See infra Section II.C.2 (analyzing the litigation trend regarding anti-trafficking practices).
Finally, this Article discusses economic expectations by pointing out the fact that supply chains are critical to a business. Just like the natural disaster that caused significant losses in the Japanese auto industry because the industry did not understand the vulnerability of its supply chain, the same could happen with a disruption caused by not understanding the fact that a key supplier had labor trafficking or child labor in its supply chain. The Article then discusses some potential problems linked to labor trafficking and child labor in man-made events such as the Rana Plaza tragedy that claimed the lives of over 1100 workers. Any company that had a key supplier in that building had a loss of business and revenue. Similarly, man-made events, such as worker unrest, are always a concern especially with an exploited labor force. Here, the Article discusses the Coalition of Immokalee Workers and the Fair Food program that addressed some inequities in the tomato industry.
Another economic factor is growing consumer and investor interest in this area, as demonstrated by a number of events, such as the litigation discussed below on the consumer side,32See infra Section II.C.2.a. (outlining the consumer claims brought by plaintiffs in Rahaman v. J.C. Penney Corp, Doe I v. Wal-Mart Stores, Inc., Tomasella v. Nestle USA, Inc., and National Consumer League v. Wal-Mart Stores, Inc.). and the Larry Fink letter on the investor side.33Infra note 397 and accompanying text. These events could lead to a loss of sales from consumers and an adverse impact on a corporation’s stock price, both of which would have preventable negative financial consequences to a corporation.
A. Defining Human Trafficking and Child Labor
1. Human trafficking
The International Labor Organization (ILO) estimates that 24.9 million men, women, and children are subjected to human trafficking around the world.34See Global Estimates of Modern Slavery, supra note 1, at 7. Of these victims, 4.8 million are in sex trafficking and are forced into commercial sex industry activities ranging from pornography to prostitution.35Id. at 8. Another sixteen million are trafficked in private economic activities including agriculture, construction, domestic work, and manufacturing.36Id. Human trafficking is a major criminal enterprise,37See Louise Shelley, Human Trafficking: A Global Perspective 2, 83−111 (2010)(exploring the financial side of human trafficking and its insidious benefits). second only to drug trafficking in terms of criminal enterprises,38See Michelle Lillie, When Drug Trafficking Becomes Human Trafficking, Human Trafficking Search (2014), http://humantraffickingsearch.org/when-drug-traffic king-becomes-human-trafficking. and a $150 billion industry.39See Press Release, Int’l Labour Org., Economics of Forced Labour: ILO Says Forced Labour Generates Annual Profits of US$ 150 Billion (May 20, 2014), According to U.S. government reports, cases of human trafficking have been reported in all fifty states and the District of Columbia. .40Human Trafficking of Children in the United States: A Fact Sheet for Schools, U.S.Dep’t of Educ. Off. Safe & Healthy Students (Dec. 3, 2013), While different governmental and non-governmental entities have defined human trafficking in different ways in an attempt to comprehend the vast scope of the crime, .41Compare 22 U.S.C. §§ 7102(2)(A)–(C) (2012) (defining trafficking under the TVPRA through the lens of coercion), with What is Human Trafficking?, UN Off. on Drugs & Crime, http://www.unodc.org/unodc/en/human-trafficking/what-is-human-trafficking.html (last visited June 1, 2019) (reasoning that human trafficking requires a means not limited to coercion), and U.S. Dep’t of State, Trafficking in Persons Report June 2012 9, 33 (2012), https://2009-2017.state.gov/j/tip/rls/tiprpt/2012 [hereinafter2012 TIP Report] (focusing on the exploitation of individuals rather than the method of exploitation). there remains three basic elements: the act, the means, and the purpose.
First, the act refers to the “recruitment, harboring, transportation, provision, or obtaining” of human beings.4222 U.S.C. § 7102(8)(B) (2012). These terms are used to describe the wide range of potential participants in a trafficking situation, which can include a labor recruiter who recruits a victim, a driver that transports the victim, an enforcer who obtains the victim and breaks them down, or an employer or pimp who harbors the victim.43Bridgette Carr et al., Human Trafficking Law and Policy 132 (2014). Despite the name “trafficking” and the fact that transportation is one of the acts that can constitute the crime, a person does not need to be moved to be trafficked. Therefore, people can literally be trafficked from within their own homes or communities into prostitution or performing labor or services.44See 2012 TIP Report, supra note 41, at 8.
Second, the means element includes any behaviors intended to achieve control over another person, by force, fraud, or coercion,45Id. which often involves psychological manipulation.46Id. at 33, 38. Consequently, the force element can be satisfied by not only traditional physical force or causing serious harm, but also inducing drug addictions, denial of food/water, brands/tattoos, sexual assault, confinement, compelling prostitution, working long hours, and compensation denial.47See Global Estimates of Modern Slavery, supra note 1, at 36. Fraud can include false offers of job (or lying about aspects of the job) or offering a better life.48Id. at 45. Coercion is defined very broadly as “(A) threats of serious harm to, or physical restraint against, any person; (B) any scheme, plan, or pattern intended to cause a person to believe that failure to perform an act would result in serious harm to, or physical restraint against, any person; or (C) the abuse or threatened abuse of the legal process.”4922 U.S.C. § 7102(2) (2012). Note also that “fraud” and “deception” are also in the definition of trafficking—and most dramatically broaden the definition. In contrast, “force” and “coercion” are most associated with trafficking but not always most prevalent in its definition. See, e.g., Modern Slavery Act, 2015, c. 30, § 3(5) (U.K.) (“The person is subjected to force, threats, or deception designed to induce him or her to provide services of any kind, to provide another person with benefits of any kind, or to enable another person to acquire benefits of any kind.”). Therefore, it can include not only threats or intimidation to the victim or family members, but also abuse of the law, confiscating identification documents, or any scheme to trick someone.50Global Estimates of Modern Slavery, supra note 1, at 36.
Finally, the purpose must be for “sexual exploitation, forced [labor], slavery or similar practices, and the removal of organs.”51See What is Human Trafficking?, supra note 41. The question that many people ask is whether human trafficking is the same as slavery? This question is premised on the notion that the term “slavery” is harsher than the term “human trafficking,” which will help to engage the public in the fight against it. However strong these feelings may be, the problem with the comparison between slavery and human trafficking is that the legal definition of slavery as it existed in the United States and elsewhere is embodied in the UN definition of that term, which connotes ownership of the slave by the master to wit: “the status or condition of a person over whom any or all of the powers attaching to the right of ownership are exercised.”52Slavery Convention Art. 1(1), Sept. 25, 1926, 212 U.N.T.S. 17.
As explained in the first human trafficking casebook, Human Trafficking Law and Policy,53See generally Carr et al.,supra note 43. the definitions of human trafficking or trafficking in persons in the Trafficking Victims Protection Reauthorization Act (TVPRA) were designed to create a definitional umbrella that included not only the older forms of slavery, such as involuntary servitude and peonage, but also the newer practices that were outside of those definitions.54Id. at 136. In other words,
all of the ways that people could be enslaved without legal ownership, physical force, absolute physical control, complete control of movement, kidnapping, abduction, domination or other indicia of total physical control, etc. Human trafficking or trafficking in persons would recognize the full spectrum of enslavement and severe exploitation based on non-physical coercion and control.55Id.
The U.S. Department of State explains that the words “trafficking and persons” or human trafficking are umbrella terms describing where one person obtains or holds another person in compelled service, which have been defined by terms such as involuntary servitude, slavery, debt bondage, and forced labor.56President’s Interagency Task Force to Monitor and Combat Trafficking in Persons, Progress in Combating Trafficking in Persons: The U.S. Government Response to Modern Slavery 1 (2013), https://2009-2017.state.gov/documents/organization/207421.pdf. Note also that forced labor is a term that is not often included in the United States’ definitions of human trafficking and trafficking in persons. Conversely, the ILO uses forced labor as an umbrella term, much like trafficking in persons and human trafficking are used in the United States.57See, e.g., The Meanings of Forced Labour, Int’l Labour Org. (Mar. 10, 2014), . Given this similarity between the elements comprising labor trafficking on the one hand and forced labor on the other, this Article will use the terms synonymously unless the context dictates otherwise.
2. Labor trafficking
With respect to supply chains, labor trafficking is our focus in this Article. The ABA Model Policies on Labor Trafficking and Child Labor notes that labor trafficking includes:
forced labor in underground markets and sweatshops, as well as in legitimate businesses, including those in the manufacturing, travel, entertainment, hospitality, agricultural, service, and extractive industries. Movement of persons is not required for [l]abor [t]rafﬁcking to exist; i.e., [l]abor [t]rafﬁcking can occur without the victim leaving his or her hometown. People may be considered victims of [l]abor [t]rafﬁcking regardless of whether they were born into a state of servitude, were transported to the exploitative situation, previously consented to work for . . . the individual controlling them, or participated in a crime as a direct result of being trafﬁcked, including the use of illegal substances. These facts become irrelevant once a person is compelled to work by force, fraud, or coercion, which can occur at any point within the employment cycle.58See ABA Model Business and Supplier Policies on Labor Trafficking and Child Labor 15 (Am. Bar. Ass’n. 2014) [hereinafter ABA Model Policies], https://www.americanbar.org/content/dam/aba/administrative/business_law/aba_model_policies.pdf.
As pointed out by the U.S. State Department, in many cases, labor trafficking occurs in the recruitment process that precedes employment.59U.S. Dep’t of State, Trafficking in Persons Report July 2015, 15 (2015) [hereinafter 2015 TIP Report], (focusing on labor recruitment in global markets). https://2009-2017.state.gov/documents/organization/243557.pdf. The recruitment process facilitates labor trafficking when corrupt labor brokers, recruiters, employment agencies, or other intermediaries prey on vulnerable workers and engage in ruthless practices such as charging recruitment fees, deceiving workers about the actual terms of the job, and confiscating passports or other identity documents.60 Id.; see also infra Section I.D. Labor trafficking can happen in any sector,61See, e.g., Global Estimates of Modern Slavery, supra note 1, at 8. and it is more common in jobs that are in the low skilled area and filled by socially marginalized people such as minorities, the disabled, or migrants.62See 2015 TIP Report, supra note 59, at 14. Again, these are populations that are vulnerable, and hence more susceptible, to being trafficked.63Id.; see also KnowtheChain, infra note 111, at 10; Shah, infra note 84.
3. Child labor
Generally, the ILO has many definitions for child labor, with subcategories such as children in employment, children in child labor, children in hazardous work, and children in light work. In general, child labor is defined as work that is harmful to a child’s physical and mental development, is socially or morally dangerous, and interferes with a child’s schooling.64What is Child Labour?, Int’l Labour Org., https://www.ilo.org/ipec/facts/lang–en (last visited June 1, 2019). This last point is particularly troubling because, without adequate education, children from poor families are less likely to break the cycle of poverty that has them working in the first place, thereby perpetuating this vicious cycle.
The global number of children in child labor stands at 152 million children, which is almost ten percent of the world’s child population.65Int’l Labour Org., Global Estimates of Child Labour: Results and Trends, 2012–2016 11 (2017) [hereinafter Global Estimates of Child Labour], https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/publication/wcms_575499.pdf. Almost half of these children, seventy-three million, are in hazardous work.66Id. Similarly almost half are between the ages of five and eleven.67Id. And, while the overall number children in child labor has declined since the turn of the century, the UN Office of Drugs and Crime indicates that child trafficking is on the rise.68UN Off. on Drugs & Crime, Global Report on Trafficking in Persons 2018 27 (2018) [hereinafter Global Report on Trafficking in Persons], https://www.unodc.org/documents/data-and-analysis/glotip/2018/GLOTiP_2018_BOOK_web_small.pdf.
Africa has the largest number of children in child labor at almost 72.1 million and also the highest prevalence of children in child labor at one in five.69Global Estimates of Child Labour, supra note 65, at 28. Asia and the Pacific have the second largest child labor population at 62.1 million and also the second highest prevalence at one in fourteen.70Id. at 12. 108 million children are child laborers in the agriculture sector, followed by the 26 million in the services sector, followed by 18 million in the industry sector.71Id.
Whether or not a particular form of “work” can be called “child labor” depends on the age of the child, the nature and hours of work performed, and the conditions under which it is performed. The answer varies from country to country, as well as among sectors within countries.72See ABA Model Policies, supra note 58, at 14–15. With respect to age, the ILO Minimum Age Convention, sets the youngest age at which children can work at [fifteen].”73This standard has been separately endorsed by the ABA. Id. at 15. However in some developing countries, twelve- to fourteen-year-olds can perform light work.74See Global Estimates of Child Labour, supra note 65, at 21. Hazardous work can only be performed by eighteen-year-olds, but children between sixteen- and seventeen-years-old may perform hazardous work under strictly deﬁned conditions.75Convention Concerning Minimum Age for Admission to Employment, art. 3, June 26, 2017, 1015 U.N.T.S. 297.
The priority in the area of child labor is to eliminate the worst forms of child labor.76See generally Worst Forms of Child Labour Convention, June 1, 1999, 2133 U.N.T.S. 163. Generally, this is work which by its nature is likely to harm the health, safety, or morals of the child. This includes hazardous work and all forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage, or recruitment as child soldiers, any involvement with prostitution or pornography, or other illicit activities including drug trafficking.77See id. at art. 3.
B. Labor Exploitation in Supply Chains
1. What is a supply chain?
The Business Dictionary defines a supply chain as an
[e]ntire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer. It comprises of vendors that supply raw material, producers who convert the material into products, warehouses that store, distribution centers that deliver to the retailers, and retailers who bring the product to the ultimate user.78Supply Chain, Bus. Dictionary, http://www.businessdictionary.com/definition/supply-chain (last visited June 1, 2019).
Today, a business’s purchasing and supply chains are critical for success for a number of reasons. Primarily, these supply chains must operate effectively so that a product that starts as a raw material can make it through many steps without any difficulties so it can reach the consumer in a timely manner. This becomes extremely challenging especially in cases of complex supply chains such as automobiles where the supply chain consists of thousands of suppliers stretching around the world, at multiple tiers that provide materials from raw materials such as steel and plastics, to complex assemblies such as entertainment systems, powertrains, instrument panels and brakes, which may consist of many subassemblies.79Robert M. Monczka et al., Purchasing & Supply Chain Management 17 (6th ed. 2015).
2. How labor exploitation taints supply chains
Add to this complexity the current competitive environment where consumers have many choices and compare the prices of almost anything on the internet.80Id. The resulting consumer demand for lower prices causes businesses to optimize business efficiencies in supply chain management, not only to keep the supplies moving through the system, but also to create a number of positive business results such as driving innovation, improving quality and reputation, reducing time to market, and lowering prices.81Id. at 7–10. Regrettably, this increases pressure downstream on the supply chain, and despite these economic benefits, the extended nature of many supply chains permits corrupt labor brokers to exploit a ready supply of vulnerable men, women, and children.82This vulnerability springs from worldwide poverty, where a third of the world’s population lives on one dollar a day. See Anup Shah, Poverty Facts and Stats, GlobalIssues (Jan. 7, 2013), http://www.globalissues.org/article/26/poverty-facts-and-stats. These unethical practices include brokers misleading workers, conﬁscating their IDs, making it difﬁcult to leave a job, and charging exorbitant fees for recruitment and living expenses.83See infra Section I.B.4 (discussing examples of ruthless practices accompanying human trafficking). These corrupt labor-sourcing practices make corporate supply chains susceptible to the taint of labor trafficking, child labor, and other labor related exploitation.84See Johnson, Business Lawyers Are in a Unique Position, supra note 22, at 1091–92 (discussing how workers are commonly exploited).
3. Evidence of the existence of labor trafficking and child labor in supply chains
The U.S. Department of Labor List of Goods Produced by Child Labor or Forced Labor (the “List”) is probably one of the most significant indicators of the existence of labor trafficking, forced labor, and child labor in supply chains.85See generally U.S. Dep’t of Labor, Bureau of Int’l Labor Affairs, 2018 List of Goods Produced by Child Labor or Forced Labor (2018), https://www.dol.gov/sites/default/files/documents/ilab/ListofGoods.pdf. As of September 20, 2018, the List shows there are 148 goods from seventy-six countries, for a total of 418 line items, that fit into this category with the largest group of seventy-four line items in the agricultural area, forty-two in manufacturing, thirty-one in mining/quarrying, and one in pornography.86See id.; see also Sweat & Toil: Global Child Labor, Forced Labor, and Human Trafficking Around the World, U.S. Dep’t of Labor, https://www.dol.gov/general/ apps/ilab (last visited June 1, 2019).
In addition, the U.S. State Department published a fact sheet called “A Day in Your Life: Touched by Modern Slavery.”87See generally U.S. Dep’t of State, Off. to Monitor & Combat Trafficking in Persons, A Day in Your Life: Touched by Modern Slavery (June 2014), https:// 2009-2017.state.gov/documents/organization/233950.pdf. It demonstrated that slave-made goods are with most Americans every day, including your cotton sheets, clothes, jewelry, morning coffee, and food throughout the day, even the tires on your car and all your electronic devices.88Id.
4. Examples of ruthless practices accompanying labor exploitation
The numbers of goods on the List, like the number of people caught in labor trafficking and child labor, are startling in some respects. However, behind the numbers, there are examples of ruthless practices that accompany the exploitation that break down into two main categories. First, are abusive working conditions, such as physical and mental abuse, meager or no earnings, long hours, and dangerous workplaces. The second group are unjust recruitment practices—practices which use the legal system or financial vulnerability of victims to place restraints on the ability of trafficked workers to leave just as chains were traditionally used to keep slaves from escaping. These practices include recruitment fees and confiscation of identification documents.
a. Abusive working conditions
Many reports indicate that workers in the global supply chains face mental and physical abuse. Workers reported incidents of verbal abuse where they were shouted at or scolded by their supervisor for making a mistake or working too slowly.89Verité, Strengthening Protections Against Trafficking in Persons in Federal and Corporate Supply Chains 78, 91, 98, 108, 199, 230, 232 (2015), https://www.verite.org/wp-content/uploads/2017/04/EO-and-Commodity-Reports-Combined-FINAL-2017.pdf. In extreme cases, workers across various industries were publicly executed, shot dead, strangled, and drowned.90Daniel Murphy, Hidden Chains: Rights Abuses and Forced Labor in Thailand’s Fishing Industry, Human Rights Watch (Jan. 23, 2018), https://www.hrw.org/report/2018/01/23/hidden-chains/rights-abuses-and-forced-labor-thailands-fishing-industry. Child abuses included beatings similar to the ones young boys in the Ivory Coast have faced.91Brian O’Keefe, Bitter Sweets: Inside Big Chocolate’s Child Labor Problem, Fortune (Mar. 1, 2016), http://fortune.com/big-chocolate-child-labor. The ILO and International Program on the Elimination of Child Labor (IPEC) report indicates that more than one fifth of working children had cuts and bruises that were likely due to intentional violence.92Int’l Justice Mission, Child Trafficking into Forced Labor on Lake Volta, Ghana: A Mixed-Methods Assessment 14 (2016), https://www.ijm.org/documents/studies/ijm-ghana-report.pdf. Another report, the GSS Child Labor Survey 2014, found that at least 87.3% of children engaged in child labor suffered from abuse.93Id. These abuses included starving, denying sleep, slaps, caning, and beatings with paddles and ropes.94Id. at 52.
Many workers also worked long hours with one Burmese migrant in Phang Nga, Thailand typically working up to nineteen hours per day.95See Murphy, supra note 90. Children who worked in Ghana’s fishing industry clocked nine to thirteen hours.96See Int’l Justice Mission, supra note 92, at 47. In addition, a Human Rights Watch report showed that children in Zimbabwe’s tobacco industry worked past their designated working hours without additional pay.97Margaret Wurth & Jane Buchanan, A Bitter Harvest: Child Labor and Human Rights Abuses on Tobacco Farms in Zimbabwe, Human Rights Watch (Apr. 5, 2018), https://www.hrw.org/report/2018/04/05/bitter-harvest/child-labor-and-human-rights-abuses-tobacco-farms-zimbabwe.
In Thailand’s fishing industry, many of the fishermen/women faced dangerous work conditions in bad weather or sea conditions, slippery boats, and hazardous machinery, electrical wiring, or scalding exhaust pipes.98See Murphy, supra note 90. The fishers were also at risk of accident, injury, and death because of inadequate training, poorly maintained vessels, language barriers, and lack of safety equipment.99Id. As a result of their labor, fishers have been cut, have suffered broken bones, mangled fingers, lost hands and limbs, head injuries, partial paralysis, and have been electrocuted.”100Id. Children in Ghana’s fishing industry also faced hazards such as drowning, serious burns, inhalation of smoke, and cuts.101See Int’l Justice Mission, supra note 92, at 14. According to the International Justice Mission report, children were injured by fish that pricked or shocked them.102Id. at 49. Children also had open wounds that become infected when they were not treated immediately.103Id.
The mining industry also has child labor with children exposed to extreme danger, suffering pain, and back injury from lifting heavy rocks. Furthermore they were exposed to toxic mercury, which can cause lifelong brain damage.104Jo Becker & Juliane Kippenberg, The Hidden Cost of Jewelry: Human Rights in Supply Chains and the Responsibility of Jewelry Companies, Human Rights Watch (Feb. 8, 2018), https://www.hrw.org/report/2018/02/08/hidden-cost-jewelry/human-rights-supply-chains-and-responsibility-jewelry. Workers also suffer from health conditions such as heat exhaustion, unexplained illnesses and fever, intestinal problems and diarrhea, and chronic seasickness in the fishing industry.105See Murphy, supra note 90. In the tobacco industry, workers cited suffering nausea, vomiting, headaches, or dizziness, which are symptoms of acute nicotine poisoning.106See Wurth & Buchanan, supra note 97. Furthermore, children and adult tobacco workers were exposed to nicotine and toxic pesticides, which can cause long-term and chronic health effects such as respiratory problems, cancer, depression, neurologic deficits, and reproductive health problems.107Id.
In the cocoa industry, according to a survey by the Payson Center for International Development at Tulane University, thirty-seven percent of kids farming cocoa in the Ivory Coast suffered “wounds” or cuts.”108See O’Keefe, supra note 91. This industry is also an example of the fact that many workers in exploitative supply chains like cocoa109See infra notes 341–45 (discussing the cocoa litigation); see also Lampley, supra note 8, at 1721–27. receive little to no pay for their work. For example, the 2015 edition of the Cocoa Barometer reported that in the 2013–2014 growing season, the average farmer in Ghana made eighty-four cents per day and farmers in Ivory Coast made fifty cents per day.110See O’Keefe, supra note 91.
b. Unjust recruitment practices
In many countries, the migrant community is vulnerable to unjust recruitment practices. An audit report from an apparel company “found that recruitment agents in Taiwan charged migrant workers up to $7,000 USD for jobs in fabric mills.”111KnowtheChain, 2018 Apparel & Footwear Benchmark Findings Report 10 (2018), https://knowthechain.org/wp-content/plugins/ktc-benchmark/app/public /images/benchmark_reports/KTC_AF_2018.pdf. In other industries such as the Malaysian electronics industry, migrants also paid recruitment fees.112KnowtheChain, 2018 Information and Communication Technology Benchmark Findings Report 5 (2018), https://knowthechain.org/wp-content/plugins/ktc-benchmark/app/public/images/benchmark_reports/KTC-ICT-May2018-Final.pdf. According to a Verité study of the electronics industry, ninety-two percent of all foreign workers surveyed paid fees, and over three fourths of job-seekers became indebted in order to pay these fees.113Verité, Forced Labor in the Production of Electronic Goods in Malaysia: A Comprehensive Study of Scope and Characteristics 100 (2014), https://verite.org/wp-content/uploads/2016/11/VeriteForcedLaborMalaysianElectronics2014.pdf.
In addition to recruitment fees, reports also indicate that passports were confiscated to limit the mobility of migrants. When employers or brokers confiscate identity and travel documents, they can control the movements of workers and prevent them from changing employers.114See Murphy, supra note 90. According to the Verité report, almost half of the foreign workers were “subject to constraints on their freedom of movement and communication that rendered them potential victims of forced labor.”115Verité, supra note 113, at 118.
A company from the Know the Chain 2018 Apparel and Footwear Benchmark Findings Report audited lower-tier suppliers and found that eighty-two percent withheld passports.116KnowtheChain, supra note 112, at 10–11. For example, migrant workers on rubber plantations in Myanmar, Liberia, and Côte d’Ivoire had their passports held by their employers.117Id. at 13. The Verité report on the electronics industry in Malaysia says that ninety-four percent of foreign workers in the sample had their passports held by the facility or their broker.118Verité, supra note 113, at 119. Furthermore, seventy-one percent of foreign workers interviewed often had little or no ability to get their passports back when they wanted or needed them.119Id. The respondents often paid a deposit in order to “borrow” their passports from their employers while in Malaysia, and this deposit ranged from between 500 Malaysian Ringgits (approximately $155) and Malaysian Ringgits 3500 (approximately $1082).120Id. at 121.
II. The Business Case and Corporate Social Responsibility
A. Corporate Social Responsibility
The troubling reality that slavery still exists today may seem enough to move business leaders to take a role in eliminating these atrocities. However, to the extent that some leaders have taken those actions, the problem remains. Therefore, it is best to present a business case and the best way to look at that business case is through a CSR construct.
The well-known Carroll model defines CSR as “the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organizations at a given point in time.”121See Ann Buchholtz & Archie Carroll, Business and Society: Ethics, Sustainability, and Stakeholder Management 32 (9th ed. 2015). It depicts CSR as a pyramid with the economic expectations to generate a profit at the base and with legal expectations to obey the law, ethical expectations to do what is right and fair, and philanthropic expectations to be a good corporate citizen above, as shown in Figure 1.122Id. at 36.
Figure 1: Carroll’s CSR Pyramid