While the DOJ substantially expanded corporate liability under the FCPA in recent years, many corporations remain unaware of the potential liability risks associated with corruption and human trafficking in employment chains.
Anti-corruption compliance efforts tend to leave the employment chain largely unchecked for human trafficking. This lack of oversight, however, creates conditions for labor recruiters to more easily conduct human trafficking, which in turn can create FCPA liability for parent corporations.
Verité, an international leader in supply chain social responsibility, reports “a clear visual connection between corruption and trafficking” in countries sending migrant labor by comparing reports from Transparency International and the U.S. Department of State. In more corrupt countries, government officials may actively participate not only in the recruitment, transportation and exploitation of trafficked workers, but even actively obstruct the investigation and prosecution of traffickers, and limit the protection of victims.
Corruption generates conditions for human trafficking. Workers often must produce a significant number of critical documents for immigration and employment purposes, such as passports, visas, birth certificates, work permits, and employment offer letters. Labor brokers trap workers by posing as employment agencies which assist in facilitating the documentation process. The labor broker acquires the required documentation by paying a bribe to a corrupt official. The labor broker then passes the cost of the bribe on to the vulnerable worker in the form of a service fee. The worker must then resort to repaying the fee by engaging in forced free labor. The large debt is held over the worker’s head to require the worker to labor “for free for months or even years to pay off [his] debt” to the broker. The number of people trafficked is estimated to be as high as 27 million, with the majority of people exploited for labor and controlled through debt bondage.
Corporate liability under the FCPA may stem directly from the following opportunities for government involvement in the trafficking process:
- bribes to reveal or sell information on victims
- provision of forged documentation to labor brokers (identity papers, visas, work permits)
- bribes to accept forged documentation or documentation purchased from the black market, or
- bribes to border-crossing officials during transportation.
To find the risk of FCPA liability associated with human trafficking, compliance auditors should first map connections between companies within the supply chain and the high-risk countries on Transparency International’s Corruption Perception Index map. Compliance auditors should then look for red flags, such as large clusters of migrant laborers from those countries working in supplier facilities. Additionally, suppliers’ financial records, such as unexplained fees, costs and deposits charged to the migrant may indicate sources of corruption. A lack of transparency from the supplier, worker complaints of deception regarding employment terms, or worker complaints of withheld personal documentation, such as passports, are also red flags that should be investigated.
Despite the sizeable number of people affected by human trafficking, human rights researchers have only recently begun to investigate the direct cause. The fact that labor brokers rely on government participation and are given little oversight by the suppliers that hire them means that parent corporations are in a unique position to make sweeping, effective change. Companies must take it upon themselves to actively investigate and eliminate hiring practices that enable human trafficking to persist. It is unlikely that human trafficking will ever be rooted out until companies strictly enforce FCPA compliance on suppliers by closely monitoring their employment chains.
Brittany Barnett, pictured above, is a law student at the University of Richmond, J.D. 2019 expected, focusing on human rights and immigration law. She spent summer 2017 working with victims of human trafficking at Ayuda, a nonprofit organization in Falls Church, Virginia.