How compliance can help prevent human trafficking

There are many charities and bodies that seek to raise awareness of and prevent human trafficking, but their work can sometimes seem distant and detached from our roles as compliance professionals. We must consider how to bridge that gap and ask what we can do to stop human trafficking, with a particular focus on supply chains.

What is human trafficking?

The United Nations sets out the following detailed definition for “trafficking in persons”:

The recruitment, transportation, transfer, harboring, or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power, or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation.

Since 2000, the volume of human trafficking hasn’t slowed, with a 2018 report by the Financial Action Task Force highlighting the proceeds from human trafficking exceeded $150 billion, a huge increase on the $32 billion figure quoted in a similar report from 2011. It is the third most lucrative crime across the globe behind drugs and weapons.

Why is it an issue for compliance?

Our focus here is on supply chains, as these often bring us into contact with third parties and international travel. The complexity and nature of supply chains across the world has made them prime targets for human trafficking activity.

Moving goods and services between countries and across land, sea, and air opens avenues for traffickers to exploit. Honest and hard-working companies can find themselves being used by criminals, and though often they will be unaware this is happening, the consequences for these companies can be severe.

Beyond the moral and ethical imperative, companies must recognize a failure to prevent trafficking leaves them exposed to financial, legal, reputational, and operational risks. It is their responsibility to make sure these risks are properly identified and addressed. It is hoped any unscrupulous parties involved in a supply chain are discovered when a financial institution carries out both its onboarding work and ongoing due diligence.

Another point where wrongdoing might be discovered is through good transaction monitoring practices.

Risks and challenges for firms

Losing access to global markets: Remember, you can’t grow where you can’t go.

Reputational damage: Unethical business practices expose your brand to potential harm, from which recovery can be difficult or impossible.

Unable to prove you are compliant: Unless you have transparency in your supply chain, it can be difficult to prove you have carried out robust due diligence.

Taking focus away from success: Bad news is always more powerful than good news, and failings in your supply chain will detract from any business growth goals you have in place.

The points above highlight some of the challenges faced by firms, but let’s not forget at the heart of human trafficking are the thousands of people that are suffering and struggling every day. Companies might face difficulties, and it is important for them to protect themselves, but a far bigger benefit of preventing human trafficking is the reduction of the dangers the victims endure.

What can we do?

To put it simply, we can all keep our eyes and ears open and be more aware of the signs of human trafficking.

“Stop the Traffik” has identified signs that are common across all types of exploitation, including if a person:

• Acts as if instructed by another, as though they are forced or coerced to carry out specific activities;
• Demonstrates signs of physical or psychological abuse, such as lacking self-esteem, seeming anxious, bruising, or untreated medical conditions;
• Seems to be bonded by debt or has money deducted from their salary;
• Has little or no contact with family or loved ones;
• Is distrustful of authorities;
• Has threats made against themselves or family members; or
• Is not in possession of their own legal documents.

Companies must adhere to important requirements, typically dictated in regulations.

• Record and report efforts to identify and remove slavery from any supply chains. This obligation might arise where a certain profit threshold is met but it is best practice to be vigilant in all business.
• Carry out a high level of due diligence on all parties they engage with, including suppliers, agents, and contractors. Companies should obtain certificates from these parties that demonstrate their compliance with standards relating to human trafficking.
• Ensure adequate training is provided to employees regarding human trafficking.

In more practical terms, this means companies should:

• Facilitate policies that will prevent human trafficking;
• Execute robust training and awareness programs;
• Maintain continuous monitoring to spot trafficking risks;
• Obtain compliance certification from suppliers; and
• Implement and maintain a helpline to allow reporting of trafficking.

Human trafficking is a serious, widespread problem but one we can all help to identify and do our best to prevent. Through awareness, monitoring, and reporting, compliance professionals and their companies will be better placed to make a difference in the global fight against this illicit activity.

The International Compliance Association is a sister company to Compliance Week. Both organizations are under the umbrella of Wilmington plc.