Politics of Poverty

Congress weighs the cost of slavery

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H.R. 4842 shines a spotlight on the ugly underworld of human trafficking, bringing a measure of transparency to an often invisible form of human degradation.

A guest post by Diana Kearney, NYU International Law and Human Rights Fellow working with Oxfam America’s Private Sector team.

For fourteen hours a day, a 12-year old works the fields without pay, enduring routine beatings and surviving on scraps of food. With fellow-laborers, they are locked in small rooms at night and warned against escape attempts, a seemingly unnecessary precaution in light of the gruesome punishments dealt to failed runaways.

This is not a scene from the 1840s Deep South. Rather, this barbarism runs rampant throughout today’s cocoa plantations in Ghana and Cote D’Ivoire, with the harvests passing through several layers of the cocoa supply chain before landing on our plates. That’s why today there must be legal ramifications for US companies that profit off human trafficking and this is why Oxfam advocates for women in the cocoa supply chain.

The Global Slavery Index estimates that 35.8 million people are trapped in modern day slavery in at least 167 countries. From mining to agriculture to electronics to textiles, human trafficking and enslavement infect virtually every industry whose products end up in every US household. The pervasiveness of forced labor and the ever-growing complexity of corporate supply chains make it impossible for consumers to make informed, slavery-free decisions when choosing which brand to buy.

Enter the “Business Supply Chain Transparency on Trafficking and Slavery Act”

A sorely-needed bill in the House of Representatives seeks to change that. Proposed by Rep. Carolyn Maloney (D-NY) and co-sponsored with bipartisan support from Chris Smith (R-NJ) and Marcy Kaptur (D-OH), H.R. 4842, the “Business Supply Chain Transparency on Trafficking and Slavery Act,” will revolutionize the way that large multinationals confront forced labor.

The bill opens with the UN Guiding Principles on Business and Human Rights’ affirmation that businesses have a responsibility to respect human rights. H.R. 4842 then mandates that companies grossing over $100 million per year:

  1.  publicly disclose their slavery and human trafficking policies;
  2. announce any concrete efforts undertaken to address trafficking or provide remediation to victims; and
  3. evaluate forced labor risks along their supply chain – which includes all suppliers, regardless of whether the business has a direct or indirect relationship with said business – as well as the methods used for identifying these risks.

Currently sitting in the House Subcommittee on Workforce Protections, H.R. 4842 also obligates companies to file an annual report with the Securities and Exchange Commission detailing their anti-trafficking efforts. The bill also instructs businesses to provide this information to individuals requesting it within 30 days. Finally, in an effort to spur a race to the top, the bill instructs the Secretary of Labor to compile a “Top 100” list of the best corporate actors with strong anti-trafficking practices.

Shifting the landscape of human trafficking through legislation

The bill rightly characterizes our current federal policies as “gravely inadequate.” By forcing companies to investigate and publicize how slavery fuels their operations, our largest and most impactful businesses will ramp up efforts to combat trafficking in order to avoid public censure and the financial damage that accompanies it. The legislation also empowers consumers to support companies whose ethical standards match their own; Without access to this data, we inadvertently sustain the slave trade almost every time we pull out our credit cards. (In the meantime, you can approximate your own slavery footprint here.)

Though business lobbyists may contend that implementation will be prohibitively expensive, this argument should fall on deaf ears. Why?

  • First, Maloney, Smith and Kaptur tap only the richest multinational corporations, or business that can afford to conduct due diligence.
  • Second, the bill does not oblige any specific action beyond broadcasting policies and efforts, meaning there are few required compliance measures.
  • Finally, studies show that the public is willing to spend significantly more in order to purchase fair trade and socially-responsible goods. Because few consumers would knowingly choose cheaper products at the expense of mass enslavement, companies can rest assured that implementation costs will not outweigh the reputational gains to their bottom line.

Though an earlier iteration of this bill was rejected in 2011, recent government developments hint at a more favorable legislative climate. In 2012 the SEC promulgated the Dodd Frank-mandated Conflict Minerals Rule, a regulation that requires companies to disclose their use of conflict minerals from the Democratic Republic of Congo and neighboring states. In addition, the recently-implemented California Transparency in Supply Chains Act requires retailers and manufacturers doing business in California to announce actions they’ve taken to prevent trafficking in their supply chain. Advocates of H.R. 4842 would do well to point to the successful roll out of both of these pieces of legislation.

The benefits of new regulation: Corporate social responsibility pays

What may at first appear an onerous regulation may in fact benefit trafficking victims and business alike. The “Top 100” front-runner companies can use H.R. 4842 as a springboard to advertise their integrity and reap the attendant economic benefits. Luis CdeBaca, the US Ambassador in the Office to Monitor and Combat Trafficking, commented that new regulation has simultaneously altered corporate culture and even encouraged companies to exceed reporting requirements in an effort to burnish their reputations.

Research from Vanderbilt University (and many others) hase shown that “better CSR reporting is linked with increased sale, recruitment of superior quality employees, more favorable treatment by regulators and policy makers, and lower cost of equity capital.” In other words, H.R. 4842 may be a financial boon to reporting companies.

H.R. 4842 shines a spotlight on the ugly underworld of human trafficking, bringing a measure of transparency to an often invisible form of human degradation. The bill is no panacea for slavery – no piece of legislation can be – but it’s a great place to start.

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