Meeting

Eliminating Human Trafficking: The Role of the Private Sector

Wednesday, January 27, 2021
Ajeng Dinar Ulfiana/REUTERS
Speakers

General Secretary, International Trade Union Confederation

Secretary General, Organization for Economic Cooperation and Development (OECD)

Cofounder and Chair, IMAGINE; Former CEO, Unilever

Presider

Senior Legal and Investigative Correspondent, NBC News; CFR Member

Our panelists discuss the role of businesses in eradicating human trafficking and modern slavery.

This meeting is cosponsored with CFR’s Women and Foreign Policy Program.

MCFADDEN: Well, hello, everyone. I'm Cynthia McFadden, a member of the Council and an investigative reporter at NBC News. We're tackling a big subject this morning and an important one: what role can business play in eradicating human trafficking and modern slavery, which of course, affects hundreds of millions of people worldwide.

The pandemic, as you know, has made things even worse. One headline put it this way, "As global economy melts down, human trafficking is booming." The same could be said for forced labor, with an estimated seventy million new people pushed into extreme poverty.

There is, of course, a lot of money being made. For example, trafficking is a highly profitable crime, with estimates of it generating a hundred and fifty billion dollars annually, it's hard to put a price tag on what modern day slavery generates for companies.

So again, this is on the record, we are joined today to discuss the matter by three very distinguished and knowledgeable panelists. Let me introduce them to you now.

Sharan Burrow is the general secretary of the International Trade Union Confederation with eighty-seven million members. Angel Gurria is the secretary general of the Organization of Economic Cooperation and Development with, I believe, thirty-seven member countries. And finally, Paul Polman, the former CEO of Unilever, who is currently the founder and chair of an advisory group called Imagine, which, and I'm going to quote from their website, works with CEOs and global leadership teams to shift mindsets and redefine business models, putting purpose at the heart of superior performance.

So Paul, let me start with you. It sounds like you're saying the businesses can do well and do good at the same time. Although the New York Times in a headline once said that your ideas demand a reinvention of capitalism. What do you say businesses can and should do right now to deal with these terrible forms of exploitation?

POLMAN: Well, thank you, Cynthia. And obviously, the distinguished panel members and friends, it is very clear that the challenges that we have that once more have been laid bare with COVID. And I think the numbers are actually more staggering than you mentioned. I would say the, you know, the two and a half billion people that still are basically on less than five dollars a day, or the one and a half billion that don't have a safety net. They're all vulnerable people, and they're all at risk of being exploited. And it is clear that that translates itself in an inefficient economic system, but also in most of the strife and the political violence that we see. And the discourse that we pay a price for.

It's actually interesting and surprising that if you look at goal number sixteen, which is peace and justice, and this world pays about ten or eleven percent of GDP on conflict prevention and wars. If you take that money alone, half of that money would wipe out all the debt of the developing markets. You could solve the Sustainable Development Goals every year for the next fifteen years, and solve the issues in the first place, so it goes directly to the heart of business because you cannot solve these issues if the major force of the economy is not directly involved.

And obviously, they're terribly exposed in the first instance. It's about risk. We've seen with COVID that companies that have a better social contract with their workers, with their value chain, with their communities, with society at large are actually doing better, also getting more rewarded, increasingly, by the financial market. But next to that, it's an enormous opportunity. I think the citizens of this world increasingly, if there's anything that COVID has shown, increasingly want to buy from companies that have a responsible business model, and that make a positive contribution to society, not a negative one.

Now, my last sentences, obviously, the issues of human rights, corruption, tax fall a little bit under the same heading, although we are talking about different but related issues, that it's very delicate, still, for businesses to get involved. Business feels that if they get involved alone, they might get attacked because there is no business that can tell you that they are not exposed in one way or another in their value chain to this. Even when I was running Unilever. So there is this fear of being called out that is not helpful. Then there is the issue of competitive pressures. If you don't do things together, then you might fall behind instead of being ahead. Increasingly proven wrong, but that's a fear. And the third one is that we still have too many governments that don't have the right frameworks in place to help and then is difficult for individual businesses to do something. We've seen democracy go down, we have seen human rights go down, we have seen more people being exposed because of all of this. And it obviously is an enormous pressure on business if you don't have the right frameworks in place.

MCFADDEN: So one of the things— Thank you for that. So one of the things that businesses have been challenged to do is to examine their own supply chains. Sounds a lot easier to do than it is. Mr. Secretary General, your organization has undertaken— I have— I must say, I confess, I have not read every word. But you have printed a very hefty suggestion of ways that companies can, in fact, penetrate their own supply chains and do better guidelines for businesses for responsible conduct. Talk to us about the highlights from that report.

GURRIA: Well, you know, one aspect that is not often considered when addressing human trafficking is the supply chain. And companies may not even be aware that they're contributing to major problems like child labor, or forced labor, or human trafficking through their activities in the supply chain. The OECD was able to show in the 2019 report that we called “Ending Child Labor, Forced Labor and Human Trafficking in Global Supply Chains.” It was a long title. But we were able to show the extent to which these phenomena are hidden in the supply chain. So our report presents the joint research findings and conclusions on child labor that we found, together with the ILO, the International Organization for Migration, and UNICEF. And then Alliance 8.7, of course, with the OECD. And in response to the ministerial declaration in the meeting of G20 labor and employment leaders and ministers of 2017.

So across regions, between twenty-eight percent to forty-three percent of the child labor estimated to contribute to exports, but does so indirectly, not just directly, but indirectly through a preceding tiers of the supply chain, the extraction of raw materials, they're all part of agriculture. So it's not just that in the part that is seen or more obvious. The forced labor and human trafficking data is more— well, it's more experimental. But a similar picture emerges that you have the more obvious part and then a very indirect— a lot of indirect, like it's the tip of the iceberg. The estimated child labor linked with economic activity in global supply chains, it varies across regions. For example, it's about twelve percent in sub-Saharan Africa, twenty-two percent in Latin America and the Caribbean. By the way, that's the part where I come from. Just a massive— and maybe Sharon can tell us about that. Nine percent in Northern Africa, and also twenty-six percent in Eastern and Southeastern Asia, so even higher than Latin America. So the link between human trafficking and forced or child labor is not always clear, but it's clearly there, you know, it is happening. We have to take it into account.

Now these results are very telling, ending child labor, forced labor, or human trafficking requires a whole of the supply chain approach, including the input industries, not just the end product. And the good news is that businesses do not start from scratch. There is consensus that due diligence is the way for businesses to tackle the issues in the supply chain. And then since, of course, what is called the national contact points because the OECD is a leading organization providing guidance on what this due diligence should look like. And, you know, governments backed— negotiated with business, with trade unions, with civil society. But we also needed due diligence looks at the full supply chain, not just at the last bit. Due diligence that is preventive, that is commensurate with and prioritized in accordance with the severity and the likelihood of harm so that you can project the level of harm and try to stop it. And that, actually, it is an integral part of an enterprise's risk management and decision-making, and the compliance officers, etc. And businesses have a responsibility to act.

But governments also have a duty to protect. Remember, this is the ultimate duty of governments: the duty to protect their citizens. And part of the critical role of governments is to promote an enabling environment to, you know, for responsible supply chains by establishing a smart mix of policy approaches that aligns with the government backed in the negotiated part, which is, you know, the due diligence expectations, where we are promoting more coherence, where we're strengthening the company due diligence efforts. And, and as I said before, a part of this picture has to be the access to remedy for everybody involved, but also for big things, you know, government to strengthen grievance mechanisms related to child labor, to forced labor, to human trafficking.

And this is where, as I mentioned before, we come into the question of the national contact points. We have something called the OECD Guidelines for Multinational Enterprises. And in those, there is this figure called the national contact point, which changes from country to country, where it's located, how it's done. Unfortunately, I can confess, we have more sake, in terms of quality of effectiveness and how competent they are, how empowered they are. Sometimes they're fantastic, sometimes they're so strong, they're powerful, they're really getting done. And sometimes, well, it's, you know, what Kissinger said, "What number do I call when I call Europe?" You know, so you don't know who to call because the national contact point is not good enough, or is not effective enough, or is not being given enough resources.

So let me let me stop here because, you know, you punched a very sensitive button of mine, as you can see. I just could go on and on and on. But the question is, when you're having these enormous— the risk of harm, you know, child labor and forced labor and trafficking, clearly, it has to go to the end of the value chain. And I have to say, Paul Polman was one of the pioneers in doing this. He said not just the final product, and I washed my hands about it, because this is the only part I know— they— you know, you go all down the supply chain because, in effect, they are responsible for the whole of the supply chain when you sell the final product.

MCFADDEN: You've given us a lot to chew on. Let me bring Madame General Secretary Shanan into the conversation. I mean, I've had the occasion to go to numerous multinational corporations and say, "Look, there's child labor in your supply chain." The universal first response is, "Oh, gee, we didn't know." To which I say, "Well, now that you do know, what you're going to do?" Everyone always says, "Oh, we're going to patrol it and take a really hard look." And as soon, I've discovered, as the spotlight is off, things generally go right back to where they were. So my question to you is how to enforce this. Yes, there are good companies who want to look at their supply chain. There are many who would prefer it to remain opaque. What actual actions can happen to make a difference?

BURROW: So you need legislation, first of all. I think Angel Gurria and Paul both said governments have a responsibility, a duty to protect and, frankly, whether it's at the behest of foreign direct investment, big corporations, whatever, they have let their citizens be exploited in the worst possible way. And business has to change. It's that simple. So just let me back up a little.

You know, you've got more than forty million people in the world in modern slavery. But I can tell you, that's not nearly the total amount. You look at then the people in sponsorship systems or kafala systems. And what you actually look for is: does this worker— are they independent of the employer? Do they have actually a contract that's transparent? Is there a form of compliance, grievance procedures and compliance to actually effect remedy? Or do they simply risk more exploitation if they raise their voices on behalf of themselves or others? And, frankly, this is huge. And it's the ugly end of the supply chain exploitation.

As somebody who's walked the supply chains, and been in labor camps, has fought, you know, governments in the Gulf states. And I might say, Qatar has now met, you know, ninety-eight of our expectations, with legislation, with labor courts, with transparent contracts, that mean you're not dependent on a sponsorship system, but rather on the job. The job, the contract, and the systems behind it, including for domestic workers. And remember, women are way overrepresented in forced labor. And then, when you go to Saudi Arabia, throughout last year, we have yet to see the final product, but they will move to a system of transparent contracts with very strong local courts. And if you can do this in the Gulf states, what's the problem?

So on the legislative front, you know, yes, it's about governments taking responsibility, but Angel's right that the standards are there, the ILO, the OECD guidelines. What we need is compulsion. And that doesn't mean— Paul's right, no one's perfect. And that doesn't mean we won't work to remedy the situation as a first resort, but mandated due diligence, the UN treaty, the EU legislation on mandated due diligence, this will set a different floor. And we have to ask ourselves whether or not the WTO in multilateral reform is going to be brave enough to put labor rights and environmental standards as a fair competition floor.

Just a word on the U.S. We're looking forward to the Council's report too because, indeed, the customs law is very strong. But there's a lot more we can do. And I think the new U.S. administration will be looking to these questions. So it is about all of us coming to the realization that if you've got ninety-four percent of your supply chains are a hidden workforce in Asia, ninety-five in Latin America, then it's not possible to have a rule of law.

MCFADDEN: So Paul— thank you for that. So Paul, isn't part of this, you know, they say it's not the money, it's the money. If goods are priced at a point where legitimate wages can't be paid, then this problem just perpetuates itself, doesn't it? I mean, what's the incentive for companies to price their goods and maybe overprice themselves in the market against their competitors? How do you talk to them about this?

POLMAN: Well, I think it's increasingly transparent, Cynthia, that it is in the benefit of companies, and that you can run a better company and more successful company and also better long term for the shareholders if you take care of that.

During Unilever, when I came in twelve years ago, we had a lot of contingent work, especially in tea. We changed all of that and increased the living standards, worked on living wages with the ILO, with Sharan and others, and had far less turnover, far more motivated employees, could provide them a decent living and honest living. And our value chain became so much better for it. The brands we were selling became so much better for it. So I don't think you'll have to compromise for what is doing right.

There was a moment that someone came to me and said, you know, everybody wants ice cream immediately. And now there are all these online services that you could go to and order them and within fifteen minutes, it's delivered to your home in London, in Paris, wherever you live. And we looked at it and these people were not even getting the minimum livable wage in the city. Then you shouldn't make your ice cream connected to that. It will actually haunt you if you do. It will attack the image of your brand, of your company itself. So we fought for London livable wages, for example.

And, obviously, when you have the size and scale of a Unilever, you can move others with you and avoid this competitive disadvantage. I understand the challenges for some of the SMEs and that's why we need to put a floor under there. And, as Sharan said, move that floor up.

But wherever you look at, we issued twice a human rights report. We actually even issued, in 2017, a modern slavery and human trafficking report. I have to say, sitting here now in 2021, I'm very disappointed that although we've issued twice this report and a slavery report—this was at a time of the Modern Slavery Act in the UK with Kevin Havilland being the commissioner at that time. Unfortunately, no company has followed.

So we need to go to mandatory disclosure, just like we do on climate change, just like we're going to do on biodiversity. Why shouldn't we start first and foremost with human rights? So we are getting there with gender, we're now having a racial component. But it is also clear that we need to start reporting on the value chain where these pressures obviously occur more than anywhere else, as Angel was referring to.

MCFADDEN: Mandatory disclosure, are there— do there also have to be sanctions? Do there have to be some teeth in those mandatory disclosures? Because, you know, the supply chain is complicated and many companies have no incentive to dig in it too deeply. I'll tell you, I was— we discovered and reported extensively on a mining operation in which children as young as three in Madagascar were mining for mica. Most of that mica was shipped to China. And it just became completely opaque after that. We spent over a year, two producers, piling through the export documents. And, finally, we're able to link it to some major multinational corporations, but it's a lot of work. So, I mean, are companies really going to have the incentive, and if they don't, should there be teeth? Should they be sanctioned? Should there be financial penalties to companies who fail to disclose?

POLMAN: Oh, very shortly, you need to have the right frameworks in place, ultimately, to get out of the free-riders and also to solve some issues, frankly, that companies cannot get into. But companies can be forced to disclose quite a lot. Just even the fact that you asked them to make a human rights report to report on salient points.

You know, at Unilever, we took eight salient points that ranged from fair wages, to right to association, to discrimination, to health and safety, to land rights. We took eight of them that were big issues in our value chain. We called them out, we worked with Oxfam, we worked with others, to better understand them. Exactly as you say, you have a hundred twenty thousand suppliers, you have subcontractors, it is frankly impossible. But what you can do is you can drive the culture, you can drive the standards, and you can actually start to actively work with governments, with the OECD and others to put these frameworks in place.

But I'm very much for, at the end of the day, if we want to solve these issues of humanity that we're talking about, of dignity and respect, of inclusion, of protection of the most vulnerable. Yeah, we do need to have these frameworks in place. There's no question about it.

MCFADDEN: So, Mr. Secretary General, I'm going to ask you a hard question because— it's not really a fair question in many ways but I'm going to ask anyway. If you could change one thing to stop the exploitation we're talking about—and I know, we've put a lot of different forms of exploitation in one basket here—but if there were one thing that you could have enacted tomorrow, what would that be to bring an end to this finally?

GURRIA: Well, let me say, it's not an unfair question. It's just, you know, it's a complicated question. And it's difficult to say one thing—

MCFADDEN: I'll give you two. [Laughs.]

GURRIA: But I would allude to what Sharan said, which is legislation, and the legislation has to include the sanctions. Because if it's not legislation that has the teeth, then if it doesn't bite, you know, if it's like dentures, you know, then it won't bite, nobody will do anything.

But also, there is the public. It's not only the sanctions. The idea is to get companies, just like the companies are now saying equal opportunity employers, you know, and they're competing. Now, again, thanks to Paul Polman, and a number of companies like that, they're now competing to see who is the greenest, you know, so now they are greener, they are, you know, they're— and the price of carbon. Big deal, you know, big deal. I remember the meetings we had with President Hollande about the price of carbon. If you don't put a big fat price on carbon, which means putting a big fat tax on carbon, then you will never change the conduct and you will be struggling all the time.

So the question is, can we make them compete also to see who are the best citizens? We have a very good example here at the OECD. We launched an initiative called the Business for Inclusive Growth. And forty companies— very, very large companies committed to be good citizens of the world, including on human rights, on the question of child labor, on the question of forced labor, but and then when the COVID came, they're now focusing on the question of COVID. And what is it that they do?

They're now kind of certifying themselves, in a way, to say I signed the pledge. I am committed to and this means we then empower the consumers to say, if it is a company that delivers and a company that complies, then we will support it by buying the product, and just the opposite for those that are perceived to be not compliant, then, of course, we don't buy their product, we punish them. And that is the part that will really hurt for those that do not comply, that do not go along with the laws. But the laws themselves and regulations and codes have to be hard enough, strong enough, clear enough, and have to be enough of an incentive because sometimes the fines are just a de minimis, and they represent only a fraction of the benefits that these people get from violating these laws.

MCFADDEN: Precisely. And one wonders, even with the most goodwill, how many of say the thirty-seven countries who are represented in your organization would be willing to have real laws with real teeth?

We need to turn and allow the members to ask some questions.

And while you're thinking of your questions, let me just ask you, Sharan, one final thought about this. I mean, I'm guessing that workers’ rights are a vital part of this, as you say, the right to appeal. I think so of the artisanal mines that I have been in all over the world. You know, workers’ rights— I mean, there's no infrastructure, there's no hospital, there were no schools, there is no local government, there are no roads. It's very complicated in some of the circumstances Yes?

BURROW: Oh, yes and no. Yes, it's true that in poorer countries, it's much more obscured and it's used as an excuse but let me throw out a challenge. This is the year for the elimination of child labor. Technology is, you know, sung as the savior of, you know, the modern world, although we obviously won't just transition because there's good technology and bad technology. And yet, children work in the DRC to mine rare earth minerals. You know, we're going to put together a coalition with business, with unions, with governments, hopefully, the government of the DRC, to eliminate child labor in the mines. So same in Ghana, fishing. As the world looks more to work, you know, sustainable fishery, plant food, you know, it's unconscionable. And there are two things. One is legislation with sanctions. It's mandated due diligence. But there's also universal social protection. Children wouldn't be forced to go to work if, in fact, their parents either had jobs, good jobs, and companies were prepared to pay miners with the necessary good-paying conditions. But also, if you have universal social protection in countries that have none, when there's a family shock, or a national shock, or a global show, you have the resilience. It doesn't exist in these countries in the way it should. Let's make that happen.

MCFADDEN: Very important things to discuss. And now let's let our members do some question asking. So I am going to turn it over and we'll see what they're thinking about. Do we have a first question?

CFR Operator: We'll take our first question from Peggy Hicks.

Q: Hello, it's Peggy Hicks. I work at the Office of the High Commissioner for Human Rights in Geneva. Thank you for a really interesting conversation. I wanted to follow up on the point that Sharan Burrow has brought up on human rights due diligence. And this is an issue that is obviously very much debated now. We've— Paul Polman has spoken about business transparency as an important point. But moving beyond that to actually putting in place due diligence frameworks that are regulated by legislation. It's an issue that's actually before the European Parliamentary Legislative Affairs Committee today. And I wanted to get a sense from your experts on how we actually move forward on that the demand that Sharan has put on the table? How do we actually get governments to take the necessary steps, to put in place these requirements of human rights due diligence that could really hold the private sector accountable for how they're dealing with human trafficking? Thank you.

MCFADDEN: Paul, do you want to take that one? Thanks. Great question.

POLMAN: Well, what has been extremely helpful for Unilever, at least, because we do want to ensure that the whole industry behaves because I do believe that even if we would set a standard and the others don't, you will all be pulled down. And there are many examples of that.

So we work, for example, on the Modern Day Slavery Act in the UK, which I thought was a fairly good piece of legislation, just like there are legislations on how to deal with corruption, then— and if that legislation has influence beyond its own national territories, and holds you responsible for the supply chain, even for partnerships that you go into, which this piece of legislation actually does, then it has quite an influence.

Now we're working with the European Union, again, with the same thing. We're looking now at the whole green conversion that we talked about, the European Green Deal as it's called. There's a farm-to-fork package. We're working with the agricultural companies where we have a lot of issues in the value chain, issues of poverty, issues of bonding, issues of slave labor, child labor. We're working there, not only to go to regenerative agriculture and attack the issues of climate change, which have a direct implication, again, on what we are talking today. It's the poor that suffer disproportionately. But we're also working within that effort to ensure that there are standards for livelihoods and define what these livelihoods mean. For— and how you concretely tackle those.

For example, a carbon market to turn agriculture into carbon positive results into a carbon market, which I think quite normally should go back to the farmers and improve their livelihoods. So if you start thinking about all the policies that we're implementing through a lens of human beings that do the issues that we need to solve, you can bake in a lot of these things.

And then we have, finally, these organizations. I'm the vice chair of the UN Global Compact. We have the ten principles. Sharan is on the board as well. We have the ten principles on which the UN Global Compact is based. And that's not a bad starting point. The fifteen thousand companies that have signed up to these principles. And we have a very rigid and stringent auditing process. Can always be better. But you could start in the absence of legislation to simply look at these ten principles of the UN Global Compact.

MCFADDEN: But let's move on to the next question or we're not going to be able to hear it from enough members. So please, next question.

CFR Operator: We'll take the next question from Emily Murase.

Q: Hello, everybody, Emily Murase, San Francisco Collaborative Against Human Trafficking. This is a question for Secretary Burrow. The 2012 California Transparency in Supply Chains Act requires major companies to disclose any or no efforts to counter human trafficking in their supply chains on their websites. Do you support this self-disclosure approach? And are there examples in your experience of civil society playing a key role in pressuring companies to do the right thing as Ambassador Gurria has suggested?

BURROW: So the self-disclosure hasn't worked. It hasn't worked in the climate sphere or in the investment sphere around climate and stranded assets. And it's not going to work in the case of stranded people. Because, again, it's what the CEO doesn't know. Cynthia said it earlier in conversation. If nobody raises these issues, and I've gone straight from terrible exploitive situations to CEOs I know. And they're mortified because they don't know. So just reporting, yes, of course, we always want disclosure and transparency. We have to have mandatory due diligence.

And let me just respond by saying we can affect this change very simply. You have mandated due diligence in Europe. It will change the face of companies' behavior who wants to trade in and out of Europe. If, before he leaves, my good friend Angel Gurria encourages the OECD to make the guidelines a convention, that will bring in more countries with responsibility for mandated due diligence. And goodness, if we get the UN Treaty on Business and Human Rights, we've got a trifecta.

And now there's the U.S. The U.S. has taken steps but we need to see more because it's also got a capacity to say this is the trade floor. We will not trade on exploitative conditions for workers that are squalor, that are totally dependent, where you're owned by, effectively, by another human.

GURRIA: Sorry, just—

MCFADDEN: Yes, please respond.

GURRIA: Emily, it has to be in the legislation. It has to be an obligation. And then there's pressure, you know, and then there are heroes of it. Cynthia is one of them, the things that she does. Kyla Satiarti, for example. You know, I was in the march with one hundred million for a hundred million down the mall in Delhi with the College. Then that— but the question is they need legal support, they also need the support of the enterprises themselves. Even for enterprises to denounce other enterprises through the national contact points and other ways to just to, you know, shame them, to just expose them. First of all, because it would be violating the law because also to expose the governments that allow them.

So it's a question of creating a culture. But no, it's not going to happen simply by self-patrolling. Or, you know, it has to be by pressure, pressure, pressure and that starts with the legislation.

MCFADDEN: Yeah. I mean, one of the problems with putting companies in charge of exploring their own supply chains is if you don't have anyone auditing that, I mean, you can just give yourself a good checkmark on each. I mean, you know, there— because of the problem with transparency. Great question. Let's move on to number three.

CFR Operator: We'll take our next question from Tom McDonald.

MCFADDEN: Tom.

Q: Yes, Cynthia, nice to see you. This is Ambassador McDonald. I'm a partner at the Vorys firm in Washington, was the U.S. ambassador to Zimbabwe. Great panel, great discussion. What do we do, though, because I saw this up close during my time in Zimbabwe, with the Chinese who bring their own workers, who are well known for exploiting the local workforce, including youth, children, and in places like Zimbabwe, where there's substantial mining operations, much to your point, and I've been to the DRC, Cynthia. It's hard to find a road outside Kinshasa that you can actually kind of move around in, but whoever on the panel wants to take this. To the Chinese, who I think are a net negative in Africa, in my opinion, and to the Russians, who are still basically selling arms and training attack helicopter pilots, but wanting to do more business and again, exploitation. I'm very familiar with the OCDE and all of that. And I'm a big fan of Lever, as we like to call it. You had a lot of products being sold in Zimbabwe, sir. What do we do about the Chinese and the Russians here in this discussion? This is a lot more than Western Europe.

MCFADDEN: You've given us a lot to chew on here. Who wants to take it? Who on the panel would like to start with that? Sure, Shanan.

BURROW: Well, the Chinese investment model is, in fact, exactly as the ambassador describes it. I mean, it's a distortionary view of support for another country because the poor countries are so desperate for the infrastructure, but it doesn't add anything to the local economy except the edifice at the end of it. And, often, they're still paying off the loan or the capital on that because they do bring their own workforce in many instances. They do actually pay Chinese wages, even in countries where the wages are higher. And they never mix with the local environment. In fact, those poor Chinese workers are often held on ships or in quite, you know, uncomfortable conditions.

But the Russian story is different. It's not so much about supply chains. It's actually, you know, more about as the arms trade and, oh my god, that is complex.

Paul raised the abomination of how much money we spend when we could be paying for universal social protection or, you know, good schools or hospitals or whatever. But it is true and, of course, you've lived through you know, the promise and despair of Zimbabwe because, in many ways, the failure of that state to actually have an inclusive and trusted democracy is in fact leading to these conditions.

But the investment model of China, we've written reports about it. Others have. Let's hope the world will actually stand firm together. We need China. We need China to move and they're moving on the green economy. You know, we need them to move on the question of not just their own people because indeed they are putting in place social protection, collective bargaining, not always in our frame, but it's improving and the wages have risen. You know, you can be paid less in Bulgaria than you can in urban China. So let me say to you, we've got a long way to go. But that investment model can't stand. It just can't stand anywhere, not just in China. Anywhere.

MCFADDEN: Thank you, Mr. Ambassador, for the question. Let's move on to the next member.

CFR Operator: Our next question will be from David Rivkin.

MCFADDEN: Greetings.

Q: Thank you, David W. Rivkin from Debevoise and Plimpton here in New York. When I was president of the International Bar Association a few years ago, we published a report on the impact of corruption on human trafficking. And the report showed that human trafficking could not exist without corruption at many different levels. And that's not an issue we have talked about yet today as another means. We've focused on business and that's very important. Indeed, we often work with businesses on trying to fold these kinds of issues into their ordinary due diligence. But I'd be curious what the panel thinks about what could be done to encourage governments to include investigation and prosecution of corruption focused on human trafficking, along with other corruption, that they're already looking at.

MCFADDEN: Such an important question. Secretary General, would you like to take that one?

GURRIA: Yes, because human trafficking is all about corruption. If there were no corruption, there would not be human trafficking because human trafficking is practically, you know, is characterized as a crime. Child labor is characterized as a crime in practically all the legislations. In some that is still missing, we still have to push forward and make it, but then the question is why is it not persecuted and prosecuted and sanctioned and stopped? Well, because of corruption.

Now, corruption is not just that you take money in your pocket and take it home. Corruption is also that you look the other way because it's politically convenient. Or in exchange, as Sharan was saying, for an investment, for something that you probably, you know, need very badly. And that, finally, you're going to get the dam, finally you get to get the road. Finally, you get to get the bridge. But of course, then you're asked to see that, you know, these little things like, you know, trafficking, or the fact that you don't respect human rights, etc, etc, is you look the other way. But this is, of course, about corruption.

So, the two are absolutely linked, and a very strong regime here. David knows it very well, you know, when he was with Debevoise and he knows about this. If you have a strong anti-trafficking regime, you have to start by having a very strong and even probably even stronger anti-corruption regime. Transparency, integrity, anti-corruption, very strong sanctions will then, of course, avoid the temptation to look the other way because, if you're an authority and you have, you know, the responsibility, then of course, you will be made responsible and accountable if the laws aren't clear enough, strong enough.

It's not just the question of the companies. It's also the question of the— and it takes two to tango for corruption to happen. So it's not just the companies offering the money. It's also the countries asking for the money.

MCFADDEN: Well, whatever we're doing right now isn't working very well. I guess we can all agree. It's an important question, and we can only scratch the surface. Thank you for it. Next question. Next member, please.

CFR Operator: We'll take our next question from Martina Vandenberg.

Q: Hi, this is Martina Vandenberg. I'm president of the Human Trafficking Legal Center in Washington, DC. And thank you for an excellent panel. I want to follow up on this question of enforcement because according to the Department of State, there were only 939 prosecutions in the entire world for forced labor in 2019. I want to pick up on something that Sharan Burrow said about customs. Under Section 307 of the Tariff Act, goods can be blocked from entering U.S. markets. So, Sharan, I'm wondering if you can talk about efforts around the globe to make sure that there is no safe harbor and no port of entry for goods made with forced labor. Are there other efforts around the globe to create laws similar to the Tariff Act?

BURROW: There's no doubt that there's a lot of ambition and a lot of discussion. But I'm hoping that the U.S. can put this in that broader framework of mandatory behavior and consequences because it is indeed the most powerful tool. I know, as a union official before, in those days when we used to actually believe in competition policy. We don't now with the big global monopolies of tech and other things, and that has to be remedied, but our maritime unions could shut down the ports if there was actually an injustice. But if, in fact, you know, that's now not possible because of massive fines and so on all the time, but we need to expand that. So we will be— in fact, I was just looking at a conversation I had with one of our lawyers in the U.S. We will be pushing this into foreign policy, into trade deals, into everywhere we can because this is the period. If we don't, not just mandate due diligence, but see that the laws to make it possible are there, we'll never end slavery for children, for adults, for migrant workers, for anybody.

MCFADDEN: You know, based on some reporting that we had done, Madagascar mica was put on the U.S. government's Labor Department, the bad list. You can't import it because it's presumed to have been mined by children. However, it's not as if we're importing sheet mica. It's coming in goods in which no one knows it's there. Every electronic of airplanes, cars, many of them are dependent upon sheet mica, but we seem not to know. So I think it's really complicated to enforce the laws that already exists.

BURROW: But, and that's why Paul and I will tell you—Paul, if I can loop you into this—that even though you need the legislation and the sanctions, where we're working with our industry, unions, with Unilever, with Dannon, with other good companies, I was in the B4AG group that Angel talked about who are supporting mandated jurors. We're trying to get the models of joint responsibility. So we identify the problem, we look to see that grievance procedures are satisfactory so we can resolve it to affect remedy, and then we monitor clean supply chains. So it has to be a whole approach. Legal, yes, sanctions, yes, proper rule of law, labor courts. But, at the same time, we all have to be responsible for identifying and eliminating this kind of practice.

I can't tell you how awful it is to look at the squalor in which many of these people are housed, to look at the oppressive conditions, to fight for just a wage on which they can live, but also send money home to their families. It's appalling. And then that's without even going to some of the hidden work in domestic workers. Now we're making gains there. But this will take all of us. There's just no question about that.

MCFADDEN: Absolutely. With my eye on the clock, we have about ten minutes remaining. Does someone want to say something on this point? Or should we go to the next question?

POLMAN: Well, I just wanted to say don't underestimate what COVID has done in terms of driving up the awareness of the social issues, and also the awareness amongst civil society, amongst employees, amongst governments, and we just need to capitalize on them.

The fashion industry, for example, was not known to be the shining example of sustainable business. But we are working now with sixty-five fashion companies, specifically in their value chains, which also have had enormous pressure with COVID, enormous issues of labor standards. But now working with Guy Ryder, with Sharan, with the OECD, we're seeing more willingness to drive it forward.

And surprisingly to me, it actually comes more from the employees' pressures than anything else. In every company now there's a Greta Thunberg and we just need to capitalize on that.

Put these alliances together and move forward. Not dwell on the ones that don't do, but actually rejoice and celebrate the ones that do. And bit by bit we can get to tipping points. I've found that you need in every industry about twenty percent to behave to change the industry. And, sure, there will always be people that abuse it regretfully. And we'll be having the same discussions probably five or ten years from now. But I think we're at a point that is probably farther along than we've ever been. So let's capitalize.

MCFADDEN: Well, rare, good news on a difficult topic. Let's go to the next question, please.

CFR Operator: We'll take our next question from Stanley Gacek.

MCFADDEN: Greetings.

Q: Yes, greetings, excellent panel. This is Stan Gacek. I'm the senior advisor for global strategies at the United Food and Commercial Workers International Union of the United States and Canada. It's a great honor to see Sharan Burrow on this panel, who has been an outstanding voice for an entire global labor movement.

I just wanted to make a comment and then a direct question to Secretary General Gurria on the due diligence point. But I just wanted to say that, I mean, obviously, the focus of this panel is on trafficking, forced labor, and child labor. Obviously, those prohibitions on that are covered in the fundamental conventions of the ILO. But I also think that we should not look at that issue in isolation from other fundamental rights and conventions of the ILO. And I'm sure Sharan will agree with me on this. But these should not be looked at in isolation from the power of the collective capacity of workers to organize and to collectively bargain and to deal with these evils. And we've seen, when unions are empowered, that we've seen advances in this area.

And I was the former deputy director and interim director of the ILO in Brazil. And we saw that in Brazil, the trade union movement taking that on and collectively bargaining around it. Obviously, there's been a lot of regression on that action recently, and that actually begs the question of important government role and legislative role.

My question to Secretary General Gurria is actually about due diligence. I wanted to know if he thinks that due diligence being a standard for admissibility on complaints brought in the OECD system under the guidelines for multinational companies, if that would be a good step? I do— you know that at least one national contact point has taken the position that, if a company which is based in its in its jurisdiction, even though the cause of action might arise in another OECD country, if due diligence was violated, then that contact point nevertheless could receive the complaint. So I was just wondering if you might elaborate on that, sir.

MCFADDEN: Thank you for your thoughtful question.

GURRIA: It should. And they're actually doing that. Actually, let me just give you— France, Germany, UK, Switzerland were all complaining about cotton from Uzbekistan. Okay? Oh, that was a very famous case. They brought it up to the national contact points, their respective national contact points. What happened? Well, very soon, what happened is that, you know, that there was a movement to stop sourcing cotton from Uzbekistan as long as there was a, you know, child labor in the supply chain, etc.

And, you know, the other one is— I was so excited when Sharan just mentioned that Qatar is complying with ninety-four or I don't know how many of the recommendations. Why? Because another case was that the Swiss denounced the forced labor in the case of Qatar in the construction of the stadium, etc, etc. And the FIFA— and now Qatar is in compliance, but also FIFA revised and made this the vision for the future.

There's also the question of illicit trade. Well, we have to get a hold on the cross-border implications of what Stanley just mentioned, how admissible is one case in another jurisdiction.

And then there's a question of public procurement. Public procurement can give rise to enormous sources of, you know, trafficking or abuse, labor, child labor, forced labor, etc. Or it can be part of the solution. Why? Because, well, thirteen, fifteen percent of the GDP of our countries are spent in public procurement. So it has to be a combination of all of the above.

 

But you mentioned the question of jurisdiction and capacity of the national contact points. Absolutely, yes, they should have the flexibility.

MCFADDEN: Thank you so much for that. I hate to say it, but we're really out of time. We have one minute remaining.

I want to thank our panelists for such an illuminating— I learned so much and I'm sure our members have as well.

There are more than two hundred members of the Council participating today so apologies if you didn't have an opportunity to ask your question. Maybe we can talk the Council into getting everybody together again a little bit later, because, as you know, the Council has made this topic a priority this year. They have put up an excellent website. If you have not availed yourself of that yet, take a look. It's beautifully done. And I understand the Council is also going to be issuing a report on the current state of things within the next couple of months. So maybe they'll invite us all back to continue this conversation.

Thank you so much for participating. Good day.

BURROW: Thank you.

(END)

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