* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Identifying corruption and money laundering forms an integral part of the daily responsibilities of business risk-control teams
Every day now it seems we hear a new story of human trafficking or modern slavery: girls trafficked into brothels; boys forced to work in mines; women exploited in garment factories; men enslaved on fishing boats. We feel horror at the suffering inflicted on the victims, and anger at the perpetrators. But our rightful moral outrage at these crimes can easily distract us from seeing the full extent of their ugliness and the broader damage they wreak on society.
For trafficking and slavery are really crimes of many crimes. Take, for example, a young woman from Eastern Europe trafficked and forced to work in a British brothel. In trafficking her, the perpetrators will have committed deceit, fraud, smuggling, kidnapping, violent assault, false imprisonment, money laundering, rape and, often, murder. And the opportunity to inflict all this on others is often created and facilitated by one initial crime: that of corruption. In sex trafficking, payments must be made to dishonest immigration officers in order to cross borders illegally, and to local police so that they will turn a blind eye; in forced labour, business activities must be started and so licences must be obtained, payroll must be fraudulently recorded, and forced labour recruited, transported and controlled.
So to fight trafficking we need to examine all the factors that enable it; to identify underlying individual crimes and use the appropriate law and measures against them. In support of these laws are thousands of legal precedents, extra-territorial mechanisms, local, regional and global law enforcement. Specific human trafficking laws do not yet have the same comprehensive and deep foundation, and it may yet be some time before such history is developed.
In the effort to combat money laundering alone, financial institutions of all types have had to invest billions of dollars in building infrastructure and recruiting teams of specialists. Currently, such activities and resources are not aimed specifically at traffickers, though that is starting to change. In fact it must change because money laundering is a transaction involving the proceeds of crime, and trafficking and slavery are crimes involving many crimes, committed in order to make someone money. The two are inextricably linked. The primary, if not singular, motivation for exploitation, is money.
If money is the desired outcome, and its laundering the final crime in trafficking’s ugly narrative, then corruption is the first. Largely due to the determined efforts of the US Department of Justice in enforcing the US Foreign Corrupt Practices Act (FCPA), there has been massive investment in anti-corruption infrastructure, not just in the finance industry. The FCPA, which has been around since 1977, has been enforced with devastating effect against companies across many industries as the Act is applicable to any with securities listed on a US exchange – in short, many of the largest companies in the world as well as their local subsidiaries. But what makes boards of directors and senior executives fear the scope of the FCPA – together with its UK equivalent, the Bribery Act - is that they carry personal liability, rendering them accountable for the actions of those they manage, and the very on-the-ground activities that can involve or benefit from slavery.
Until very recently the burden of fighting slavery and providing victim care was largely borne by civil society, a few thousand NGOs of varying sizes and resources located variously around the planet, along with global organisations such as the International Labour Organization. According to the US Government’s Trafficking in Persons Report for 2016 only 77,823 victims of trafficking were identified in 2015. This is very small compared with the estimated global total of people in modern slavery, which ranges from 21 million to 45.8 million.
The other party expected to shoulder the load of combating trafficking is law enforcement which, over-worked and under-resourced, only manages to obtain some 7,000 or convictions for human trafficking offences in a successful year. Yet, for millions to be exploited, it perhaps takes millions of exploiters, and so the overwhelming majority will go unpunished.
Many of the victims identified are from sex trafficking. Yet the majority of trafficking victims are exploited for labour. They are involved in the manufacture of electronic products and textiles, in health care, transport, mining, construction, fishing, farming, domestic service - in short, they are exploited by businesses, large and small, local and global. Their exploiters profit from a number of opportunities to access money: taking from investment and loans received to develop and operate the businesses, from revenues received during operations, as well, of course, as from the proceeds of withholding pay and debt bondage.
Trafficking is a crime of many crimes, and the identification and mitigation of two of those – corruption and money laundering – now forms an integral part of the daily responsibilities of business risk-control teams. One may say their voice is small – small, that is, compared to the risk-takers who have traditionally dominated trade and commerce. But, considering that such teams didn’t exist twenty years ago, their influence in business decision-making has increased rapidly, due to anti-corruption laws, like the FCPA, and the whole system of anti-money laundering laws such as the Patriot Act. These risk-management departments, filled with lawyers, compliance people, accountants, crime intelligence officers and data analysts, are a powerful ally in the fight against human trafficking because in their businesses they are at the centre of the fight – a place law enforcement cannot go.
These risk experts have the resources and, frankly, are obligated to use them under these various laws, to prevent seeds sown in the fertile ground of corruption, nurtured by the proceeds of slavery, trafficking and exploitation, from ripening into poisoned fruit.
Duncan Jepson is founder and a director of Liberty Asia. Nick Grono is the CEO of the Freedom Fund, a private donor fund dedicated to ending modern slavery. Liberty Asia and the Freedom Fund recently published a report “Modern Slavery and Corruption”, available here.
