Episode 22 (pt. 1): Ben Fouracre and Archana Kotecha - Human Trafficking

Episode 22 (pt. 1): Ben Fouracre and Archana Kotecha - Human Trafficking

ThinkSet-Podcast-Episode-Covers-192x192 Ben&Archana.png

In this episode, host Eddie Newland speaks with BRG Director Ben Fouracre and Archana Kotecha, Asia Region Director and Head of Legal at Liberty Shared. They discuss the state of human trafficking around the world and how it may affect businesses and supply chain economics. They also review analysis regarding where human trafficking occurs, the global supply chain and where businesses should take caution, and ethical sourcing for consumers.


TRANSCRIPT

S1: 01:51

Ben and Archana, thank you so much for joining us today on the ThinkSet Podcast. How are you doing?

S2: 01:56

Very well. Thank you.

S3: 01:57

Good. Thank you.

S1: 01:59

Perfect. Well, Archana, I wanted to start with you. Your organization, Liberty Shared, your mission statement says, "To prevent human trafficking through legal advocacy, technological interventions, and strategic collaborations with NGOs and corporations in Asia and globally." Can you tell us a little bit about how Liberty Shared pursues these goals and what separates it from maybe other similar organizations?

S3: 02:22

Sure. So Liberty Shared was established in 2011. And the idea was really to provide solutions to change the way in which human trafficking and related forms of exploitation were tackled. The way we go about bringing about this disruption is to really look at preventing human trafficking through the strategic capture and communication of intelligence, information, knowledge, and data, using technology. And the idea really is to empower and develop stakeholders' capacities to collaborate and to take better action. With the rule of law, one of our key programs is to really address the gaps in governance, gaps in the law and accountability mechanisms, and to really promote better access to justice for victims of human trafficking through strategic litigation, capacity building of frontline NGOs, and capacity building of the authorities as well.

And finally, I guess, one of our key areas has really been to disrupt trafficking through banking and private-sector interventions. And that involves data sharing with banking and finance institutions, but also to really focus on upscaling compliance staff on understanding what human trafficking might look like in the daily transactions that they monitor.

S1: 03:39

A little bit later in the podcast, we're going to dive into the litigation side of things. But Archana, I want to follow up quickly on trafficking as an issue itself. There are a lot of stats out there about human trafficking, but what are some of the things you've seen that you can relate to our listeners to help paint a picture of the problems on the ground?

S3: 03:55

I guess, from my perspective, one of the big issues that we are seeing—and I think the world has woken up to this now—is really the fact that business models are thriving on the exploitation of the most vulnerable. The idea that in the existence of extended supply chains, and where a lot of these supply chains are located in countries where the rule of law is weak, there is poor access to justice and remedy for the most vulnerable. It becomes extremely difficult for a lot of vulnerable migrant workers, for example, to actually be able to work in decent conditions. We are seeing protracted recruitment processes that involve a lot of debt and that really add a different dimension to the migration of individuals towards a better future. We're seeing across geographies and across sectors, particularly in the agricultural sector, extraction of raw materials, in many informal sectors, electronics, etc., where close to 25 million people globally are today being exploited in conditions of forced labor.

And I guess one of the difficulties we have around this space is: corporate accountability in many countries remains poor. So you would very rarely see much action taken against corporates who are engaging in exploitative practices. The other dimension to this, which can no longer be ignored really, is human trafficking is also being used to fund terrorist activities. And that also has crept up on the radar of banking and financial institutions as something to watch out for.

So one of the biggest issues really is that where you are dealing with global supply chains, and we don't have a global mechanism to tackle the issue of human trafficking, we have a problem that is spanning jurisdictions and that is spanning sectors. And finding a comprehensive and holistic way of addressing this remains very difficult. And as a result, you have, not simply countries where these issues are located that are suffering and the individuals are suffering, but also there are other countries across the world who are buying products and services produced by these individuals, who are also accountable in many respects for a lot of this issue as well.

S1: 06:17

Well, that helps really paint a picture beyond the statistics some folks may have heard about trafficking. So, Ben, how can a company like BRG, or the companies that BRG works with, fit in with everything Archana just described? How can companies with large footprints help?

S2: 06:33

From our perspective at BRG, we're working with companies on their risks. So we're looking at how to mitigate risk, and we're looking at how to respond to issues that come up related to risk. And when we talk about the subject of human trafficking, as Archana has already said, you have huge companies with extremely large, complex supply chains and a lack of transparency, really, within those supply chains in terms of the activities, the operations that may exposing them to any risk related to human trafficking.

For the first part of the question, how BRG fits in, we do a lot of investigation on supply chains. We do a lot of due diligence work on companies' supply chains to identify where those risks may be and to ensure that companies are aware of the areas where they may need to take action. I think, in terms of how the larger companies with larger global footprints can help, number one, companies being aware of their responsibilities is key, and making—or taking the necessary actions. I think that the larger organizations have a lot more power to make a stand with their suppliers in terms of leading on ethical business practices. And I think that we often see, time and time again, that where these issues occur is, where supply chains are being squeezed for cheaper labor, for cheaper cost, etc., there's always a demand for a cheaper product or a cheaper production. And that's often where we see these issues creeping in. So if a supplier has to demand to cut costs and reduce margins through their supply chain, I think they also have a responsibility to ensure that those supply chains are operating in an ethical way.

S1: 08:10

One thing that I wanted to make sure, given the background that you both have, is we talked about the UK Modern Slavery Act. Ben, this question is for both of you, so, Ben, I guess you can answer it first. But what has changed, since that law went into effect, from the work that you do? Or what have you seen change the most?

S2: 08:28

Yeah, that's an interesting question because I'm based in Japan. And to be honest, unless you're speaking to some of the foreign legal firms, not much has changed. I think that it's created a dialogue among the global organizations that operate in Asia in terms of what they should be doing. But I would say, from the perspective of Japanese companies who also operate global supply chains, I don't get the sense that very much has changed. I still think that there's a lack of awareness of the situation and how it relates to Japanese corporates.

S1: 09:01

Archana, would you agree with that?

S3: 09:03

Oh, absolutely. I totally agree with Ben. And we have seen a lot of excitement and movement in the UK, in Europe generally, and in the United States. But when it comes to Asia, it's a whole different picture and not much has changed here. And I guess for the jurisdictions where things have changed, what has been exciting hasn't so much been the disclosure put out by companies, but what that has entailed and the sort of processes that go behind the creation of filing a statement effectively. So some of the due diligence that has had to go into it, some of the training, some of the commitment that companies have had to come forward and put down. And also, from my perspective, I noticed that the law has brought a much-needed awareness to the issue in the business sector and definitely paved the way for greater commitment.

But one must not be blind to the fact that the Modern Slavery Act of the UK sets the bar extremely low, and that it is currently undergoing some revisions in order to tighten up the language. And I think the most difficult issue in dealing with this law is that there are no sanctions as such attached with noncompliance. And when you look at the later sort of—the other countries that have jumped on the bandwagon and look to adopt this law, for example—Australia and many other countries are considering it; they are considering better versions of the UK Modern Slavery Act. And we know that France passed the Devoir de Vigilance, which is actually a very souped-up version of the law. So the French law requires filing of a vigilance plan which focuses on mitigation of risk. And it also gives any third party located anywhere in the world, in the extended supply chain of a French-headquartered company, the right to bring an action, in France, against the parent company for violation of rights. And I think that's really the next generation of transparency and accountability laws as compared to the Modern Slavery Act of the UK.

S1: 11:03

It sounds like there're a number of different regions in individual countries that are getting more on board with the idea that this is really a problem and something that we can finally start addressing if the right protocols are put in place. What is it about the Asia region in general, in your opinion, that has a low—maybe a step behind everywhere else or a number of other geographies at this point?

S3: 11:27

It's weak rule of law, generally, and the fact that these are huge, huge-revenue-generating businesses that we are talking about. In some countries in Southeast Asia, for example, states own a lot of the sectors. They own large shares in these sectors. So when it comes to revenues, when it comes to improving conditions, all of those have dimensions where costs are added up to those. And that might lead to a decrease in revenue, or that's the perception of it anyway. So there is a real reluctance to engage in it. And also a lot of these countries where supply chains are based are competing with each other in order to get business. So the more competitive pricing you can offer on labor, on availability of cheap labor, location, space, etc., the more competitive you're likely to be. So I think in Asia, that's a very real issue and one that we are still grappling with.

S2: 12:23

Yeah. I think, also, it's an interesting question. There's also something related to the culture of the media. In Western countries, the media are very free to report on issues and to raise public awareness. And I think consumers in those regions have more access to information and so can feel a bit more educated in terms of what they're buying or the pressure they may put on the companies that they're buying them from. I think in a lot of the countries where human trafficking is prevalent, there is a lack of media focus, or, perhaps, media is regulated or censored or—just purely the culture of the media. It doesn't attack local companies. It doesn't look to investigate supply chains and the labor workforce and the real issues that are taking place in those countries. And as a result, there's a lack of awareness that these things are taking place.

S3: 13:14

I think there's also a real targeting of human rights defenders and of media as well in these countries, which means that criminal defamation is often used as a mechanism to silence those who are trying to bring to light poor working conditions or exploitative working conditions. And that's a reality that is very difficult and that also keeps information confined.

S1: 13:38

That was one thing I was going to ask, especially in the region here in the US where I live. Just south of us in Latin America, a lot of the issues, if you look back into the '80s and '90s, that they had with the drug trade is the local media was either complacent or part of the problem. But they were threatened. If they came out and reported it, then they could go worry about what would happen to their family. Is that also an issue, or is it more just the culture has been noted where they don't really just want to attack local businesses because that's not how things work?

S2: 14:11

Yeah. I mean, I think we've seen arrests of journalists and so on in certain countries, which raises concern about freedom of press and how easy or how difficult it's made for people to really investigate and report on these issues. So I think that that's a very valid issue in terms of the fear of doing something that's going to potentially harm one's interest. I think that's certainly a key reason.

And I think also, investors—I mean, this is another reason why in countries like the UK where they have the Modern Slavery Act. I think investors play a big role, too. And, perhaps, investors in the other countries are not quite so focused on human rights; again, potentially because the country they're operating in or the country they're investing in doesn't really have much of an impediment against companies operating in that way.

S1: 14:56

They just don't have the track record of going about it that way.

S2: 14:59

That's right. Yeah.

S1: 15:01

So if we were to focus then on probably the most global event, there is with the World Cup, there's already been—and I've seen stories already—major human trafficking issues in Qatar with the building of the stadiums. Archana, does this frustrate you that human trafficking gets so much attention only when it comes around a big event like this?

S3: 15:22

I think this would have been true probably a few years ago, where events like the Super Bowl, etc., really generated a lot of focus and conversation around this. But I think things have changed now, and over the last four or five years, we have seen real momentum behind this issue. It's very hard today to pick up papers, sort of international broadsheets, without seeing a story reported about exploitation, whether it's labor exploitation or sex exploitation. And human trafficking has more momentum today than it's ever had before and attention. Sustainable Development Goals 8.7 of the UN is all about eradication of modern slavery. And human trafficking is considered to be within that bracket.

Of course, with big events, it's always important to draw attention to the sourcing of raw materials, the supply chains related to those, the building that is required, the construction sector, the sort of all these stadium building, etc. But also the influx of individuals into a particular town or city or cities, which brings with it a sort of boom in the sexual services that are available in those place, some of which might be coercive. So there are a lot of industries that are very closely attached, that are very directly impacted by exploitation within the context of very large games. Japan, for example, will be hosting the Olympics in 2020. Interestingly enough, there hasn't been anywhere near as much attention on the issue of supply chains, of exploitation in the context of building the stadiums, etc., as there was during the time of the building of the World Cup stadium for Qatar. And I think one thing that people must not lose sight of is that, yes, Qatar had the Kafala system, and the abuses were extremely well documented.

This is not to say that there aren't any exploitation issues in relation to the building of the stadium and other infrastructure and the hospitality industry in Japan. And that does require as much focus and attention, because it is an opportunity to really zero in on a particular country and their practices. But we are at a time where the issue has so much global focus that it's not simply rallied around the large games, etc. The large games just provide a little bit more focus on an issue that is now on many governments' priority list.

S1: 17:47

So, Ben, how do you advise companies to make sure that, whether it's around a big event or when the spotlight is shining bright, how do you make sure they aren't interacting with the wrong people or partners on these sorts of issues or in these events?

S2: 18:01

I mean, the first fundamental thing is for companies to perform an adequate risk assessment. So we would look at what the prevalent risk is in the country that they're looking to operate in. And there're different categories to those types of risks. There can be industry-specific risks. So, for instance, normally, issues of human trafficking occur where you have a requirement for a low-skilled labor force or dirty or dangerous work conditions—seasonal resource needs. Often, when there's temporary human resource required, that's where we see these issues creeping in. Industries which are very competitive and have little regulation. Industries that rely on online advertising.

Or, of course, finance. The finance industry where you're using credit cards. You have fees. You have online transactions. So the risks in terms of industry, and then risks in terms of operations. For instance, where you have offshore manufacturing, where you're relying on labor recruitment, where you have very long complicated supply chains, and companies or regions that have a lack of CSR initiatives in place.

And then you have to look at social groups. So the most targeted social groups will be those that are poor or vulnerable and have low skills. You have migrant workers, women, and children. So a thorough review of all the business activities your company is undertaking in those areas. And then, really, implementation of internal measures to mitigate those risks. So making sure that there's engagement with third parties, that suppliers are prequalified, that they're consolidated, that they're well known and you have transparency on your supply chain, and that there's incentives established for them to actually agree to operate by a set of standards that you're setting out for them. So some third parties may have adequate measures in place, and some may need assistance in terms of getting their measures up to the types of standards that is required.

So our role is really to help companies to understand what is their risk, and then to do the due diligence, to do the investigation into their supply chain, to find out the areas where perhaps they're falling short or where they're vulnerable to these risks, and then help them to put fences around those issues. And it's often a long process. It's not straightforward. But ultimately, that's what companies have the responsibility to do.

S1: 20:15

So because it is such a long process and—say, the company calls you tomorrow and says, "We want to get our ducks in a row. We're part of the World Cup leading into this, and we know that people are paying attention." What are the instructions that you give them first? How do they start their risk assessment?

S2: 20:34

Well, first and fundamental is, is there a company policy on human trafficking? That's the first thing that a company needs, a clearly defined companywide policy that states their commitment and states the prohibition of any employees or third parties to engage indirectly or directly in the use of trafficked or slave labor.

The important thing about that is it has to come from senior management. It's no good [when] a department in the company [is] implementing this policy and then communicating it to everyone. This has to be something that senior management is committed to, because the process is an investment. It takes a lot of commitment. It takes a lot of education of the workforce. So that's very key.

I think, secondly, is what the current oversight is on those high-risk operations. So I talked previously about a risk assessment of those areas. So has that been done? And what was found as a result of that? And what action has been taken or what action needs to be taken? And what due diligence is conducted on third parties? Is there any due diligence at all? And if there is, how does it manifest itself? How is that process through the organization? What are the lessons that are learned from issues that have come up in the past? And are we implementing and responding to those issues? How thorough is the due diligence? Is it a Google check, or are we actually going out there and observing our supply chains and who's working there and taking notes?

You have to look at how to order operations to focus on human trafficking risk. Orders don't necessarily focus on specific risks such as human trafficking, and I think that it's important to understand where your high-risk operations are, that your auditing function also has to be very aware of the red flags that would indicate issues related to human trafficking. And then what education and training are you providing for your employees and also for your third parties? So working with representatives, meeting with management, looking at workplace observation, talking about the issue of human trafficking, why it's important to the company, where it may manifest itself in the company, and why the company is taking a stand on this. And then looking at what monitoring functions to ensure that there's ongoing oversight on the situation. Regular review of supply chain, regular review of regulations, and regular visiting and education and information given to employees and stakeholders in the operation. Those are kind of very easy things that we can look at in terms of what you currently have in place, where are the gaps, and what is it we need to do.

S1: 23:04

[music] This ThinkSet Podcast is brought to you by Berkeley Research Group. You can subscribe to the podcast and access other content from ThinkSet magazine by going to thinksetmag.com. I'm Eddie Newland, and thanks for listening.

S4: 23:21

The views and opinions expressed in this podcast are those of the participants and do not necessarily reflect the opinions, position, or policy of BRG or its other employees and affiliates.

 

Episode 22 (pt. 2): Ben Fouracre and Archana Kotecha - Human Trafficking

Episode 22 (pt. 2): Ben Fouracre and Archana Kotecha - Human Trafficking

Episode 21: Abhijit Yadav - The Changing Indian Economy

Episode 21: Abhijit Yadav - The Changing Indian Economy