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The Nexus Between Corruption and Human Trafficking

Brittany Barnett

While Congress substantially expanded corporate liability under the FCPA in recent years,^[1] many corporations remain unaware of the potential liability risks associated with corruption and human trafficking in employment chains.^[2] Many anti-corruption compliance efforts tend to leave the employment chain largely unchecked for human trafficking. This lack of oversight, however, creates conditions for labor recruiters to more easily conduct human trafficking, which in turn directly creates FCPA liability for parent corporations.^[3]

A recent study comparing reports from Transparency International and the U.S. Department of State reported “a clear visual connection between corruption and trafficking” in countries sending migrant labor.^[4]  This makes clear that in more corrupt countries government officials^[5] may actively participate not only in the recruitment, transportation and exploitation of trafficked workers, but also by actively obstructing the investigation and prosecution of traffickers, and limiting the protection of victims.^[6]

Labor brokers rely on corruption in countries in which they operate to generate conditions for human trafficking.^[7] To work abroad, workers must produce a significant number of documents for immigration and employment purposes, such as passports, visas, birth certificates, work permits, and employment offer letters.[8] Labor brokers trap workers by posing as employment agencies that assist in facilitating the documentation process.[9] After targeting the worker, the broker pays bribes to obtain the required documents, the largest cost of doing business.[10] The cost becomes a service fee that the worker must repay to the broker,[11] amounting to a large debt that is then held over the worker’s head, forcing him to work “for free for months or even years to pay off [his] debt” to the broker.[12] The number of people trafficked is estimated to be as high as 27 million, with the majority of people exploited for labor and controlled through debt bondage.[13]

Corporate liability under the FCPA may stem directly from the following opportunities for government involvement in the trafficking process:

• bribes to reveal or sell information on victims;^[14]
• provision of forged documentation to labor brokers (identity papers, visas, work permits);
• bribes to accept forged documentation or documentation purchased from the black market^[15]; or
• bribes to border-crossing officials during transportation.

To find the risk of FCPA liability associated with human trafficking, compliance auditors should first map connections between companies within the supply chain and the high-risk countries on Transparency International’s Corruption Perception Index map. Compliance auditors should then look for red flags, such as large clusters of migrant laborers from those countries working in supplier facilities.[16] Additionally, within suppliers’ financial records, unexplained fees, costs and deposits charged to the migrant may indicate sources of corruption. A lack of transparency from the supplier, worker complaints of deception regarding employment terms, or worker complaints of withheld personal documentation, such as passports, are also red flags that should be investigated.[17]

Despite the sizeable number of people affected by human trafficking, human rights researchers have only recently begun to investigate the direct cause. The fact that labor brokers rely on government participation and are given little oversight by the suppliers for whom they hire[18] means that parent corporations are in a unique position to make sweeping, effective change. Companies must take it upon themselves to actively investigate and eliminate hiring practices that enable human trafficking to persist. It is unlikely that human trafficking will ever be rooted out until companies strictly enforce FCPA compliance on suppliers by closely monitoring their employment chains.

 

^[1] Lucinda A. Low & Owen Bonheimer, The Widening FCPA Dragnet: The Increasing Pursuit of Individuals and Foreign Persons and Expansive use of Legal Theories, 3 J. of Sec. Operations & Custody 176 (2010).

^[2] Verité, Corruption & Labor Trafficking in Global Supply Chains 3 (2013), https://www.verite.org/wp-content/uploads/2016/11/WhitePaperCorruptionLaborTrafficking.pdf [hereinafter, Verité].

^[3] See id. at 2.

^[4] Id. at 3. See also U.N. Office on Drugs & Crime, The Role of Corruption in Trafficking in Persons 4 (2001), https://www.unodc.org/documents/human-trafficking/2011/Issue_Paper_-_The_Role_of_Corruption_in_Trafficking_in_Persons.pdf (“there are consistent indications that corruption does play an important role in facilitating and fostering the crime of trafficking in persons”) [hereinafter UNODC Paper].

^[5] Verité, supra note 2, at 3.

^[6] UNODC Paper, supra note 4, at 4.

^[7] See Trafficking Victims Protection Act, 22 U.S.C. § 7101(b) (16) (“In some countries, enforcement against traffickers is also hindered by official indifference, by corruption, and sometimes even by official participation in trafficking.”).

[8] See UNODC Paper, supra note 4, at 7.

[9] Verité, at 5.

[10] UNODC Paper, at 8.

[11] Id., at 11.

[12] Verité, supra note 2, at 3.

[13] Sheldon X. Zhang & Samuel L. Pineda, Corruption as a Casual Factor in Human Trafficking, in 7 Organized Crime: Culture, Markets and Policies 41, at 42 (Dina Siegel & Hans Nelen, eds., 2008).

^[14] UNODC Paper, supra note 4, at 7.

^[15] Verité, supra note 2, at 5.

[16] Id. at 6. See also Detecting and Preventing Human Trafficking in Supply Chain, Metric Stream Inc., http://www.metricstream.com/insights/human-trafficking-in-supply-chain.htm [hereinafter: Detecting and Preventing Human Trafficking].

[17] Verité, supra note 2, at 2.

[18] See Detecting and Preventing Human Trafficking, supra note 16; see also Verité, supra note 2, at 7.