Laos Private Sector Assessment A Preliminary Scoping Study The primary objective of the study is to provide a broad-based overview of the private sector in Laos as a stakeholder in com- bating modern slavery in the country PB The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 1 The Mekong Club 1. Contents The Mekong Club is a catalyst 2. Objectives of the Study 4 8. The Mekong Club Target Sectors 20 for change – engaging, inspiring and supporting the private 8.1. The Agriculture Sector 20 sector to eradicate slavery from 3. Definition of Terms 5 8.1.1. General their business. Given that the 20 majority of modern-day slavery 4. Demographic Overview & Key Social Trends 6 8.2. FMCG Retail 21 exists in the private sector, these companies are ideally placed to 8.3. Manufacturing 21 4.1 Summary 6 help turn the tide of this global 8.3.1. Garment Industry 22 epidemic. 4.2. Population Distribution 6 8.4. Banking Industry 23 The only organisation of its kind, 4.3. Social Indicators 8 The Mekong Club steers away 8.5. Tourism, Food Service & Hospitality 26 from the approach taken by other 4.3.1. Human Development Index (HDI) 8 8.5.1. Tourism 26 players in this space, which is to 4.3.2. GINI Coefficient 10 ‘name and shame’ companies – 4.3.3. Poverty Rate 10 ousting bad behaviour or issues 9. Modern Slavery in Vietnam 28 related to this subject. Instead, we believe in starting and ending 5. The Labour force 11 9.1. Background 28 with collaboration. 5.1. Employment and Income 11 9.2. USA Department of State “Trafficking in In fact, The Mekong Club 5.1.1. Employment Distribution 11 Persons” Report – June 2017 Update 29 originally formed as a direct 5.1.2. Income response to the growing 13 number of companies looking 5.2. Gender Gap 13 to develop strategies to address 5.3. Comparative Minimum Wage 14 forced labour risk through a professional forum. Divided into industry-specific working groups, 6. Political Risk Assessment 16 these networks meet regularly to learn, share best practices, 7. The Private Sector 17 and network with other like- minded professionals. Member 7.1. Overview 17 companies also work together to achieve an annual deliverable 7.2. Key Players in the Private Sector 18 which will work towards producing tangible results in the 7.3. Transparency 19 fight against forced labour. 2 The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 3 2. Objectives of the Study 3. Definition of Terms The primary objective of the study is to provide a broad- Throughout the report the following definitions will apply to the use of the terms based overview of the private sector as a stakeholder in human trafficking, forced labour, bonded labour and contract slavery, as specified by combating modern slavery in the country. More specifically The Mekong Club. the study aims to generate a knowledge base from which The Mekong Club can approach the private sector in order FORCED BONDED LABOUR HUMAN TRAFFICKING to create awareness and offer cooperative solutions for the LABOUR AND CONTRACT SLAVERY eradication of modern slavery in corporate supply chains; the core focus of the Mekong Club’s mission. An act (1) carried out by a All work or service which is Bonded labour begins when a third party, through different extracted from any person worker borrows money from The following secondary objectives specify the details of means (2), for the purpose of underthe menace of any an employer and commits the data that need to be gathered in order to fulfil the exploitation (3). penalty and for which the themselves to work person has not offered for the employer in return. For children under age 18 it is scope of the study: themselves voluntarily. sufficient to demonstrate Contract slavery involves the act of moving a child for deceiving or illegal contracts the purpose of exploitation. signed by victims who cannot understand them,and used to justify forced labour. 1. Act of: Threat of penalty Common features of Bonded • Give an overview of the demographic landscape • Recruitment • Physical and/or sexual Labour and economic conditions in Laos • Transportation violence. • Transfer • Imprisonment or physical • The employer manipulates • Harbouring confinement. interest rates or charges • Detail the characteristics of the labour force in • Receipt • Withholding of wages, excessive rates. Laos by looking at factors such as size, average unreasonable fees or financial • The employer imposes income, distribution, key issues 2. By means of: penalties. high charges for • Threat • Withholding of identity food, accommodation, • Provide a detailed analysis of the private sector • Force or coercion documents. transportation, or tools. • Abduction • Unfair dismissal or exclusion • The employer charges in terms of size of industries, number of workers • Fraud from future employment. workers for shortfalls in and key players • Deception • Deprivation of food or shelter. business output or days • Abuse of power • Exclusion from community, missed due to worker • Provide in-depth reports on the Banking/finance, • Abuse of vulnerability social life or denunciation to sickness. Manufacturing, Construction, Agriculture and community/family. 3. For the purpose of: • Intimidation and other threats. Common features of Contract Retail and hospitality industries • Exploitation Slavery • Slavery or similar practices Lack of Valid Consent • Contracts are in a language • Identify the current state of modern slavery in • Servitude • Worker deceived about the the victim does not Laos • Prostitution wages they would receive. understand. • Removal of organs • Worker cannot leave • Contracts are presented to • Forced labour and service employment as they must victims who cannot read. remain for an undefined period • Victim is told fines and to repay debts to employer. penalties will follow if he • Worker made to work by breaks the contract. family. • Deception or fraud during recruitment stages. HUMAN TRAFFICKING FORCED LABOUR BONDED LABOUR emphasizes the movement of is often a consequence victims of human trafficking and CONTRACT SLAVERY emphasizes are two forms of forced labour the exploitative condition the victim suffers 4 The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 5 Number of Districts and Average Population of Districts 4. Demographic Overview & Key Social Trends by Province: 2015 Average Number of Total 4.1. Summary Province Population of Districts Population Districts Population 6.4 million Total 148 6,492,228 43,866 Rural 67% Vientiane Capital 9 820,940 91,216 HDI 0.740 Phongsaly 7 177,989 25,427 Poverty Rate 7.2% Luangnamtha 5 175,753 35,151 GINI 39.4 Oudomxay 7 307,622 43,946 Bokeo 5 179,243 35,849 4.2. Population Distribution Luangprabang 12 431,889 35,991 The total population of Laos was estimated at 6,492,228 as of March 1,2015.1 According to the Population and Housing Census of 2015, about 67% of the total population resided in rural areas. Huaphanh 10 289,393 28,939 The male-female ratio is almost equal. The reports states that “At its current population, the Xayabury 11 381,376 34,671 country remains one of the smallest in Southeast Asia - slightly bigger than Singapore, but less than half of neighbouring Cambodia.” Xienkhuang 7 244,684 34,955 Vientiane Province 11 38,099 Population Distribution by gender and Location in (2016) 419,090 Borikhamxay 7 273,691 39,099 2016 Khammuane 10 392,052 39,205 Total 6,492,228 Savannakhet 15 969,697 64,646 Male 50.1% Saravane 8 396,942 49,618 Female 49.9% Sekong 4 113,048 28,262 Rural 67% Champasack 10 694,023 69,402 Urban 33% Attapeu 5 139,628 27,926 The Lao population is distributed over 17 provinces and the capital Vientiane, which has a Xaysomboun 5 85,168 17,034 population of 820,940.2 Laos has a youthful population that will soon lead to the realisation of a “demographic dividend”, which “refers to the opportunity for accelerated economic growth resulting from declining fertility and mortality which, leads to a growing proportion of the working population accompanied by a reduction in population dependent on them.”3 The 2017 population pyramid clearly shows that about 60% of the population is under the age of 29.4 1. http://www.lsb.gov.la/lsb/pdf/PHC-ENG-FNAL-WEB.pdf 3. Ibid 2. http://www.lsb.gov.la/lsb/pdf/PHC-ENG-FNAL-WEB.pdf 4. https://www.populationpyramid.net/lao-peoples-democratic-republic/2017/ 6 The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 7 Population Pyramid 2017 Laos Human Development Index (HDI) Male Female Life Expected GNI per 100+ 0.0% 0.0% Mean years 95-99 0.1% 0.0% expectancy years of of schooling capita HDI Value 90-94 0.0% 0.0% at birth schooling (2011 PPP$) 85-89 0.1% 0.1% 80-84 0.2% 0.2% 1990 53.6 6.7 3.1 1,616 0.397 75-79 0.3% 0.4% 70-74 0.5% 0.6% 1995 56.2 6.9 3.6 1,902 0.425 65-69 0.7% 0.9% 58.9 8.0 3.9 2,244 0.463 60-64 1.1% 1.2% 2000 55-59 1.4% 1.5% 2005 61.8 9.0 4.2 2,887 0.503 50-54 1.6% 1.8% 45-49 1.9% 2.2% 2010 64.4 9.9 4.6 3,725 0.655 40-44 2.3% 2.5% 35-39 2.9% 3.0% 2011 64.9 10.2 4.8 3,930 0.662 30-34 3.8% 3.8% 25-29 4.9% 4.8% 2012 65.3 10.4 5.0 4,201 0.668 20-24 5.5% 5.3% 15-19 5.3% 5.1% 2013 65.7 10.6 5.1 4,500 0.675 10-14 5.4% 5.2% 5-9 5.9% 5.7% 2014 66.2 10.8 5.2 4,798 0.678 0-4 6.1% 5.8% 10% 8% 6% 4% 2% 0% 2% 4% 6% 8% 10% 2015 66.6 10.8 5.2 5,049 0.683 In South East Asia, Vietnam outranks the Philippines, Cambodia and Myanmar (see Table 5.2.1.1) on the 4.3.