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Guidance on Operational Practice & Indicators of Version 2.0, June 2017

This document provides guidance on how to spot the signs of definite, strong and possible indicators of forced labour for both auditors and audit readers. It proposes a list of indicators, based on operational practice, which either independently or in various combinations, can increase the risk of forced labour through a worker’s cycle.

The guide also proposes that protecting possible victims and capturing and documenting evidence should be paramount to any key steps to be taken by auditors when forced labour is suspected or found. The guide can be used as a general reference tool by auditing bodies, ethical sourcing initiatives and businesses to help their understanding of forced labour risks and to enhance their existing audit protocols. Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017)

Table of Contents

Introduction 3

Why is this Guide necessary? 4

How can this Guide be used? 5

What is forced labour? 6

What are the “alert signs” that may indicate potential or actual forced labour? 7

Deceptive or Coercive 9

Employment under Menace of Penalty 12

Debt/ Entrapment & Termination Prevention 16

What are the key considerations when forced labour is found or suspected? 23

Protect Workers 23

Capture and Protect Evidence 24

Resources 26

Useful Terms 27

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Introduction

The International Labour Organization (ILO) Recent legislation, such as The UK’s Modern estimates on its website that at least 21 Day Act, shows a growing recognition million people worldwide are victims of of the links between forced labour and the forced labour. Of these, the ILO finds 14.2 regulation of supply chains and adds to the million (or 68 per cent) are victims of forced rising pressure on businesses to address labour exploitation in economic activities, their impacts on human rights in their such as , construction, domestic business and supply chains. Nothing can or . The risks to business substitute for the critical role of governments are far reaching; the sixth edition of the and workers’ organisations in ensuring U.S. Department of Labour’s List of Goods compliance with labour standards, but in Produced by or Forced Labour places where these mechanisms are not includes 136 goods produced through these fully developed, private sector compliance forms of labour in 74 countries across initiatives fill an important gap. An effective the world. social audit can make an important contribution to the identification, prevention and eradication of forced labour.

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Why is this Guide necessary?

Sedex has highlighted research showing forced labour is a common risk in the supply chain but that audit findings rarely raise it.

There are many reasons why the problem is In between the extremes, there are a variety of underreported in audits and why they may not be employment relationships in which the element providing the full story, many of which fall outside of free choice by the worker begins at least to the scope of a guide to solve. be mitigated or constrained, and can eventually be cast into doubt. The challenge for auditors is Forced labour can be notoriously difficult to to draw the line between substandard working eradicate. Supply chains are long and complex conditions and extreme forms of exploitation such and often, companies don’t have enough visibility as forced labour. This is because the majority of or influence to address the problem. However, this cases occupy a middle ground and are hard to document seeks to move us one step closer to the fit into a straightforward ‘forced labour – yes/ identification of forced labour, through guidance no’ category. Sometimes it is the combination of on the signs where forced labour is – or may be – factors which lead to a forced labour situation. an issue. This Guide has been produced for use by social We seek to help to overcome some of the auditors and businesses on how to spot the practical confusions around freedom of choice signs, by proposing a list of operational indicators and freedom to leave in ILO definitions of forced of actual, likely or possible situations of forced labour. There is an important distinction to be labour. This document proposes a list of pragmatic made between forced labour and situations operational indicators, which either independently where people may be working in sub-standard or in various combinations, can increase the risk employment. However, sometimes the difference of forced labour through a worker’s employment may not be immediately clear. Forced labour cycle. The guide also proposes that protecting occurs on a spectrum of exploitation. Where does possible victims and capturing and documenting end and labour exploitation begin, evidence should be paramount to any key steps and where does labour exploitation end and forced to be taken by auditors when forced labour is labour begin? suspected or found.

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How can this Guide be used?

Social auditors and audit readers can use this guide to collect and communicate data points that will, over time hopefully, facilitate greater comparability and broader reporting of risks across audits associated with this critical issue. Business can also use the guide to better understand the operational practices that increase workers’ vulnerability to forced labour and where the risk of forced labour is more likely.

The guide can be used as a general reference tool Please note that while implementing these by auditing bodies, ethical sourcing initiatives and indicators demonstrates good human rights businesses to help their understanding of forced due diligence practices, this guidance is not labour risks and to enhance their existing audit intended as a stand-alone document to conduct protocols. Auditors and companies that hire them an audit, but rather as a supplement to audit are encouraged to engage their employees and companies’ own systems as well as to the Sedex business partners to promote broader recording Members Audit (SMETA) materials and reporting of forced labour risks in social audits, available from the Sedex web site. Moreover, the and to develop an implementation plan on how to indicators are not exhaustive and are not intended incorporate the range of indicators proposed into to be used as a substitute for legal advice; their existing auditing systems in a manner that consequently all liability for any claim or loss is ensures victim protection and capturing evidence excluded. for follow-up investigation or remediation are paramount. There are some auditors and This Guidance on Operational Practice & Indicators companies that are doing significantly more today of Forced Labour is a work in progress. We and we expect as they adopt this guide they will therefore encourage broad feedback on the naturally innovate and significantly improve on the document. As we learn from experience, we will recommendations. review and improve the guidance and expand our tool set for members.

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What is forced labour?

According to the ILO’s Article 2.1 of the No. 29, forced labour “shall mean all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself [or herself]voluntarily .” The key elements of the definition are in the figure below.

Figure: Key Elements of the Forced Labour Definition

All work or service Any person Menace of penalty Voluntary

All types of work Includes sanctions, Adults and children service or employment threats, , etc. Free to consent to enter into employment Any industry, sector or Non-payment of occupation Regardless of nationality, including irregular migrant Free to leave / With or without a workers Loss of rights or employer contract, legal or illegal priviledges

Source: ILO’s Combating Forced Labour: A Handbook for Employers and Business

The ILO has explained that forced labour is determined by the nature of the relationship between a person and an ‘employer’ and not by the type of work performed or the legality of the work. In its guidance, “Indicators of Forced Labour” the ILO categorises eleven indicators of forced labour:

Abuse of vulnerability Retention of identity documents

Deception Withholding of wages

Restriction of movement

Isolation ! Abusive working and living conditions

Physical and sexual violence Excessive

!x Intimidation and threats x!?x

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What are the “alert signs” that may indicate potential or actual forced labour?

There are significant challenges involved in The proposed indicators offer a range of translating the ILO’s concept into a practicable “monitoring measures” or “alert flags” that may footing in social audits. Aware of the nebulous real- be used to help identify actual, likely or possible world boundaries between forced labour and more situations of forced labour. In essence they provide general exploitation, and of the fact that modern common examples of the practices employers forms of forced labour extends beyond the main engage in that – if severe or numerous enough ILO 11 indicators, we set out to devise a longer list – or if brought together – can lead to forced of forced labour indicators. This guidance builds labour situations. They also identify the negative on the ILO list and provides a range of “Operational outcomes resulting from workers experiencing Practices and Indicators” which auditors may forced labour. uncover during audits. To assist auditors in their approach, this guidance groups these practices and indicators into the employment cycle and proposes definitions within that cycle that characterise the elements of forced labour. See the figure below.

Figure: Forced Labour Risk Factors – The Employment Cycle

Covers practices which result in workers being trapped through debt Highlights practices and Details in which vulnerable bondage, withholding indicators in the recruitment workers are controlled, wages and unreasonable process which result in isolated, threatened, deductions so workers are someone being misled or intimidated in order to left with little or no pay, as coerced into employment. coerce. well as other practices that prevent or restrict a workers ability to quit.

Debt / Wage Entrapment Deceptive or Coercive Employment under and Termination Recruitment menace of Penalty Prevention.

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For each indicator proposed, the ILO’s 11 indicators (see page 6 of this document) are linked as well as its applicable ILO definitional element.

Each indicator is also marked to Columns are also added to show its strength or significance, demonstrate who does it in order to as follows: show the different contexts in which forced labour is possible, as follows:

Definite indicator, which warrants a finding of non-compliance with the ! Employer-led exploitation is “Employment is Freely Chosen” exploitation of job applicants and standard. workers by the employer.

Strong indicator, which signals an Intermediary-led exploitation is by an increased risk for forced labour, but ! further investigation may be needed employer endorsed labour provider or to determine the context and any other formal or informal recruitment interplay with other indicators, in order intermediary. to establish whether or not it rises to the level of forced labour. ! Hidden third party labour exploitation occurs where one person holds a Possible indicator, which if found position of power over another and that position for personal gain. alongside other possible indicators, may warrant further investigation. It usually takes place largely in an informal, unregulated way at a before the recognised labour supply chain. In other words, these workers are often “introduced” to employers or labour providers, who are often unaware of the risk that the workers are being controlled by exploitative individuals. It also occurs during employment by exploitative individuals or gangs acting covertly without the employer’s knowledge.

Back to contents d Join now sedexglobal.com 8 Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments Deception relates to the failure to deliver what what deliver to the failure to relates Deception verbally either worker, the to has been promised be in a forced could worker The writing. in or a job into entered have they if situation labour the made at promises false or deception through the to with regard and hiring recruitment time of including employment, of and conditions terms and length location, work, of job type, availability as well as and benefits, or contract, of the acquisition or housing and living conditions, or job location status, migration regular of be may Children the employer. of the identity surrounding promises false through recruited visits, parent of frequency or attendance school the leave to freedom worker’s then, the If etc. way, in any time is restricted any at employment situation. labour be in a forced would worker the situation labour be in a forced could worker The the at to agreed provisions contract the original if provisions by replaced are recruitment time of one or either worker, the to less favourable the hiring and of the course times over more substitution”) “contract (e.g., process deployment worksite the at arrives worker the once or agreements.” so-called “supplemental through worse materially substitution for contract No facility, product different (e.g., conditions lower food, housing or for undisclosed fees labour migrant for should be allowed etc.) wages, work. and start of home departure between ILO Definition Definition ILO Element Involuntariness Involuntariness Involuntariness Involuntariness Involuntariness

x!?x !x Applicable Indicator ILO Intimidation Intimidation & threats, of restriction movement Abuse of vulnerability, Deception Abuse of vulnerability, Deception Abuse of vulnerability, Deception Abuse of vulnerability, Deception ! ! ! ! !

! ! ! ! ! Recruiter, Recruiter, Employer Recruiter, Employer Recruiter, Employer Recruiter, Employer Recruiter, Employer Model

Definite Strong Strong Strong Strong Strength Deceptive or Coercive Recruitment Coercive or Deceptive Indicator coercive employs employer or Recruiter which physically practices, recruitment psychologically or (abduction, confinement) during recruitment worker the control process Worker contract or oral representations representations oral or contract Worker relationship employment misrepresents are workers and/or entitlements or be which may sign contract to asked misrepresentative conditions, working work, the of Nature wages/ or living costs terms, employment to than those indicated worse earnings are the at workers, including migrant workers, contract after and/or job application of point signed Job adverts (particularly for requiring jobs requiring for (particularly adverts Job misleading about the job, are migration) conditions, working employer, job location, or wages terms, contract employment earnings employment of and conditions The terms are recruitment the time of upon at agreed in the employment those contained not without been made Changes have contract. worker the of consent or the knowledge

9 Join now sedexglobal.com Back to contents d Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments The worker could be in a forced labour situation situation labour be in a forced could worker The deception a job through into entered have they if a lack indicating work, for about the type/terms leave to freedom worker’s then, the If consent. of in any time is restricted any at the employment labour be in a forced would worker the way situation. written should have workers all states The ILO easily they in a language that contracts, to with regard understand, specifying rights identity of retention overtime, wages, of payment preventing to issues related and other documents verbally were terms/conditions If labour. forced then it mirrors, contract and the actual given be an indication. necessarily not would ILO Definition Definition ILO Element Involuntariness Involuntariness Involuntariness Involuntariness

Applicable Indicator ILO Abuse of Abuse of vulnerability Abuse of Abuse of Vulnerability, Deception Abuse of vulnerability, Deception Abuse of vulnerability, Deception ! ! !

! ! ! ! ! ! Recruiter Recruiter, Recruiter, Employer, Hidden Recruiter, Employer, Hidden Recruiter, Employer Model

Strong Strong Possible Possible Strength Deceptive or Coercive Recruitment Coercive or Deceptive Indicator charged being fraudulently are Workers (bus transportation clothing, food, for fees rides), health and boat airplane tickets or supplies and/or documentation work checks, recruitment their as part of Workers are required to sign blank papers, to required are Workers lead to which could etc., letters of and conditions terms being tied to workers to consent did not they employment Key employment terms and conditions and conditions terms employment Key to prior provided not systematically are in understandable workers to employment via letter/ language own writing and in their law by as required agreement/contract different by provided back contracts Back to do not process in the recruitment actors in home country with agency one (e.g., match upon arrival) and another

Back to contents d Join now sedexglobal.com 10 Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments While it is only a possible indicator of forced forced of a possible indicator While it is only be a non-compliance to risks, it is likely labour require codes and buyer supplier as many systems and management systems, management with the law. ensuring compliance to critical are can documentation and lack of testimony Worker in support. be cited often An additional difficulty here is that due to flawed flawed to due is that here difficulty An additional do not workers sometimes practices recruitment the undertake abilities to possess the skills or end and therefore for recruited were they role than rate a lower job at in a lesser working up to freedom worker’s then, the If anticipated. they in time is restricted any at the employment leave labour be in a forced would worker the way any situation ILO Definition Definition ILO Element Involuntariness Involuntariness Involuntariness Involuntariness

Applicable Indicator ILO Abuse of Abuse of vulnerability Abuse of vulnerability Abuse of Abuse of vulnerability, Deception ! ! !

! ! ! ! Employer Recruiter, Recruiter, Employer Recruiter, Employer Recruiter, Employer Model

Possible Possible Possible Possible Strength Deceptive or Coercive Recruitment Coercive or Deceptive Indicator and agents brokers multiple labour are There employment to recruitment from Workers are uninformed or misinformed misinformed or uninformed are Workers of Terms employment. of about terms explained not systematically are contract can understand so they workers to verbally letter/agreement/contract employment No systems in place to identify and prevent and prevent identify to in place systems No and hiring recruitment in their labour forced compliance ensure to and/or practices laws international or with local, national chosen labour, is freely on employment workers, agency of including no monitoring labour temporary/casual/contractor Job advertisements and/or application application and/or advertisements Job in a better completed are documents language than – in a different – or of standard possesses the worker

11 Join now sedexglobal.com Back to contents d Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments Victims of forced labour may suffer intimidation intimidation suffer may labour forced Victims of about their complain when they and threats employment. quit their wish to or conditions a this can constitute the ILO, to According designed to coercion, psychological of form The vulnerability. sense of worker’s a increase the and impact of the credibility that states ILO worker’s the from must be evaluated threats her his or account taking into perspective, and background age, cultural belief, individual status. economic or social ILO Definition Definition ILO Element Menace of of Menace Penalty of Menace Penalty Involuntariness Involuntariness

x!?x x!?x x!?x x!?x !x !x !x !x Intimidation Intimidation & Threats, Abuse of Vulnerability Intimidation & Threats, Physical Violence, Abuse of Vulnerability Intimidation & Threats, Physical Violence Intimidation & Threats, Abuse of Vulnerability Applicable Indicator ILO ! ! !

! ! ! ! ! Employer, Employer, Hidden Employer, Hidden Recruiter, Employer, Hidden Hidden Model

Definite Definite Strong Strong Strength Employment under Menace of Penalty Penalty of Menace under Employment Indicator been have workers migrant Undocumented to being returned of threats to subjected the to reported and/ or home country their employment leave they authorities if Workers are led to believe that if they do not do not they if that believe led to are Workers them their of is being asked what with comply or social physical, be subject to will families country home in their retribution financial juju, religion, through controlled are Workers self, to threats or violence by or etc. witchcraft others or family fraudulently to coerced/forced are Workers take and/or benefits security social claim for agreements out loans/credit

Back to contents d Join now sedexglobal.com 12 Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments Restriction of freedom of movement could could movement of freedom of Restriction relationship, work the leaving to a bar constitute According voluntariness. the question of raising and enter to free not are workers if the ILO, to restrictions subject to premises, work the exit this reasonable, considered which are labour. forced of indicator a strong represents might restrictions legitimate that provides ILO the safety of protection to include those related sites. work in hazardous workers of and security ILO Definition Definition ILO Element Involuntariness Involuntariness Menace of of Menace Penalty Involuntariness Involuntariness of Menace Penalty

x!?x x!?x !x !x

x!?x x!?x !x !x Restriction of of Restriction movement of Restriction movement Intimidation Intimidation & Threats, Physical Violence of Restriction movement, & Intimidation Threats of Restriction movement, & Intimidation Threats & Intimidation Threats Applicable Indicator ILO ! ! !

! ! ! ! ! ! Employer Employer Employer, Employer, Hidden Employer Employer, Hidden Employer, Hidden Model

Strong Strong Strong Strong Strong Strong Strength Employment under Menace of Penalty Penalty of Menace under Employment Indicator or abusive physically to subjected are Workers discipline of forms humiliating Employer punishes or threatens to remove remove to threatens punishes or Employer or potential) privileges (such as promotion cooperate who do not workers for work extra Security guards control , restricting restricting workforce, control guards Security is what beyond movement of freedom reasonable considered re- or on leaving restrictions Unreasonable (including accommodation) premises entering deposits, such as permissions or e.g. requiring off on days when shift ends or outside controlled are movements Workers employers their of agents by workplace the the leave when they them who accompany site broker or in company stay to required Workers or enter unable to housing and are controlled freely the premises leave

13 Join now sedexglobal.com Back to contents d Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments Workers’ communication can be restricted by by can be restricted communication Workers’ workers mobile phones, isolating confiscating in the movement restricting others, from constant by or living quarters, or workplace surveillance The ILO states that the imposition of overtime overtime the imposition of that states The ILO within the limits labour forced constitute does not agreements. collective or legislation by permitted examine to those limits, it is appropriate Above which a link arises between in the circumstances Although labour. and forced overtime obligatory work to refuse be able to in theory may workers vulnerability hours, their working normal beyond and no choice have may they in practice means that earn the minimum to do so in order obliged to are states The ILO both. jobs, or their or wage is imposed service or work which in cases that the under vulnerability, worker’s the exploiting by of payment or a penalty, of menace such exploitation the minimum level, below wages conditions poor of a matter be merely to ceases work imposing one of it becomes employment; of which calls for a penalty of the menace under workers. the of protection ILO Definition Definition ILO Element Menace of of Menace Penalty Menace of of Menace Penalty

Abuse of Abuse of Vulnerability Excessive Excessive Overtime, Abuse of Vulnerability Applicable Indicator ILO !

! ! ! Employer Employer, Employer, Recruiter, Hidden Model

Strong Strong Strength Employment under Menace of Penalty Penalty of Menace under Employment Indicator a or agent employment The employer, workers restricts individual party third communication Workers have to work more overtime for fear fear for overtime more work to have Workers dismissal, reduced (e.g., some detriment of cuts, demotion) pay work, future

Back to contents d Join now sedexglobal.com 14 Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments According to the ILO, anyone can be a victim can be a anyone the ILO, to According who lack people labour; however forced of livelihood few have laws, local of knowledge group, ethnic or a minority, belong to options, characteristics other have or a have population the majority them apart from set that when an employer It is vulnerable. especially are vulnerable worker’s a of advantage takes arise. may labour a forced position that ILO Definition Definition ILO Element Menace of of Menace Penalty Involuntariness Involuntariness Involuntariness

x!?x !x Withholding wages of Abuse of Abuse of Vulnerability, Isolation Abuse of Vulnerability, Isolation Intimidation & Threats, Physical Sexual or Violence Applicable Indicator ILO ! ! ! !

! ! ! ! ! ! Recruiter, Recruiter, Employer, Hidden Employer, Hidden Recruiter, Employer, Hidden Employer, Hidden Model

Possible Possible Possible Possible Strength Employment under Menace of Penalty Penalty of Menace under Employment Indicator and the facility leave to reluctant are Workers when distress signs of show They seek help. This is the outside. with people from dealing barriers language / cultural by compounded Workers look to or allow someone else allow or look to Workers act as if and/or behalf speak on their to someone else by instructed Workers are fined for, often arbitrary, rule arbitrary, often for, fined are Workers of & practice policy Unreasonable breaking; rule breaking for workers fining or psychological either signs of show Workers frightened, appear may They abuse. physical have may They and confused. withdrawn an of be the result seem to injuries that and/or wounds, untreated assault, old or and malnourished dirty appear

15 Join now sedexglobal.com Back to contents d Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) While it is only a possible indicator of forced forced of a possible indicator While it is only be a non-compliance to risks, it is likely labour require codes and buyer supplier as many and management systems, management ensuring compliance to critical are systems and lack of testimony Worker with the law. in support. be cited can often documentation Comments Involuntariness Involuntariness Menace and/or Penalty of ILO Definition Definition ILO Element Involuntariness Involuntariness

Isolation Isolation Applicable Indicator ILO !

! ! ! ! Employer Employer Recruiter, Recruiter, Employer, Hidden Model

Possible Possible Possible Strength Employment under Menace of Penalty Penalty of Menace under Employment Indicator false provide or know do not Workers and/ addresses, accommodation information: and/or employer their of address name or or they where the location of address name or working are Geographic, social, cultural, or even language even or social, cultural, Geographic, workers migrant trap that present are isolation site work a at and prevent identify to in place systems No practices employment in their labour forced with local, compliance ensure to and/or on employment laws international or national chosen labour is freely

Back to contents d Join now sedexglobal.com 16 Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments Forced labourers are often working in an attempt in an attempt working often are labourers Forced inherited) sometimes (or an incurred off pay to The debt employment. or during recruitment debt cover loans to or advances wage can arise from living or daily from or costs or recruitment costs. such as medical expenses, emergency bonded bondage, or debt the ILO, to According between in power an imbalance reflects labour, provider its labour or and employer worker the binding of It has the effect agent. external or an unspecified for the employer to worker the bears no time and often period of excessive or a bank or loan from the “normal” to resemblance repayment. for lender independent other Employers – or recruiters – can also make – can also make recruiters – or Employers from the to escape workers for it difficult or indebtedness, inflated or Induced debt. factors many of can result debts compounded of manipulation or falsification such as by goods/services for prices inflated accounts, goods/services of value reduced purchased, on loans interest excessive charging produced, etc. workers, to advances or ILO Definition Definition ILO Element Involuntariness Involuntariness Involuntariness Involuntariness Involuntariness

Debt Debt Bondage, Withholding wages of Debt Bondage, Withholding wages of Debt Bondage, Withholding wages of Debt Bondage, Withholding wages of Debt Bondage, Withholding wages of Applicable Indicator ILO ! !

! ! ! ! ! ! Employer Employer Recruiter, Recruiter, Employer Hidden Recruiter, Employer, Hidden Model

Definite Definite Definite Definite Definite Strength Debt/Wage Entrapment & Termination Prevention Termination & Entrapment Debt/Wage Indicator they until employment leave cannot Workers to the owed debts off pay to worked have employer. until employment leave cannot Workers owed debts off pay to worked have they intermediary other or broker the labour to transport, for work, the who has facilitated services other or accommodation Workers cannot leave employment until they they until employment leave cannot Workers to a third owed debts off pay to worked have work with the unconnected individual party who has managed them them or who controls debt into or indebtedness workers’ inflates Employer no income or minimal have they ensures with workers, loans held by Substantial onerous and/or rates interest excessive and/ unreasonable financing schemes and/or repayment of and conditions terms unlawful or

17 Join now sedexglobal.com Back to contents d Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments The ILO principle, that states all work work all states principle, that The ILO on the mutual should be founded relationships parties, implies that the contracting of consent any at relationship work the leave may both notice giving reasonable subject to moment, a collective or law with national in accordance his/ withdraw cannot worker the If agreement. a penalty, suffering of without fear consent, her labour, be forced to be considered may work the she has been he or the moment starting from working. stop to denied the right migrant of documents the identity Retaining forced constitute itself, of does not, workers are they that rationalize often Employers labour. documents official other holding passports or do often workers but in fact safekeeping, for their to access requesting comfortable feel not gaining for the process and/or documents, and is onerous documents their to access worker Without papers, a migrant intimidating. leave about or move and safely freely cannot imprisonment risk of and is at a host country, it is a If . and questioned by stopped if documents, original retain to requirement legal and consent written their should give workers they ensure to in place should be systems there time. any at documents their can retrieve ILO Definition Definition ILO Element Menace of of Menace Penalty of Menace Penalty of Menace Penalty

Withholding wages of Withholding wages of Retention identity of documents Applicable Indicator ILO !

! ! ! ! Employer Employer Employer, Employer, Recruiter, Hidden Model

Definite Definite Definite Strength Debt/Wage Entrapment & Termination Prevention Termination & Entrapment Debt/Wage Indicator is pay, including earned , leaving not worker on the contingent set a minimum or working before employment early for wages Withholding of time; period of termination contract The employer, employment agent or a third a third or agent employment The employer, original worker’s of control in is individual, party documents travel papers, and/or identification workers possessions; personal other or and/or on demand these items access unable to are the job leave cannot they that feel they and/or loss without risking their Monetary fines or deductions are levied if a if levied deductions are fines or Monetary period set a minimum or work does not worker time of

Back to contents d Join now sedexglobal.com 18 Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments Workers may be obliged to remain with an remain be obliged to may Workers for waiting while than agreed longer employer to According them. to owed are that wages the wages of payment delayed or irregular the ILO, labour a forced imply automatically do not systematically are wages when But situation. the worker a withheld, and deny and deliberately to this points change employer, to opportunity labour. forced ILO Definition Definition ILO Element Involuntariness Menace of of Menace Penalty of Menace Penalty of Menace Penalty of Menace Penalty

Debt Debt Bondage, Withholding wages of Withholding wages of Withholding wages of Withholding wages of Withholding wages of Applicable Indicator ILO !

! ! ! ! ! ! Employer Employer Employer Employer Employer, Employer, Recruiter, Hidden Model

Strong Strong Strong Strong Strong Strength Debt/Wage Entrapment & Termination Prevention Termination & Entrapment Debt/Wage Indicator on workers due to Outstanding payments than the paid later paid (or not are termination run) next required from the worker is in worker the from period required Notice law to period and contrary the pay of excess return to costs own their pay to have Workers complete do not they origin if of country to term contract labour their terminate cannot Workers time of a specified period after until contract has benefit other or has passed after employer been paid by Pay period intervals are longer than one month than one month longer are period intervals Pay period in than one pay paid more are wages or wages arrears; delayed/withheld

19 Join now sedexglobal.com Back to contents d Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments Employers can also make it difficult for workers workers for it difficult can also make Employers inflated or induced due to employment leave to indebtedness Employer or recruiter access to workers’ bank workers’ to access recruiter or Employer the for leverage powerful creates accounts worker A worker. the over recruiter or employer in his job because she/he trapped feel may if away be taken will earnings her/his that fears leave. to attempts or she/he complains ILO Definition Definition ILO Element Involuntariness Involuntariness Menace of of Menace Penalty Involuntariness Involuntariness

Debt Debt Bondage, Withholding wages of Debt Bondage, Withholding wages of Withholding wages of Withholding wages of Abuse of vulnerability; Withholding wages of Applicable Indicator ILO ! ! !

! ! ! ! ! ! ! Employer Employer Recruiter, Recruiter, Employer, Hidden Recruiter, Employer Recruiter, Employer, Hidden Model

Strong Strong Strong Strong Strong Strength Debt/Wage Entrapment & Termination Prevention Termination & Entrapment Debt/Wage Indicator work obliged to are they believe Workers or a favour repay to pay low for or without pay reason some other for or service Workers have to work to pay off off pay to work to have Workers an to owed debts (unreasonable) work for finding agent employment/work fees other or finding, transport an sign up to to required are Workers accommodation long period of excessively with deposits lodge excessive or rental of leaving early for penalties financial accommodation or employment Workers receive payment in kind payment receive Workers which vouchers, etc.) (accommodation, tokens, wage % of an unreasonable exceeds someone else’s paid into wages have Workers of in control not are workers or bank accounts; bank accounts own their

Back to contents d Join now sedexglobal.com 20 Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) Comments This is legal practice in many countries – and an countries in many practice This is legal with other link this risk need to likely may auditor indicators. These schemes often significantly deplete a deplete significantly These schemes often off pay to and ability pay take-home worker’s debt ILO Definition Definition ILO Element Involuntariness Involuntariness Involuntariness Involuntariness of Menace Penalty Involuntariness

Abuse Vulnerability Withholding wages of Withholding wages of Withholding wages of Withholding wages, of Deception Withholding wages, of Deception Applicable Indicator ILO

! ! ! ! ! ! Employer Employer Employer Employer Employer Employer Model

Strong Strong Possible Possible Possible Possible Strength Debt/Wage Entrapment & Termination Prevention Termination & Entrapment Debt/Wage Indicator by pay workers’ made from Deductions are consent/ without worker’s the employer by for provided not which are and knowledge law national Migrant workers are forced to pay for return return for pay to forced are workers Migrant home countries their to travel Forced savings programs in place – where a where – in place programs savings Forced withheld and is salary worker’s the portion of which the to account a savings into deposited of term her until access have does not worker is complete work permit is tied to work visa and workers Migrant a single employer withheld and paid at are wages of Proportion year the the end of or incomplete deliberate of Evidence working hours wage and/or of falsification and/or Wages double books); (e.g., records workers or verified be not could worked hours be cannot wages that way paid in such a verified

21 Join now sedexglobal.com Back to contents d Sedex Guidance on Operational Practice and Indicators of Forced Labour (Version 2.0, June 2017) While it is only a possible indicator of forced forced of a possible indicator While it is only be a non-compliance to risks, it is likely labour require codes and buyer supplier as many and management systems, management ensuring compliance to critical are systems and lack of testimony Worker with the law. in support. be cited can often documentation Comments Risks of forced labour increase in cases of a in cases of increase labour forced of Risks with the relationship dependency pre-existing multiple dependency in cases of or employer the job, e.g. go beyond that on the employer for only not depends on the employer worker and how housing, food job but also for his/her relatives. his/her for work If deductions are allowed under law and/or and/or law under allowed deductions are If deductions should not requirements customer . wages below worker take Involuntariness Involuntariness Menace and/or Penalty of ILO Definition Definition ILO Element Involuntariness Involuntariness Involuntariness

Abuse of Abuse of vulnerability Abuse of vulnerability Withholding wages, of Deception Applicable Indicator ILO !

! ! ! ! Employer Employer Employer Employer, Employer, Hidden Model

Possible Possible Possible Possible Strength Debt/Wage Entrapment & Termination Prevention Termination & Entrapment Debt/Wage Indicator wage and/or deposits required Monetary work-related essential deductions made for the employer by should be met that items No systems in place to identify and prevent and prevent identify to in place systems No and termination wage in their labour forced compliance ensure to and/or practices on laws international or with local, national chosen labour is freely employment Worker has multiple dependencies on the Worker the job go beyond that employer Workers have not been given a free a free been given not have Workers lose will and live they where in choice their leave they if accommodation their employment

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What are the key considerations when forced labour is found or suspected?

The specifics surrounding the nature of the exploitation discovered in the audit process will necessarily dictate what While it is only a possible indicator of forced forced of a possible indicator While it is only be a non-compliance to risks, it is likely labour require codes and buyer supplier as many and management systems, management ensuring compliance to critical are systems and lack of testimony Worker with the law. in support. be cited can often documentation Comments Risks of forced labour increase in cases of a in cases of increase labour forced of Risks with the relationship dependency pre-existing multiple dependency in cases of or employer the job, e.g. go beyond that on the employer for only not depends on the employer worker and how housing, food job but also for his/her relatives. his/her for work If deductions are allowed under law and/or and/or law under allowed deductions are If deductions should not requirements customer minimum wage. wages below worker take action to take.

1 Protect Workers 2 Capture and Protect Evidence Involuntariness Involuntariness Menace and/or Penalty of ILO Definition Definition ILO Element Involuntariness Involuntariness Involuntariness

However, good business practice in dealing with Running through all of this is the risk to the victim, forced labour – or with suspicions of forced labour anyone associated with them, and the auditor

– requires at a minimum actions by auditors to (1) who is investigating and reporting these issues. Abuse of Abuse of vulnerability Abuse of vulnerability Withholding wages, of Deception Applicable Indicator ILO capture and protect evidence in the audit report, For that reason authorities (such as investigating and (2) protect at risk individuals. Protecting and enforcement authorities) may need to be ! possible victims and capturing and documenting engaged in order to provide the auditor and

! ! ! ! evidence for follow-up should be paramount to victim with the necessary guidance, support, Employer Employer Employer Employer, Employer, Hidden Model any key steps to be taken when forced labour is assistance and protection. It is recommended that suspected or found. audit companies, and companies that hire them,

develop and have in place clear communication Possible Possible Possible Possible Strength 1. Protect Workers guidelines that guide auditors on whether, how and when to refer matters to the appropriate As a guiding principle, auditors’ immediate governmental authorities. Guidelines should actions, and the ongoing corrective actions taken consider the effects of the involvement, or lack by facility management and/or the businesses thereof, on the facility, possible victim, any other that buy from them, should focus on what is best affected employees, and/ or auditing body. The for any possible victims in question. The primary protection of those at risk individuals must take responsibility when dealing with a potential victim precedence over all other considerations. Not is to ensure their safety and welfare. This is at the doing so runs the risk that any necessary criminal core of legislation and is fundamental to the investigation will be undermined, and the possible approach taken by law enforcement agencies, victim are left unprotected. In environments where the voluntary sector and any other organisation law enforcement officials may not be fully trained involved in the support of potential victims. in handling severe cases of abuse, auditors might need to also be aware of local resources and Debt/Wage Entrapment & Termination Prevention Termination & Entrapment Debt/Wage Indicator wage and/or deposits required Monetary work-related essential deductions made for the employer by should be met that items No systems in place to identify and prevent and prevent identify to in place systems No and termination wage in their labour forced compliance ensure to and/or practices on laws international or with local, national chosen labour is freely employment Worker has multiple dependencies on the Worker the job go beyond that employer Workers have not been given a free a free been given not have Workers lose will and live they where in choice their leave they if accommodation their employment

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organisations that provide victim services, which Many issues raised by workers (related to some can act not only as a support to the victim, but the of the indicators in the Guide) will not have any auditor. Organisations include those that support supporting documentation or written evidence the worker’s rehabilitation (including physical and so auditors traditionally have been reluctant and mental health), repatriation (if desired by the to include the issues in the audit report. Auditors worker), and/or their reintegration into the labour are encouraged, in order to capture evidence market and community. of risks for follow-up, to use their judgement on the type of non-compliance raised, such as Auditors may feel the need to share the report citing management systems as a basis, whereby with any known brands purchasing from the other items (such as lack of documentation) in facility in order to protect workers, particularly addition to worker testimony can also be cited in when reporting any suspicions to a facility that support. Auditors can visit SMETA’s Supplementary is complicit in exploitation can place either the Guidance for Dealing with Sensitive issues Raised at auditor or the worker at risk. This will present Audit for a ‘good practice approach’ on how these issues with audits that are owned by the facility; issues could be handled. legal (and perhaps ethical) concerns may arise regarding disclosure to a third party who has Moreover, not all the indicators proposed are not paid for and is therefore not the owner of definite signs of non-compliance and warrant a the report. It is recommended that auditors (and finding of forced labour exploitation. Forced labour companies who hire them) review all contractual are very difficult to identify in a definitive manner, terms for commissioned audits to identify and especially based off of the ILO definitions, as remove any limits to sharing in these limited multiple factors need to be in place to definitively cases where the auditor, in his/her experience identify a situation as forced labour. In fact, many and judgment, believes that there is an actual of the indicators in the Guide are suggested as or a strong indication of a likely forced labour they may – only in various combinations – increase exploitation case. the risk of forced labour through the employment cycle. Current practice is to cite the non- Auditors can also visit the Sedex Members Ethical compliance (if there is one) under other content Trade Audit (SMETA)’s Supplementary Guidance areas (e.g. wages, working hours, accommodation, for Dealing with Sensitive issues Raised at Audit for harassment, etc.) but not as a forced labour risk. additional guidance on possible communication Auditors are encouraged to, in order to ensure the vehicle options. proper follow-up (investigation, remediation, victim 2. Capture and Protect Evidence protection, etc.) can be taken, also record the risks in the audit report under ‘Employment is Freely Chosen.’ Some sites are not aware that some non- Any of the risks listed in this Guide, if identified, compliances have knock on effects onto forced should be documented in the audit report to labour (e.g. non-payment of wages means workers allow for corrective action planning by buyers and do not feel they can leave employment). Therefore suppliers, or more importantly victim protection, it is useful also for the facility (through raising where warranted. It is also important to make a observations) to understand their own risk. record of any concerns and information which may be useful at a later stage should an investigation be appropriate.

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The following table suggests how to record evidence in the audit report:

Strength Documentation

Definite A finding of any of the indicators listed as “definite” in this Guide during the audit should be recorded in the audit report as a non-compliance under ‘Employment is Freely Chosen’ issue titles. (This is the current state of play for forced labour findings during audits)

Strong If one or more strong indicators appear (e.g., workers have to work more overtime for fear of some detriment) and Either ●● workers have a dependency relationship with the employer that go beyond the job (e.g. dependency on the employer for family member’s employment; dependency for basic accommodation and food needs), Or ●● practices prevent them from leaving (e.g. ‘delayed or withheld wage payments’)

Then auditors should raise the issues as non-compliance by making greater use of existing Employment is Freely Chosen issue titles.

Auditors will also use their experience and judgement to make a determination whether an aggregation of findings of strong and/or possible indicators warrants a finding of non-compliance.

Possible Possible indicators are not strong enough to suggest forced labour in themselves, but an aggregation of findings of possible indicators could warrant further investigation.

In cases where there is insufficient evidence to raise a forced labour non-compliance, either through a lack of definitive signs or the combination of findings of strong and/or possible indicators are inconclusive, then auditors should raise them as observations under Employment is Freely Chosen by making greater use of existing Employment is Freely Chosen issue titles.

Evidence should always be documented for follow-up. It should be remembered that forced labour flourishes in an environment when reporting is unlikely. Non-reporting allows it to continue unabated and allows actual, likely or possible exploitation to flourish or to be hidden, thereby preventing future identification and increasing the control of and threats to workers. Non-reporting also prevents a whole picture of forced labour to be seen and understood, preventing facilities to understand their own risk. Auditors are encouraged to, in order to ensure the proper follow-up (investigation, remediation, victim protection, etc.) can be taken, to record all non-compliances and all risks in the audit report under ‘Employment is Freely Chosen.’

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Resources

Delphi Indicators (http://www.ilo.org): presents can do. Includes a case study on how workers are lists of operational indicators which can be used affected as well as a spotlight on migrant workers to assess the situation of a potential victim of & labour brokers. trafficking with respect to each of the six main elements of the definition of trafficking in human UK Modern Slavery Act Briefing (https://www. beings, as found in the Palermo Protocol. sedexglobal.com/modern-slavery-act-briefing/): a generalised introduction into the transparency Institute for Human Rights and Business Dhaka clause of the ’s Modern Day Principles for Migration with Dignity Slavery Act, what it means for business, and how (http://www.dhaka-principles.org/): a roadmap Sedex helps its members with compliance. that traces the worker from recruitment through employment and the end of contract and that Stronger Together Tool Kit (http:// provides key principles employers and migrant stronger2gether.org/): offers an anti-human recruiters should respect at each stage in the trafficking/forced labour video, a toolkit to tackle process to ensure migration with dignity. hidden labour exploitation, multi-language posters, worker leaflets and other resources. International Labour Organization (http://www. ilo.org/global/topics/forced-labour/): guidance The Joseph Rowntree Foundation (https://www. material and tools for employers and business to jrf.org.uk): commissioned a paper that examines strengthen their capacity to address the risk of how forced labour is currently framed within forced labour and in their own national legislation and explores a continuum of operations and in global supply chains. exploitation and interventions between decent work and forced labour. Sedex Supplier Workbook (https://www. sedexglobal.com/sedex-supplier-workbook/): UK Gangmasters Licensing Authority ‘How an in-depth guide offering practical guidance, to Spot the Signs’: (http://www.gla.gov.uk/): case studies and good practice to help suppliers defined the term modern day slavery and provides around the world drive ethical improvements in guidance on how to spot the signs. their businesses. Verité Fair Hiring Toolkit (www.verite.org): offers SMETA (Sedex Members Ethical Trade Audit) tools, guidance and approaches to support the (https://www.sedexglobal.com/products- responsible recruitment and hiring of migrant services/smeta-audit/): an audit methodology workers in global supply chains. that engages supply chain monitors, buyers and Walk Free Tackling Modern Slavery in Supply suppliers in one common audit approach, thereby Chains (https://www.walkfree.org): provides reducing duplication and increasing convergence. companies guidance on how to reduce or Sedex Modern Day Slavery Briefing (https:// eliminate the risk of modern slavery occurring in www.sedexglobal.com/briefing-modern-day- their supply chains, either as a direct or indirect slavery/): a generalised introduction into the result of their procurement practices. challenging issues of human trafficking and forced labour, with recommendations on what businesses

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Useful Terms

Bonded Labour or Debt Bondage: Debt bondage Although they are interconnected, forced labour is a worker pledging their labour or the labour and human trafficking are not the same in of others under their control as security for a or in practice. Forced labour can debt; when either the real value of the work result from internal or cross-border movement undertaken is never applied to repayment of the which renders some workers particularly debt, or the length and nature of the work that vulnerable to deceptive recruitment and coercive has to be undertaken is never fully defined or labour practices. However, whilst trafficked limited. The labour is not necessarily forced by people are often exploited through forced violence or threats; instead it is enforced by the labour, not everyone who experiences forced worker’s forced acceptance of the obligation to labour has been trafficked. An unknown number repay the artificial debt. It is included as a form of people voluntarily enter into employment of exploitation related to trafficking in the United in farms, factories and homes and, once in the Nations protocol on trafficking in persons. door, are unable to leave because the employer/ enforcer holds them in forced labour. They may Forced Labour: Article 2.1 of The Forced Labour work alongside persons who were recruited and Convention No. 29 states that forced labour “shall brought into the same situation (i.e., trafficked). mean all work or service which is exacted from any But, they are not defined as ‘trafficked’ and so are person under the menace of any penalty and for not eligible for the legal protections offered to which the said person has not offered himself [or trafficked workers. The movement of people for herself] voluntarily.” the purpose of forced labour and services usually involves an agent or recruiter, a transporter, and Human Trafficking: Article 3, paragraph (a) of a final employer, who will derive a profit from the Protocol to Prevent, Suppress and Punish the exploitation of the trafficked person. In some Trafficking in Persons defines trafficking in persons cases, the same person carries out all these as “the recruitment, transportation, transfer, trafficking activities. harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, Modern Day Slavery: Often used as a “catch all of abduction, of fraud, of deception, of the abuse term” to denote human trafficking, forced labour and of power or of a position of vulnerability or of slavery-like practices such as debt bondage, and the the giving or receiving of payments or benefits sale or exploitation of children. All of these crimes to achieve the consent of a person having have a common feature – they involve one person control over another person, for the purpose of depriving another person of their liberty in order to exploitation.” Where the victim is a child under 18 exploit them for personal or commercial gain. years of age, there is no requirement of coercive means. It is sufficient if the child is both recruited Slavery: Art 1(1) of the UN Slavery Convention and exploited through one of the recognized defines slavery as “the status or condition of forms of exploitation (e.g. slavery, organ removal, a person over whom any or all of the powers sexual exploitation, etc.). attaching to the right of ownership are exercised.” Slavery is much more than forced labour; all slavery involves forced labour but not all forced labour involves slavery.

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Acknowledgements

A Working Group of the Sedex Stakeholder Forum (SSF) produced the Guidance on Operational Practice & Indicators of Forced Labour.

Sedex would like to thank Stronger Together for lending us David Camp’s leadership and expertise to the Working Group. Stronger Together was launched in 2013 as a collaborative business led initiative to equip employers and recruiters with the practical knowledge and resources to tackle modern slavery by providing free good practice guidance and tools through www. stronger2gether.org and to support industry to combat forced labour, labour trafficking and other hidden worker exploitation in their business and supply chains.

Back to contents d Join now sedexglobal.com 28 This Guidance on Operational Practice & Indicators of Forced Labour is a work in progress. We at Sedex hope it is a step forward, albeit perhaps a small one, in broader identification and reporting of forced labour risks in modern supply chains. We also understand that there may challenges and we hope to learn from the experiences of others and gather feedback on what else Sedex can do to best facilitate adoption of this guidance into practice as well as what other tools may be needed to facilitate broader identification and reporting of forced labour risks. We also recognize that there are some auditors and companies that are doing significantly more today and we expect as they and others adopt this guide they will naturally innovate and significantly improve on the recommended indicators. We therefore encourage broad feedback on the document. As we learn from experience, we will review and improve the guidance and expand our tool set for members. Please forward your comments to [email protected]. To download SMETA 6.0, or for more general information about SMETA, please visit:

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