Korea 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 Korea as a stakeholder in combating modern slavery in the country PB The Mekong Club Korea Private Sector Assessment The Mekong Club Korea Private Sector Assessment 1 The Mekong Club 1. Contents The Mekong Club is a catalyst 8.2. Retail 21 for change – engaging, inspiring 2. Objectives of the Study 4 and supporting the private 8.3. Manufacturing 24 sector to eradicate slavery from 3. Definition of Terms 5 their business. Given that the 8.3.1. General 24 majority of modern-day slavery exists in the private sector, these 4. Demographic Overview & Key Social Trends 6 8.3.2. Electronics 2 5 companies are ideally placed to help turn the tide of this global 8.3.3. Automative 26 4.1. Summary 6 epidemic. 8.3.4. Garment and textile Industry 26 The only organisation of its kind, 4.2. Population Distribution 6 The Mekong Club steers away 8.4. Banking Industry 26 from the approach taken by other 4.3. Social Indicators 8 players in this space, which is to 8.4.1. General 26 4.3.1. Human Development Index (HDI) ‘name and shame’ companies – 8 ousting bad behaviour or issues 4.3.2. GINI Coefficient 9 8.4.2. Top Banks 27 related to this subject. Instead, 4.3.3. Poverty Rate 9 8.5. Tourism, Food Service & Hospitality 29 we believe in starting and ending with collaboration. 8.5.1. Food Service 29 In fact, The Mekong Club 5. The Labour force 10 originally formed as a direct 5.1. Employment and Income 8.5.2. Tourism 29 response to the growing 10 number of companies looking 5.1.1. Employment Distribution 10 9. Modern Slavery and human trafficking 30 to develop strategies to address 5.1.2. Income 10 forced labour risk through a professional forum. Divided into 5.2. Gender Gap 10 9.1. Overview 30 industry-specific working groups, 5.3. Comparative Minimum Wage 11 9.2. USA Department of State “Trafficking in these networks meet regularly Persons” Report 31 to learn, share best practices, 5.4. Comparativeness 13 and network with other like- 9.3. Foreign Brides 32 minded professionals. Member 6. Political Risk Assessment 15 companies also work together 9.4. Sex Industry 32 to achieve an annual deliverable which will work towards 7. The Private Sector 16 producing tangible results in the 7.1. Overview fight against forced labour. 16 7.2. The role of Chaebols in the Korean Economy 16 7.3. Transparency 19 8. The Mekong Club Target Sectors 20 8.1. The Agricultural Sector 2 0 8.1.1. The fishing industry 20 2 The Mekong Club Korea Private Sector Assessment The Mekong Club Korea 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 means (2), for the purpose of underthe menace of any an employer and commits The following secondary objectives specify the details of exploitation (3). penalty and for which the themselves to work the data that need to be gathered in order to fulfil the person has not offered for the employer in return. For children under age 18 it is themselves voluntarily. scope of the study: 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 Korea • 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. Korea 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 Korea • 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 Korea Private Sector Assessment The Mekong Club Korea Private Sector Assessment 5 4. Demographic Overview & Key Social Trends 4.1. Summary Population 51,270,000 Seoul Metro 49.5% HDI 0.901 Poverty Rate 12.5% 4.2. Population Distribution Population Distribution by Population Pyramid 20175 Gender and Location in 2017 The total population of Korea is estimated at 51.270 million according to the 2016 100+ Female 0.0% 0.0% Male Population and Housing Census1, with a 2016 95-99 0.0% 0.1% roughly even split overall between males 90-94 0.1% 0.3% Total 51,270,000 85-89 0.3% 0.6% and females. The population of the Seoul 80-84 0.7% 1.2% metropolitan area alone constitutes about Male 50.1% 75-79 1.2% 1.7% 2 49.5% of the total population . 70-74 1.6% 1.9% Female 49.9% 65-69 2.1% 2.3% Seoul Met- 60-64 3.0% 3.1% 49.5% 55-59 3.8% 3.9% ropolitan 50-54 4.1% 4.1% 45-49 4.2% 4.2% Korean population growth rate has slowed down to 0.36% in 20183. The population structure 40-44 4.1% 4.0% 35-39 3.8% 3.7% is highly skewed towards the older population. (see population pyramid). In 2016 the elderly 3.6% 3.4% 4 30-34 population exceeded the youth . 25-29 3.5% 3.1% 20-24 3.7% 3.3% 15-19 3.0% 2.8% 2015 2016 10-14 2.4% 2.2% ‘000 % ‘000 % 5-9 2.3% 2.2% 0-4 2.3% 2.2% Youth (0-14) 6.910 13.9 6.770 13.6 10% 8% 6% 4% 2% 0% 2% 4% 6% 8% 10% Working Age 36.230 72.9 36.310 72.8 (15-64) Elderly (65+) 6.570 13.2 6.780 13.6 1. http://kostat.go.kr/portal/eng/pressReleases/8/7/index.board 2. ibid 3. http://www.worldometers.info/world-population/south-korea-population/ 5. https://www.indexmundi.com/malaysia/demographics_profile.html 4. http://kostat.go.kr/portal/eng/pressReleases/8/7/index.board 6 The Mekong Club Korea Private Sector Assessment The Mekong Club Korea Private Sector Assessment 7 4.3. Social Indicators Korea’s HDI Value and component measures compared to countries in the region8 4.3.1. Human Development Index (HDI) 6 Life Expected Mean GNI Per According to the UNDP Human Development Report of 2016 , “Korea (Republic of)’s HDI value for 2015 HDI HDI Expectancy years of Years of Capita IHDI is 0.901— which put the country in the very high human development category—positioning it at 18 out Value Rank at birth schooling Schooling (PPP USD) Value of 188 countries and territories.” The Human Development Index (HDI) is a statistic measuring human development based on life expectancy, education, and per capita income indicators7. Vietnam 0.683 115 75.9 12.6 8 5,335 0.562 Philippines 0.682 116 68.3 11.7 9.3 8,395 0.556 Korea Human Development Index (HDI) Thailand 0.740 87 74.6 13.6 7.9 14,519 0.586 Life Expected GNI per 0.689 expectancy years of Mean years capita HDI Value Indonesia 113 69 12.9 7.9 10,053 0.563 at birth schooling of schooling (2011 PPP$) China 0.738 90 76 13.5 7.6 13,345 ** 12,064 1990 71.7 13.7 8.9 0.731 Malaysia 0.789 59 74.9 13.1 10.1 24,620 ** 16,733 1995 73.9 14.7 10.0 0.781 Cambodia 0.563 143 68 10.9 4.7 3,095 0.436 20,602 2000 76.1 15.9 10.6 0.820 Myanmar - - - - - - - 2005 78.7 16.7 11.4 25,340 0.860 East Asia & 0.720 - 74.2 3,423 0.617 12,125 0.581 Pacific 2010 80.8 16.7 11.8 30,475 0.884 81.1 16.8 11.8 0.889 Medium 0.631 - 68.6 4,314 0.655 6,281 0.469 2011 31,498 HDI 2012 81.3 16.7 11.9 32,213 0.891 2013 81.6 16.6 12.2 32,911 0.896 4.3.2.