By Declan Croucher, Verité
Verité’s on-the-ground research, risk assessments, and monitoring work in global supply chains routinely uncover situations where unethical labor brokers and corrupt government officials are instrumental in greasing the wheels of labor trafficking. The foreign subsidiaries, franchisees, joint ventures, and suppliers of global multinationals who end up employing trafficked migrant workers frequently express ignorance of the continuing—and largely hidden—scourge of modern-day slavery that affects more than 20 million people.
Is there a direct connection between the corrupt practices occurring in the foreign migrant labor supply chain and the type of red flags associated with human trafficking and forced labor? Yes. These red flags include deception regarding employment terms and conditions, illegal or unethical placement fees charged to foreign contract workers, unexplained fees and costs, lack of transparency, and workplace practices such as passport retention and “runaway insurance” deposits.
Recently issued Foreign Corruption Practices Act (FCPA) guidance from the Department of Justice (DOJ) reaffirms that payments to foreign government officials (e.g., border control, immigration, or law enforcement) to gain an improper business advantage or to secure or maintain business can give rise to liability, regardless of whether there was actual knowledge of wrongdoing or purposeful avoidance of such knowledge. The FCPA makes it clear that “willful blindness” or “deliberate indifference” to red flags is sufficient to establish criminal knowledge of corrupt practices.
US companies, including foreign subsidiaries, franchisees, joint venture entities, or even suppliers that use third party employment agencies or labor brokers, run the risk of potential FCPA liability. The risk arises from the fact that these entities rely on employment agencies and labor brokers who must interact with foreign officials to obtain work and travel permits, visas, etc. Any interaction with foreign officials creates potential for exposure under the FCPA. Read more…