A Global Alliance Against Forced Labour - International Labour ...

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A DYNAMIC GLOBAL PICTURE6. Forced labour and the global economy: Policy issues287. Research and action over the past four yearshave led to a clearer understanding of forced labourin its different forms, of gaps in the law and policyframework against it, of its causes, its impact on differentsocial groups, and also the linkages betweenforced labour and such priority concerns as povertyreduction, promoting equality of rights, and addressingthe social dimensions of globalization.288. In the first Global Report on forced labour,human trafficking for forced labour was describedas the “underside of globalization”. 153 The improvedknowledge base has since shed further light on thelinkages between forced labour and the various aspectsof globalization, including increased globalcompetition, migration and labour market deregulation.But which forms or manifestations of contemporaryforced labour can be attributed to aspects ofglobalization? And how can a fairer globalization,with due regard for its social dimensions, help toeradicate these abuses?289. The analysis in preceding chapters serves toillustrate certain points. The forced labour associatedwith trafficking represents one of the most blatantfailures of labour markets, and even of global governance,to address the needs of arguably the most vulnerableand least protected human beings in the worldtoday. Although trafficking itself is by no means a newproblem, the mechanisms of such trafficking todaydo appear to pose major new challenges for the worldcommunity. Yet it would be unwise to draw too hardand fast a distinction between the older and the newerproblems. Bonded labourers are at times moving intocoercion in different industries, under different mechanismsof indebtedness, because some unprincipledemployers sense the opportunity to exploit this sourceof cheap and vulnerable labour. Trafficked workersare also bonded by debt, in both industrialized anddeveloping countries. And new forms of employmentcoercion in some transition economies of east Asia andelsewhere can also be explained in part by globalizingtrends, when employers in the emerging private sectorare desperate to capitalize on world market opportunitiesby exacting as much labour as possible from acheap and often unprotected workforce.290. It is now clearer that competitive pressures canhave an adverse impact on conditions of employmentand, at their extreme, can lead to forced labour. Withglobal pressures on suppliers to reduce costs by everyavailable means, retailers and intermediaries can takeadvantage of the intense competition between suppliersin order to squeeze profits out of them. Manysuppliers are paid a product price which barely allowsthem to break even. If they wish to make a profit, theyhave to reduce labour costs yet further. Suppliers withjust a little lower than average cost efficiency are liableto bankruptcy, and a small reduction in labour costscan have a large effect on profit realization.291. Suppliers can pass on the burden to labourcontractors, demanding that they provide workers ata cost so low as to make the use of coercive methodsmore likely. There is indeed some evidence that this ishappening, in that contractors are accepting fees perworker so low that it would be impossible to complywith the provisions of national labour law. In one casein the United Kingdom, a labour contractor suppliedSouth African workers to a fruit packing companywhich in turn was a supplier of the leading retailers.The contractor was paid an hourly rate per workerless than that which, according to the Chairman ofthe Association of Labour Providers (ALP), would benecessary simply to cover the costs of any labour contractorwho abides by the law.292. In many countries, this pressure on costs hasbeen accompanied by two other trends which havecontributed to forced labour: the increased supplyof migrant workers and the deregulation of labourmarkets, which can blur the boundaries between theformal and informal economies. Migrant workers canbe more vulnerable to forced labour situations simplybecause they and their families have less to gain – andfar more to lose – from denouncing these situationsto the authorities. In addition, strong pressures to deregulatelabour markets and to downsize labour inspectionservices may have allowed the proliferationof unregistered agencies which can operate beyondthe boundaries of state control.293. With respect to labour institutions, one needsto consider both those responsible for labour recruitmentand placement, and those whose duty is to protectworkers against abusive practices. In recent decadesthere have been strong pressures to end public monopolieson job placement, paving the way for privateemployment agencies, which are often seen as moreefficient. But coercive practices have been identified,again in both developing and developed countries,where there has been inadequate control over theseagencies. The agencies that have in some way beenassociated with coercive and exploitative practicesrange from one-person businesses and intermediariesin rural Latin America or Asia, to loosely regulatedenterprises in central and eastern Europe which candouble as travel and job placement agencies. Eradicatingsuch practices represents a major challenge foremployers’ organizations worldwide, as well as fortrade unions. Self-regulation by employers’ groupsis one approach towards solving the problem, byinsisting on minimum standards and denying membershipor credentials to any job placement agency153. Stopping forced labour, op. cit., p. 47.63
A GLOBAL ALLIANCE AGAINST FORCED LABOURthat fails to meet them. In the case of more seriousabuse, however, severe penalties are urgently needed.294. In developing countries, there is clearly aneed for more detailed research on labour arrangementsprevailing in the informal economy, to confirmwhether or not forced labour and debt bondageproblems exist on a significant scale and, if so, where.Research undertaken with the ILO in sub-SaharanAfrica indicates that debt bondage and forced labourmay be prevalent amongst street traders in urban centres,rickshaw pullers and others, who are sometimesobliged to hand over their identity cards to their suppliers.If they do not meet repayment schedules for thesupplies provided, they are required either to providefree labour (for example, as a night guard or domesticservant), or to renegotiate the debt, accepting further“advances” and thereby becoming effectively bondedby ever-increasing outstanding debt burdens. 154295. The orthodox economic view calls for a progressivedismantling of labour regulations in orderto ensure smoother and more flexible functioning oflabour markets. Ironically, it is precisely this deregulationthat leads to one of the worst forms of labourmarket failure. In strictly economic terms forced labouris a labour market failure because it violates keyconditions for labour markets to function efficiently,namely the freedom of workers to exercise choice andto receive sufficient remuneration for freely chosenemployment. The right to freedom is essential forefficient labour markets in the same way that propertyrights are essential for efficient product markets.But for the purposes of the present Report, the term“labour market failure” can be used more broadly toencompass the combined failure of labour markets,institutions and regulations to provide for more efficientor more equitable outcomes.296. Dual approaches will always be needed,combining the “carrot” and the “stick”, mixing lawenforcement with prevention and tackling the structuralroots of forced labour as well as the individualagents who exact it. Improved law enforcement, basedon a clear legal framework, must always be part ofthe solution. But it is unrealistic to believe that anemphasis on law enforcement alone, targeting limitednumbers of employers who extract profit fromlabour exploitation, can eradicate deeply embeddedstructural problems. To ignore the need for a clearregulatory framework on forced labour, on the ratherspurious grounds that this could inhibit market-orientedeconomic growth and development, wouldbe an unacceptably weak response to the persistentproblem of modern forced labour.297. When should the emphasis be on the prosecutionof individual offenders, and according to whatcriteria? And when is there a need to address moresystemic deficiencies or failures in a country’s labourmarket institutions, related to the longstanding survivalor more recent emergence of forced labour practices?These are difficult policy dilemmas, which haveto be looked at in the light of the specific situationin each country, and on which there is as yet verylimited experience. Where there are national actionplans against forced labour, it is clear that the approachaims to be comprehensive.298. The negotiators of multilateral or bilateraltrade agreements can play an important role in promotingincentives towards a globalization free offorced labour. Consumers also have a pivotal rolein pressing for higher labour standards around theworld. With globalization, the time when forced labourin parts of the production chain could be hiddenfrom the general public is rapidly vanishing, as informationabout working conditions in different partsof the globe is growing exponentially. Consumers inNew York or Paris want to know where their clothesor sugar or tomatoes come from, and in what conditionsthey were produced, and producers increasinglyunderstand that it is in their commercial interest toeradicate forced labour worldwide.299. The growing number of trade agreementswith reference to forced labour and other labourstandards shows that trade negotiators have aimedat dealing with these issues. The North AmericanAgreement on Labor Cooperation (NAALC) signedin 1993 was adopted as a supplementary accord to theNorth American Free Trade Agreement (NAFTA);subsequent bilateral trade agreements involving theUnited States have addressed forced labour and otherstandards in their main texts. The Trade PromotionAuthority approved by the United States Congressin 2002 required the United States Government toensure in all its trade negotiations that the signatorycountries comply with their own labour lawsas well as the core labour standareds of the ILO. 155The different Generalized System of Preferences(GSP) arrangements of both the EU and the UnitedStates provide tariff reductions on imports from developingcountries on condition that they meet anumber of requirements, including the prohibitionof forced labour. The EU’s GSP now explicitly refersto ILO Conventions No. 29 and No. 105, as well asthe other fundamental Conventions covered by the1998 ILO Declaration on Fundamental Principlesand Rights at Work.300. Together with such bilateral trade agreements,a number of industrialized countries are offering financialand technical assistance for the improvementof labour laws and their application. The ILO itselfhas received substantial technical cooperation resourcesfor its work in this area. It is imperative thatcountries that do demonstrate the courage and politicalwill to face up to the new forced labour should154. See for example: Etude sur le travail forcé: cas de Madagascar, op. cit.155. Bipartisan Trade Promotion Authority Act of 2002, s. 2102.64
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REPORT OF THE DIRECTOR-GENERALA glo
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ContentsIntroduction . . . . . . .
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Introduction1. Four years ago, the
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PART IUnderstanding and measuringfo
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UNDERSTANDING AND MEASURING FORCED
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