Human trafficking in the supply chain: What can your business do?

It’s not something anyone wants to hear, but there is a very strong chance that you have at some point — and probably on multiple occasions — purchased a product or service where slavery was involved in the manufacturing or distribution process.

This is how prevalent human trafficking, the most common form of modern slavery, is around the world. “Slavery” might imply continual confinement under non-stop guard, enforced by brute force, but human trafficking is often stealthier and more insidious. Coercion, manipulation, psychological intimidation, financial pressure (such as debt collection) and threats against family members are among the methods traffickers use to exploit the vulnerable and financially needy (though violence is certainly still a terrible tool in this criminal industry).

The U.S. Department of Homeland Security defines human trafficking as “the use of force, fraud, or coercion to obtain some type of labor or commercial sex act.”¹ While sex trafficking is a scourge that demands our attention and action, by its nature it is usually more in the shadows than other forms of forced labor, which can look like normal workplace activity to those not regularly observing the worksite. In a global economy where materials and ingredients come from many different sources across many different regions and countries, that veneer of normality can entwine forced labor into a business’ operations without the company even being aware of it. Ignorance, however, is no excuse when it comes to a crime this heinous. And much as we might like to think these practices only occur in nations with few human rights laws or workforce regulations, trafficking occurs here in the U.S. as well.

January is National Human Trafficking Prevention Month and so a perfect time to put a sharper focus on this all-too-common exploitation. Whether originating domestically or abroad, it’s the duty of every business and every person to do what they can to help combat human trafficking. It is first and foremost a moral responsibility, but it’s also a professional duty, as any connection to trafficking can derail business continuity and even put a company’s ability to continue operating at risk.

Human trafficking can touch any business

If you’re thinking, “My company has high ethical standards and vigilant human resource practices, so this is not affecting us,” you need to consider how much you know about the vendors and suppliers you work with. Even if those business partners are ethical within their own operations, how much is known about the vendors and suppliers they work with? For example, if you run a retail business, you might decide to work with a well-regarded U.S. clothing manufacturer to help avoid intersecting with an enterprise that exploits workers. But do you know where that manufacturer sources its materials from…where the cotton or wool they use is harvested and how those agricultural workers are recruited and treated?

Too often, people think of forced labor as something secretive and difficult to uncover. The massive number of people victimized and the estimated profits generated by human trafficking, however, challenge the notion that this is a crime hidden from view. According to figures released in 2022, over 27 million people are working as forced labor globally.² To put that number in perspective, it’s greater than the current respective populations of Texas and Florida as well as the nation of Australia (to name just a few prominent total population counts under that figure). And the U.S. Department of Homeland Security estimates human trafficking is a $150 billion business yearly.³ That’s more than the annual net income of all but one of the 10 most-profitable businesses in the world, according to one ranking.⁴

Forced labor occurs in businesses of all sizes, from small businesses to middle market companies to Fortune 500 giants. It has been uncovered everywhere from the staff of tiny, budget nail salons to the farms that supply cocoa to global candy manufacturers. Trafficking also happens across all industries, with these varied sectors cited as ones where instances of forced labor are a major problem in multiple countries:⁵

• Agriculture, animal husbandry and fishing
• Domestic service
• Construction
• Manufacturing and factory work
• Hospitality
• Health and beauty salons
• Restaurants
• Traveling sales crews
• Landscaping
• Carnivals

The price of passivity

Looking at the scope of the human trafficking problem can be overwhelming and even concerned business leaders might see the issue as beyond their ability to act. But there are indeed real, productive actions a company can take and your business could pay a high price for not doing more to ensure it is not connected, even inadvertently, to human trafficking. Here are just a few of the ways it can impact your business:

Supply chain interruption

If you work with vendors or suppliers who are accused of or found guilty of forced labor, their operations may be shut down by authorities, forcing your company to find other sources for the materials, ingredients, goods or services they provide

Legal action

There have been several prominent civil and criminal court cases against companies for working with vendors or suppliers involved in trafficking, even in instances where the company stated no knowledge of the employment practices or working conditions of these outside parties. Even if the case is dismissed or won by the defendant, legal costs may be significant.

Reputational damage

Consumer awareness is growing on the issue and raises a serious chance of blowback if a business customers patronize is found to be connected to human trafficking. As household budgets dictate purchasing decisions more than other factors, it could be argued consumers are “voting with their dollars” (though in most instances surely without knowledge) in encouraging forced labor. However, protests, boycotts and other social actions can quickly spur changes in spending habits. Even a slow erosion in business due to bad word-of-mouth could ultimately damage a company in a lasting fashion

Taking action 

1. Identifying risky business partners and locations: The Chamber’s recommendations include having board committees dedicated to addressing human trafficking in supply chains and using in-house or third-party analysts to identify business partners and operations that may pose human trafficking risks.
2. Education and monitoring: Recommendations include training programs for relevant representatives, media campaigns aimed at business partners and external stakeholders, hiring consultants to develop goals and performance indicators (and monitoring adherence to those goals), and conducting audits on political and socioeconomic status of countries where the company operates and how those conditions impact workers.
3. Requirements for suppliers: Recommendations include contractually required certifications from suppliers that show they are working to identify and eradicate trafficking from their operations and utilizing hotlines where workers can report abuses without fear of retaliation
4. Examining production and recruitment: Recommendations include managing demand so that production needs can be met by known and trusted partners, and policing recruitment practices to ensure recruiters are not engaged in charging fees that incur debt bondage.
5. Engage with your community: Recommendations include launching campaigns to promote awareness in the communities where businesses operate, and establishing task forces in collaboration with international organizations, nonprofits and business or trade associations to bring more attention to the issue.

The Chamber’s recommendations are just a starting point and the good news is that there are countless resources for guidance on how your company can help fight human trafficking and learn more about an urgent issue. (We’ve included links to a few key resources below.)

Combatting human trafficking requires attention from everyone. For a business, that’s where awareness and training come into play. In business impact and supply chain analyses for customers, Zurich Resilience Solutions will call attention to red flags related to trafficking, but companies need to scrutinize potential suppliers and vendors as fully as they can on their own, as the best time to prevent any association with traffickers is before contracts are signed and business agreements are made.

The global economy has brought the world many benefits in terms of broader product access, more open competition and cross-cultural enrichment. In enjoying some of the cost benefits this economic model has provided, however, we all need to have our eyes opened to a crime that is pervasive in many supply chains. Convenience, affordability and efficiency are essential to any successful business, but we all need to work to ensure that human freedom and dignity are valued above all else.