Passport with visa stamps

In previous Vision articles, we have pointed out that inadequate screening and oversight of brokers, recruitment agents, and labor outsourcing providers almost invariably leads to both legal and code of conduct non-compliances. It is closely correlated with the presence of indicators of forced and bonded labor in facilities that employ foreign migrant workers. Suppliers, and foreign subsidiaries, frequently delegate responsibility for the recruitment and management of migrant workers to receiving country recruitment agents or labor providers, who in turn work with long-term sending country “partners” to pool, select, and dispatch foreign workers. Employers and their labor providers consistently claim that they are not aware of the process undertaken by the sending country partners to procure foreign workers, and facility contracts rarely address these issues.

This is a mistake.  Suppliers and subsidiaries are more closely connected to the labor intermediaries in their supply chain than they realize or disclose. In the case of most sending countries, the employing subsidiary or supplier to which its nationals are being dispatched, and the terms and conditions of employment, must be approved or attested in advance at the sending country Embassy, Consulate, Labor Attaché or similar entity in the receiving country. Further, the subsidiary or supplier has to provide a raft of supporting documents, many of which must be notarized, and pay fees that can amount to hundreds of dollars. In addition to providing undertakings in the form of affidavits to the sending country government about the treatment of its foreign migrant workers, the employer must identify both receiving and sending country recruitment agents and, importantly, provide evidence that it has assigned Power of Attorney to said agents to act as legal representatives with respect to the recruitment and dispatch of the approved workers. In many sending countries, foreign workers also require an exit visa or foreign employment permit issued to them with the “approved” foreign employer as a named beneficiary.

The existence of these documents, undertakings, and processes means subsidiaries and suppliers cannot afford to disown or deny responsibility for recruitment agents and others working on its behalf based on a variety of legal theories, including traditional agency principles.

Verité consistently advises companies that holding foreign subsidiaries, franchisees and suppliers accountable for the entire foreign contract labor supply chain is the single most effective step they can take to mitigate risk and effectively uncover and address the root causes of trafficked workers and forced labor in supply chains. This requires active due diligence, including assessments of the labor providers themselves.

Fortunately, there is substantial information now available about the third-party labor intermediaries that populate supply chains. Verité is piloting a philanthropically funded project to create a transformative analytical product that will enable companies to unravel complex labor supply chains and identify risks of human trafficking and forced labor within them. Working closely with participating companies, Verité will integrate corporate supply chain data, targeted field research on recruitment patterns and networks, and pertinent public information into a database platform. Verité experts will analyze the integrated data to illuminate particular labor supply networks and flag specific risks connected to one or multiple companies’ supply chains. This data, augmented by Verité’s high-quality analysis and targeted recommendations, will be pushed to web-based applications that provide companies valuable information and actionable intelligence.

For more information contact Declan Croucher, Director of Business Development.

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