Human trafficking is one of the most important problems in the modern world and it is one of the fastest-growing forms of international crime. Human trafficking refers to a complex global phenomenon that includes sexual exploitation, forced criminality, the deployment of child soldiers, and indentured servitude and forced labor. The United Nations’ International Labor Organization (ILO) defines forced labor as “all work or service which is exacted from any person under the menace of any penalty, and for which the said person has not offered himself voluntarily.” ILO’s indicators of forced labor include restriction of movement, withholding of wages, debt bondage, abusive working and living conditions, excessive overtime, and retention of identity documents. All forms of human trafficking, including forced labor, have devastating impacts on the victims.
Human trafficking and forced labor thrive in both developing and industrialized economies. These transnational crimes have been identified in the global supply chains in several sectors, including agriculture, forestry, fishing, travel and tourism, hospitality, mining, garments and textiles, and food processing. Per the Global Slavery Index, 2018, the United States was ranked first among G20 countries in importing goods made by the most at-risk individuals, such as victims of forced labor and human trafficking.
According to the Trafficking in Persons Report 2020 of the U.S. State Department, traffickers often use child labor and forced labor to produce high volumes of goods at low prices. Traffickers offer loans and manipulate the debts to coerce workers into continued employment. The indicators of forced labor include excessive hours of work or forced overtime, deductions of costs and expenses from wages, payment of wages delayed or withheld indefinitely, debt owed to employer or recruiter, deception about the nature of work or location, physical or psychological coercion, and lack of access to identity or travel paperwork. It is encouraging that there is an increasing awareness among consumers about the use of forced labor in food and retail production, which impacts their purchasing behavior. According to a survey conducted by Fair Labor Association, 92% of the consumers believe companies should be transparent about product sourcing and 80% say that they are likely to search for products that ensure the suppliers do not employ child labor or forced labor.
Extensive and multilayered manufacturing channels make it difficult for companies to monitor their many supply chains. Some suppliers are selling directly to retailers or distributors, whereas others may have several intermediaries such as labor recruiters, brokers, and subcontractors in between growers or producers and retailers. It is a common practice that upon the arrival at their destinations of employment, the workers quickly learn that the working conditions are different than what was offered to them. They are expected to work longer hours for lower wages, owe money to the recruiter with interest, and their ID documents are often taken from them. Frequently, they do not speak the local language and lack access to law enforcement agencies. They can be worried about penalties for working illegally or their immigration status and feel trapped. In these cases, corporations have a responsibility to ensure integrity at every step of their product or service’s journey, from raw material procurement to the purchase by the final consumers.
The Use of Technology to Fight Forced Labor
Multi-level supply chains in today’s global economy makes it harder for companies to identify forced labor via complex employment practices. New technologies can assist companies to work with vendors that follow ethical practices in their supply chain. Currently, the tools to detect and prevent forced labor practices are limited because of the multiple layers in the supply chain. Potential solutions to this problem include the use of blockchain and artificial intelligence (AI).
Blockchain is a decentralized, immutable, and publicly accessible ledger of information that enables users to share data and make transactions without a third party. Blockchain technology prevents any party from making an addition or alteration without the consensus of the group. As a result, all records remain unchanged and can be viewed by participants at any time. Blockchain technology provides transparency from the source point to end consumption. Blockchain technology can play a significant role to combat forced labor and prevent the exploitation of workers via transparency in supply chain management. For example, in some situations, workers from developing countries do not have an official identity document, which makes it more difficult to track their movement. Biometric information such as fingerprint and iris scans create a virtual identity for workers and eliminates the need for paper documentation. As a result, the reliance on paper documentation and the confiscation of identity would no longer be a means of control. Traditional paper contracts can easily be changed during the transportation process, especially for overseas employees. Blockchain technology could prevent changes such as lower wages than promised or additional fees and work hours.
The partnership between the private industry and the non-profit sector could create solutions to this problem. For example, the cooperation of the tuna fishing and processing company Sea Quest Fiji with World Wildlife Foundation, technology company ConsenSys, and technology implementer TraSeable Solutions in Fiji in 2018, resulted in the launch of a pilot project. The goal of the project is to track supply chain management, prevent slave labor, and eradicate illegal fishing. The project uses QR codes to track products on the blockchain. Scanning a can of tuna packaging using a smartphone app shows the journey of the tuna fish, where and when the fish was caught and by which vessel and fishing method. The technology also enables the end user to scan a QR code by using a smartphone app which will tell the story of the tuna fish, such as where and when the fish was caught, and by which vessel and fishing method. Therefore, the consumer can verify the fish they are consuming was legitimately sourced.
Another example of the cooperation between the private and public sectors to fight forced labor is the project undertaken by Diginex, a global blockchain solutions company and The Mekong Club, an anti-slavery nongovernmental organization (NGO). Diginex and The Mekong Club have joined forces with data analytics platform Verifik8 to pilot a blockchain-based app called eMin, which has been piloted in Thailand, Malaysia, and Bahrain. The eMin app allows for copies of employment contracts stored on the blockchain and workers can access a secure copy of their contract at any time, bringing transparency to the recruitment process. Companies are also able to audit their supply chains easily, with the comfort of knowing the information is immutable. The eMin app is designed to take a significant step toward improving the lives of migrant workers and to reduce the chances of exploitation, by engaging both the private and public sectors. Over time, the eMin app has turned into a comprehensive management system, complete with functions for securing all documentation using blockchain, beyond the employment contract, as well as grievance management. The Mekong Club promotes the eMin app with companies across different industries in order to include more factories and locations. Matt Friedman, CEO of The Mekong Club, said, “eMin improves the lives of migrant workers, to give them secure access to their documentation, but also is being used to identify issues that otherwise may not have been picked up.”
Developments in artificial intelligence (AI) technology can assist in identifying forced labor’s often complex employment practices. Free-form text and unstructured data can help identify forced labor patterns, and data mining can assist in tracking illicit behaviors.
A nonprofit organization called Made in a Free World focuses on developing solutions to human trafficking with a supply chain management software called Forced Labor Risk Determination & Mitigation (FRDM). FRDM allows corporate users to track their supply chains and detect forced labor issues. It uses machine learning to measure forced labor risks at each level of production in real time rather than only monitoring the last stage of the supply chain. FRDM software uses predictive algorithms by collecting data on which countries and industries source which materials and products from which places, as well as which materials are used to make different products. In the next step, the software uses an algorithm to predict the likelihood a given product was made with forced labor. Corporate customers of FRDM use the software to upload their purchases and the FRDM database provides supplier insights to various stages of the supply chain and identifies the riskiest suppliers. The software allows corporations to make informed decisions regarding raw material purchases and link suppliers to purchases to view risks to purchases beyond Tier 1 suppliers. As a result, corporations can compare company efforts against industry norms. FRDM partners with global business marketplaces and supply chain payments providers like SAP Ariba or Tradeshift and allows businesses to review their complex supply chain via the FRDM database. It is important to detect forced labor practices and it encourages companies to publish documents like third-party labor compliance certificates to their customers through the software, showing that their products are ethically sourced without forced labor.
At the heart of forced labor, in all its forms, including modern slavery and human trafficking, is the exploitation of vulnerable people for financial gain. Therefore, the financial services industry, particularly firms that handle cash — such as money services, remittance businesses, and retail banking — is both a key component in the facilitation of this crime as well as a key focus area for those fighting it.
For example, criminals or their representatives, generally use a range of personal and business accounts to help launder the resulting proceeds of the criminal act, as well as facilitate it. From these accounts, a full range of legitimate financial products and services become available, including cross-border payments, correspondent banking, and trade financing, as well as common retail banking services.
These legitimate financial products enable criminals to both fund activities such as recruitment advertising, flights and transport, food, entertainment, and accommodations for enslaved captives and to create distance and complexity between themselves and the original illicit source of funds.
In addition, criminals may seek financial loans and bank investment in businesses linked to industries such as agriculture, cleaning, food packaging and processing, manufacturing, food service and hotels, retail, transport, and warehouse and distribution that appear legitimate but have a high incidence of forced labor/modern slavery due to their complex supply chains and historic recruitment of migrant workers.
While criminals seek to anonymize themselves and their networks, financial footprints and data trails can be used to detect and disrupt these operations. Technology can connect the dots and provide the necessary insights and intelligence to support investigations.
Uncovering suspected forced labor and human trafficking typologies in all forms is one of the issues tackled by UK-based decision intelligence company Quantexa, whose key focus is on gathering information from NGOs, news source databases of known traffickers, and internal information held by financial institutions to make actionable intelligence. By resolving these separate entities, context-driven AI technology builds a detailed picture of both the criminal’s network and how the victim and the various professional enablers that facilitate forced labor are connected.
Traditional human intelligence is often gathered in a particular country by charities monitoring news sources, hearsay, and other resources. With many charities operating within a single country, and trafficking often spanning countries, information needs to be shared with governmental and intragovernmental organizations to compile a broader profile of a trafficker or activity. This traditional intelligence, however, is usually not sufficient to identify a network of traffickers, particularly within financial services companies.
Construction Project Example
Through the application of entity resolution and network generation, an organization identified a range of forced labor/modern slavery risk indicators that suggested a construction project was exploiting migrant workers. Industry red flags were compared against a resolved dataset that combines the financial institution’s data with external third-party data to find and score hidden connections and behaviors.
Modern Slavery/ Forced Labor - Linked to a Construction Project
Red Flags of Worker Exploitation
Construction projects that outsource labor supply to agencies rather than directly employing workers limits oversight of the contracts that those workers have with the agency employing them.
Construction agencies that recruit high volumes of migrant workers.
Many workers are housed in one location and driven each day to and from the construction site.
Using a combination of human intelligence and digitally compiled insight, organizations can identify traffickers and their connections.
The increase in the awareness of forced-labor conditions globally among the customers, businesses, and governments in recent years resulted in an increased demand for goods produced under fair labor standards. Businesses are expected to have an understanding of their supply chain, take action when necessary, and work with ethical suppliers. Supply chain transparency is fundamental for businesses to detect labor violations and allows them to conduct risk assessment regarding labor.
It is encouraging that consumers prefer ethically sourced goods, businesses are inclined to adhere to fair labor practices, and governments are introducing new laws and regulations to prevent forced labor practices. The use of technology via blockchain and AI can help to detect and eradicate forced labor by increasing transparency in the work chain and assisting businesses that rely on third-party relationships to detect suppliers using forced labor.
Special thanks to Guidehouse's contributing author Balki Aydin.
This article was co-created with Anti-Human Trafficking Intelligence Initiative (ATII) Aaron Kahler, Sam Graber and Resham Sethi and Quantexa's Alexon Bell and Matthew Long.