Engaging Business to End Trafficking and Slavery

April 27, 2013Overseas Ministries Study Center, New Haven, CT

Rev. David M. SchillingInterfaith Center on Corporate Responsibility

Faith-based Investor Coalition•Founded in 1971, ICCR is a coalition of 300 religious investors from the Catholic, Jewish and Protestant communities in the United States with a combined investment total of over $100 billion •ICCR has over 60 associate members--socially responsible investment firms, public pension funds, union pension funds, foundations and universities.

ICCR

Faith Context “Faith communities evaluate companies, not

only by what they produce and their impact on the environment, but also by how companies contribute to sustainable community and protect or undermine the dignity of the human person. We believe these companies carry responsibility for the human and moral consequences of their economic decisions.”

Principles for Global Corporate Responsibility: Bench Marks for Measuring Business Performance

Faith Context

“The dignity of the human person, realized in community with others, is the criterion against which all aspects of economic life must be measured.”

Pope John XXIII, Mater et Magistra

Corporate Responsibility to Respect Human Rights

•ICCR members encourage companies to adopt comprehensive, transparent, verifiable human rights policies for their operations, business partners and suppliers •15 years ago, only a handful of companies had human rights policies •Today, 300 companies have adopted human rights policies and more to come www.business-humanrights.org

UN Framework on Business & Human Rights and the Guiding Principles establish a global norm for companies to respect human rights and implement a “human rights due diligence process:”

•Assess impact•Integrate findings•Track and•Report performance

Awareness of human trafficking for the purposes of forced labor/slavery and commercial sexual exploitation is growing among investors and

companies. Why?

Human Trafficking/SlaveryAn Egregious Violation of Human Rights

•Moral repugnance•Compliance with national laws•Serious risk and reputational issue•Consumer awareness•Assessing risk further down supply chains to commodity/materials level•Media stories (CNN’s Freedom Project)• Reporting requirements (CA Law; Dodd/Frank Law- “Conflict Minerals” reporting)

Human Trafficking/SlaveryKey Drivers of Greater Awareness

Women and girls are greater share of total (55%) Children 17 and younger account for 26% Majority subjected to forced labour in place of origin or residence (56%)

Source: International Labour Office (ILO) Special Action Programme to Combat Forced Labour (SAP-FL) 2012

Victims of forced labor by region

Source: International Labour Office (ILO) Special Action Programme to Combat Forced Labour (SAP-FL) 2012

PREVALENCE(per 1000 inhabitants)Central and South Eastern Europe …. 4.2Africa ….. 4.0Middle East ….. 3.4Asia and the Pacific ….. 3.3Latin America & the Caribbean ….. 3.1Developed Economies & EU ….. 1.5

Human Trafficking—Forced Labor/Slavery in Global

Supply Chains

ICCR members have engaged dozens of companies in the apparel, footwear, toy, electronics, automotive and consumer products sectors on supply chain codes of conduct, including prohibitions on forced and child labor.

Growing Expectations:Supply Chain Responsibility

• Beyond 1st Tier: “Monitor all suppliers, contractors, and sub-contractors, tracing to raw materials to ensure that measures are in place throughout the company’s entire supply chain(s) to prevent human trafficking” (Luxor Implementation Guidelines)

• Beyond Factory Walls—Role of Labor Brokers• California Transparency and Supply Chain

Law: “…to provide consumers with information regarding their efforts to eradicate slavery and human trafficking from their supply chains.”

Supply Chain Accountability: Labor Trafficking

1. A policy stating the company’s commitment to respect human rights, including language on trafficking/slavery

2. An assessment of actual and potential human rights impacts, including trafficking and slavery

3. Integration of the policy and corresponding assessment into internal oversight systems and independent monitoring programs

4. Training of employees, contractors and vendors

Supply Chain Accountability: Labor Trafficking

5. A clause in contracts with suppliers, host-government agreements and joint ventures stating a common repudiation of human trafficking/slavery

6. Alliances with appropriate authorities including police, anti-trafficking organizations, child welfare agencies and public-private partnerships with governmental institutions

7. Awareness raising and educational campaigns

8. Annual public reports on performance

Good practice:

Gap’s response to trafficked children in a sub-contracting factory in northern India through a multi-stakeholder, multi-layered industry-wide approach in 2007. Case Study in ICCR’s Social Sustainability Resource Guide:http://www.iccr.org/publications/2011SSRG.pdf

Human Trafficking—Forced Labor/Slavery in Global

Supply Chains

Government of India’s Ministry for Rural Development; Gap Inc.

• Worked with Indian Government, a local NGO, and an apparel supplier in Mewat to create a handwork center for embroidery for women.

• By helping build a skilled workforce and by addressing low employment, poverty and the other social ills that provide a breeding ground for human trafficking, it’s goal is to eradicate the practice.

350 women have been trained and are earning income that enables them to put their children in schools.

Human Trafficking and the Steel Industry

In 2006, Bloomberg Markets Magazine published a story on modern slavery, focusing on the production of pig-iron in Brazil. Every year, thousands of workers are forced to illegally harvest timber and produce charcoal under the most extreme and degrading conditions.

Charcoal produced at these camps is used to make pig-iron, which is ultimately sold to international buyers including Nucor, one of several companies named in the story.

Human Trafficking and the Steel Industry

Investor Engagement With NucorDomini Social Investments and ICCR co-filers submitted three shareholder proposals to Nucor in 2008-10, seeking a Board review of Nucor’s efforts to ensure fundamental human rights in its global operations and supply chain. Nucor agreed in 2010 to require all of its top Brazilian pig-iron suppliers to join the National Pact for the Eradication of Slave Labor or the Citizens Charcoal Institute (ICC).

BRAZIL

BRAZIL

Human TraffickingCommercial Sexual Exploitation of Children• ICCR members got involved in 2005, engaging

Marriott to adopt the ECPAT code of conduct to combat the commercial sexual exploitation of children.

• A shareholder resolution was filed and later withdrawn because:

• A high level company task force was set up

• Marriott adopted and implemented a policy protecting children

Engaging the Hotel Industry• Since 2005, ICCR members have engaged a number

of hotel chains.

Those that have adopted policies against trafficking include: Choice Hotels, Hilton, Host Hotels, Marriott International, Starwood, Wyndham Worldwide. Engagement of 8 hotel chains around World Cup; 9 hotel chains in London before Olympics.

Engaging the Airline Industry

• Airlines are being approached to do in-flight messaging on human trafficking and training of front-line personnel.

• Continental, United, US Airways and Delta/Northwest, which signed the ECPAT code in March 2011.

The London Olympics andHuman Trafficking

• Letters from investors with $58bn AUM to:– 13 hospitality companies– 21 Olympic sponsors

• Train staff and suppliers to recognize and avoid trafficking

• Monitor supply chains• Examine hiring and recruitment practices• Report publicly on progress

– International Olympic Committee• Website with tools and actions• Report highlighting good practice • Press

Finding and addressing labor trafficking in complex global supply chains requires working with a range of stakeholders to make progress

down to the commodity level.

Multi-stakeholder Initiatives

Examples include multi-stakeholder campaigns coordinated by the Responsible Sourcing Network at As You Sow: •Conflict minerals from the Congo that are used in electronic products

•Forced child labor in cotton fields of Uzbekistan

Multi-stakeholder Initiatives

Uzbek Government-Sponsored Forced Child Labor

What We Can Do:

• Awareness/education of congregations on trafficking and slavery issues

• Consumer choices. Go to: http://slaveryfootprint.org/#where_do_you_live

“How many slaves work for you?”• Get involved: Not For Sale-

http://www.notforsalecampaign.org/• Free2Work ratings of companies--

http://www.free2work.org/

ICCR ResourcesOn Trafficking/Slavery

•ICCR’s Human Trafficking and Modern Slavery Investor Statement http://www.iccr.org/news/press_releases/2011/pr_slaveryinvestorstatement062711.php•“Effective Supply Chain Accountability: Investor Guidance on Implementation of the California Transparency in Supply Chains Act and Beyond”http://www.iccr.org/news/press_releases/2011/pr_SB657_111711.php •Business Transparency on Trafficking and Slavery Acthttp://www.iccr.org/news/press_releases/2012/pr_slaveryact012612.php•“Celebration without Exploitation” http://www.iccr.org/publications/2012StrategiesToAddressTrafficking.pdf?id=1205

ICCR Resources on Trafficking/Slavery

•Rabbis for Human Rights-North America (ICCR member) http://rhrna.org/issuescampaigns/slavery-a-human-trafficking.html •ICCR Members’ global networks --Example, Catholic Relief Services (CRS) provides humanitarian relief and development assistance to the poor and marginalized in over 100 countries and territories around the world. http://crs.org/where/•Faith Based trafficking networks -- Example, Talitha Kum, a International Network of Religious Life Against Trafficking In Persons, based in 20 countries. Contact: Sr. Estrella Castalone uisg_talithakum@yahoo.it

Other Resources

•Global Business Coalition against Human Trafficking (gBCAT) http://www.gbcat.org•Luxor Guidelines to the Athens Ethical Principleshttp://www.endhumantraffickingnow.com/luxor_protocol.php•Dhaka Principles: Migration with Dignityhttp://www.ihrb.org/pdf/Dhaka_Principles/Dhaka_Principles_Long_version.pdf•Staff Wanted, Program of IHRB focused on labor trafficking in hospitality industry—London Olympicshttp://www.ihrb.org/pdf/Staff_Wanted.pdf

Thank Thank You!You!

Rev. David SchillingSenior Program Director

Interfaith Center on Corporate Responsibilitydschilling@iccr.org

www.iccr.org

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