Modern-Day Slavery



Each day, the 39 Filipino nationals worked up to 16 hours at South Florida country clubs, golf courses and restaurants that cater to a wealthy clientele.

Each night, they returned to crowded homes in a quiet residential neighborhood in Boca Raton where food was scarce and barely edible.

Meals sometimes consisted of chicken feet soup and rotten vegetables. When one complained, the owners of Quality Staffing Services forced her to drink muriatic acid, causing her lasting stomach problems, according to advocates for the workers. When another worker broke his wrist, he was refused medical care for more than a week, leaving him permanently disabled, they say.

Despite the long hours, these employees received little or no pay for their work. Their wages were nearly depleted after owners of the staffing agency deducted fees for food, housing, even for showers. The workers couldn't pay off the $5,000 they had borrowed to pay the recruiting fees to the agency. They weren't allowed to leave their homes without an escort. Their visas were withheld. Complaints were met with threats—against them and their families back home.

They were modern-day slaves, a concept incomprehensible to most Americans.

"You had an unscrupulous staffing agency that would literally dupe these workers into coming over thinking they were going to have the American dream, only to find out shortly thereafter that the dream was actually a nightmare," says Carmen Pino, assistant special agent in charge of the U.S. Immigration and Customs Enforcement's Homeland Security Investigations, who investigated the case. "They were in this perpetual trap."

In December 2010, agency owners Alfonso Baldonado Jr. and his wife, Sophia Manuel, were sentenced to more than four years in prison for human trafficking. The employers that hired the workers weren't charged because they weren't aware of the workers' plight, Pino says.

However, such cases underscore how easily HR professionals and their companies can become inadvertently involved in trafficking through the actions of labor providers, subcontractors or suppliers. They can face costly legal troubles, lost business and lasting damage to their reputations.

U.S. consumers' recent outrage regarding workers' suicides and alleged child labor at Apple's major manufacturing contractor—Foxconn Technology in China—illustrates a potential repercussion. In February, Apple announced it would hire an independent organization to inspect Foxconn facilities.

Government and law enforcement officials have increased their vigilance, too. U.S. State Department officials are working with their counterparts in other countries to enforce international treaties that outlaw human trafficking. U.S. Justice Department officials are coordinating federal and state efforts to pursue traffickers operating in the United States. Meanwhile, a new California law is adding pressure on companies doing business in that state by requiring them to publicly disclose what they are doing to prevent human trafficking in their supply chains.

Traditionally, many HR professionals have concerned themselves only with their direct employees—ignoring what happens beyond their walls. But some experts now are urging those in HR to help their companies build cultures that respect and protect the human rights of all workers—wherever they might be.

"Just like you've got to know where your raw materials come from, you've got to know where your people come from. I think HR people are just awakening to this. 'How do I unleash the potential of people through the whole supply chain?' " says Mara Swan, ManpowerGroup's executive vice president of global strategy and talent.

How Widespread?

More than 27 million people worldwide are victims of human trafficking, which is estimated to be a $32 billion industry, according to a 2011 State Department report. It's the fastest-growing criminal activity after drugs and weapons trafficking. Immigrants, especially those who are poor, desperate for work or fleeing violence, remain particularly vulnerable. Last year, the U.S. Department of Labor reported that 130 types of goods in 71 countries were produced with forced labor, child labor or both.

Although many might conclude that human trafficking occurs only in developing countries, the U.S. has become a top destination for victims lured by promises of work and then forced into modern-day slavery, according to government and human rights groups. Estimates of U.S. victims range from 17,500 to 100,000 citizens and immigrants at any one time.

A majority of those people may be victims of sex trafficking, but victims' advocates say the number of individuals coerced to work for little or no pay is growing as economic pressures force executives to trim costs and make leaders more receptive to presumed legal sources of cheap labor. Others say those trapped in forced labor aren't always recognized as victims, so their numbers are underreported.

"They're hidden in plain sight. You see these people every day," Pino says.

Alberto Pozzi, general manager at Miami Shores Country Club in Miami Shores, Fla., says he had no idea that workers he hired through Quality Staffing Services were being abused—until he read about it in the newspaper. "I was flabbergasted, to be honest," Pozzi says. "These people never had a word or outward indication that they were unhappy."

Legal Battles

The owners of Quality Staffing Services, incorporated in Florida, were charged under various federal laws. But the primary law used against human traffickers is the federal Trafficking Victims Protection Act passed by Congress in 2000. Strengthened by subsequent amendments, the law prohibits the use of physical force, fraud or psychological coercion to retain workers against their will. Employers can be liable if they know about or profit from trafficking. The law allows temporary visas for victims who testify against their abusers.

Federal government task forces opened 2,515 suspected incidents of trafficking for investigation from January 2008 to June 2010. Of those, 29 percent involved labor trafficking, according to the U.S. Bureau of Justice Statistics.

Last year, the U.S. Equal Employment Opportunity Commission (EEOC) filed lawsuits against a labor broker, Global Horizons of Beverly Hills, Calif., and eight farms in Washington state and Hawaii, alleging that they subjected more than 200 Thai men to low pay, vermin-ridden housing and physical assaults by overseers. In another suit, attorneys contend that Signal International, a marine services company with facilities along the Gulf Coast, subjected 500 Indian welders and pipefitters to unsanitary housing and bad food, for which they were charged an inordinate amount of money.

Such civil suits can be easier to prove than criminal cases, where the threshold for a guilty verdict is "beyond a reasonable doubt." Six years ago, the EEOC's Los Angeles office reached a $1 million settlement with Trans Bay Steel Inc. to compensate 48 Thai welders held against their will and forced to work without pay.

In addition to federal law, all but two states—West Virginia and Wyoming—have laws prohibiting some form of human trafficking, according to the Polaris Project. The nonprofit organization advocates for stronger federal and state laws, operates the National Human Trafficking Resource Center hotline, and provides support for victims.

Private lawsuits can be filed on behalf of victims. In Louisiana, a federal judge in December granted class-action status to more than 350 Filipino teachers suing two labor contractors, Universal Placement International of Los Angeles and Manila-based PARS International Placement Agency, under the federal anti-trafficking law. The teachers were allegedly tricked into paying as much as $16,000 in recruiting fees and charged high rates for substandard housing.

While the East Baton Rouge Parish School Board has been dismissed from the case, its top HR official, Elizabeth Duran Swinford, formerly associate superintendent for human resources, is still named as a defendant. Attorney Dennis Blunt denies wrongdoing: The school board and its employees "bore no responsibility for whatever fees they [the teachers] agreed to pay … to a placement company they hired." 

But Jim Knoepp, senior staff attorney for the Southern Poverty Law Center, who represents the teachers, says school officials should have known who was paying the recruiters' fees. "Whenever someone tells you it's not going to cost you anything, maybe you should look behind the curtain to see who it is going to cost," Knoepp says.

Zero Tolerance

In 2006, ManpowerGroup was the first company to sign the Athens Ethical Principles, a voluntary public-private accord that declares a zero-tolerance policy for working with any entity that benefits in any way from human trafficking. The policy includes signatories' clients, vendors and business partners.

"We had to protect our reputation, our people and our clients from working with these bad actors who are exploiting workers and participating in human trafficking," Swan says.

Today, more than 12,000 private employers have signed the Athens accord. David Arkless, ManpowerGroup's president of corporate and government affairs, serves as president of the board of End Human Trafficking Now, a Geneva-based organization created to assist businesses in adopting the zero-tolerance policies.

While many senior leaders assign responsibility for monitoring and training personnel at international factories to corporate social responsibility (CSR) teams without collaboration with HR departments, ManpowerGroup's structure places those functions under Swan's HR umbrella—along with communications, marketing and innovations. The CEO deliberately grouped the functions together to strengthen the culture of valuing human rights, she says.

"When you have integration like we have, we can actually say we have changed behavior," Swan says. "I feel very strongly that HR understands behavior better than anyone else in the organization." Every communication connects to the company's purpose of protecting human rights, she adds.

Social Responsibility for HR

Most HR professionals don't understand the implications of managing human rights, says Elaine Cohen, a CSR consultant and author of CSR for HR: A Necessary Partnership for Advancing Responsible Business Practices (Greenleaf, 2010).

"They don't consider it part of their role, unless someone plunks it down on their desks. They just, unfortunately, stay very unaware of this issue," Cohen says.

In a Society for Human Resource Management survey of more than 700 HR professionals in the United States released last year, only 6 percent of the respondents confirmed that HR was primarily responsible for creating the CSR, or sustainability, strategy and 25 percent indicated that HR was involved in implementing such strategy.

Yet HR professionals can bring critical skills to the endeavor, including the ability to create and drive organizational culture, to lead change management processes, and to enhance organizational and individual capability for CSR issues such as human trafficking, Cohen says.

Engaging Business

In February, The Coca-Cola Co. co-hosted its fifth conference on human trafficking since 2008, bringing together more than 115 business leaders to hear the diverse perspectives of victims' advocates, socially responsible investor groups and law enforcement officials.

The conference was sponsored by the U.S. Council for International Business, the U.S. Chamber of Commerce and the International Organization of Employers.

The annual gathering was an opportunity to make other companies more aware of a problem that might not be on their radar, says Ed Potter, director of global workplace rights for Coca-Cola.

Potter says he's an anomaly because he reports to the company's senior vice president and chief people officer, Ceree Eberly. He has dotted-line responsibility to the company's new chief sustainability officer, Beatriz Perez. Most conference attendees work for their CSR, compliance or legal teams, he says.

Coca-Cola's HR team "owns" 22 of the 30 basic human rights outlined in the United Nations' Universal Declaration of Human Rights, Potter explains. The HR team wrote the company's human rights statement and workplace rights policy and is responsible for championing them.

"We understand there cannot be a sustainable business unless there are sustainable communities. So to one degree or another, it's part of everyone's job to own sustainability," he says.

The company provides guiding principles for U.S. and international franchise bottlers and companies in its global supply chain. The HR team has primary responsibility for developing and providing training on the policies. All direct employees are required to certify annually that they have read the policies, acted consistently with them and reported known violations.

Suppliers are audited by an independent organization to ensure compliance, and there are numerous in-person training programs each year with suppliers' employees. The company's migrant labor human rights tool is used globally to identify potential issues and remedy them.

"The issue of human rights should be part of the totality of human resources," Potter says. While auditing suppliers may be supervised by another department, there must be cross-functional collaboration, he adds.

Down the Line

The apparel industry's sweatshop scandals in the 1990s caused companies such as Gap and Nike to create elaborate systems for conducting third-party audits and inspecting factories in other countries.

Other companies are getting a crash course in human rights as they struggle to comply with the California Transparency in Supply Chains Act, which became effective in January. The law requires retailers and manufacturers with more than $100 million in annual revenue doing business in the state to disclose on their websites their efforts to eliminate human trafficking from their supply chains.

"It's positive peer pressure," says Mary Ellison, director of policy at the Polaris Project. If one company is seen doing a good job, she explains, others will want to do the same.

Some attorneys also are seeing a ripple effect. Suppliers, who aren't bound by the law, are being asked by customers to set up monitoring systems, says David S. Christy Jr., a partner with Thompson Hine LLP in Washington, D.C. Then suppliers have "to take that [request] to their suppliers," he adds.

Catherine Cormier, PHR, HR manager at Tower Laboratories Ltd. in Centerbrook, Conn., learned about the California law from a vendor. She was shocked when she read about modern-day slavery. Although attorneys told her Tower wasn't required to take action, she proposed that her 150-employee company take a stand against human trafficking. She plans to send the company's other vendors a questionnaire about their practices.

"We do pride ourselves on being socially responsible," Cormier says.

Patricia Jurewicz, director of the Responsible Sourcing Network, a project of San Francisco-based CSR advocacy group As You Sow, anticipates that consumers will study what companies post to their websites and compare their activities.

Google recently donated $11 million to three nonprofits to gather more data on human trafficking and increase public awareness. Some funds will go to Slavery Footprint, operator of a website where consumers can find out whether products they use have been manufactured with slave labor.

The complex economic, political and cultural pressures that allow human trafficking to flourish in some countries are impossible for one company to tackle alone, says the Rev. David Schilling, director of human rights and resources for the Interfaith Center on Corporate Responsibility, a coalition of religious institutional investors.

That's why many executives are joining other businesses, advocacy groups or government agencies to share best practices and improve desperate economic conditions that make individuals vulnerable to traffickers.

As for the Florida workers, they spent three years waiting for the court case to be resolved. Some went through counseling. Others were treated for medical and dental problems. Some went back to school and learned trades.

"We wanted to give them the choices that the traffickers took away," says Anna Rodriguez, executive director of the Florida Coalition Against Human Trafficking, whose counselors aided the trafficked workers.

All former victims are now employed in various states. Six have been joined by their families. Three are expecting babies, she says. With help, maybe one day they will realize their American dreams.

The author is a senior writer for HR Magazine.

Discuss Modern-Day Slavery

• What does your organization do to guard against human trafficking and protect the human rights of all workers?
• What is the HR role?
• What is your company doing in response to the California Transparency in Supply Chains Act?

Web Extras

• Web chat: Slavery and Your Supply Chain. Attorney Trenton Norris of Arnold & Porter LLP. See archived web chat here.
• Online sidebar: Keep an Open Ear 
• Online sidebar: When Does It Become Trafficking? 
• Online sidebar: Hotels Guard Against Sex Trafficking 
• SHRM article: New California Law Focuses on Human Trafficking (Legal Issues)
• SHRM article: DOL Announces Final Rule on H-2B Foreign Labor Certification Program (Global HR Discipline)
• Report: Trafficking in Persons Report (U.S. State Department)
• Report: List of Goods Produced by Child Labor or Forced Labor (U.S. Department of Labor) 
• Website: U.S. Department of Justice 
• Declaration: The Universal Declaration of Human Rights (United Nations) 
• Report: Guiding Principles on Business and Human Rights (Human Rights Council) 
• Website: United Nations Global Initiative to Fight Human Trafficking  
• Online training: United Nations Global Initiative to Fight Human Trafficking
• Online tool: Identifying Victims of Human Trafficking (Polaris Project)
• Website: End Human Trafficking Now
• Report: Effective Supply Chain Accountability (Interfaith Center on Corporate Responsibility)
• Website: Polaris Project
• Website: Slavery Footprint
• Website: Alliance to End Slavery & Trafficking
• Policy: Human & Workplace Rights, including suppliers’ guidelines, workplace rights policy and human rights statement (The Coca-Cola Co.)
• Website: ManpowerGroup
• Case studies: Forced Labour, A Handbook for Employers and Business (International Labour Organization)
• Article: New California Law Requires Disclosure Regarding Human Trafficking (Arnold & Porter LLP)