The increased focus on the issue of human rights reflects a growing sense that private sector actors must take responsibility for violations with which they are associated.

1. Human Trafficking and the Private Sector
Countering trafficking and unfair labour practices by integrating
human rights into corporate values and operations.
Many companies struggle to understand where, when, and how human trafficking
occurs within their intricate supply chains. This lack of knowledge contributes to the
ongoing problem of forced labour, which affects approximately 40.3 million people
globally. Human trafficking and forced labour are particularly acute in Asia, where
workers across a range of sectors are often forced into exploitative work conditions
and modern-day slavery.
The length and complexity of corporate supply chains in today’s global economy
places companies across all industries at high risk of association with human rights’
abuses and unfair labour practices. High-profile exposés linking human trafficking
and exploitation to the supply chains of large companies have created a surge in
corporate social responsibility initiatives aimed at mitigating or remedying
transgressions.

2. Why Private Sector Should Bother?
Tackling human trafficking, forced labour and related human rights abuses is now
more than just an ethical imperative advocated by human rights’ groups or a
corporate social responsibility box-ticking exercise: it is now a business imperative
for the private sector and failure to manage them ‘could negatively affect a
company’s share price, brand value and operational performance’.
The increased focus on the issue of human rights reflects a growing sense that
private sector actors must take responsibility for violations with which they are
associated.
Business Risks Associated with Human Trafficking and Forced Labour
Legal Risk
Human trafficking and forced labour are considered crimes in most countries around
the world. Companies found involved or complicit in such activity could face
prosecution resulting in criminal or civil sanctions including fines, compensation to
victims and imprisonment. Trafficking and forced labour are also violations of
international human rights law.
Threats to Brand Value and Company Reputation
Allegations of human trafficking and forced labour can present serious threats to
brand value and company reputation, particularly for those companies operating in
consumer goods industries. Brand “contamination” can be difficult to reverse, and
allegations such as these can threaten both existing and future business partnerships,
resulting in a loss of contracts and/or future business opportunities.
Trade-Related Risk

3. In some countries, trade regulations strictly prohibit the import of goods that have
been produced by trafficked or forced labour. In these jurisdictions, allegations of
abuse can result in imported goods being seized by public authorities, inspected, and
released only when shown to be untainted.
Threats to Investment and Finance
Allegations of human rights abuse, forced labour and human trafficking can
significantly threaten investor relations and risk divestment from both ethical and
mainstream investors. They can also jeopardize access to public funds such as
export credits, as public authorities increasingly link the financial support they
provide to business with proven ethical performance.
Engaging the Private Sector
In recent years, business actors of all kinds have taken a number of steps in the fight
against human trafficking. This can be broadly categorized as “preventive” or
“protective” action, with the former focused on awareness raising, communications
and media campaigns, and the latter including measures to protect or correct wrongs
suffered by trafficking victims.
Prevention
Policy engagement and codes of conduct, Supply chain risk assessments, Mapping
and social audits, Awareness raising and capacity building of staff and suppliers,
Establishment of effective grievance mechanisms for workers, Supporting
community-level engagement, and Public advocacy campaigns.
Protection
Implementing corrective action where a case of trafficking is discovered, Providing
for the immediate protection of victims, Ensuring the right to redress and

4. compensation, Supporting the longer-term economic and social rehabilitation of
victims, and Reintegration into the community.
And, Partnership
The private sector also possesses characteristics that make it uniquely situated for
engagement and partnership in countering human trafficking and forced labour. In
particular, their position in relation to streams of commerce, focus on innovation,
and access to resources, position it as a potentially valuable partner. Leveraging the
private sector’s resources, innovative practices, and unique positioning will help
advance anti-trafficking efforts.
There are a range of opportunities for private sector partnership in the fight against
human trafficking on both the supply and demand sides of the equation.
Government regulation can serve an essential function in incentivizing the private
sector to use its unique characteristics and position to counter human trafficking.
Why Private Sector Should Be Motivated?
Every successful business must emphasize profitability; but it is just as critical for
success and sustainability that a business take a holistic, people-centered approach
that places human rights at the core. When companies promote corporate ethics,
values, and brand without embedding a meaningful human rights approach that is
operationalized throughout their business practices, these often remain figments of
public relations. This approach to countering trafficking does not penetrate the root
causes of the problems and contribute towards corporate sustainability.
Successful companies are good at business, but they are often less capable in
operationalizing human rights due diligence standards within their operations to
prevent trafficking and labour rights abuses from ever occurring. The boldest among

5. them will engage proactively with key stakeholders and embrace equitable and
ethical standards in meaningful, tangible, action-oriented ways.
A company must engage stakeholders (e.g., employees, communities, investors,
business partners, and government officials) in a transparent way that advances its
understanding and identification of human rights concerns and stiches a human
rights approach into the fabric of its corporate values. By failing to do so, effective
and sustainable solutions will not be reached, opportunities to collaborate and work
in step with other important actors will be foregone, and recurring challenges related
to human trafficking and forced labour will persist in supply chains.
Call For Action
Here are steps that companies can take to integrate human rights into corporate
values, and counter trafficking and unfair labour practices:
1. Adopt and implement the UN Guiding Principles on Business and Human
Rights (UNGP). This is the first global standard for preventing and
addressing the risk of adverse impacts on human rights linked to
business activities (including human trafficking and forced labour).
2. Use the UN Guiding Principles Reporting Framework. This easy to
understand tool aims to support companies in implementing and
reporting on their human right activities according to the UNGP.
3. Conduct a Human Rights Impact Assessment (HRIA) to identify the
potential human rights impacts, including human trafficking and forced
labour, within your company’s operations.
4. Employ human rights, trafficking and forced labour related
benchmarking tools:

6. • Corporate Human Rights Benchmark is the first initiative to compare the human
rights performance of the largest companies. Its methodology is based on the UNGP
and specific industry standards and has specific criteria for forced labour and human
trafficking.
• Know The Chain specifically focuses on benchmarking corporate performance on
forced labour and human trafficking in corporate supply chains.
5. Engage in strategic partnerships. Forming win-win partnerships with other key
stakeholders is an effective way to navigate the vast number of resources, initiatives
and available options to integrate a human rights centered-approach into corporate
values and operations.
Dhiraj Karki is the founder and senior consultant at dkompany, a
specialized economic consultancy providing strategic advisory services in
the field of trade, investment and development, as well as law, regulation
and compliance. Karki is a Nepalese national and has worked on private
sector development and inclusive economic growth issues in Kathmandu
for the past ten years. He can be reached at dk@dkompany.biz
This article has benefited from Karki’s recent association with Winrock
International where he served as a Private Sector Engagement Specialist
for USAID Hamro Samman, a 5-years program to counter human
trafficking in Nepal.
Originally published in Medium on October 31, 2017