Corporate Liability For Human Trafficking In Supply Chains
Corporate Liability for Human Trafficking in Supply Chains
Definition:
Human trafficking in supply chains occurs when companies, knowingly or negligently, use suppliers or subcontractors that exploit workers through forced labor, debt bondage, child labor, or coercion. Corporate liability arises when the company fails to conduct due diligence, ignores red flags, or actively participates in such exploitation.
Legal Framework:
International Laws & Guidelines:
UN Guiding Principles on Business and Human Rights (2011) – Obliges companies to prevent human rights abuses in supply chains.
ILO Conventions – Prohibit forced labor and child labor.
UK Modern Slavery Act 2015 – Requires corporate reporting on slavery and human trafficking in supply chains.
US Trafficking Victims Protection Act (TVPA) & California Transparency in Supply Chains Act – Enforce liability for complicity in human trafficking.
Domestic Criminal Laws: Companies may face prosecution under anti-trafficking statutes, labor laws, or anti-slavery provisions, depending on the country.
Civil Liability: Corporations may be sued for damages caused by negligence in preventing trafficking, under tort or corporate law.
Key Cases
1. Nike and Indonesian Sweatshops (1990s–2000s)
Facts:
Nike faced allegations that its Indonesian suppliers used child labor and forced overtime, amounting to human trafficking-like exploitation.
Legal Findings:
Workers were paid far below minimum wage and worked in unsafe conditions.
Evidence suggested systematic exploitation, but Nike argued it did not directly employ the workers.
Outcome:
Negative publicity led Nike to adopt strict monitoring and compliance programs.
No direct criminal charges, but civil suits and public pressure highlighted corporate liability for supply chain abuses.
Significance:
Established that companies may be responsible for human trafficking in indirect supply chains even without direct employment.
2. Trafigura and Ivory Coast Toxic Waste Case (2006–2007)
Facts:
Trafigura subcontractors allegedly exploited workers in handling toxic waste in Abidjan, using coercion and unsafe labor conditions.
Legal Findings:
Subcontractors subjected workers to hazardous conditions without protective measures.
Company faced allegations of negligence in selecting contractors and oversight.
Outcome:
Civil settlements were paid to affected workers and communities.
Highlighted corporate responsibility for trafficking and exploitation by third-party contractors.
Significance:
Shows liability arises when companies fail to ensure human rights compliance in outsourced operations.
3. H&M and Garment Factory Exploitation (Bangladesh, 2013–2015)
Facts:
H&M was found to have suppliers using child labor and bonded labor in garment production.
Legal Findings:
Audits revealed children under 15 working in unsafe conditions.
Management initially failed to terminate contracts, raising questions about due diligence.
Outcome:
H&M implemented a strict supplier code of conduct and remediation programs.
While criminal prosecution did not occur, civil liability was discussed in EU courts.
Significance:
Reinforces due diligence obligations under international human rights norms.
4. Nestlé and Cocoa Supply Chains in West Africa (2015)
Facts:
Nestlé faced allegations that cocoa suppliers used forced child labor and debt bondage, amounting to human trafficking.
Legal Findings:
Investigation revealed children working long hours under coercion.
Nestlé was accused of not adequately monitoring its multi-tier supply chain.
Outcome:
US courts considered civil claims under TVPA and the Alien Tort Statute.
Nestlé strengthened its supply chain auditing and remediation programs.
Significance:
Demonstrates corporate civil liability in human trafficking cases in supply chains.
5. Unilever and Palm Oil Suppliers (2016–2018)
Facts:
Unilever’s palm oil suppliers in Southeast Asia were found using migrant labor under exploitative conditions, including passport confiscation and forced labor.
Legal Findings:
Independent audits confirmed systematic coercion of migrant workers.
Unilever had policies but enforcement was weak, creating liability exposure.
Outcome:
Company implemented stricter monitoring, supplier audits, and remediation measures for trafficked workers.
Significance:
Highlights liability for systematic, ongoing exploitation in complex global supply chains.
6. Samsung Electronics and Korean Subcontractors (2017–2019)
Facts:
Samsung’s subcontractors for electronics assembly allegedly underpaid workers and forced overtime, with reports of coercion and unsafe conditions.
Legal Findings:
Audits revealed pressure on workers to meet quotas under threat of dismissal, fitting patterns of forced labor.
Workers’ rights groups filed complaints alleging complicity in human trafficking-like practices.
Outcome:
Samsung revised its global supplier code of conduct, increased audits, and paid settlements to affected workers.
Significance:
Demonstrates corporate liability for human trafficking in technology supply chains.
Key Takeaways
Corporate liability arises when companies:
Knowingly use trafficked labor
Fail to conduct reasonable due diligence
Ignore credible reports of trafficking
Liability can be criminal, civil, or regulatory depending on jurisdiction.
Common risk sectors: apparel, electronics, palm oil, cocoa, shipping, and logistics.
Preventive measures:
Robust supplier audits
Transparent reporting under laws like UK Modern Slavery Act
Worker grievance mechanisms and remediation policies
Cases show that even indirect involvement via subcontractors can trigger liability.
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