US Executive Order On Curbing Human Trafficking

The term “human trafficking” covers “the act of recruiting, harboring, transporting, providing, or obtaining a person for compelled labor or commercial sex acts through the use of force, fraud, or coercion.”

The requirements of the Executive Order are (along with the anti-trafficking provisions of the 2013 National Defense Authorization Act) reflected in the 2015 amendments to the anti-trafficking provisions in the Federal Acquisition Regulation (FAR) 52.222-50: Combating Trafficking in Persons.

The additional responsibilities associated with the Executive Order apply to all federal contracts, whether they are American or not, awarded after March 2, 2015, and they also flow down to subcontractors including agents.

Scope of the Requirements
In accordance with FAR 52.222-50, contractors are required to publish a compliance plan detailing their efforts to identify human trafficking in their supply chains and eradicate it, if:

• A contract is worth over $500,000
• It is performed outside the United States
• It involves i) services or ii) products other than commercially available off-the-shelf (COTS) items

Such contractors must also provide annual certification of compliance to procurement officers.

Contractors not falling into these categories are not required to publish compliance plans. However, they must still comply with the law by avoiding having trafficked persons in their supply chains.

Where’s the risk?
The biggest risk factor regarding human trafficking arises when organizations outsource their recruiting function, e.g. by hiring overseas labor agents to find migrant workers to overcome regional labor shortages. Labor agents can no longer make false promises to prospective recruits about the living and working conditions they can expect. Labor agents are also prohibited from withholding workers’ documents such as passports, and charging workers fees, which can take years to repay.

There is a high risk of labor abuses within electronics/electrical manufacturing. Naturally, this has implications for manufacturers of vehicles, defense systems and other products that use electronic components. Other fields identified as high risk include agriculture, construction, hospitality, and warehouse work.

It’s possible to find more information on risk by industry, product, or region in Verité’s report “Strengthening Protections Against Trafficking in Persons in Federal and Corporate Supply Chains”.

How can contractors reduce risk?
Contractors of any size may find it hard to comply with the new requirements relating to human trafficking in the FAR – and small and medium-sized firms without dedicated compliance teams may face particular challenges. Of course, failing to comply could have serious repercussions for contractors, including closure if they lose their government contracts. In addition, non-compliance may incur substantial fines or imprisonment. To reduce the risks of non-compliance, contractors must take preventive measures and, crucially, be transparent about any outstanding issues.

To help contractors and subcontractors meet the requirements of the Executive Order, the final version of the FAR includes some guidance. In addition, responsiblesourcingtool.org supports contractors in their efforts to develop systems that adequately monitor their performance on the issue of human trafficking in global supply chains. The online tool helps organizations to evaluate suppliers and to manage risk by directing them to resources and information relevant to management systems, supply chain monitoring, and compliance. Other measures that may be appropriate for contractors and subcontractors include retraining staff, inspecting facilities, and interviewing labor agents to assess their competence and integrity. Risk may also be significantly reduced if firms avoid outsourcing the recruitment function to labor agents and take the function back in-house. This may help to ensure that they follow the FAR requirements for recruiting migrant workers.

While the requirements for federal government contractors (and the penalties for non-compliance) may appear daunting, support is available from a range of sources. Taking this help may allow these organizations to avoid penalties, retain government contracts and enhance their ethical performance.

What can SGS offer?
SGS has been involved in social accountability since its inception and has provided tailored audit services since 1996.

We can support organizations through a range of services (including evaluating approaches to human trafficking and monitoring supply chains) as part of an overall due diligence approach to responsible sourcing. SGS also helps companies understand the product and labor supply chain through using the Transparency-One supply chain mapping platform.

With the largest network of highly trained auditors who are highly experienced in reviewing operational capabilities, labor standards, environmental compliance and business integrity, we can support your responsible purchasing policies.

For further information, please contact:

Adam Whinston
Director, Supply chain Assessments & Solutions
SGS North America, Inc.
t: +1 973 461 7950
email: cts.media@sgs.com

About SGS
SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity. With more than 85,000 employees, SGS operates a network of over 1,800 offices and laboratories around the world.

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This release was published on openPR.