January 01, 2013

Overview and Structure

Background

By taking simple steps within its operations, a Business can have a significant impact on Labor Trafficking and Child Labor. These are major problems. The International Labour Organization (the “ILO”) estimates that 20.9 million men, women and children are forced into labor around the world, with 68% (14 million) forced to work in traditional industries, such as construction, mining, agriculture, domestic work or manufacturing. Another 22% (4.5 million) are involved in forced sexual exploitation, and 10% are involved in State-mandated labor.  The ILO reports that the number of working children has declined by one-third since 2000, but still stands at 168 million with 60% (98 million) in agriculture and more than half (85 million) in hazardous work.   Despite the decline, that total equals more than half the entire population of the United States. As former UN Secretary-General Kofi Anan stated regarding child labor, “[f]ew human rights abuses are so widely condemned, yet so widely practiced.” 

In 2012, ABA President Laurel Bellows (2012-13) prompted the ABA to form a Human Trafficking Task Force to attack human trafficking from a legal standpoint.  Its efforts include training lawyers and law enforcement officials, who are often the first people to respond to trafficking situations; strengthening pro bono networks to ensure that all civil legal needs of trafficking victims are addressed; and holding a media campaign on the issue, including a new video that will explain how the legal community can help. See, Laurel Bellows, Breaking the Shackles: More Must Be Done to End Human Trafficking and Help Victims, A.B.A. J., Sept. 1, 2012.

Business enterprises also have a key role to play, and some are at the forefront of this fight. Their market power can have an effect that no regulator can. President Bellows asked the ABA’s Business Law Section to develop best practices for business enterprises if they encounter human trafficking. One key need in the business community  is the development of acceptable business policies or codes of conduct to address Labor Trafficking and Child Labor. Some business enterprises have their own policies to address these issues, but many do not. Even those that do can benefit from seeing model policies that reflect best evolving practices. Yet there currently are no standard or widely adopted policies on these matters within the United States.

The Business Law Section responded to President Bellows’ request by creating a Working Group composed of over 50 leading business law experts which prepared the ABA Model Business and Supplier Policies on Labor Trafficking and Child Labor (the “Model Policies”).

Developing the Model Business and Supplier Policies

The Working Group adopted the following mission statement

Mission statement: To coordinate with the ABA Human Trafficking Task Force in developing a recognized set of business conduct standards for companies to assist with human labor trafficking issues in an environment of increased knowledge and concern involving human labor trafficking and the implementation of international, federal and state legislation addressing those concerns

The aim was to craft a set of voluntary business-ethical standards that would help to combat human trafficking while avoiding unnecessary regulation or liability. The Working Group divided the project into three phases:

  1. A Drafting Issues Subgroup to set the Scope of the Model Policies
  2. A Drafting Subgroup to draft the Model Policies
  3. A vetting Subgroup to vet the Model Policies with the legal and business communities

The Drafting Issues Subgroup finished its work by December 10, 2012 with the following recommendations, which the Working Group accepted:

  1. Definition of Human Labor Trafficking: This was originally defined as Forced Labor, but has since been expanded to encompass Labor Trafficking and Child Labor, as explained below.
  2. Definition of Policies: The Model Policies do not constitute legal advice. The aim was to find an approach that could identify specific behaviors and problems in a supply chain, but that would be broad enough to account for overall corporate business environment and culture.  At a minimum, the company’s own internal policies would probably be expected to address the following substantive areas in additional detail: prohibited conduct, ethical conduct, training, internal reporting policies and procedures, record keeping, third party/supplier certifications and screening, remedial procedures for non-compliance, and other areas consistent with the foregoing items.
  3. Identification of Geographic Scope of Policies: The Model Policies should be global and account for acts and omissions that occur in the international supply chains of both U.S. businesses doing business abroad and foreign businesses doing business in the U.S. regardless of size, industry (with the exception noted in 6 below) and/or status as a regulated or non-regulated entity.
  4. Identification of the Legislation or Proposed Legislation Impacting the Model Policies: Model Policies are most useful if they not only help to eliminate a scourge, but also help to avoid unwarranted legal liability. Given the divergence of state laws in this area, we aim to create Model Policies that can help businesses regulated by various statutes.  This has required the Working Group to consider not only the key laws already in place, but also those likely to become effective soon.  This effort requires coordination with the committee for the Prevention of and Remedies for Human Trafficking of the Uniform Law Commission of the National Conference of the Commissioners on Uniform State Laws among others.
  5. Annotations: We determined that annotations similar to those in the Uniform Commercial Code would be helpful in order to provide additional resources to the intended audience.  Thus, we offer the Annotated Model Policies contained in the Database of Resources.
  6. Sector/Industry Specific: Industry-specific issues will be addressed in the Database of Resources 

The Drafting Subgroup commenced its work in January 2013. We reviewed a number of existing company policies, standards/guidelines and applicable laws such as: The Department of Labor ILAB Toolkit; Department of Agriculture Standards; United Nations Guiding Principles on Business and Human Rights; the Luxor Implementation Guidelines to the Athens Ethical Principles; the Trafficking Victims Protection Act (TVPA); Uniform Law Commission Model Law; California’s Transparency in Supply Chains Act; and the Executive Order Against Trafficking in Persons in Federal Contracting and the Implementing Regulations thereto.

Over the next eleven months, we held numerous discussions and meetings to refine the Model Policies extensively (close to 100 drafts). In-person meetings occurred on February 10,  2013 during the ABA Midyear Meeting in Dallas, Texas, on April 5 during the 2013 Business Law Section Spring Meeting  in Washington D.C. and on August 11, 2013 during the 2013 ABA Annual Meeting in San Francisco, California. 

The Vetting Subgroup worked in coordination with the Drafting Subgroup and began to distribute its First Exposure Draft of the Model Policies on July 3, 2013 to a number of corporations, NGOs, government al entities and law firms.  The Working Group reviewed the results of the distribution at its August 11, 2013 meeting in San Francisco (above).  By September 26, 2013, the Second Exposure Draft went out to those who commented on the First Exposure Draft and others. The Second exposure draft was also posted on the ABA Human Trafficking Task Force Website, making it available to the general public for comment.  The Third Exposure Draft was also posted on that website and was distributed starting on October 23, 2013.  

On November 20, 2013, the final draft of Resolution 102B was submitted to the ABA House of Delegates, the 560-member policy making body of the ABA, for consideration during the 2014 ABA Midyear Meeting.  It had over 20 co-sponsors and supporters. It was a Resolution to both (1) adopt the Model Principles as ABA Policy and (2) urge businesses to adopt and implement their own business and supplier policies on labor trafficking and child labor that are consistent with the Model Principles. On February 10, 2014, the ABA House of Delegates adopted the Resolution without any objection. The materials reflecting this action can be found here under ABA House of Delegates Approval Materials.

Structure

The Model Policies are not intended to be an off-the-shelf or one-size-fits-all product. Instead, they offer useful guidance and commentary, and they identify optional considerations that a business enterprise should take into account when developing its own tailored policies.  These options range from adopting only the most general business and supplier policies based on the Model Principles (see Part II), to modifying existing policies in order to be consistent with the Model Principles and the related Commentary and Guidance (see Parts III and IV), to taking a more comprehensive approach that implements a detailed set of fine-tuned business and supplier policies in a manner consistent with the materials here. Additional options (including annotated model policies) can be found in the Database of Resources. In any case, the business enterprise is encouraged to use the Model Policies to fashion a corporate policy or code that fits its operating environment. Whether the Business or Suppliert is creating a new company policy or revising an old one, it should adapt these materials based on its particular facts and circumstances.

The Model Policies consist of six parts:

  • Part I: Introduction
  • Part II: Model Principles
  • Part III: Model Business Policy
  • Part IV: Model Supplier Policy
  • Part V: Model Glossary
  • Part VI: Endnotes 

These are intended to assist business enterprises and suppliers that do not currently have policies relating to Labor Trafficking and Child Labor, as well as businesses and suppliers that wish to consider possible modification of existing policies to reflect evolving practices. 

Part I--Introduction 

The introduction is primarily provides a background and overview, with an acknowledgement that the Model Policies adopt a risk-based approach in which a Business’s policy is efficiently tailored to target the areas where it faces the greatest risk of human trafficking.  Businesses that implement a form of these Model Policies should identify general areas where that risk is more significant so they can prioritize those areas for greater due diligence, monitoring, verification or other appropriate action. 

Part II--Model Principles 

The Model Principles are the core of the Model Policies. They are a Business’s high level articulation of its commitment to address Labor Trafficking and Child Labor.  They are also are the only portion of the Model Policies that were adopted by the ABA as its official Policy.  There are four Model Principles for Businesses and four Model Principles for Suppliers, and at this level they are the same for each:

Principle 1—The Business/Supplier will Prohibit Labor Trafficking and Child Labor in its Operations.

Principle 2—The Business/Supplier will Conduct a Risk Assessment of the Risk of Labor Trafficking and Child Labor and Continually Monitor Implementation of this Policy.

Principle 3—The Business/Supplier should: (i) Train Relevant Employees, (ii) Engage in Continuous Improvement, and (iii) Maintain Effective Communications Mechanisms with its Suppliers.

Principle 4—The Business/Supplier will Devise a Remediation Policy and Plan that Addresses Remediation for Labor Trafficking or Child Labor in its Operation 

As explained under ABA House of Delegates Approval Materials, the ABA House of Delegates also passed a second resolution urging businesses to adopt policies that are consistent with the Model Principles. 

Part III—Model Business Policies

These Model Policies apply to a “Business,” rather than to the business’s “Suppliers.” The Policies define the terms “Business” and “Supplier.” The Model Business Policies consist of two main parts: 

The Principles—There are four Model Business Policies, each of which relate to one of the Principles above.  Each Model Policy starts with a statement of the applicable Principle. 

Commentary and Guidance—Each Model Policy then contains a section with recommended considerations about the kinds of provisions that a business could include in its internal policy or code of conduct.  Again, we use the word recommendation to remind readers that these are voluntary, not prescriptive. A business can modify any or all of the provisions to suit its environment. 

Part IV – Model Supplier Policies

These Model Policies apply to a Supplier, rather than the “Business.” They consist of the same two sections (namely, the Principles, plus Commentary and Guidance).  However, certain provisions differ from the Model Business Policies, as appropriate. 

Part V – Model Glossary

The Model Glossary defines a number of terms in the Model Policies, such as “Business,” “Supplier,” “Labor Trafficking,” “Child Labor,” and “Risk Assessment.”  Although the Glossary terms can illuminate the Model Principles, they do not represent official ABA Policy. The Glossary is particularly useful for a business that directly adapts the Model Policies, although it can be helpful for any business considering policies in this area.  Notwithstanding, a Business’s definitions should reflect its own business needs. For example, a Business might use the Principles as a guide to develop its policy but adopt the definition of Labor Trafficking used in the laws of the jurisdictions where it does business, rather than the Model Glossary’s defined term.

Part VI – Endnotes

The endnotes relate to certain language in the Model Policies.  In some cases they provide additional detail concerning definitions (e.g., note 12 for Child Labor and note 13 for Labor Trafficking).

Database of Resources — This portion of this website holds a wide range of resources for to consult when fashioning policies. They include original Model Policy documents; ABA House of Delegates Approval Materials; Annotated Model Policies; Law and Policy Updates; references to other websites and scholarly works; training materials; sample company policies; publicly available materials; and the Fortune 100 Report on Trafficking.  These materials will be updated so that business enterprises will have a current, comprehensive resource to assist them in developing and implementing their own polices on Labor Trafficking and Child Labor.