Contractual Provisions and Monitoring
Contractual representations and warranties are often used to
control risk. A counterparty’s representation not to engage in
certain behavior, and to accept certain consequences if it does,
in itself is a protection. Like the contractual provisions used to
protect against money laundering and corruption risk, anti-human-trafficking contractual provisions may include:
■ ■ ■ Representations and undertakings that the third party will
comply with human trafficking laws;
■ ■ ■ Indemnity provisions if the third party violates human trafficking laws;
■ ■ ■ Access to audit the counterparty’s books and records; and
For third parties posing higher human trafficking risk, periodic
monitoring protocols could be employed. These protocols might
include updating due diligence more frequently, exercising audit
rights, providing periodic training, requesting annual compliance
certifications, providing employees with direct responsibility for
supply chain managements and holding accountable employees
or contractors failing to meet company standards regarding hu-
man trafficking.
Additional monitoring controls specific to human trafficking
would include:
■ ■ ■ Provides employees with direct responsibility for supply chain
managements with training on human trafficking and slavery,
particularly with respect to how to mitigate risks within the
supply chain; and
■ ■ ■ Implements procedures to hold accountable employees or
contractors failing to meet company standards regarding
human trafficking.
Confidential Reporting and Internal Investigations
Like their AML and ABC counterparts, effective human trafficking compliance programs should include procedures that allow
individuals to report allegations of trafficking confidentially,
without fear of retaliation. As discussed below, employee training
on hotline reporting procedures should reference human trafficking concerns, and the individuals that receive the calls should
receive training on how to handle such calls. Where violations of
the company’s human trafficking policy are identified, disciplinary and remediation measures can be leveraged from existing
protocols regarding employee misconduct. Human trafficking
compliance training should emphasize the hotline’s existence
and make all employees aware that it should be used to report
suspected human trafficking activity.
Training Program
Training is vital to communicating the policies and procedures
employees are expected to know and follow. Who receives training,
how often it is provided, and the method in which it is provided
(e.g. online module, in-person, etc.) will be driven by the risk
assessment results. While in-depth human trafficking training
may be required for the most high-risk areas of a company, lower
risk groups might receive human trafficking training as part of
an already existing compliance training program. Training sessions should be well-documented, reflecting the attendees, date
of training, length of training, training method, and the list of
materials provided at the training session. Tracking protocols
may leverage AML and ABC training procedures.
Where appropriate, agents of the company and other high-risk
third parties, such as labor brokers, should receive training on the
company’s policies and procedures relating to AML, ABC, and
human trafficking. The results of a well-constructed risk assessment should assist in identifying the most high-risk third parties.
Independent Testing
Effective AML and ABC compliance programs require independent
testing of the effectiveness of the company’s internal controls.
AML and ABC testing ensures that a compliance program exists
not just on paper, but that its policies and practices have been
integrated into the company’s operations and culture in both
principle and substance. A company’s general audit group may
perform this testing function; however, to demonstrate a robust
compliance program to regulators, it can be beneficial to have the
testing conducted by an independent, external group.
Regardless of who conducts the testing, the same resources
and protocols used in the AML and ABC spaces can be applied
in the human trafficking space. Opportunities for improvement
should be identified and remediated through updated procedures,
improved internal controls, and where necessary, the imposition of disciplinary measures holding accountable employees
or contractors failing to meet company standards regarding
human trafficking.
Conclusion
As the law in this area expands, both on the federal and state levels,
companies will face increased pressure to develop compliance
programs that proactively eradicate human trafficking in supply
chains. The current state of the human trafficking legal landscape,
and its conceptual overlap with AML and ABC, make the development and implementation of a human trafficking compliance
program both vital to a company’s overall compliance structure
and easily integrated into existing company practices. Companies
should anticipate making changes to their compliance plans to
meet the expected requirements. ■
Endnotes
1 U.S. Department of State Office to Monitor and Combat Trafficking in
Persons, Trafficking in Persons Report 2013, at 7 (June 2013), http://www.
state.gov/j/tip/rls/tiprpt/2013/
2 State of California Department of Justice, Office of the Attorney General,
Human Trafficking, http://oag.ca.gov/human-trafficking/
As the law in this area expands, both on the
federal and state levels, companies will face
increased pressure to develop compliance
programs that proactively eradicate human
trafficking in supply chains.
