Thursday, February 4, 2016

Finally - Absolute Must-Read Guides to US Foreign Corrupt Practices Act for human and labor rights activists

As anyone who has ever worked on an investigation under the US Foreign Corrupt Practices Act is aware (For guidance, see the US Department of Justice web guide at http://www.justice.gov/criminal-fraud/fcpa-guidance), the FCPA is a great tool enabling companies and enforcers to identify, prevent and remedy bribery of foreign government officials in exchange for business advantage.  

It's not just the expansive extraterritorial jurisdiction; the availability of both civil and criminal penalties (including fines and jail sentences); and strong enforcement by US authorities in the US Department of Justice and the Securities and Exchange Commission.  It is also the immense web of compliance practices and risk assessments that have developed over time both within companies and in company networks.  This compliance web includes internal audits; robust compliance teams; due diligence of third parties; special contract provisions making bribery of a foreign official an event allowing termination of the contract; electronic filtering of transactions; multiple trainings and compliance manuals; and global lists of companies and individuals with government or criminal ties  The thoroughness and complexity of this web is mind boggling.

On the other hand, as anyone who works in human and labor rights or represents migrant workers and/or victims of human trafficking knows, human trafficking and migrant smuggling cannot occur without the knowledge and complicity of certain government officials - the obvious suspected linking factor being bribery and corruption.

In recent years, the NGO Vérité has started issuing reports and studies drawing the link between human trafficking and exploitation on the one hand and bribery and corruption on the other (See Vérité's 2013 White Paper Corruption & Labor Trafficking in Global Supply Chains here:  http://www.verite.org/sites/default/files/images/WhitePaperCorruptionLaborTrafficking.pdf).  In 2013, global anti corruption NGO Transparency International highlighted the role bribes paid to building inspectors played in fires and building collapses that killed hundreds of workers in disasters like the one that occurred at Rana Plaza in Bangladesh (See Transparency International, "In Bangladesh, corruption kills hundreds," April 26, 2013, http://www.transparency.org/news/feature/in_bangladesh_corruption_kills_hundreds).

At long last, the NGOs Liberty Asia (libertyasia.org) and The Freedom Fund (freedomfund.org) have produced two absolute must-read clear language guides to the FCPA for human rights advocates.  The first is a 16-page briefing paper Modern Slavery and Corruption (http://freedomfund.org/wp-content/uploads/Liberty-Asia-Corruption-Briefing-Paper-FINAL-FOR-EMAIL.pdf) providing a thumbnail sketch of the FCPA and clearly highlighting the points at which bribery plays a role in the human trafficking process.  Some of these points include pressure to use labor brokers related to government officials (a kickback or direct benefit scheme); provision of excessive and extravagant gifts to officials responsible for issuing permits and licenses (a practice expressly prohibited under the FCPA); bribes to officials at border checkpoints to allow trafficked persons to pass through without scrutiny; bribes to police and inspectors to ignore mistreatment of workers or workplace violations.  These and other elements of corruption are highlighted in a case study of a hypothetical victim of human trafficking in this excellent and poignant briefing paper.

Less concise but equally useful is the 148-page legal guide Modern Slavery and Corruption- Legal Analysis of Relevant Laws and Their Application (http://freedomfund.org/wp-content/uploads/Liberty-Asia-Corruption-Legal-Analysis-FINAL-FOR-EMAIL.pdf).  This excellent legal guide punctuates each well-documented explanation of FCPA statutory law with a takeaway message that is easily digestible by the human rights activist.  For example, on the subject of 3rd party liability, the guide notes, "[T]he use of labor recruiters to secure seasonal labor and low-skilled labor, as well as the use of products whose supply chain is known to utilize human trafficking, are all warning signs that might give rise to FCPA liability if companies do not conduct proper due diligence."  

The legal guide also explains the UK Bribery Act (which prohibits bribery of private company officials as well as foreign government officials), the US Trafficking Victims Protection Act and other relevant legislation.  Importantly, the guide lends visibility into corporate compliance programs and culture (see p. 24 et seq.) - critical elements in the enforcement of legal norms prohibiting bribery, money laundering, financing of terrorism and other types of corporate and legal risk.

Putting an end to corruption, human trafficking and abuse of migrant workers is a 2-way street.  CSR and Corporate Compliance departments within companies must talk to each other; corporate compliance professionals must communicate norms and opportunities to human rights advocates; and human rights advocates must sensitize corporate compliance professionals about compliance risks inherent in human trafficking and other human and labor rights abuses.

In sum, Read these manuals!  They are great - actually awesome - resources.

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