TWN Info Service on UN Sustainable Development (May14/11)
23 May 2014
Third World Network  

Forced labour generates $150 billion profits per year, says ILO
Published in SUNS #7808 dated 21 May 2014
 
Geneva, 20 May (Kanaga Raja) -- The total illegal profits generated by the use of forced labour worldwide amount to US$150.2 billion per year, according to a new report by the International Labour Organisation (ILO).
 
The report, titled "Profits and Poverty: The Economics of Forced Labour", said that more than one-third of the profits, amounting to US$51.2 billion, resulted from forced economic exploitation, including nearly US$8 billion generated in domestic work by employers who use threats and coercion to pay no or low wages.
 
Globally, said the ILO report, two thirds of the profits from forced labour were generated by commercial sexual exploitation, amounting to an estimated US$99 billion per year.
 
"In calculating the profits, it is assumed that wages and intermediate consumption make up about 30 per cent of the total earnings of forced labour victims in commercial sexual exploitation," it added.
 
The profits from forced labour are highest in Asia (US$51.8 billion) and Developed Economies (US$46.9 billion), said the ILO, citing two reasons for this, namely, the high number of victims in Asia and the high profit per victim in Developed Economies.
 
In this regard, it found that annual profit per victim is highest in the Developed Economies (US$34,800 per victim), followed by countries in the Middle East (US$15,000 per victim), and lowest in the Asia-Pacific region (US$5,000 per victim) and in Africa (US$3,900 per victim).
 
According to the ILO, forced labour imposed by private agents for labour exploitation includes bonded labour, forced domestic work, forced labour of migrants in many economic sectors and work imposed in the context of slavery or vestiges of slavery. Forced illicit activities such as forced begging for gangs, for example, are also included in this category.
 
Forced labour imposed by private agents for sexual exploitation covers any commercial sexual activity, including pornography, exacted from the victim by fraud or force, while forced labour imposed by the state covers all forms of work exacted by public authorities, military or paramilitary, compulsory participation in public works and forced prison labour (within the scope of ILO Conventions No. 29 and No. 105).
 
The ILO said that the estimate of the profits and the analysis of the causes of forced labour presented in this report are limited to labour and sexual exploitation extracted by private agents.
 
The ILO report cited income shocks and poverty as being the main economic factors that push individuals into forced labour, with other factors that give rise to risk and vulnerability being lack of education, illiteracy, gender and migration.
 
"This new report takes our understanding of trafficking, forced labour and modern slavery to a new level," said ILO Director-General Guy Ryder in an ILO press release.
 
"Forced labour is bad for business and development and especially for its victims. Our new report adds new urgency to our efforts to eradicate this fundamentally evil, but hugely profitable practice as soon as possible," he added.
 
According to the ILO, its latest report had re-estimated the illegal profits made from the use of forced labour based on an updated methodology and data collected for its 2012 Global Estimate.
 
The new estimate is the aggregation of regional profit figures for three forms of forced labour, namely forced economic exploitation outside domestic work, forced domestic work and forced sexual exploitation, it said.
 
In the 2012 survey, the ILO had estimated that 20.9 million people are in forced labour globally, trafficked for labour and sexual exploitation or held in slavery-like conditions.
 
The vast majority of the 20.9 million forced labourers - 18.7 million (90 per cent) - are exploited in the private economy, by individuals or enterprises.
 
Of these, said the ILO, 4.5 million (22 per cent) are victims of forced sexual exploitation, and 14.2 million (68 per cent) are victims of forced labour exploitation, primarily in agriculture, construction, domestic work, manufacturing, mining and utilities.
 
The remaining 2.2 million (10 per cent) are in state-imposed forms of forced labour, such as prisons, or in work imposed by military or paramilitary forces.
 
Women and girls represent the greater share of the total - 11.4 million (55 per cent) - compared to 9.5 million (45 per cent) men and boys. Adults are more affected than children - 15.4 million (74 per cent) are aged 18 or older, with the number of children under the age of 18 estimated at 5.5 million (26 per cent), it said.
 
According to the ILO, the Asia-Pacific region accounted by far for the largest number of forced labourers, at 11.7 million (56 per cent of the global total), while the second highest number was found in Africa at 3.7 million (18 per cent), followed by Latin America and the Caribbean with 1.8 million victims (9 per cent).
 
The Developed Economies and European Union accounted for 1.5 million (7 per cent), while countries of Central, South-Eastern and Eastern Europe (CSEE) and the Commonwealth of Independent States (CIS) have 1.6 million (7 per cent). There are also an estimated 600,000 (3 per cent) victims in the Middle East.
 
Of the total of 20.9 million people in forced labour, an estimated 9.1 million people (44 per cent) moved either internally or internationally, while the majority, 11.8 million (56 per cent), were subjected to forced labour within their place of origin or residence.
 
Victims of forced labour exploitation, including domestic work, agriculture and other economic activities, generate an estimated US$51 billion in profits per year, and that out of those, the profits from forced labour in agriculture, including forestry and fishing, are estimated to be US$9 billion per year.
 
Profits for other economic activities are estimated at US$34 billion per year, encompassing construction, manufacturing, mining and utilities.
 
The ILO also estimated that private households employing domestic workers under conditions of forced labour save about US$8 billion annually by not paying or underpaying their workers.
 
Based on information in the 2012 Global Database, it can be estimated that forced domestic workers are paid on average about 40 per cent of the wage they should receive.
 
Profits per victim are highest in forced sexual exploitation, the report found, underlining that with a global average profit of US$21,800 per year per victim, this sector is six times more profitable than all other forms of forced labour, and five times more profitable than forced labour exploitation outside domestic work.
 
It is also estimated that the profits made with the world's 10.7 million victims of non-domestic forced labour exploitation reach US$43.4 billion per year, with an average annual profit of US$4,000 per victim.
 
"This profit is estimated to be the result of the exploitation of victims in agriculture on the one hand, and industrial sectors (construction, manufacturing mining and utilities) on the other."
 
The ILO said that forced labour profits in agriculture are lower than the sum of other sectors, but are quite significant in terms of the number of workers.
 
It is estimated that more than a third of the victims of forced labour in non-domestic sectors work in agriculture (including fishing and forestry), amounting to 3.5 million of the 10.7 million people in forced labour exploitation other than forced domestic work.
 
It is estimated that nearly US$8 billion are literally stolen annually from the 3.4 million domestic workers in forced labour worldwide.
 
The ILO said that this estimate is based on data collected by the ILO for the 2012 Global Estimate, which shows that domestic workers in forced labour are effectively deprived, on average, of 60 per cent of their due wages.
 
This amount of stolen wages, or profit, varies between US$50 per month in Africa and more than US$600 per month in Developed Economies.
 
The total annual profits made from forced sexual exploitation are estimated at US$99 billion worldwide, with the profits being highest in Asia due to the large number of victims.
 
However, the ILO said that annual profits per victim are highest in Developed Economies (US$80,000) and the Middle East (US$55,000), due to the high average price of sexual encounters.
 
In some concluding observations, the ILO report found that women and girls are generally less likely to be in forced labour irrespective of their age.
 
For instance, being female as opposed to male reduces the probability of a household member aged 5 or older being in forced labour by 0.21 percentage points (in the Niger), to 9.89 percentage points (in Guatemala).
 
With the exception of Guatemala where, surprisingly, the literate were more likely to be in forced labour (4.14 percentage points), the ILO said that being literate leads to a maximum 1.15 percentage point decrease in the probability of household members being in forced labour.
 
"Put into perspective, the 21 million victims in forced labour and the more than US$150 billion in illegal profits generated by their work exceeds the population and GDP of many countries or territories around the world," said the ILO.
 
"Yet this vast nation of men, women and children, along with its resources, remains virtually invisible, hidden behind a wall of coercion, threats and economic exploitation," it added.
 
The report indicated that while unscrupulous employers and criminals reap huge profits from the illegal exaction of forced labour, the losses incurred by the victims are also enormously significant.
 
"People in forced labour are often caught in a vicious cycle that condemns them to endless poverty. They may suffer personal trauma that will require years to overcome as they try to rebuild their lives."
 
"There is a critical need to expand our current knowledge base on forced labour through standardised data collection methods across countries," said the ILO, stressing that such standardisation and regular data collection would enable the ILO and other international organisations to generate more reliable global figures, measure trends and better understand risk factors.
 
"The continued existence of forced labour is bad for its victims, for business and development. It is a practice that has no place in modern society and should be eradicated as a matter of priority," said the ILO.
 
"While progress is being made in reducing state-imposed forced labour, we must now focus on the socio-economic factors that make people vulnerable to forced labour in the private sector," said Beate Andrees, head of the ILO's Special Action Programme to Combat Forced Labour, in the press release.
 
Andrees recommended a series of measures to reduce vulnerability to forced labour. These include bolstering social protection floors, investing in education and skills training, promoting a rights-based approach to migration, and supporting the organisation of workers, including in sectors and industries vulnerable to forced labour.
 
"If we want to make a significant change in the lives of the 21 million men, women and children in forced labour, we need to take concrete and immediate action," said ILO Director-General Ryder.
 
"That means working with governments to strengthen law, policy and enforcement, with employers to strengthen their due diligence against forced labour, including in their supply chains, and with trade unions to represent and empower those at risk," he added. +