Illicit trade driving demand for child, forced labour

Organised criminal networks involved in illicit trade are forcing men, women and children to work in conditions that put them at risk of human rights abuses.

Stefano Betti, deputy director general of TRACIT, told an Economist webinar this week that the report is the first to look at the relationship between illicit trade and forced labour, a problem which he says is "vastly overlooked" and "one of the worst consequences" of the criminal activity.

The report encourages governments to specifically address forced labour in illicit trade, improve data collection, and deploy innovative investigative techniques to crack down on the perpetrators.

The report zeroes in on several illicit trade sectors, including counterfeiting of apparel, footwear and luxury goods and electronics machinery and equipment, illicit tobacco and pesticides, and the trade in substandard and falsified medical products. It also covers the illegal mining, fishing and timber trades.

Counterfeit goods are a big part of the problem with high demand from producers for resources, transportation and labour, says TRACIT.

While much attention has been paid to the negative impacts of counterfeiting on consumer health and safety, such as faulty automobile brake pads or fake pharmaceuticals, consumers are not the only people harmed by fakes. There are significant human rights abuses associated with the manufacturing and sale of counterfeits, according to the report.

The US Office of the Intellectual Property Enforcement Coordinator (IPEC) has said that behind-the-scenes production of counterfeit goods "often involves…the use of child labour, forced labour, human trafficking, long hours and dangerous 'sweatshop' working conditions, and payment of unlawfully low wages that do not cover living expenses."

In some cases, identity papers of immigrant workers are confiscated and workers are also housed in hazardous and unhealthy conditions.

"We have frequent reports of forced labour incidents occurring along supply chains that are legal in nature," said Betti, and that includes numerous cases within Europe. "Can you imagine the extent of the problem in supply chains that are illegal, that are managed by criminal networks with no concern for human rights?"

As an example, he cited reports of organised crime groups, including the Camorra, employing forced labour in the manufacture of counterfeit goods in the Naples area of Italy.

"Many counterfeit goods are made in developing countries by gangs that have no regard for their workers," said William Shepherd, partner at Material Handling & Logistics.

"Know that with every counterfeit you buy, you are helping to employ slaves who toil in horrific conditions. They receive little pay and work at the whim of the bosses," he says in the report.

TRACIT calls for technological innovations that improve discovery and traceability of illicitly sourced product.

"A predictive model that red flags sectors and regions at risk of labour abuse in illicit trade needs to be developed and built with the goal of strengthening law enforcement’s ability to detect, disrupt and dismantle these networks."