Forced labour generates over $150 b profits - ILO
by Kanaga Raja
The total illegal profits generated by the use of forced labour
worldwide amount to $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
$51.2 billion, resulted from forced economic exploitation, including
nearly $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 $99 billion per year.
"In calculating the profits, it is assumed that wages and
intermediate consumption make up about 30% of the total earnings of
forced labour victims in commercial sexual exploitation," it said.
Profit
The profits from forced labour are highest in Asia ($51.8 billion)
and Developed Economies ($46.9 billion), said the ILO report, 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 ($34,800 per victim), followed by countries in
the Middle East ($15,000 per victim), and lowest in the Asia-Pacific
region ($5,000 per victim) and in Africa ($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).
Factors
The ILO said that the estimate of the profits and the analysis of the
causes of forced labour presented in the 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 people into forced labour, with other factors that give rise to
risk and vulnerability being lack of education, illiteracy, gender and
migration.
"The 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
victims. Our new report adds new urgency to our efforts to eradicate
this fundamentally evil, but hugely profitable practice as soon as
possible," he said.
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.
Exploitation
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%) - are exploited in the private economy, by people or enterprises.
Of these, said the ILO, 4.5 million (22%) are victims of forced
sexual exploitation, and 14.2 million (68%) are victims of forced labour
exploitation, primarily in agriculture, construction, domestic work,
manufacturing, mining and utilities.
The remaining 2.2 million (10%) 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%) - compared to 9.5 million (45%) men and boys. Adults are
more affected than children - 15.4 million (74%) are aged 18 or older,
with the number of children under the age of 18 estimated at 5.5 million
(26%), 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% of the
global total), while the second highest number was found in Africa at
3.7 million (18%), followed by Latin America and the Caribbean with 1.8
million victims (9%).
The Developed Economies and European Union accounted for 1.5 million
(7%), while countries of Central, South-Eastern and Eastern Europe (CSEE)
and the Commonwealth of Independent States (CIS) have 1.6 million (7%).
There are also an estimated 600,000 (3%) victims in the Middle East.
Of the total of 20.9 million people in forced labour, an estimated
9.1 million people (44%) moved either internally or internationally,
while the majority, 11.8 million (56%), 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 $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 $9 billion per year.
Profits for other economic activities are estimated at $34 billion
per year, encompassing construction, manufacturing, mining and
utilities.
More profitable
The ILO also estimated that private households employing domestic
workers under conditions of forced labour save about $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% 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 $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 $43.4
billion per year, with an average annual profit of $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.
Estimate
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 $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% of their due
wages.
This amount of stolen wages, or profit, varies between $50 per month
in Africa and more than $600 per month in Developed Economies.
The total annual profits made from forced sexual exploitation are
estimated at $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 ($80,000) and the Middle East ($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.
Exception
For instance, being female as opposed to male reduces the probability
of a household member aged five 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 $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 said.
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.
Risks
"People in forced labour are often caught in a vicious cycle that
condemns them to endless poverty. They may suffer personal trauma that
will need years to overcome as they try to rebuild their lives. There is
a critical need to expand our present 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 victims,
business and development.
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