What Role Should Anti-Trafficking Play in U.S. Development Efforts?

Professor James Cockayne is a senior fellow (non-resident) at the UN University Center for Policy Research. He is the chair of the Council on Foreign Relations Study Group on Trafficking in Persons. He tweets @James_Cockayne.

When the members of the United Nations adopted the Sustainable Development Goals in 2015, they committed in SDG 8.7 to end modern slavery and human trafficking by 2030. With just ten years to go, that goal seems far off. The International Labour Organization’s latest count estimated more than 40 million people in slavery, and a recent UN report suggests the number has probably grown this year due to the pandemic.

One contributing factor seems to be the global development sector’s lack of attention to modern slavery. Much of the global development sector has had a significant blind spot on the issue of trafficking in persons. The United States represents a rare and important exception, and now stands in a position to lead the way to integrate the fight against human trafficking into global development practice. Cooperation between development actors, as well as with private business and investors along specific value-chains, will be key.

The development sector’s blind spot

Between 2000 and 2017, governments committed a total of just USD 12 in Official Development Assistance (ODA) to anti-slavery efforts per victim each year, in aggregate worldwide. This is the conclusion of a new UN University study, Developing Freedom, which I led. An independent research project commissioned by the UK government, it included practitioner surveys, analysis of over two million official aid project records, and deep dives into anti-slavery efforts in six global value chains: apparel, cattle, construction, cotton, fisheries, and palm oil.

The study finds that trafficking in persons imposes a significant drag on economic and social development. Trafficking in persons reduces productivity, public revenues, and private sector innovation; dampens economic multiplier effects (because victims do not control their own consumption, savings, and investment choices); increases intergenerational poverty and inequality; and increases corruption and environmental harm.

Yet our survey of development practitioners’ views and the practices of development institutions such as the World Bank, bilateral development agencies, export credit agencies, and development finance institutions found a blind spot to these links. Most development actors see modern slavery, forced labor, and human trafficking as social or criminal justice concerns, not core economic, trade, or industrial policy concerns. Modern slavery is more likely to be seen as a project management risk to be safeguarded against than a target for strategic programming, lending, or policy advice. 

Trafficking in persons imposes costs on everyone, except traffickers. Ending that system and addressing those externalities can unleash significant economic growth. International Monetary Fund researchers have estimated the uptick from ending child marriage—just one part of the basket of violations known collectively as ‘modern slavery’—as over one percent of national GDP. And as Developing Freedom shows, where countries have taken steps to end large-scale use of forced labor and trafficking in persons, significant economic gains have resulted.

What the system is arguably missing, because of this blindspot, is thus not only the significant ramifications that human trafficking has on development outcomes, but also the opportunity to promote development by fighting trafficking in persons.  

U.S. exceptionalism

The United States has stood out as a leader in integrating anti-trafficking thinking into its development work. Developing Freedom estimates that between 2000 and 2017, the United States accounted for almost 43 percent of all global ODA committed to address modern slavery, forced labor, human trafficking, and child labor. Counter-trafficking work has been a focus for USAID for almost two decades, with programming in over eighty-one countries and regions since 2001. USAID describes trafficking as “a fundamental obstacle to our mission as a development agency [that] undermines the development objectives we seek to accomplish through our programming,” and since 2012 it has had a Counter-Trafficking in Persons Policy.

As Sarah E. Mendelson explored in a recent blog in this series, the United States has used a diverse array of levers to promote anti-trafficking goals. U.S. diplomatic and political pressure has been central to some of the most successful efforts to disrupt and transform large-scale trafficking systems, such as the use of forced labor in the Uzbek cotton harvest. The State Department’s annual Trafficking in Persons reports and “Tier” system are central tools for exerting this pressure.

In recent years, the U.S. government has also begun to tie access to U.S. financial and export markets to anti-trafficking standards. The U.S. Tariff Act of 1930 (19 U.S.C. § 1307) prohibits the importation of merchandise produced wholly or in part by forced or indentured labor. In recent years, U.S. Customs and Border Protection has issued Withhold Release Orders (WROs) on a range of goods, most famously all cotton and tomatoes produced in Xinjiang, China. U.S. government departments have also warned entities with ties to the financial system about their obligation not to handle the proceeds of forced labor in Xinjiang. A provision in the United States-Mexico-Canada Agreement (USMCA) has led Canada to adopt similar restrictions on import of goods made with forced labor, with Mexico expected to follow suit.

For the United States to embed anti-trafficking more effectively in global development practice, it must engage multilateral institutions. Congress has already recognized this. The Trafficking Victims Protection Reauthorization Act of 2017 requires the U.S. executive directors of multilateral development banks such as the World Bank to encourage the development of anti-human trafficking provisions in those banks’ project development, procurement, and evaluation policies. It also requires them to work for the integration of human trafficking risk analysis into country strategies and programming.

Yet there is more that can be done, for example, through the UN development system, and in bilateral development lending and export credit provision. Like-minded countries have shown a willingness to integrate anti-trafficking thinking into development work, including Australia, Canada, the Netherlands, Norway, and the United Kingdom. Working in partnership—for example, by forming a group focused specifically on that task, sharing information and methods, and coordinating engagement—could scale these benefits.

The opportunity provided by pandemic response

Although the pandemic has increased vulnerability to modern slavery and human trafficking, it has also created an opportunity to advance efforts to combat these problems, for two reasons.

First, the pandemic has revealed how we all suffer when supply chains are poorly managed and workers are left vulnerable. Capital markets have rewarded firms that are perceived as having better human capital and supply chain management arrangements in place. And the surge of capital into environmental, social and governance (ESG)-based investing is creating demand for investment opportunities with positive social benefits, including development finance. This creates an important opportunity for embedding anti-trafficking objectives in financing for development (FFD) arrangements—for example, in the Blue Dot Network formed by the United States, Japan, and Australia to certify infrastructure projects that meet international sustainability standards.

Second, thanks to the bailouts in many countries, many governments are now more deeply invested and embedded in private industry than they have been before. This gives them a historic opportunity to use their leverage to nudge private business toward responsible business conduct. The U.S. government has long refused to procure goods and services from vendors tied to forced labor and human trafficking. And it has found company in the United Kingdom, Australia, Canada, and New Zealand, which have all committed to a set of shared principles. A similar approach could be taken in the area of development finance and public investment more broadly.

Putting anti-slavery efforts at the heart of development work will be a win-win-win. Victims and survivors of modern slavery will win from the increased attention to their plight and support for their recovery. The communities and countries in which they live will win, from gains in productivity, innovation, good governance, and sustainability. And business will win, from increased resilience and a strengthened social license. The result will be a fairer and more sustainable development system.

Developing Freedom: The Sustainable Development Case for Ending Modern Slavery, Forced Labour and Human Trafficking (UNU, 2021), is available at www.developingfreedom.org.