Industry AgendaDecember 2014Prepared by the Network of Global Agenda Councils task force on human traffickingHedging Risk by Combating Human Trafficking: Insights from the Private Sector ContentsWorld Economic Forum® © 2014 – All rights reserved.No part of this publication may be reproduced orTransmitted in any form or by any means, includingPhotocopying and recording, or by any informationStorage and retrieval system.R E F 2 61114IntroductionHuman trafficking in the private sector: an ongoing challengeInnovation in the financial services and technology sectors to combat traffickingThe transport industry: airlines and trucks to fight traffickersHospitality and tourism: creating a culture of dialogue and awarenessConclusionEndnotesAcknowledgements3571013171820 3Insights from the Private SectorIntroductionAccording to the International Labour Organization, more than 20 million women, men and children around the world are currently the victims of human trafficking. Tricked, desperate or simply coerced, they provide cheap labour for a wide range of sectors, from domestic work and agriculture to construction and manufacturing, or are the unwilling victims of sexual exploitation.Small wonder, then, that the UN describes human trafficking as “a crime that shames us all”.Yet it is also a crime that all of us, especially in business, are in a position to combat.Why should business care about trafficking?Even if we confine ourselves to concerns about the bottom line and responsibilities towards shareholders, there is a clear business case to be made for the private sector’s role in tackling trafficking. For a start, all forms of illicit trade cost the legitimate private sector money – and trafficking is big business. The International Labour Organization estimates that forced labour in the global private economy generates $150 billion in illegal profits every year.Furthermore, an unregulated workforce, and its recruiters and employers, make no contribution to taxes, healthcare systems or any of the services that help societies to flourish, leaving legitimate businesses to carry a larger share of the burden.There is also the very real threat of reputational damage. These days, it is not enough for leaders to say they weren’t aware of the corrupt nature of a part of their supply chain; this will count for nothing in the face of outrage from consumers whose choices are increasingly informed by ethical considerations.But there is, of course, a clear moral imperative for all companies to ensure that their business is free of modern slavery. The human cost of trafficking is incalculable, as Yury Fedotov, Executive Director of the United Nations Office on Drugs and Crime, emphasized at the launch last July of the first World Day Against Trafficking in Persons.Trafficking, he said, “exploits the dream of millions for a better life for themselves and their children”. Traffickers “steal this hope to turn people into commodities in a perfidious trade that, despite our efforts, continues to operate with impunity”.In the early years of the 21st century, at a time when humankind has never been so interconnected and so interdependent, the cruel trafficking of people for criminal gain is surely a stain on our civilization that none of us, corporation or individual, can allow to stand.I commend the Global Agenda task force on human trafficking for starting a conversation with the World Economic Forum to ensure that it will not.Jean-Luc VezHead of Security Policy and Security Affairs, World Economic Forum 4Hedging Risk by Combating Human TraffickingHuman trafficking is bad for business. That, certainly, is the conclusion of the co-authors of this report, Louise Shelley, Director of the Terrorism, Transnational Crime and Corruption Center at George Mason University, and Christina Bain, Director of the Initiative on Human Trafficking and Modern Slavery at Babson College, both members of the World Economic Forum’s Global Agenda Council on Illicit Trade & Organized Crime. The Network of Global Agenda Councils is a unique, global community of over 1,500 premier thought leaders who are the foremost experts in their fields of academia, business, government, international organizations and society. Grouped into over 80 councils, Global Agenda Council members commit their extensive knowledge, expertise and passion to jointly shape the global, regional and industry agendas. The Global Agenda Councils are committed to addressing the most pressing issues and opportunities of our time and aim to provide new thinking and solutions.As members of the Global Agenda Council on Illicit Trade & Organized Crime, this task force believes that trafficking is a subject that cuts across the work of several different councils and conceived the idea of a powerful working group whose members would be drawn from across the network. They recruited members from 15 Global Agenda Councils, representing subject matters as diverse as migration, human rights, logisti