Any federal contractor knows that the award of a federal government contract is contingent upon a laundry list of complex, lengthy, substantial assurances. A smoke-free, discrimination-free, and sexual harassment-free workplace to name a few. That is true whether you supply tomatoes, uniforms, IT services, construction, security or fighter jets. More than 660,000 businesses willingly make the requisite assurances to gain access to an incredible marketplace, the US Government -- the largest purchaser of goods and products in the world.
Through those assurances, i.e. regulations, the USG has the leverage to shape corporate policy and is doing so quite purposefully for human trafficking. The first effort began in 2006 with a new federal acquisition regulation. Since then, federal contractors have been required to abide by the government's zero tolerance policy for human trafficking, put policies and procedures in place, inform employees of the policy and consequences, and include the same "Combating Trafficking in Persons" clause in any subcontracts. Contracts can be terminated and contractors can be debarred.
Occasionally allegations arose followed by Congressional inquiries. Then came three years of Congressionally mandated Inspector General reports of high risk contracts at USAID, the State Department and the Defense Department. Some inspections of subcontractors uncovered violations such as withheld passports, wage and hour violations, substandard housing conditions, and recruitment debts -- indicators of human trafficking. Notably, the reports found that the contract clause was not in place for subcontractors the majority of the time.
It became clear to the administration and Congress that in the seven years since the regulation went into effect, no contract has been terminated, no contractor has been debarred and no broader implementation or enforcement was behind the regulation. This realization occurred at the same time that senior officials charged with anti-trafficking responsibilities from multiple federal agencies were strategizing around coordinated interagency initiatives. Then came additional pressure as the Wartime Contracting Commission identified human trafficking of third country nationals in Iraq and Afghanistan, finding that prime contractors could have done more to supervise their labor brokers and subcontractors and thereby prevent forced labor.
So began a renewed effort. Last summer, the USG launched mandated training for federal contracting officers responsible for oversight of individual contracts. The training's objectives are that the contracting officers understand both human trafficking and the contractor requirements, how to conduct verification and assess compliance, and what to do in cases of violations.
Then came last fall's Executive Order -- Strengthening Protections Against Trafficking In Persons In Federal Contracts. It gets more specific, targeting the activity that is often overlooked yet contributes to labor exploitation and forced labor. Specifically, federal contractors are prohibited from engaging in fraudulent recruiting or misrepresenting the terms of the job or housing, charging recruitment fees, and confiscating identification documents including a passport. For all contracts of $500,000 or greater or to be performed abroad, contractors and subcontractors must submit a compliance plan and post it publicly on their website. The plan must detail recruitment, wages, housing, an employee awareness program of the corporate policies, and an employee reporting process. Additionally, federal contractors are required to comply with investigations and audits.
Right now, the Federal Acquisition Regulatory Council is rolling up its sleeves to craft an updated regulation based on the Executive Order. In March, the Council kicked off the process with an open meeting, asking for public comments on best practices, helpful language from codes of conduct, and cost and personnel required to create and maintain a compliance plan among other things. Then it began drafting. An interim rule is anticipated late summer.
The Council's task is to walk the line of neither being overly burdensome on corporations nor creating a meaningless check the box exercise. Coupled with promised, required and sustained enforcement, this second bite at the apple has more teeth and more contractors paying attention.
For larger corporations, this is just one of several compliance laws related to transparency in the supply chain and responsible sourcing, spelling out that there are more to come. The alternate view of increased legal obligations is that of opportunity. One, to demonstrate the good labor practices that so many already have in place, something about which corporate stakeholders are increasingly concerned. And two, to use the required employee awareness program not only to roll out corporate policy, but also as a way to equip employees to identify human trafficking in their community. As a cause, human trafficking has captured the attention of many, eager to contribute in some way. Partner with us in the 5/20 Campaign -- training 5 million by 2020 to identify and prevent human trafficking -- to demonstrate your commitment and desire to be a solution.
The Global Freedom Center's expert attorneys work with corporate compliance teams to meet each FAR requirement and deliver the required training. Reach out today.