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Executive Order Focuses on Prohibiting Human Trafficking

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Last week, President Obama signed an Executive Order (EO) strengthening the government’s zero-tolerance policy rules governing trafficking in persons (TIP). The EO lays out detailed guidance for a new anti-trafficking rule that will prohibit U.S.-facilitated trafficking occurring abroad. The EO states:

More than 20 million men, women, and children throughout the world are victims of severe forms of trafficking in persons….

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The United States has long had a zero-tolerance policy regarding Government employees and contractor personnel engaging in any form of this criminal behavior. As the largest single purchaser of goods and services in the world, the United States Government bears a responsibility to ensure that taxpayer dollars do not contribute to trafficking in persons. By providing our Government workforce with additional tools and training to apply and enforce existing policy, and by providing additional clarity to Government contractors and subcontractors on the steps necessary to fully comply with that policy, this order will help to protect vulnerable individuals as contractors and subcontractors perform vital services and manufacture the goods procured by the United States.

The added protections include expanding the current definition of human trafficking and the contract clause to include the following trafficking-related activities:

  • Use of misleading or fraudulent recruiting practices
  • Charging employees recruitment fees
  • Destroying, concealing, confiscating, or denying access to employee personal identity documents
  • Failing to pay return transportation costs for third country nationals (TCNs)

The EO also requires contractors and their subcontractors to improve TIP training, certify that they are in compliance with anti-trafficking laws, and cooperate fully with trafficking audits and investigations. Federal contracting officials are required to report TIP allegations to the Inspector General or the suspension/debarment official. The EO will apply when the contract is performed overseas and is valued over $500,000.

Other key provisions will require a process for employees to report TIP violations; plans for recruitment, wages, and housing that protects workers; procedures for preventing subcontractors at any tier from engaging in trafficking; and certifications by contractors and subcontractors that they are in compliance with the TIP requirements.

The EO goes into effect immediately, but will apply to new solicitations only after new regulations are put on the books by the Federal Acquisition Regulatory (FAR) Council.

This is great news. The Project On Government Oversight has long highlighted concerns in this area, pushing for improvements to the anti-trafficking regulations for years, testifying on the issue before Congress, and producing a podcast with TIP experts.

The EO received bi-partisan support from Sens. Al Franken (D-Minn.) and Marco Rubio (R-Fla.), but it wasn’t celebrated by everyone. Rep. James Lankford (R-Okla.), who co-sponsored along with Rep. Gerry Connolly (D-Va.) the End Human Trafficking in Government Contracting Act, stated that the EO “is modeled after his bill and circumvents the legislative process.” Rep. Lankford’s bill (H.R. 4259) and its companion bill sponsored by Sen. Richard Blumenthal (D-Conn.) (S. 2234) have won financial clearance from the Congressional Budget Office, and the House bill has been passed as an amendment to the 2013 Defense Authorization Act (H.R. 4310, Secs. 835 and 1701 et al.).

Although the EO closely parallels the existing legislation, especially in the area of defining what constitutes trafficking, there are three differences that should be considered by those directed with implementing the EO. First, the EO prohibits the charging of recruitment fees whereas the legislation prohibits the charging of “exorbitant placement fees, including fees equal to or greater than the employee’s monthly salary.” Unfortunately, the charging of placement or recruitment fees or commissions is often the main method by which foreign workers are bound to their employers. Foreign workers, also known as third country nationals (TCNs), pay brokers or recruiters in their home countries for the opportunity to work abroad. The exorbitant fees charged by brokers often cause workers to sell heirlooms or mortgage their homes. If there are no assets, TCNs frequently “borrow funds from loan sharks, who often resort to violence and intimidation to recover their investments from TCNs or their families.” The EO’s prohibition on recruiting fees might be unrealistic, as compared to limiting excessive fees, but it would result in contractors and subcontractors doing more direct hiring, which might provide a level of accountability that is needed.

Second, the EO lacks criminal penalties, unlike the House and Senate bills. Current regulations include a remedies provision (including termination of employees, termination of the contract, and suspension/debarment) and the legislation makes a giant leap forward to deter trafficking violations, allowing for criminal fines, imprisonment, or both. The EO’s silence isn’t a fault, but most likely deference to the need for legislation that will amend criminal laws.

Third, the legislation spells out procedures for contracting officers and other government officials to investigate TIP allegations, notify Inspectors General, report on those allegations, enter findings in the Federal Awardee Performance and Integrity Information System (FAPIIS), and report to certain Defense Department offices. The EO doesn’t speak to those points, but those actions are worth promoting when the EO is implemented by the FAR Council.

TIP isn’t just an issue for Congress. The Departments of Defense and State, the Commission on Wartime Contracting, the Government Accountability Office, and the Congressional Research Service report have highlighted TIP issues that should be considered by the FAR Council as well as by Congress to deter and eliminate the problem.

It is alarming to know that TCNs are working on U.S. projects abroad when they have been lured to Iraq or Afghanistan thinking there were going to Dubai or elsewhere, are working for a small fraction of the pay they were promised when they were hired, or are forced to remain because they have to pay back excessive fees to a recruiter or loan shark at home. Those scenarios are ones of slavery and exploitation, not democracy and freedom. It is up to the government and all contractors to alter that reality. In fact, in addition to releasing the EO to improve contractor TIP practices, the Administration also released a determination that U.S. funding to certain foreign governments should be suspended until they comply with anti-trafficking laws. Those actions highlight how pervasive trafficking is around the world and the Administration deserves credit for taking on the issue at home and abroad. That is also why we need a legislative fix to the TIP problem in addition to the EO. Congress should consider the legislation proposed by Reps. Lankford and Connolly and Sen. Blumenthal before this session of Congress ends.

By: Scott H. Amey, J.D.
General Counsel, POGO

scott amey Scott Amey is General Counsel for the Project On Government Oversight. Some of Scott's investigations center on contract oversight, human trafficking, the revolving door, and ethics issues.

Topics: Contract Oversight

Related Content: Contractor Accountability, Human Trafficking

Authors: Scott H. Amey, J.D.

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