Info Service on UN Sustainable Development (May14/11)
23 May 2014
Third World Network
labour generates $150 billion profits per year, says ILO
in SUNS #7808 dated 21 May 2014
Geneva, 20 May (Kanaga Raja) -- The total illegal profits generated
by the use of forced labour worldwide amount to US$150.2 billion per
year, according to a new report by the International Labour Organisation
The report, titled "Profits and Poverty: The Economics of Forced
Labour", said that more than one-third of the profits, amounting
to US$51.2 billion, resulted from forced economic exploitation, including
nearly US$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 US$99 billion per year.
"In calculating the profits, it is assumed that wages and intermediate
consumption make up about 30 per cent of the total earnings of forced
labour victims in commercial sexual exploitation," it added.
The profits from forced labour are highest in Asia (US$51.8 billion)
and Developed Economies (US$46.9 billion), said the ILO, 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 (US$34,800 per victim), followed by countries
in the Middle East (US$15,000 per victim), and lowest in the Asia-Pacific
region (US$5,000 per victim) and in Africa (US$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
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.
The ILO said that the estimate of the profits and the analysis of
the causes of forced labour presented in this 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 individuals into forced labour, with other factors
that give rise to risk and vulnerability being lack of education,
illiteracy, gender and migration.
"This 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 its victims. Our new report adds new urgency to our efforts to
eradicate this fundamentally evil, but hugely profitable practice
as soon as possible," he added.
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.
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,
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 per cent) - are exploited in the private economy, by individuals
Of these, said the ILO, 4.5 million (22 per cent) are victims of forced
sexual exploitation, and 14.2 million (68 per cent) are victims of
forced labour exploitation, primarily in agriculture, construction,
domestic work, manufacturing, mining and utilities.
The remaining 2.2 million (10 per cent) 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 per cent) - compared to 9.5 million (45 per cent) men and boys.
Adults are more affected than children - 15.4 million (74 per cent)
are aged 18 or older, with the number of children under the age of
18 estimated at 5.5 million (26 per cent), 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 per cent
of the global total), while the second highest number was found in
Africa at 3.7 million (18 per cent), followed by Latin America and
the Caribbean with 1.8 million victims (9 per cent).
The Developed Economies and European Union accounted for 1.5 million
(7 per cent), while countries of Central, South-Eastern and Eastern
Europe (CSEE) and the Commonwealth of Independent States (CIS) have
1.6 million (7 per cent). There are also an estimated 600,000 (3 per
cent) victims in the Middle East.
Of the total of 20.9 million people in forced labour, an estimated
9.1 million people (44 per cent) moved either internally or internationally,
while the majority, 11.8 million (56 per cent), 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 US$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 US$9 billion per year.
Profits for other economic activities are estimated at US$34 billion
per year, encompassing construction, manufacturing, mining and utilities.
The ILO also estimated that private households employing domestic
workers under conditions of forced labour save about US$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 per cent
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 US$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 US$43.4 billion
per year, with an average annual profit of US$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.
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 US$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 per cent
of their due wages.
This amount of stolen wages, or profit, varies between US$50 per month
in Africa and more than US$600 per month in Developed Economies.
The total annual profits made from forced sexual exploitation are
estimated at US$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 (US$80,000) and the Middle East (US$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.
For instance, being female as opposed to male reduces the probability
of a household member aged 5 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
"Put into perspective, the 21 million victims in forced labour
and the more than US$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 added.
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.
"People in forced labour are often caught in a vicious cycle
that condemns them to endless poverty. They may suffer personal trauma
that will require years to overcome as they try to rebuild their lives."
"There is a critical need to expand our current 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 its victims,
for business and development. It is a practice that has no place in
modern society and should be eradicated as a matter of priority,"
said the ILO.
"While progress is being made in reducing state-imposed forced
labour, we must now focus on the socio-economic factors that make
people vulnerable to forced labour in the private sector," said
Beate Andrees, head of the ILO's Special Action Programme to Combat
Forced Labour, in the press release.
Andrees recommended a series of measures to reduce vulnerability to
forced labour. These include bolstering social protection floors,
investing in education and skills training, promoting a rights-based
approach to migration, and supporting the organisation of workers,
including in sectors and industries vulnerable to forced labour.
"If we want to make a significant change in the lives of the
21 million men, women and children in forced labour, we need to take
concrete and immediate action," said ILO Director-General Ryder.
"That means working with governments to strengthen law, policy
and enforcement, with employers to strengthen their due diligence
against forced labour, including in their supply chains, and with
trade unions to represent and empower those at risk," he added.