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Sponsoring slavery

The need for major reform of the GCC’s kafala system

by Paul Cochrane

Every minute, one person is sold over an international border. Human trafficking is now the fastest growing international crime; it is second in size only to the drug trade and ahead of arms trafficking, according to the United Nations Office on Drugs and Crime.

Due to its nature as a hidden crime, there are no precise figures on human trafficking, but profits are estimated to be $32 billion annually — $4 billion from forced economic exploitation and $28 billion from forced sexual exploitation. In terms of trafficked people, some 20.9 million people are victims of forced labor, of which 9.1 million, or 44 percent, are moved either within or outside of their country and therefore likely to be trafficked, according to 2012 data from the International Labor Organization (ILO). 

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Shocking though such numbers may seem, they are just the tip of the iceberg. Part of the problem is defining exactly what human trafficking is, while a United Nations resolution was inked in 2003, many countries do not have a precise definition, yet alone laws criminalizing the trade. Getting the legislation right is essential to tackling this crime. Furthermore, there needs to be increased focus on targeting the financial side of what is a low-risk, high-reward activity.

Only recently has the financial side of human trafficking become a focus, with the intergovernmental Financial Action Task Force issuing a report in 2011 on human trafficking and including it as a predicate offense in its latest anti-money laundering recommendations for countries to adopt. 

Non-governmental organizations (NGOs) are also increasingly active, such as Finance Against Trafficking, which is soon to release a manual for businesses to identify suspicious financial activity and human trafficking. The delay in taking on human trafficking at the financial level is by and large political. Since September 2001, the major focus by the world’s de facto regulator — the United States — on tackling financial crime (after the drug trade and money laundering) has been countering terrorist financing during the “War on Terror” years. A ‘war on human trafficking’ has not yet started, but the momentum is building. As the focus grows, the Middle East and North Africa will inevitably come under the spotlight, with the Gulf Cooperation Council (GCC) countries in particular. 

In Lebanon, the parliament, under American pressure, passed an Anti-Trafficking Law (No. 164) in 2011, adding a section to the criminal code prohibiting and punishing all forms of human trafficking; enforcement, however, has been lackluster. The GCC, on the other hand, is lagging seriously behind on the legislative and enforcement side, and a primary reason is the sponsorship or kafala system. Under kafala, foreign laborers have to have a sponsor, who typically charges the worker for the privilege and takes the worker’s passport until he or she is allowed to leave the country. 

It is a big business, with the ILO estimating there are 15 million guest workers in the GCC. In Kuwait, for example, a sponsor normally charges between $5,260 to $8,770 per worker, depending on the nationality. Sponsor 100 people, and you are making some seriously easy money. According to Jamal Abdul Raheem, founder of the Business Crime Bureau in Kuwait and an outspoken critic of the kafala system, the sponsor is in effect breaking the law by not declaring the source of income, therefore committing a money-laundering crime. 

The ILO has urged “major reform” of the kafala system and human rights groups have called for GCC states to designate foreign laborers as migrant workers not as guest workers. Changing the designation is important to provide more legal rights for workers. Additionally, while migrant workers are not initially trafficked persons, as they leave countries such as India, Pakistan, Sri Lanka and the Philippines voluntarily, many become trafficked persons by being deceived and exploited by sponsors, which fits into the ILO criteria of forced labor: debt bondage, where a worker is not paid but works to pay off a debt; restriction of movement; and retention of passports or identity documents so a worker cannot leave or prove his or her identity. Tackling this issue is going to be a long and hard process as it goes to the very foundations on which many of the GCC’s skyscrapers and economies are built.  

As income inequality continues to rise around the world, human trafficking is likely to only grow as an international crime. Getting the financial community on-board to red flag suspicious transactions related to human trafficking is essential to tackle the monetary reward and help curb this nefarious trade.


Paul Cochrane is the Middle East correspondent for International News Services

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Paul Cochrane

Paul Cochrane is the Middle East Correspondent for International News Services. He has lived in Beirut since 2002, and has written for some 70 publications worldwide, covering business, media, politics and culture in the Middle East, East Africa and the Indian subcontinent.

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