Private sector makes $236bn illegal profit from labour annually – Report

The private sector generates $236bn in illegal profits annually, a new study by the International Labour Organisation has revealed.

According to the report titled “Profits and Poverty: The Economics of Forced Labour”, there has been a 37 per cent rise in illegal profits from forced labour since 2014.

It stated that the total amount of illegal profits from forced labour had risen by $64bn (37 per cent) since 2014, fuelled by growth in the number of people forced into labour and higher profits generated from the exploitation of victims.

The report estimated that traffickers and criminals were generating close to US$10,000 per victim, up from US$8,269 (adjusted for inflation) a decade ago.

“Total annual illegal profits from forced labour are highest in Europe and Central Asia ($84bn), followed by Asia and the Pacific ($62bn), the Americas ($52bn), Africa ($20bn), and the Arab States ($18bn),” it stated.

According to the ILO, when illegal profits are expressed per victim, annual illegal profits are highest in Europe and Central Asia, followed by the Arab States, the Americas, Africa and Asia and the Pacific.

It further stated that forced commercial sexual exploitation accounts for more than two-thirds (73 per cent) of the total illegal profits, despite accounting for only 27 per cent of the total number of victims of privately imposed labour.

“These numbers are explained by the huge difference in per victim profits between forced commercial sexual exploitation and other forms of non-state forced labour exploitation – $27,252 profits per victim for the former against $3,687 profits per victim for the latter.

“After forced commercial sexual exploitation, the sector with the highest annual illegal profits from forced labour is industry, at $35bn, followed by services ($20.8bn), agriculture ($5.0bn), and domestic work ($2.6bn),” the report indicated.

It explained that those illegal profits were the wages that rightfully belonged in the pockets of workers but instead remained in the hands of their exploiters, because of their coercive practices.

The Director-General of the ILO, Gilbert Houngbo, said, “Forced labour perpetuates cycles of poverty and exploitation and strikes at the heart of human dignity. We now know that the situation has only gotten worse. The international community must urgently come together to take action to end this injustice.”

He noted that there were 27.6 million people engaged in forced labour daily in 2021.

“This figure translates to 3.5 people for every thousand people in the world. Between 2016 and 2021, the number of people in forced labour increased by 2.7 million,” he asserted.

“People in forced labour are subject to multiple forms of coercion, the deliberate and systematic withholding of wages being amongst the most common. Forced labour perpetuates cycles of poverty and exploitation and strikes at the heart of human dignity. We now know that the situation has only got worse.

“The international community must urgently come together to take action to end this injustice, safeguard workers’ rights, and uphold the principles of fairness and equality for all,” Houngbo declared.

The report stressed the urgent need for investment in enforcement measures to stem illegal profit flows and hold perpetrators accountable.

Meanwhile, it recommended strengthening legal frameworks, providing training for enforcement officials, extending labour inspection into high-risk sectors, and better coordination between labour and criminal law enforcement.

According to the report, forced labour cannot be ended through law enforcement measures alone, enforcement actions must be part of a comprehensive approach that prioritizes addressing root causes and safeguarding victims.