Yet a long way to go…

It is a tedious task to bring to the notice of the government officials that the citizens of their State have been kept under bondage in lieu of a meagre amount of 50 or 100 US Dollars by the perpetrators, who were none other than the owners of small scale industries or at times human smugglers mostly acting as middle agent for the labourers and the employers.

The Indian Judiciary also has its reserved opinion towards the crime of Human Trafficking. A reference may be drawn from a case “M.S. Krishna Reddy Versus State of Karnataka, CA No.1617 of 2015, Supreme Court”[1]. In this case the accused Appellant was convicted under Section 344 of the Indian Penal Code, 1860 as well as under the provisions of Section 3 read with Section 14 of the Child Labour (Prohibition and Regulation) Act, 1986 and Section 16 and 17 of the Bonded Labour System (Abolition) Act, 1976 for a term of 7 years consecutively by the Trial Court and affirmed by High Court. The Appellant had further challenged the quantum of punishment in Supreme Court on the grounds that whether the punishment should be concurrent or consecutively. After much debate and argument, the Supreme Court of India overruled the judgment stating that the accused must undergo concurrent sentences. Perhaps, the postulate of Supreme Court leniency towards the convicted accused could have been averted.

gavel 2

NGO’s in India can be registered either as a Trust under the Indian Trust Act or as a Society under section 20 of The Societies Registration Act, 1860 or under Section 8 of Companies Act 2013, as a non-profit company. Article 19 of the Constitution of India contains the provisions relevant to NGOs, philanthropic organizations, and philanthropic giving. Other relevant national laws in India regulating the philanthropic giving in India is Indian Companies Act,2013; Bombay Public Trusts Act 1950, Indian Trusts Act ,1882; Societies Registration Act 1860; Foreign Contribution Regulation Act,2010; Income Tax Act 1961; Prevention of Terrorism Act 2002.

Corporate Businesses should support and respect the protection of internationally proclaimed human rights within their sphere of influence[2]. The very existence of Bonded Labour and Forced Labour in India shows the violation of the Ten Principles of UN Global Compact by India.

Good Corporate Governance makes the same possible. However, there are examples of failure of Corporate Governance in companies like Enron, Satyam, Cadbury, Wal-Mart, Xerox which led to belief amongst the people that the CEOs of big companies cannot be trusted, leave alone NGO’s. In 2002, the U.S. federal government passed the Sarbanes-Oxley Act[3], intending to restore public confidence in corporate governance.

The 2001 European Commission Green Paper on CSR defines this responsibility as “a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment.[4] CSR recognizes that corporations are not only responsible to their shareholders, but owe, or should owe, particular duties to persons or communities directly or indirectly affected by their operations; such persons or communities comprise a corporation’s “stakeholders”[5].

In India, under section 135 of Companies Act 2013, CSR has been made mandatory. It is mandatory to invest 2% of its average net profit for the directly preceding 3 financial year.

The most influential public international CSR instruments are the OECD Guidelines, the UN Global Compact, and the 1998 ILO Declaration on Fundamental Principles and Rights at Work. The OECD Guidelines are recommendations addressed by governments to Multinational Enterprises(MNE). Although they are not legally binding on MNEs, OECD States have agreed to adhere to the Guidelines and encourage their companies to observe them wherever they operate. The Guidelines were first published in 1976 and most recently updated in 2000.[6]They contain recommendations on human rights, employment and industrial relations, environment, bribery, consumer interests, science and technology, competition, and taxation. The UN Global Compact was formally launched in September 2000 by the UN Secretary-General, who called on world business leaders to voluntarily “embrace and enact” the nine Compact principles in individual corporate practice and support complementary public policy initiatives.

two persons hand shake
Photo by on

India is not a member state to OECD, perhaps one of the core reason to why it is feasible for the Government of India to overlook the issues of forced labour and labour rights. India maintains its common law system which she inherited from the British colonial era. After her Independence in the year 1946, India adopted her first independent constitution which guarantees numerous fundamental, political and social rights.

In recent years the ways of criminal activities have become more sophisticated then what it was previously. The communications have become sophisticated and with it the criminals. It is important to understand, that to be able to deter crimes we need to be able to develop a sophisticated system as well. Sophisticated criminals are also the ones who are involved in large scale human trafficking. And these traffickers are successful in masquerading within the crowds.

In UK, Europe and America, banks have come under great pressure under regulators to root out the dirty money in their systems[7]. Banks and Financial institutes are working closely with the law enforcement identifying the proceeds of criminal activity which is also an extremely difficult task. Nevertheless, Financial Institutions were fined well over a total of over 321 billion dollars for failing to do enough. Some even fell foul of the law themselves[8]. Criminal Charges against US entity HSBC US and the parent HSBC Group for its sustained and systematic failure to guard against the corruption of the financial system by drug traffickers and other criminals and for evading US sanction laws[9].

Indian Government has launched a sustained campaign in the last 4 years against black money and has taken several bold steps including the constitution of the ‘Special Investigation Team on Black Money’, enactment of the ‘The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015’, Income Declaration Scheme, 2016, Benami Transactions(Prohibition) Amendment Act, 2016 and the demonetization scheme. One such measure was the setting up of a ‘Task Force’ in February, 2017 by the Prime Minister’s Office under the joint Chairmanship of the Revenue Secretary and Secretary, MCA with a mandate to check in a systematic way, through a coordinated multi-agency approach, the menace of companies indulging in illegal activities including facilitation of tax evasion and commonly referred to as ‘Shell Companies’. However, India has failed to implement the same in terms of prosecution and conviction. The conviction rate on crimes of money laundering is extremely low[10].

In 2015, British Law Enforcement and Banks came together to form the “Joint Money Laundering Intelligence Task Force. The Banks signalled that were keen to help in locating the dirty money or flagging any transactions that look vaguely suspicious.

In Philadelphia USA, a new generation financial technology or fintech companies are emerging with the intent to support this cause. David Maclaughlin heads one such fintech company, Quanta Verse. Quanta Verse[11] has developed machine-learning technology which allows someone to truly follow the money. This technology is already being used by the World’s biggest banks. The team of Quanta Verse is training the company’s computer system to identify potential criminal activity on its own.

The ILO Conventions on Forced Labour and relevant UN Conventions define and prohibit various types of forced labour, slavery and servitude, and debt bondage. UN Sustainable Development Goal 8[12]: promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. According to the 2016 Global Slavery Index[13], India has the most slaves in the world[14]. There are an estimated 46 million people enslaved worldwide with more than 18 million of them in India, the survey added.

India being a vast and complex country will require a more diversified technique to handle this issue. India, again and again, failed to implement the domestic and International laws in terms of protecting the labour rights and maintain a fair and non-partial working environment.

India needs to get down to the grass root to bring in the changes.

By Paroma Banerjee

Paroma Banerjee is an Advocate and member of West Bengal Bar Association. She has worked with MNC’s, the banking sector and non-profit organisations. She is currently associated with a scheduled bank.

[1]Supreme  Court of India, Daily Orders, <>

[2] U.N. Global Compact, The Ten Principles Principle 1 (2000), available at http:// GC/nf/nf/theNinePrinciples [hereinafter Global Compact]. See OECD Guidelines, supra note 6, at 19( accessed 17/05/2018)

  1. Sarbanes-Oxley Act, 15 U.S.C.A. §§ 7201-7266 (2004) ( accessed 17/05/2018)

[4] Promoting a European Framework for Corporate Social Responsibility: Green Paper, COM(01)366 final at 5, available at social/soc-dial/csr/greenpaper_en.pdf [hereinafter Green Paper]. ( accessed 17/05/2018)

[5]  OECD Principles of Corporate Governance Principle III, Organisation for Economic Co-Operation and Development (OECD) Doc. SG/CG(99)5 (1999), available at pdf (acessed ….) [hereinafter OECD Principles]. See The OECD Guidelines for Multinational Enterprises 19, OECD Doc. OECD/GD(97)40 (2000), available at (accessed …..) [hereinafter OECD Guidelines]. ( accessed 19/05/2018)

[6] Muchlinski, supra note 10, at 578-92; Stephen Tully, The 2000 Review of the OECD Guidelines for Multinational Enterprises, 50 INT’L & COMP. L.Q. 394 (2001).

[7] Banks and Dirty Money,

[8] Compliance doesn’t pay, Money launderers are making a mockery of regulation and fine by Lionel Laurent,

[9] BBC New, HSBC to pay $1.9bn in US money laundering penalties,

[10]Prosecution in 370 cases under PMLA, two convictions: Arun Jaitley, July21, 2017; The Economics Times, < >

[11] Wayne-based AI company QuantaVerse lands Wired profile, July14,2017,

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[12]UN, Department of Economic and Social Affairs Division for Inclusive Social Development

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[13] The Global Slavery Index 2016 para4,< >

[14] It’s a national shame that bonded labour still exists in India, Nov 5th 2017, Hindustan Times, < > < accessed07/06/2018>

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