Government contractors could soon be required to create anti-human trafficking compliance plans and face stiff penalties, including criminal charges, for using trafficked labor.

On March 27, 2012, anti-trafficking bills were simultaneously introduced in both chambers of Congress following recent reports of human trafficking carried out by local subcontractors in Iraq and Afghanistan.  A January report by the Pentagon inspector general found that 2011 saw more trafficking investigations of the defense contractor supply chain than in any of the four previous years. The new bills define human trafficking as occurring when, inter alia, labor is forced by confiscation of passports, employment terms are misrepresented during recruiting, and workers face oppressive fees for employment placement.

The new bills would apply to contractors receiving $1 million or more in federal contracts for work abroad. These companies would be required to annually certify that they are policing human trafficking in their work forces.  Any trafficking would have to be reported to the contracting agency’s inspector general. Remedial actions would include contract termination, suspension of contract payments, and withholding of award fees.  Moreover, the bills would enable the U.S. Justice Department to prosecute contractors engaging in trafficking abroad, with penalties of up to 5 years in prison.

The federal government in the past years appears to have taken trafficking concerns more seriously.  In December 2011, the U.S. Defense Department issued a final rule amending DFARS 242.302 to require human trafficking surveillance, which did not create a new obligation for contractors but simply put them on notice of anti-trafficking rules that had been on the books since February 2009. The bills now in Congress would, however, create significant new obligations for contractors over and above current regulations.

“We head from the Commission on Wartime Contracting and the inspectors general of the Defense Department and State Department that existing protections against human trafficking in connection with overseas government contracts are not sufficient,” said one of the bill’s sponsors, Sen. Rob Portman, R-Ohio, in a statement.

While the bills enjoy bipartisan support, their passage is, of course, uncertain. Nevertheless, contractors working abroad should consider proactive measures to detect or prevent use of human trafficked labor as it will likely be an issue of concern for the federal government for years to come.