A wide range of literature shows that labour abuse is not confined to one sector of the illicit economy, but is a pervasive feature across multiple illegal markets. The International Labour Organization (ILO) estimates that nearly 28 million people are trapped in forced labour worldwide, generating record profits for exploiters (ILO, 2024[1]). These abuses often occur in the shadows of illicit economies, where opacity, lack of regulation, and criminal control create fertile ground for coercion and exploitation.
Labour abuse acts as a cross-cutting enabler of illicit trade. In illegal mining, reports from the UN and NGOs have documented the presence of child miners and bonded labourers to extract gold, cobalt, and precious stones in unsafe conditions, and which then feed into illicit and sometimes formal supply chains (UNODC (2024[2]). In the fisheries sector, ILO and International Organization for Migration (IOM) studies have shown that trafficked workers are coerced to work for months at sea on vessels engaged in illegal, unreported, and unregulated (IUU) fishing, often without pay and under physical abuse. In agriculture, particularly in high-risk crops such as coca plant or cannabis, there is evidence of child labour and debt bondage in both licit and illicit channels, underscoring the porous boundary between legal and illegal markets when governance is weak (ILO–OECD–IOM–UNICEF, 2019[3]).
The drivers of labour exploitation by criminal groups often mirror those of illicit trade in general: profit maximisation, low probability of detection, and weak enforcement. Exploitative labour serves as a means to cut production costs, reduce overheads, and externalise risks. In markets such as counterfeit production, wildlife trafficking, and narcotics cultivation, the reliance on forced or underpaid labour is not incidental but intrinsic to sustaining competitiveness against lawful operators.
Labour abuse also plays a role in linking different illicit activities (OECD, 2016[4]). For example, trafficked migrants coerced into agricultural labour may later be redirected to street vending of counterfeit goods or drug distribution. Victims of labour exploitation in one illegal economy can be moved into others, creating a fluid workforce for organised crime. This convergence has been observed in West Africa, where victims exploited in artisanal mining have been trafficked into drug smuggling, and in Southeast Asia, where coerced workers in IUU fishing have been forced to participate in smuggling other contraband. It is important to underscore that although many individuals knowingly engage in illegal activities, their involvement occurs under coercive conditions that severely constrain their ability to decline participation.
The literature stresses that labour abuse in illicit markets is not only a human rights violation, but a governance challenge. It undermines fair competition, weakens the rule of law, and erodes trust in global supply chains. Moreover, by fuelling corruption and generating criminal proceeds, labour exploitation entrenches the power of organised crime and hampers development goals.
A substantial volume of factual studies demonstrates that illicit trade and associated criminal economies are closely intertwined with labour exploitation. The ILO estimates that forced labour generates over USD 236 billion in illicit profits annually, reflecting the systemic role of exploitation in criminal business models (ILO, 2024[5]). UNODC’s Global Report on Trafficking in Persons (UNODC, 2024[2]) highlights how organised crime groups rely on exploitative labour – through coercion, debt bondage, or fraudulent recruitment – to sustain activities in drugs, cybercrime, and in the production and distribution of counterfeit goods (UNODC, 2013[6]).
While forced labour imposes a substantial cost on the global economy, the ILO has highlighted that its elimination is not only a human-rights imperative but an economic opportunity. It notes that ending forced labour would generate an estimated increase of USD 611 billion in global GDP, along with an additional USD 114 billion in tax revenues (ILO, 2024[5]). These findings reinforce the argument that addressing forced labour can boost economic growth, strengthen labour markets, support fair competition, and contribute to sustainable development.
Several studies provide concrete examples of counterfeiting linked to labour abuse. UNODC has reported on clandestine textile workshops where counterfeit clothing was produced under conditions that involved long hours, no contracts, and unsafe machinery, with children and irregular migrants making up part of the workforce (UNODC, 2013[6]). Europol and EUIPO identified multiple counterfeit cigarette factories in Eastern Europe that were dismantled but which had employed undocumented migrants, some of whom were kept under constant surveillance and prevented from leaving (EUIPO and Europol, 2022[7]). TRACIT has described cases where children were engaged in attaching counterfeit logos to footwear and apparel, while smuggled migrants were coerced into retailing fakes on the streets of southern European cities (TRACIT, 2021[8]). These examples underscore the reality that counterfeiting is often sustained by abusive and systematic labour practices to cut costs and to maximise illicit profits. The Anti-Slavery Collective reports a case involving young men, some of whom had arrived in the United Kingdom by boat less than 24 hours earlier, who were subsequently deployed as spotters in clandestine counterfeiting operations. These individuals were subjected to excessively long working hours and received only GBP 20 per day.
It would be misleading, however, to assume that only criminals are implicated. Empirical evidence shows that legitimate businesses are not immune. The Rana Plaza collapse in 2013, for example, revealed structural negligence in parts of the global garment supply chain; the deaths of over 1 100 workers sparked worldwide outrage and calls for accountability. Murphy (2021[9]) has traced cotton linked to forced labour in Xinjiang to global apparel markets, highlighting governance failures among established brands. Transparentem (2021[10]) has documented how suppliers in South and Southeast Asia systematically misled social auditors to conceal forced-labour practices. Such findings, although scattered across case studies, demonstrate persistent vulnerabilities in globalised supply networks.
In contrast to illicit operators, legitimate businesses have access to structured frameworks to prevent labour exploitation and demonstrate compliance. The OECD Guidelines for Multinational Enterprises (OECD, 2023[11]) and the OECD Due Diligence Guidance for Responsible Business Conduct (OECD, 2018[12]) offer step-by-step processes for identifying, preventing, and mitigating risks linked to forced labour. Sector-specific instruments, such as the one for garment and footwear issued by the OECD (OECD, 2017[13]), provide tailored recommendations on purchasing practices, subcontracting, and recruitment. The ILO Tripartite Declaration on Multinational Enterprises and Social Policy (ILO, 2022[14]) reinforces international labour standards and encourages worker representation and social dialogue. Private certification schemes also play a role: the SA8000® standard (SAI, n.d.[15]) sets auditable criteria on child labour, working hours, and health and safety, while the Fair Labor Association’s Workplace Code of Conduct (Fair Labor Association, n.d.[16]) requires member companies to maintain minimum labour standards across suppliers. Moreover, the OECD’s system of National Contact Points (NCPs) provides a unique non-judicial grievance mechanism that offers transparency and accountability when allegations of non-compliance arise; to date, over 700 cases have been recorded.
These tools enable legitimate businesses – particularly those operating under strong governance regimes – to take actions to reduce exposure to labour abuse. The key challenge lies in ensuring their robust implementation and monitoring, particularly in high-risk areas and at lower tiers of supply chains (Jaax and van Lieshout, 2025[17]). The Anti-Slavery Collective (TASC) has highlighted through multiple case studies, however, that labour exploitation can persist throughout the entire counterfeit supply chain – from production and assembly to distribution and retail.
A distinct but related body of literature documents the nexus between counterfeit trade and human trafficking. UNODC (2010[18]) reported cases in which irregular migrants smuggled into Europe were forced to sell counterfeit handbags and DVDs on the streets to repay traffickers. Europol and EUIPO (2020[19]) demonstrated that organised crime groups engaging in intellectual property (IP) crime often run “poly-criminal” operations, with people trafficking, smuggling, and counterfeiting sharing the same logistics, facilitators, and financial channels.
Concrete cases reinforce this convergence. In Spain and Italy, law-enforcement authorities have uncovered networks that coerced West African migrants into street vending of counterfeit luxury goods. In Southeast Asia, the Mekong Club (2022[20]) found that trafficking routes used to move counterfeit pharmaceuticals also carried victims of forced labour, reflecting the operational efficiency of using shared infrastructure for multiple illegal commodities. (EUIPO and Europol, 2022[7]) has documented instances where victims of human trafficking were exploited in the same factories producing counterfeit cigarettes.
These findings confirm that labour exploitation in counterfeiting cannot be examined in isolation from wider trafficking dynamics. Organised crime groups often perceive people as both a commodity (trafficking victims) and as a resource (exploited workers), with counterfeiting providing a ready market for coerced labour. Addressing this nexus requires integrated responses: combining anti-trafficking measures, customs enforcement, labour inspections, and IP crime investigations to dismantle the criminal infrastructures that sustain both.
The reviewed evidence points to a growing awareness of the close linkages between labour exploitation and illicit trade. While much of the evidence is qualitative or anecdotal, it consistently underlines how exploitative labour practices reduce production costs for illicit operators, distort markets, and weaken enforcement of labour and trade standards.
The recognition of the distortive effects of the use of forced labour has translated into policy and, in some cases, concrete regulatory initiatives designed to address these risks at the border. These initiatives do not target the use of forced labour by criminal networks. Instead, they focus on preventing the placement on the market of goods produced with forced labour more broadly – whether through state-sponsored forced labour – making the use of forced labour in the supply chain illegal as in the case of the US Uyghur Forced Labor Prevention Act (UFLPA) – or across all economic operators, as envisaged under the EU Forced Labour Regulation.
A prominent initiative is the UFLPA (Box 2.1), which was enacted in December 2021 to prevent goods made with forced labour from entering the United States and to hold accountable those involved in the systematic use of forced labour in the Xinjiang Uyghur Autonomous Region (XUAR) of the People’s Republic of China (hereafter “China”). The UFLPA created a rebuttable presumption that goods linked to XUAR China Xinjiang province or entities included on the UFLPA Entity List are prohibited from importation due to their being produced wholly or in part with forced labour and therefore barred from entry into the United States. US Customs and Border Protection enforces the prohibition through detention, supply-chain documentation checks, and scientific verification. Importers can obtain release with an exception by meeting certain requirements, including demonstrating that the goods are not produced with forced labour.