Debt bondage, also known as debt slavery, bonded labour, or peonage, is the pledge of a person's services as security for the repayment for a debt or other obligations. Where the terms of the repayment are not clearly or reasonably stated, or where the debt is excessively large, the person who holds the debt has thus some control over the laborer, whose freedom depends on the undefined or excessive debt repayment. The services required to repay the debt may be undefined, and the services' duration may be undefined, thus allowing the person supposedly owed the debt to demand services indefinitely. Debt bondage has been described by the United Nations as a form of "modern day slavery", and the Supplementary Convention on the Abolition of Slavery seeks to abolish the practice.
The practice is still prevalent, especially in South Asia and parts of Western and Southern Africa, despite the fact that most countries in these regions are parties to the Supplementary Convention on the Abolition of Slavery. Lack of prosecution or insufficient punishment of this crime are the leading causes of the practice as it exists at this scale today. When the bonded labourer dies, debts are often passed on to children.
Usage of term
Although debt bondage, forced labour, and human trafficking are all defined as forms or variations of slavery, each term is distinct. Debt bondage differs from forced labour and human trafficking in that a person consciously pledges to work as a means of repayment of debt without being placed into labor against will. The system of pawnship occurred simultaneously with the slave trade in Africa. Moreover, conditions for emancipated slaves were harsh. Debt peonage was practiced as "an illegal form of contemporary slavery... well into the 1950s" in "Florida, Georgia, Alabama, and other parts of the Deep South." Civil authorities would arrest "colored men off the street and in their homes if they were caught not working," charge them with vagrancy, assess fines equal to several weeks of pickers' pay, and compel them "to pick fruit or cut sugarcane to work off the debt.... Those captured were hauled to remote plantations ..., held by force, and beaten or shot if they tried to escape."
In Peru, a peonage system existed from the 16th century until land reform in the 1950s. One estate in Peru that existed from the late 16th century until it ended had up to 1,700 people employed and had a prison. They were expected to work for their landlord a minimum of three days a week and more if necessary to complete assigned work. Workers were paid a symbolic two cents per year. Workers were unable to travel outside their assigned lands without permission and were not allowed to organise any independent community activity. In the Peruvian Amazon, debt peonage is an important aspect of contemporary Urarina society.
Asia
The ancient Near East
Severe personal debt was widespread in the ancient Near East. Debtors who did not pay up could become their creditors' chattel, as could other members of their families. The problem of debt bondage, in conjunction with the state's ability to levy serfs for labour, led many to flee their homes. Some of these fugitives formed bands of roving warriors called habiru-men', especially in the Levant of the late second millennium. When a natural disaster occurred or food was scarce, people willingly chose debt bondage as a means to a secure life. and as they worked, often on farms, lodging, meals, and clothing fees were added to the existing debt causing overall debt and interest to increase. These continued added loan values made leaving servitude unattainable. In particular, the Indian indenture system was based on debt bondage by which an estimated two million Indians were transported to various colonies of European powers to provide labor for plantations.
Moro Muslim parents from Cotabato in mainland Mindanao sold their children and slaves to Chinese merchants so the Chinese could later sell them in the Sulu Sultanate after Cotabato was hit by famine and smallpox in 1872. Jesuits stepped in by buying the children from the Chinese.
The Cotabato-based Jesuit mission lasted from 1862 until Spanish rule in Cotabato ended and during famine and disease epidemics they bought children from Muslim parents themselves or from Chinese merchants who had bought the children from the Muslim parents and placed them into a "ransomed slave children" orphanage. The Muslim datus sold their child slaves to the Jesuits during the famine in 1872. Thomas M. McKenna reported that he was told by Datu Adil that Moro Maguidanaons would send their slaves to schools instead of their own children in Cotabato when the Americans opened up schools so these slaves later became bureaucrats and teachers for the Magindanaons. In South Sulawesi in the Dutch East Indies, elite Toraja would also not send their own children to school and instead send their slaves.
Europe
Classical antiquity
Debt bondage was "quite normal" in classical antiquity. The poor or those who had fallen irredeemably in debt might place themselves into bondage "voluntarily"—or more precisely, might be compelled by circumstances to choose debt bondage as a way to anticipate and avoid worse terms that their creditors might impose on them. In the Greco-Roman world, debt bondage was a distinct legal category into which a free person might fall, in theory temporarily, distinguished from the pervasive practice of slavery, which included enslavement as a result of defaulting on debt. Many forms of debt bondage existed in both ancient Greece and ancient Rome.
Ancient Greece
Debt bondage was widespread in ancient Greece. The only city-state known to have abolished it is Athens, as early as the Archaic period under the debt reform legislation of Solon. Both enslavement for debt and debt bondage were practiced in Ptolemaic Egypt. By the Hellenistic period, the limited evidence indicates that debt bondage had replaced outright enslavement for debt. Solon's reforms occurred in the context of democratic politics at Athens that required clearer distinctions between "free" and "slave"; as a perverse consequence, chattel slavery increased.
The selling of one's own child into slavery is likely in most cases to have resulted from extreme poverty or debt, but strictly speaking is a form of chattel slavery, not debt bondage. The exact legal circumstances in Greece, however, are more poorly documented than in ancient Rome.
Roman historians illuminated the abolition of nexum with a traditional story that varied in its particulars; basically, a nexus who was a handsome but upstanding youth suffered sexual harassment by the holder of the debt. In one version, the youth had gone into debt to pay for his father's funeral; in others, he had been handed over by his father. In all versions, he is presented as a model of virtue. Historical or not, the cautionary tale highlighted the incongruities of subjecting one free citizen to another's use, and the legal response was aimed at establishing the citizen's right to liberty (libertas), as distinguished from the slave or social outcast.
Cicero considered the abolition of nexum primarily a political maneuver to appease the common people (plebs): the law was passed during the Conflict of the Orders, when plebeians were struggling to establish their rights in relation to the hereditary privileges of the patricians. Although nexum was abolished as a way to secure a loan, debt bondage might still result after a debtor defaulted. debt bondage (and slavery) provided other forms of unfree labour.
Russian Empire
Throughout the reign of Tsar Alexander II, Russia was dominated by reforms; Serfdom was abolished in 1861 after decades of subjection, granting over 23 million serfs their freedom as well as obtaining citizenship, marriage without permission, property rights along with business ownership. This was well received amongst the peasantry, whom labelled Alexander "the Liberator". This act was the first and most paramount of major reforms enacted during his reign. However, serfs became obligated towards labouring on the land in order to gain private ownership, thus rendering them heavily indebted. Moreover, the outward urban migration of the population from rural areas only made this more difficult to achieve, with peasants enduring similar, albeit greatly reduced, hardship as a result.
Despite that, peasants were enabled to purchase private property, and therefore begin soil cultivation for their own behalf, although this was also somewhat reduced by former tenants being forced to provide land redemption payments for the next several decades, whilst simultaneously being restricted to purchasing less fertile and profitable land without nobility interests. Furthermore, peasants were often overcharged for land beyond market value, often varying from every location, with almost all the peasantry whom obtained greater land amounts being within the Congress Poland, in order to weaken the dominant Polish nobility power structure. It has also been documented that many serfs remained heavily indebted, bound by their superior landlords, having acquired no significant liberty irrespective of the abolition reforms that were recently introduced. Nobility privileges were not affected, and, if anything, debatably strengthened.
Regardless of the Tsar's intentions, some have argued that the emancipation enactment merely benefitted the landowners as an extension of the nobility, in that dedicated compensation secured for the aforementioned greatly overestimated market value of their property. They also determined what they would surrender, with partial remains distributed between the serfs. Extortionately priced land meant that peasants only bought narrow areas difficult to preserve with barely any food or revenue. Landowners received additional financial compensation for land plots they yielded to serfs, contrary to the peasants having to pay for their own plots of land. This led to serfs having to borrow loans as well as mortgages off the State Bank and their landlords, the vast majority of which originating from the former issuer. In order to alleviate the heavy burden, they were tied towards labouring until their debts repaid; Debt consolidation was entirely absent. Land inventories were seized with allotments and payments calculated, since it legally belonged to the landlord, as peasants with government loans were required to redeem allotments from landlords, although redemption payment durations were almost half a century. Within the first 20 years of emancipation, almost all of their peasants had received their land, leading to redemptions becoming mandatory, although allotments were adequate enough. Notwithstanding of this, the domestic population explosion that occurred for the remainder of the 19th century exposed peasants to increased economic difficulties.
Modern practice
Though the figures differ from those of the International Labour Organization, researcher Siddharth Kara has calculated the number of slaves in the world by type, and determined that at the end of 2011 there were 18 to 20.5 million bonded laborers. Bonded laborers work in industries today that produce goods including but not limited to frozen shrimp, bricks, tea, coffee, diamonds, marble, and apparel. It is estimated that 84 to 88% of the bonded laborers in the world are in South Asia. Total revenue from brick kilns in South Asia is estimated by Kara to be $13.3 to $15.2 billion. Laborers are discouraged from defaulting on loans through fear of violence and death from brick kiln owners. In countries like Ghana, it is estimated that 85% of people enslaved are tied to labor. Exporter fish companies drive smaller businesses and individuals to lower profits, causing bankruptcy. Currently, estimates from the International Labour Organization state that between 800,000 and 1.1 million domestic workers are in South Africa. Many of these domestic servants become bonded to labor in a process similar to other industries in Asia.
The debt is often inflated with additional costs such as housing, food, and medical care, making it nearly impossible for the individuals to repay it. As a result, they remain trapped in a cycle of exploitation and abuse.
It is a severe violation of human rights and a significant issue in the fight against human trafficking and modern slavery.
Consequences
Revenue
The International Labour Organization (ILO) estimates that $51.2 billion is made annually in the exploitation of workers through debt bondage. Though the employers actively take part in accruing the debt of laborers, buyers of products and services in the country of manufacturing and abroad also contribute to the profitability of this practice. These children generally do not have access to education thus making it impossible to get out of poverty. Moreover, if a relative who still is in debt dies, the bondage is passed on to another family member, usually the children. Less than two decades later, Pakistan also passed a similar act in 1992 and Nepal passed the Kamaiya Labour (Prohibition) Act in 2002.
In India, the rise of Dalit activism, government legislation starting as early as 1949, as well as ongoing work by NGOs and government offices to enforce labour laws and rehabilitate those in debt, appears to have contributed to the reduction of bonded labour there. However, according to research papers presented by the International Labour Organization, there are still many obstacles to the eradication of bonded labour in India.
Sub-Saharan Africa
In many of the countries like South Africa, Nigeria, Mauritania, and Ghana in which debt bondage is prevalent, there are not laws that either state direct prohibition or specify punishment. In addition, though many of the countries in Sub-Saharan Africa have laws that vaguely prohibit debt bondage, prosecution of such crimes rarely occurs.