Palau (Tier 2 Watch List)

The Government of Palau does not fully meet the minimum standards for the elimination of trafficking but is making significant efforts to do so. These efforts included convicting a trafficker for the first time since 2018, convicting a government official for corruption in trafficking-related crimes, initiating two labor trafficking prosecutions, establishing an interagency working group, and conducting public awareness campaigns. In addition, the government finalized and implemented a national action plan (NAP) and hired an investigator and victim advocate for its Anti-Human Trafficking Unit. However, the government did not demonstrate overall increasing efforts compared with the previous reporting period, even considering the impact of the COVID-19 pandemic on its anti-trafficking capacity. The government remained without standard operating procedures (SOPs) for victim identification and referral to services, leading to insufficient identification and protective services. A court issued a lenient sentence to a convicted trafficker, weakening deterrence, undercutting nationwide efforts to fight trafficking, and creating potential security and safety concerns for trafficking victims—particularly for victims who cooperated with the investigation and prosecution. Therefore Palau remained on Tier 2 Watch List for the second consecutive year.

  • Increase efforts to investigate, prosecute, and convict traffickers, including complicit officials, under trafficking laws and seek sentences with significant prison terms for traffickers.
  • Develop, disseminate, and train officials on SOPs for the proactive identification of trafficking victims and their referral to protection services.
  • Increase efforts to identify victims through proactive screening of vulnerable populations, such as migrant workers and individuals in commercial sex.
  • Amend anti-trafficking laws to remove sentencing provisions that allow fines in lieu of imprisonment for sex trafficking crimes and allow the prosecution of victims for unlawful acts traffickers compelled them to commit.
  • Enforce the anti-trafficking laws punishing recruiters, employment agents, and labor officials for illegal practices that facilitate trafficking.
  • Increase resources for and develop victim protection services, including long-term shelter options, interpretation services, and medical and psychological care.
  • Create and implement a system to proactively offer foreign trafficking victims job placements and work visa extensions.
  • Establish and implement witness confidentiality procedures.
  • Increase anti-trafficking awareness among vulnerable populations, including foreign migrant worker communities.
  • Establish a mechanism for the systematic monitoring of government anti-trafficking efforts.

The government increased law enforcement efforts. Sections 2106-2108 of the criminal code criminalized sex trafficking and labor trafficking and prescribed penalties of up to 25 years’ imprisonment, a fine of up to $250,000, or both if the victim was an adult and up to 50 years’ imprisonment, a fine of up to $500,000, or both if the victim was younger than age 18. These penalties were sufficiently stringent, but by allowing for a fine in lieu of imprisonment for sex trafficking crimes these penalties were not commensurate with penalties prescribed for other serious crimes, such as rape.

The Ministry of Justice’s Anti-Human Trafficking Unit (AHTU) investigated three forced labor cases, compared with three potential trafficking case investigations (one of forced labor and two of sex trafficking) in the previous reporting period. Authorities determined two of the three cases did not meet trafficking standards and proceeded with either closing the case or investigating non-trafficking related charges. In addition, the government continued four case investigations initiated in prior years. Authorities closed three of the four cases due to insufficient evidence or expired statute of limitations; the fourth case was ongoing. The Attorney General’s Office prosecuted two alleged labor traffickers, compared with no prosecutions in the previous reporting period. Courts convicted one labor trafficker during the reporting period, the first trafficking conviction since 2018. Courts convicted a former president of a state legislature on labor trafficking for non-payment of wages under Section 2006 of the Penal Code, violation of the Code of Ethics and the Unified Tax Act, and terroristic threatening and sexual harassment under the Penal Code. Courts sentenced the trafficker to six months’ incarceration, seven years’ probation, and a $28,000 fine and ordered the trafficker to pay $2,516.40 in restitution; these penalties were well below those allowed under the criminal code. Lenient sentences of a year or less created potential safety problems for trafficking victims and weakened deterrence. In 2020, the government charged a former state governor with trafficking-related charges, including “promoting prostitution” for operating a massage parlor for commercial sex purposes. In January 2022, courts convicted the former official on non-trafficking related charges, including misconduct in public office and violations of the Code of Ethics, Foreign Investment Act, and the Unified Tax Act. Courts sentenced the former official to five years’ probation, suspended 18 months’ incarceration, $13,500 in criminal fines, and $1,246 in civil penalties and ordered the defendant to pay for the return flight of an individual suspected of being involved in commercial sex at the massage parlor. Observers noted official complicity continued to play a significant role in facilitating trafficking crimes, hindering law enforcement efforts to combat trafficking. The government did not report any other investigations, prosecutions, or convictions of government employees complicit in human trafficking crimes.

Authorities cooperated with foreign governments on ongoing international trafficking cases. The government, in partnership with an international organization, developed anti-trafficking training curriculum for police cadets and trained police officers on how to identify and investigate cases of child exploitation. In addition, the government provided specialized human trafficking investigation training to police officers assigned to the AHTU. The government reported providing trauma-informed training to the Victims of Crime Advocate (VOCA), AHTU, law enforcement officials, and other stakeholders who were actively involved in providing support to victims. Despite these trainings, observers stated officials generally continued to lack an understanding of trafficking. The government reported it redirected or limited resources among law enforcement as a result of the pandemic; this may have adversely affected the government’s ability to investigate or prosecute trafficking crimes.

The government maintained inadequate efforts to protect victims. The government identified one female foreign victim of forced labor, compared with identifying one victim of labor trafficking the previous reporting period. The AHTU, with assistance from an international organization, continued to develop SOPs for victim identification and referral but reported pandemic-related travel restrictions delayed progress; consequently, the government remained without SOPs for victim identification and referral to services. Authorities reported using an interview guide designed to assist in interviewing and avoid re-traumatizing trafficking victims. Due to a lack of formal identification procedures, authorities likely detained or deported some unidentified trafficking victims. Observers reported only the most egregious cases of trafficking were likely to come to the attention of authorities because of the lack of proactive identification procedures and foreign migrant workers’ reluctance to complain to authorities out of fear that such complaints would result in job termination and deportation. The government reported, due to the pandemic and lack of employment in Palau, an increase in foreign migrant workers who returned to their countries of origin; some of these migrants may have been unidentified trafficking victims. While the 2005 Anti-Smuggling and Trafficking Act granted victims immunity from prosecution for the “act of people trafficking,” the vague language permitted prosecution for unlawful acts traffickers compelled victims to commit, such as commercial sex or petty crime. In the previous reporting period, the government prosecuted and convicted potential victims for commercial sex acts, violation of work permits, and immigration violations.

The government could provide medical treatment, counseling, temporary job placement, transportation, and temporary shelter accommodation to trafficking victims; the government reported providing a temporary job placement permit for one victim, compared with providing temporary employment and shelter services to one victim in the previous reporting period. AHTU investigators could employ local interpreters as needed in Bengali, Mandarin, and Tagalog. As in prior reporting periods, the lack of support services reportedly led some victims to leave the country rather than pursue legal recourse. The government funded an NGO to assist trafficking victims with legal counseling and representation before labor and immigration hearings, compared with no funding provided the previous reporting period; the government last provided approximately $15,000 to an NGO for these purposes in 2018. The government did not report allocating any additional funding for victim assistance, compared with spending $500 on victim assistance to remove an identified victim from an outer island in the previous reporting period.

The Office of Labor Compliance (Labor Compliance) could provide victims with temporary employment placements; the government reported assisting one victim with obtaining new employment, compared with assisting one identified victim the previous reporting period. Labor Compliance conducted labor inspections to ensure compliance of labor laws and anti-trafficking provisions; the government did not report opening any investigations as a result of the labor inspections. In December 2021, the government established a memorandum of understanding between Labor Compliance and AHTU to ensure the agencies shared trafficking information; in addition, Labor Compliance reported all trafficking-related information to an interagency Anti-Human Trafficking Working Group (Working Group). The VOCA, who reported directly to the Minister of Justice, could provide support to victims of serious crime, including human trafficking, and liaise with investigators on behalf of the victim to negotiate the victim’s participation in the investigation. In addition to the VOCA, the AHTU employed a dedicated victim advocate who worked to assist trafficking victims. The VOCA and victim advocate cooperated and coordinated to provide assistance to trafficking victims. The government did not require participation of victims in trafficking investigations; however, authorities reported one victim participated in an investigation during the reporting period. The judicial system did not keep victim identities confidential due to the requirement to testify in court rather than utilizing written or video-recorded testimonies. In prior reporting periods, alleged traffickers threatened witnesses.

The AHTU continued to staff a trafficking hotline with the VOCA and with on-call AHTU lead investigators who spoke Palauan and English; the government did not report how many calls the hotline received or if any calls led to investigations. In addition, Labor Compliance operated a dedicated 24-hour hotline that workers could call with concerns about their employment situation. Courts ordered one convicted trafficker to pay restitution to one victim, compared with none the previous reporting period. The government could offer ad hoc short-term legal alternatives to the removal of foreign victims to countries where they might face hardship or retribution; the attorney general or the special prosecutor prosecuting the case could designate victims as “vulnerable,” making them eligible for alternate employment and accommodation assistance.

The government increased efforts to prevent trafficking. The AHTU, a unit within the Ministry of Justice’s Bureau of Public Safety’s Division of Transnational Crime, coordinated all national efforts to combat human trafficking. The government, with assistance from an international organization, finalized and enacted a new 2022-2025 Anti-Human Trafficking NAP; the government dedicated funding and resources to the implementation of the NAP. The AHTU was responsible for the implementation of the 2022-2025 NAP, identifying and supporting victims, investigating alleged human trafficking crimes, liaising with prosecution authorities, and data collection; the AHTU received funding from the National Congress. In August 2021, the government hired an investigator and a victim advocate for the AHTU. In January 2022, the government established the interagency Working Group to share information regarding human trafficking cases, identify systemic issues and government policies that may inadvertently benefit traffickers, and coordinate the collection of human trafficking data. The Minister of Justice served as the chair of the Working Group, which included representatives from 11 government agencies and an international organization. In February 2022, the Working Group invited four NGOs and community organizations to join.

In partnership with an international organization, the government held awareness campaigns targeting school-aged children and the public. The government did not report conducting educational or public awareness campaigns for employers or labor recruiters. The government reported a reduction in radio airtime availability for trafficking awareness campaigns and a decrease of in-person outreach campaigns due to the pandemic. The government could track trafficking data in a spreadsheet provided by an international organization; however, the government was unable to collect and collate the data due to redirected or limited resources caused by the pandemic. The government authorized workers to move to different employers and granted temporary placement permits for workers experiencing hardship, problems with legal due process, abuse, or other extenuating circumstances. In response to the pandemic, the government implemented an employment assistance program that allowed foreign workers who had lost employment to find new employment and obtain a work permit and legal residency status. The government did not make efforts to reduce the demand for commercial sex acts.

As reported over the past five years, human traffickers exploit domestic and foreign victims in Palau. Palau’s foreign population, about one-third of the country’s population of 18,000, is especially at risk for trafficking. According to an NGO, only one-third of male respondents to a survey believe that trafficking takes place in Palau. Undocumented immigrants and migrant workers with low levels of education and English language proficiency have an increased vulnerability to trafficking. Filipino, Bangladeshi, Nepali, Thai, Korean, and the People’s Republic of China (PRC) national adults pay thousands of dollars in recruitment fees and willingly migrate to Palau for jobs in domestic service, agriculture, restaurants, or construction; upon arrival, traffickers exploit some in conditions substantially different from what had been presented in contracts or recruitment offers, and some become trafficking victims. Women from the Philippines and the PRC are recruited to work in Palau as waitresses or clerks, but traffickers exploit some in sex trafficking in karaoke bars or massage parlors. Foreign workers on fishing boats in Palauan waters also experience conditions indicative of human trafficking. Cuban nationals working in Palau may have been forced to work by the Cuban government. Natural disasters and climate-induced displacement significantly increases Palauans’ vulnerability to trafficking due to a loss of livelihood, shelter, or family stability. Official complicity plays a role in facilitating trafficking. Authorities have investigated government officials—including labor, immigration, law enforcement, and elected officials—for complicity in trafficking crimes.

U.S. Department of State

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