30 June 2022 15:56:38

How the private sector can join the fight against modern slavery

According to the United Nations (UN), it is estimated that there are over 40 million men, women and children in situations in modern day slavery today, with about half in Asia alone. These victims, who can be found in factories, construction sites, within fisheries and sex venues, are forced to work for little or no pay, deprived of their freedom, and often subjected to unimaginable suffering.

When most people think of slavery, they think of a problem that happened many years ago. I often hear people state "Slavery is a thing of the past. We don’t have any slaves anymore. This was abolished many years ago." While it is true that organised slavery, which had once been legal, has been abolished, modern slavery continues to thrive.

Each day, it is estimated that over 25,000 people enter modern slavery. This translates to 9.2 million victims a year or a new slave every 4 seconds. This could be in India, Thailand, United Kingdom or Australia. This issue can be found in nearly every country in the world, without exception. In fact, the UN has indicated that there are more slaves in the world today than at any other time in history. Imagine that, in 2022.

What is modern slavery?

Most people who hear these numbers are very surprised. I recently had someone make the following statement "How can this be? I haven’t heard the term modern slavery before. Something this big could not just happen overnight."

The reason for this confusion often comes down to semantics. For the past 35 years, we have been using the phrase "human trafficking" to describe what is now being called "modern slavery". The original phrase "human trafficking", defined by the UN as "the recruitment, transport, receipt and harboring of people for the purpose of exploiting their labor", began circulation in the early 2000’s. According to people who were involved in coming up with this phrase, the use of the word "trafficking" resulted from many of the early cases involving people who were brought from one country to another to eventually be exploited. For this reason, the word trafficking, which implies the movement of something, was used.

But over time, people came to realise that while there were many examples of cross-border trafficking, there were also examples of people who were exploited in-country or even within their own city. For this reason, there was a conceptual shift to use the term slavery, which places the focus on the exploitation that these victims face. The word "modern" was added due to the historical aspect of the term slavery.

A losing battle

We are not winning the fight against modern slavery. Out of the 40 million slaves around the world, it is estimated that only 108,000 victims are helped according to the US State Department’s ‘2021 Trafficking in Persons’ report. Even with the collective response of governments, the UN and civil society partners, less than 0.2 per cent of the victims are assisted. Relying solely on the anti-slavery community around the world to tackle the scourge of modern slavery and the criminals behind it simply isn’t working. Unless something drastic changes, this trend will continue unabated.

So, why are these numbers so low? According to the International Labor Organization, the profits generated from this illicit trade are estimated to exceed US$150 billion annually. But despite the size of the problem, annual global donor contributions add up to only around US$350 million, which represents approximately 0.23 percent of total profits generated by the criminals.

With this in mind, it is not surprising that the number of trafficked persons continues to increase. Despite all of the organisations and individuals attempting to address this problem, we are only having limited impact.

While most people think that human trafficking focuses primarily on women and girls being forced into the sex industry, this represents only about 25 per cent of the total cases. The remaining 75 per cent fall under the heading "forced labour". Out of this figure, about 60 per cent of the victims are associated with manufacturing supply chains, which begin with a grower or producer and end as a finished product purchased by consumers in the retail market. This means that 16 million modern slavery victims are present within private sector ventures. The business world needs to start taking this issue seriously.

Risky business

So why should the business world care about this topic? The answer is simple, modern slavery is becoming an ever-increasing business risk. Governments and regulators around the world are clamping down, and more companies will need to show they have done everything in their power to reduce modern slavery in their operations or face condemnation, fines, loss of access to government contracts and/or prosecution.

Beginning in 2012, new transparency legislation has been put in place that requires major companies to indicate what they are doing to address modern slavery. This includes the California Transparency in Supply Chain Act, the UK Modern Slavery Act, France’s Duty of Vigilance and the Australian Modern Slavery Act. With each new legislation, additional factors are included. For example, the Canadian and German legislation under consideration includes extensive fines and penalties for companies that are found to have modern slavery in their supply chains.

We are also seeing a rise in the number of class action lawsuits against major retail companies within the fisheries, chocolate and palm oil sectors. When modern slavery conditions are found in one of these food sectors, it can result in the entire industry receiving a bad name.

Modern slavery is now on the radar of the media and non-governmental organisation’s, many of whom are unafraid to publicly shame and thrust brands into the spotlight for failing to address it. There has been a significant increase in investigative journalism and data collection to highlight and expose modern slavery within a range of industries. In some cases, campaigns have been launched to encourage consumers to write to those companies that have been linked with modern slavery.

More and more consumers are asking questions about whether the products they buy are "slave free". As part of this trend, millennials are much savvier when it comes to slavery and are using online resources and apps to identify if they are purchasing products from companies that may profit from the enslavement and exploitation of people.

In the investment world, there has been a concerted effort to include metrics related to modern slavery within environmental, social and governance (ESG) frameworks. Major companies that don’t pay attention to this trend might find that their investment options will become more restrictive.

And now, since January 2020, the COVID-19 outbreak has been affecting the entire world. To slow the spread of this virus, many countries have implemented extreme quarantine measures that have significantly affected a full range of businesses. With many business shutdowns, order cancellations, workforce reductions and sudden changes to supply chain structures, many workers have lost their jobs or been furloughed for an extended period of time. As a direct result of this unfolding situation, the risk of modern slavery has skyrocketed globally as the dire economic impact of this pandemic has increased.

What can you and your business do?

As these trends continue, more companies will need to better understand their vulnerability to modern slavery, and there are many people working in the private sector who have come to realise that slave-like conditions are incompatible with good business.

What can your company do? First, raise awareness within your organisation to ensure that both the leadership and relevant departments (C-suite, compliance, legal, risk, and so on) have a clear understanding of the importance of the issue.

Second, you can offer training to both internal staff and external suppliers to ensure they understand your company’s systems and procedures related to modern slavery.

Third, you can ensure that all internal and external company policies and codes-of-conduct related to modern slavery are up-to-date and cascade down to suppliers and sub-suppliers to reduce the chances of collaborating with companies that exploit people in modern slavery.

Fourth, you can carry out internal assessments to identify potential risks. This includes reviewing available data related to country and commodity risk factors to understand how much due diligence should be used to explore modern slavery indicators.

Fifth, using a range of tools, your company can take specific measures to maintain a slave-free supply chain by conducting investigative audits that illuminate the real conditions faced by workers. For example, within many supply chains, supervisors sometimes restrict worker movement, hold their official documentation to prevent workers from leaving, withhold contracts or substitute another version in an unknown language, force workers to do overtime without pay, impose illegal fees and penalties, withhold wages as leverage, or hold workers in place with fraudulent debt. All of these factors are considered modern slavery indicators. To collect data on these issues, auditors often use a detailed set of questions for migrant workers, worker grievance apps and in some cases forensic audit protocols.

Finally, if issues are identified, companies need to be equipped with the right tools to address labour violations in supply chains. This includes developing an internal plan of action based on a set of guidelines.

The time for these kinds of interventions is now. Companies all over the world can set their own agendas to take a leading role in addressing this issue. The necessary skills and capabilities to tackle the problem, whether it be legal, compliance, accounting, communications or financial expertise, exist within the sector. With more emphasis on ESG and "business with purpose", these efforts will demonstrate that the private sector is part of the solution, not the problem. Doing this could also significantly help reduce the number of human trafficking victims.

To make sense of this important topic and its relevance to the private sector in the United States and Canada, I will embark on a presentation tour during September and October to reach out to businesses across North America. This trip represents a public service offered to help raise awareness and offer practical advice and guidance on how to address the issue.

Visit this link for more information about the tour.

Matt Friedman is an international human trafficking expert with more than 30 years’ experience. He is CEO of The Mekong Club, an organisation of Hong Kong’s leading businesses which have joined forces to help end all forms of modern slavery. Friedman previously worked for USAID and the United Nations in more than 30 countries. He offers technical advice to numerous governments, banks and corporations working to eliminate all forms of modern slavery and is the author of 12 books.