Modern slavery is present in many industries, permeating every step of the supply chain. The latest estimates indicate that 49.6 million people worldwide were living in modern slavery in 2021 on any given day, and the numbers are growing. Between 2016 and 2021, ten million more people became victims of modern slavery, with women and children being the most vulnerable. These numbers include those who are made to work against their will and those forced into marriage. Both apply to situations where a person is exploited and cannot refuse or leave due to danger, violence, fraud, abuse of power or other forms of coercion.
With the global estimate including 27.6 million in forced labour, modern slavery is a risk businesses must face and prioritise to help eliminate. Over 22 million account for those in a forced marriage. Crises such as the global pandemic, armed conflict and climate change have led to disruptions in employment and education, increasing poverty and unsafe migration, and contributing to rising domestic and gender-based violence. Most forced labour happens in the private economy. Among the millions in forced labour exploitation on any given day, 86 per cent are in the private sector (including 23 per cent in forced commercial sexual exploitation), and 14 per cent is state-imposed forced labour. Given the numbers, it’s inevitable that a business, anywhere in the world, can be affected.
Money Talks
Forced labour affects many sectors of the economy, making it a reality for many companies whose operations and supply chains are at risk. And the numbers show that it is becoming more and more prevalent. There are 17.3 million adults and children in forced labour imposed by the private sector (excluding commercial sexual exploitation), accounting for almost two-thirds of all people in forced labour. Big and small businesses linked to the broader market economy are affected. It’s evident in the food and beverage sector, in factories and plants, where workers are forced to work long hours in appalling conditions to pay back debts or for little or no wages. Human trafficking occurs in spas, massage parlours and nail salons, where women are coerced into working against their will, often in dangerous conditions and made to live in cramped, dirty, or unsafe situations. Technological advances increase the threat of modern slavery, made possible by online platforms for ride-sharing, home-letting, and social networking. Banking and finance are also affected, from risks in money laundering to financing illicit activity through loans or investments. Manufacturing, hospitality, fishing, agriculture, construction and the mining sector have not escaped unscathed from the impact of modern slavery.
While there is an increasing commitment to tackling modern slavery, it remains a prominent issue that prevents a successful realisation of business sustainability initiatives. Identifying incidents of modern slavery in a company’s operations can be challenging, especially if there is a limited ability to monitor and track a product through the supply chain. But, there are huge risks and consequences when a business has not done due diligence in assessing, identifying, preventing and mitigating the risk associated with slavery in their supply chains. The legal and financial implications are far-reaching, and while the effects of reputational damage and loss of consumer trust are more complex to quantify, they are also at a high risk.
Due Diligence in Ethical & Fair Hiring Practices
Diligence in applying and enforcing ethical and fair hiring practices to operations and supply chains makes businesses accountable and helps promote better recruitment industry standards. Importantly, it helps protect workers from abusive and fraudulent practices such as extortionate fees and related costs imposed by shady recruitment agencies and other employment intermediaries. Migrant workers using agencies or brokers to secure employment in a foreign country are often subject to flawed recruitment practices, requiring them to pay agency and broker fees. These typically low-income workers may be asked to cover travel, visa and administrative costs and other unspecified fees and service charges, which often have no connection to the genuine costs of delivering these services. Workers may take out loans against the promise of potential future earnings, which can lead to debt bondage and vulnerability to further exploitation, including forced labour. Evidence shows that recruitment fees put workers at a significantly higher risk of forced labour, debt bondage and human trafficking. As part of their efforts to develop an ethical migrant worker recruitment policy, more companies, including Apple, Patagonia and HP Inc., have introduced a zero-recruitment fee policy for migrant workers.
As more businesses strive to address modern slavery, countries are introducing legislation requiring companies to stop and reduce the risks of modern slavery in their operations and supply chains. In the UK, the Modern Slavery Act 2015 and related laws introduced crimes of human trafficking and other forms of modern slavery offences. The Australian Modern Slavery Act 2018 seeks to prevent and eliminate modern slavery through transparency. Canada has enacted legislation to fight modern slavery, while New Zealand has proposed new legislation. France, Germany, Norway, the Netherlands and the EU are also adopting supply chain due diligence laws.
Identify, Manage & Mitigate Modern Slavery Risks
Independent organisations collaborate with diverse partners to address modern slavery. The Mekong Club supports companies globally in identifying and eliminating forced labour. Similarly, Be Slavery Free empowers stakeholders through advocacy, education and collaboration.
Employees are a powerful resource for companies with supply chain risk. Training and educating staff helps increase awareness and prevention. Companies must monitor supply chains, customers, employees and assets to ensure compliance and transparency. Employees should be able to identify warning signs such as restricted movement, poor working conditions and withheld pay, and report concerns safely.
Modern slavery remains a real risk for business today. Governments, companies and NGOs are working together to improve transparency, enforce laws and raise standards across industries.
Support in crisis readiness, training and compliance can help organisations improve resilience and contribute to ending modern slavery.
A version of this article first appeared in the Crisis Response Journal.
Caroline Sapriel is the Managing Partner of CS&A International with over 30 years of experience in risk and crisis management.
