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How modern slavery impacts the global labor market

December 19th, 2018 - Posted by Mark Dunn in Anti-Bribery And Corruption

Migration is a recurrent theme in human history. Whether seeking to escape violence, natural disasters or poverty, migrants express their determination for better lives through migration. On International Migrants Day, we look at a particular risk that migrants face—forced labor. The issue is more widespread than you might think. One of the most significant findings of the 2018 Global Slavery Index is that the risk of forced labor is even more prevalent in high-GDP countries than previously assumed. This once again highlights the necessity to take immediate action against forced labor and raises an important question. How can corporations, governments and civil society address the forced labor risk and prevent the exploitation of vulnerable migrants?

Forced labor risk entering global supply chains

To address the question of forced labor and how to prevent it, we must first acknowledge the social depth and economic impact of modern slavery. According to recent numbers published by the International Labor Organization (ILO) more than 40 million people are victims of modern slavery worldwide. Out of these, 25 million are in forced labor and approximately 15 million are in forced marriages.

Millions of men, women and children whose daily lives are brutally affected, are forced to work or offer a service under the threat of violence and without consent. Forced labor is the most severe form of human exploitation and primarily affects more vulnerable groups of society. Migrants are particularly at risk because they may rely on unscrupulous recruiters that promise job opportunities, then extract high recruitment fees and use deceptive hiring practices that leave workers trapped in forced labor situations due to debt. There are numerous contexts which assist the creation of economic dependences leading to forced labor, including lack of education, thriving corruption, poverty, weak rule of law and high unemployment numbers.

Why International Migrants Day matters

The United Nations recognises the exploitation of migrants and forced labor on December 18th with International Migrants Day, commemorating the International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families. Its aim is to recognize the contributions migrants make to the global economy and to put emphasize on their basic human rights.

Through the implementation of the Sustainable Development Goals in 2015, the global community has created a universal platform for the fight against forced labor in the 21st century. Sustainable Development Goal 8.7 reflects these ambitious objectives and urges the global community to
“take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labor, including recruitment and use of child soldiers, and by 2025 end child labor in all its forms.”

The ILO recently criticised Thailand for their lack of action concerning forced labor and other cases of severe human rights abuse on domestic fishing vessels, once again raising public awareness to forced labor risk, but other cases often fail to attract the same public attention. Yet, the Thai sample case is only one of countless recent cases of human rights abuse in connection with forcing migrants into labor.

The influx in migration in Europe has swiftly put the continent in the center of attention when it comes to the risk of forced labor in supply chains.
Since 2015, vital European border-countries such as Italy, Cyprus, Bulgaria and Romania have experienced a drastic increase in refugees from the Middle East and the Sub-Saharan region, making them notably more vulnerable to forced labor and economic exploitation.

The European agricultural sector is often named as one of the key sectors of concern regarding forced labor of migrants and refugees. In 2017 The Guardian reported, “that thousands of Romanian agricultural workers were being used as forced labor and sexually exploited by their Italian employers.”
This systematic marginalisation and exploitation of especially female Romanian migrants in the Italian agricultural sector stands out as a serious sample case on how migrants are forced into modern slavery, both economic and sexual.

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Taking action, creating chances

Recent activities underline the global efforts of putting forced labor at the center of attention and combating its root causes, such as poverty, gender inequality and lack of education. Corporations can play an important role in helping address forced labor risk by conducting thorough due diligence and implementing continuous supply chain risk monitoring. Regulations like the UK Modern Slavery Act, implemented in 2015, and the 2010 California Transparency in Supply Chains Act represents governmental initiatives to address human trafficking, forced labor and modern slavery in the 21st century.

Although businesses are bound to comply with such governmental regulations, it can also be seen as an incentive within a profound CSR strategy, simultaneously enabling a better reputation within non-governmental organisations and civil society and facilitating corporate risk management and mitigation.

Enhanced risk mitigation is a must

Here are 5 recommendations on how companies can strengthen their risk mitigation strategies concerning forced labor and modern slavery.

1. Implement robust internal controls including risk-based due diligence, ongoing monitoring and regular assessments of process effectiveness
2. Emphasise the need for transparency throughout the customer engagement process, capturing important details related to political contributions, charitable donations and lobbying expenditures
3. Manage potential supply chain risk by conducting bi-annual due diligence checks on current suppliers
4. Conduct supplemental due diligence into beneficial ownership and control structures when operating in high-risk markets
5. Require full disclosure of the structure and shareholder ownership when engaging with state-owned enterprises
Could your current compliance policies and processes stand up to this level of scrutiny?

Next Steps

1. See why your due diligence needs to encompass forced labor risk
2. Explore LexisNexis solutions for due diligence and ongoing risk monitoring.
3. Share this blog post with your colleagues and connections on LinkedIn.

What do you think?