Supporting the private sector in the fight against modern slavery
Modern slavery is an umbrella term comprising different forms of slavery, servitude, forced or compulsory labour and human trafficking. It represents a $150 billion per year illegal industry with over 40 million victims; and of those affected, approximately 16 million are in the private sector and 70 per cent are women.
Businesses and investors usually encounter modern slavery in the form of compulsory labour and human trafficking, through unacceptable practices such as abusive and fraudulent recruitment, withheld wages and document retention. The financial system has a special role to play as modern slavery and human trafficking are the third largest source of criminal profit, much of which moves through the global financial system.
There is growing recognition that the private sector has an important role to play in identifying risk factors, preventing occurrences and responding effectively when incidents do occur. In recent years, investors have become increasingly aware of the business risks associated with ignoring modern slavery risks, as well as the benefits—both human and commercial—to properly managing and addressing these risks.
In 2018, the ESG I team worked with the UK government’s FCDO, the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) to commission Managing Risks Associated with Modern Slavery – A Good Practice Note for the Private Sector. The Note provides practical guidance to the private sector on how to proactively identify and manage potential risks and incorporate this guidance into the processes that many investors and companies already have in place (such as environmental and social due diligence and labour monitoring). It also builds a strong business case for addressing the risks of modern slavery in the private sector and communicates the importance of action, cooperation and collaboration.
The collaboration of international financial institutions – BII, IFC and EBRD – with FCDO provided a clear opportunity to influence global and multi-sector coverage. The contributors are committed to upskilling their own teams and encouraging implementation across investees, clients and the wider private sector. Following the publication of the Note, BII staff were involved in developing A Blueprint for Mobilizing Finance Against Slavery and Trafficking, a UN-sponsored initiative to increase the financial sector’s influence in reducing modern slavery.