By Neil Giles, CEO, Traffik Analysis Hub
The Covid-19 pandemic has not only disrupted businesses globally, but has also created the perfect breeding ground for modern slavery to thrive and as a result, many companies could be unwittingly falling foul of anti-slavery laws.
This new era of risk is largely due to businesses having to navigate the pandemic inspired ‘new normal’ whilst meeting continual demands in a world where borders were shut down, cities were put into lockdown, and staff and services were not readily available. The rush to find short-term solutions for production or logistics created ‘new business’ opportunities for human traffickers, which has on many levels increased the commercial risk exposure for legitimate businesses.
Recent research released by Dow Jones on tackling global modern slavery found that following the start of the pandemic, labour exploitation overtook sexual exploitation as the most reported trafficking type, making up 41% of all cases reported to NGOs from January to June 2020. The report also found a 2000% spike in global reports of supply chain disruption in March 2020.
Labour exploitation is a risk for many industries but the food and beverage industry is perhaps the most exposed. This industry was forced to become more reliant on an ‘emergency’ labour supply chain when faced with high consumer demand during the pandemic. Business leaders in this sector needed to quickly respond in order to put their organisations on a recovery footing. However, when it came to whether this response was compliant or not, the reality showed that there were gaps in terms of what companies said they did, and what they actually did.
The reason that human traffickers have succeeded in this ever-risky commercial environment is largely due to the fact that the pandemic shifted people’s attention away from the issue, and in doing so has allowed modern slavery to evolve and thrive in the darkness.
The Dow Jones research found that media coverage regarding modern slavery decreased by 25% globally and 26% in Asia, following the onset of Covid-19 compared to the same period the year before. There was also an even steeper drop in cases reported to regional NGOs on the ground in multiple countries.
With a decline in both the number of cases reported and media coverage regarding modern slavery, the illegal industry (which, according to the International Labour Organization generates $150 billion in profit each year) has flourished. Meanwhile, business leaders live under a false sense of security that could well be a ticking time bomb if not effectively addressed.
So how should the issue of modern slavery be properly addressed?
Legislation is an important first step in disincentivising human traffickers. However, no legislation can address the issue of modern slavery on its own. Organisations and their leaders must play an active role in tackling modern slavery by better understanding the corporate risks associated with the crime and playing an active role in addressing it.
Understanding that money is the reason modern slavery exists is key to addressing the issue. Reducing the opportunity to access and move money through financial services channels, or earning money through purchasing products with unethical supply chains, would make modern slavery less attractive to traffickers.
The financial services sector is in fact one of the most exposed industries to this issue with a 131% increase in modern slavery related coverage, yet it is also a key industry that can help solve the problem. A proactive dual move by the financial services sector to reduce the ability of human traffickers to access or move money as well as flag exploitation would be a major deterrent.
When it comes down to supply chain exploitation, the questions that businesses should be asking are largely ignored. Being able to describe how human traffickers interact with different businesses and helping businesses to recognise this irrespective of whether they are banking staff, a hiring manager on a construction site or a merchandise buyer would go a long way in raising the awareness and understanding of the issue that businesses must tackle. Ignorance is not bliss.
As the global economy starts to reignite and businesses tread the road to recovery, commercial leaders must ensure they are aware of the increased risks associated with modern slavery. Every organisation needs to review changes made during Covid-19, conduct deeper due diligence into supply chains, and improve related internal processes. Most importantly, they must work more with NGOs and other partners that can help leverage data to identify threats and trends to mitigate risk and tackle modern slavery once and for all.