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Be The Hero: The Importance of Volunteerism

Our world faces significant troubles. Our atmosphere is heating up at an alarming rate. Our polar ice is melting. Some of our most beloved species are near extinction. People are enslaved in nearly every country in the world. More than half the world lives in dire poverty. Wars rage in more than ten countries. Millions still die from starvation, preventable diseases and so much more. We must take stock of the fact that these problems are not going away. And in many cases, they are actually getting worse.

When faced with this list of troubling issues, many will say to themselves: “Why do I have to listen to such things? It’s so sad and depressing. Why can’t we let the people who are supposed to fix these terrible problems just do their job? What does this have to do with me?”

As a humanitarian professional who has lived and worked in over 40 countries around the world, I have come to realize that if those of us who work on these issues could solve them, we would. But the fundamental truth is that we simply can’t. They go well beyond what a few thousand people around the world can fix. These crises require an army of united people – people who care.

And let’s face it, these problems belong to each and every one of us. What is the justification for this statement? When we are born into this world, we share our human experience with 7.6 billion other people. We share the air, the water, the resources, the animals, the plants, the food, the places and so much more. Every one of us benefits from what this world has to offer. But too many of us take this for granted – almost as a privilege or an entitlement. This is not right.

To respond to this situation, we need a way to engage, inspire and motivate ordinary people to accept some responsibility for this world and to do something – anything. How will we do this? We need a series of tools to make a compelling case for their voluntary involvement, including: public speeches, books and articles that inform and inspire, volunteer support programs and more. This approach will create a vast army of committed volunteers who will form a community of initiators, facilitators, motivators and responders.

I consider everyone who volunteers, no matter how big or small the gesture, to be heroic. There is heroism within each and every one of us. It is a voice of good, of righteousness, of action and of love. In today’s world, this voice too often lies dormant and receives very little nurturing. This heroic part of us can rise up and face the problems of the world head-on.

For the past thirty-five years, I have given countless presentations to help motivate people to step up and become involved in our world and its problems. While my own personal issue happens to be addressing human trafficking, my message to others is simple: find a cause that resonates with you and join the fight. Understanding which issue is closest to our heart is an essential first step. Maybe a person wants to fight global warming, address injustice, reduce poverty or stop bullying. From experience, we all know that we tend to be more motivated and committed to work on things that are more important to us.

What prevents most of us from getting involved? There are two factors. First, many people feel doubt. I often hear people ask: “What could I possibly do to help? I am just one person. What difference could I make?” If only one person were to step up, then I’d agree that probably not much could be expected. But if 10 million people stepped up and offered their small, compassionate gestures, imagine the impact. Success in this area is a numbers game. Second, there are few mechanisms in place to help a person down the path to acting.

As a set of core values related to volunteerism, I believe that collective actions have the greatest chance of impact – and that an army of ordinary people working together can change the world. I believe that for change to happen, we need to unite different types of people – all sharing their unique experience and skills together. I believe in collaboration because I know that we are stronger when we work together as a community rather than passing the buck to a handful of paid professionals. I feel inspired to act because I know this work is urgent—and that it affects us all in one way, shape or form. Finally, I believe in harnessing people-power, because I know that it is individual decisions that have the greatest impact on helping to heal our world.

Yes, our world is in trouble, but we don’t have to passively accept this reality. Our world has the capacity to heal more people, feed more people, educate more people, resolve international and community issues, and help others when a disaster or conflict arises. When society accepts this challenge to address our issues and problems, incredible solutions often follow.

The Mekong Club offers a talk related to the importance of volunteerism entitled “Be the Hero: Be the Change.” This talk reminds us that we can all be the everyday heroes offering this hope. From the first story, this presentation moves an audience’s heart by offering compelling anecdotes related to the fight against human trafficking and other social issues, it offers practical wisdom and rich lessons, and outlines a path forward for voluntary action. Through this process, the training compels each of us to examine our own potential and purpose in life by looking at how our lives could serve others. The presentation inspires corporate teams to begin their personal journey of contribution to the greater good through many practical examples of heroic actions that anyone can undertake.

If you’d like to get involved and volunteer with us, please fill out our volunteer application form.

Author – Matthew Friedman

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Migration Matters: Climate Change & Modern Slavery

When evaluating modern slavery and ESG, we tend to see articles and media focusing on modern slavery as part of the ‘Social’ element and Climate Change as strictly ‘Environmental’. However, when we take a moment to consider the causes and consequences of modern slavery and the challenges facing sustainability in supply chains, this picture becomes much more complex. This blog examines the relationship between modern slavery and climate change and challenges this view of the two as separate issues for categorisation.

First ,we must consider modern slavery trends and the drivers of modern slavery, one of which being migration. People migrate for many reasons, to find work, be closer to family members, and explore new places. In many cases, migration can offer world of new opportunities and prosperity. However, for many migrant workers, particularly those seeking low-paying work in global supply chains, the migration journey is marred with risk of exploitation and abuse. Modern slavery trends indicate that traffickers prey on migrant workers, from unscrupulous recruitment agencies forcing workers into debt to secure roles, to criminals luring migrants with false job opportunities before forcing them into dangerous or illegal situations. Migration is a key focus area for modern slavery policymakers, NGOs, governments, and companies seeking to better protect workers. Understanding the drivers of migration when promoting sustainability in supply chains is therefore important to see where modern slavery risk may lie.

Climate change can cause displacement of people in many ways. Some displacement may be because of a particular event known as a ‘climate shock’, this may be a sudden natural disaster that hits a community and causes an immediate surge of migrants fleeing to safety in nearby places. Examples of climate shocks may include tsunamis, major floods, or hurricanes that are fueled by underlying climate issues. Less immediately recognizable as drivers of migration may be slow-onset climate events. These long-term deteriorations in weather conditions may include rising sea levels leading to community displacements over time or erratic rainfalls leading to unpredictable harvests and famine. Furthermore, such slow-onset conditions can lead to conflicts as groups compete for resources in an increasingly unpredictable and unstable environment. The World Bank estimates that, by 2050, the impact of the climate crisis, such as poor crop yields, a lack of water and rising sea levels, will force more than 216 million people across six regions, including sub-Saharan Africa, south Asia and Latin America, from their homes. This migration is set to become a key modern slavery risk area.

Migrants, particularly those migrating in unexpected or desperate circumstances, are vulnerable to abuse and exploitation into modern slavery situations. They may make risky decisions to cross borders to escape their situation, paying traffickers or taking on debts to reach their destination. Modern slavery trends show that traffickers prey on this vulnerability, deceiving victims into forced labour situations and bringing the under their control through force, fraud, and coercion. There is also risk when people migrate from rural to urban environments, into places and industries that they are unfamiliar with.

One woman, who migrated to Accra from northern Ghana, used to farm until the land was ruined by flooding and she was forced to move. For seven years she has worked as a porter (kayayie), carrying items on her head. She said:

“Working as a kayayie has not been easy for me. When I came here, I did not know anything about the work. I was told that the woman providing our pans will also feed us and give us accommodation. However, all my earnings go to her and only sometimes will she give me a small part of the money I’ve earned.”

The relationship between climate-induced migration and modern slavery is just one area in which these two global issues are interlinked. Many companies and investors invest significant resources into their ESG and modern slavery reporting and metrics. However, the ‘E’ (Environmental) and ‘S’ (Social) are seen as two separate groups of activity. Climate change and modern slavery are intrinsically linked and evaluating supply chain sustainability must take this into account. As the world changes and evolves, so we expect to see modern slavery trends and the relationship between modern slavery and different ESG factors become more intertwined.

Author – Phoebe Ewen

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Sustainable Safeguarding: Calling for a Respect-Focused Approach to CSR

COVID-19 is testing corporate commitment to social responsibility. While major e-commerce and software companies have turned enormous global profits, making massive donations and supporting COVID-19 relief efforts, mid- and large-sized corporates are facing harsh cost-cutting realities just to keep core business practices afloat. In some cases, this means marginalizing CSR initiatives as companies face a global decline in consumer behaviour. Across the Greater Mekong Region’s sprawling supply chains, some of the hardest hit industries, including the garment and luxury goods sectors, provide employment for hundreds of thousands of supply chain workers. A shift in consumer behaviours leaves remaining consumers increasingly ethically conscious. Corporations must learn to strike a balance between profitability and ethical appeal to a dwindling and increasingly selective consumer base.

To do this, CSR teams are increasingly turning to frontier technologies (AI solutions, expert systems, machine learning), some of which were already being used in corporate CSR efforts. But CSR in general, particularly during the COVID-19 pandemic, demands more than quick fixes. Technological solutions will instead have to intervene along a web of COVID-19 induced financial, psychological, emotional, and personal pressures that are impacting employees at all rungs of the corporate ladder from upper management to supply chain workers. CSR teams are also being faced with mounting evidence that COVID-19 discriminates, in a way that many existing frontier technologies do not adequately acknowledge. Black and ethnic minority individuals are the most likely demographic to contract COVID-19, and comprise the majority of workers across global supply chains.

In short, significant changes in CSR are ahead, with frontier technologies perched at the fore in a) enabling more efficient and (hopefully) ethical business practices and b) supporting an increase in transparency between stakeholders across the global supply chain.

But key questions remain: Which stakeholders are responsible for safeguarding the public health and ethical behaviour of a corporation and its employees? Should frontier technology be integrated into existing systems to better address COVID-19’s changing and variable outcomes? And most critically, how can non-profits, research centres, and public sector stakeholders work better alongside corporates to ensure protection for a corporation’s most vulnerable workers?

Using CSR terminology, corporate safeguarding represents the next phase of the social compliance auditing solutions that we innovate at the United Nations University in Macau and the Mekong Club through our social auditing frontier technology product, Apprise Audit. We work on a data-driven, private, and empathetic modern slavery auditing tool for corporations to streamline social audits. But the recommendations that we make extend beyond the interview support and data analysis that our product offers. The core of our safeguarding approach with Apprise Audit is helping corporates understand the underlying factors that may spark conditions of forced labour across pre-departure, deployment, employment, return / onward migration.

Corporate safeguarding ensures that each company whose businesses or employees directly engage with vulnerable people must protect them from harm through upholding a moral ethics of care. With Apprise Audit, we insist that safeguarding as a concept also understands that conditions making workers vulnerable can change over time. We also point out that labour conditions exist along a spectrum, ranging from exploitative labour on one end to decent work at the other.

The idea of integrating corporate safeguarding’s holistic yet nimble approach into CSR seems easy to endorse yet may be difficult for businesses to implement. But we believe it is more than possible for corporates to allow for bureaucratic flexibility, frontier tech solutions, and empathy for supply chain workers through COVID-19 and beyond.

The approach is simple: Protect. Respect. Remedy. These three words comprise the UN Framework for Business and Human Rights put forth in 2010. According to this framework, states have the responsibility to induce regulatory controls that protect workers and corporations. Both states and corporations bear the responsibility of remedying problems as they arise. And perhaps most importantly, corporates should respect states, regulatory bodies and workers not just because they are obligated to under international human rights law, but because that is a standard of expected conduct — a bare minimum if you will — towards ensuring a corporation’s continued operations. With consumer purchasing decisions becoming increasingly informed by ethical concerns, and as workers bear immense mental and physical health strain, we call for CSR efforts to continue upholding tenants of safeguarding and respect. This is true now during COVID-19 conditions more than ever before.

Frontier technologies will play an increasingly integral role upholding both corporate safeguarding and respect for workers. But they are by no means “silver bullet” solutions. In reality, the complex social problems underlying tech solutions need to be part of a CSR team’s corporate safeguarding strategy. Businesses should therefore strive to use any means necessary, including technology, to protect and respect their workers. They should also work collaboratively across multiple stakeholders to remedy the vast web of interconnected problems these workers face as a result of the COVID-19 pandemic.

Thank you to our guest writers Sophie Zinser & Hannah Thinyane.

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Cryptocurrency & Modern Slavery

Human trafficking, also often referred to as modern slavery, is the act of recruiting, transporting, transferring, harboring, or receiving of persons by means of threat, fraud or use of force or other forms of coercion for the purpose of exploitation.[1] Human trafficking is one of the fastest-growing forms of crime in the world, and an estimated 40.3 million people were victims of modern slavery in 2016.[2] Approximately 24.9 million of those victims were trapped in forced labor, and women and girls were estimated to account for 71% of modern slavery victims.[3] The annual profits generated from modern slavery are approximately $150 billion per year. Financial institutions have been responsible for identifying and reporting modern slavery for some time, but as criminal activity continues to evolve, so should financial institutions’ strategies.

Traffickers exploit traditional banking systems to spend, transfer, and launder their illegal profits. Financial institutions have a role in the fight against modern slavery and human trafficking by identifying and preventing traffickers from laundering the proceeds of their crimes. As banks become better at identifying the proceeds of human trafficking, criminals will find new ways to make it harder for investigators to understand and trace the movement of funds. Financial institutions and law enforcement should enhance their strategies to identify and prevent the laundering of trafficking proceeds.

Recently, criminals involved in human trafficking have turned to cryptocurrency in an attempt to avoid the strict controls of traditional banking systems and exploit dark markets for sex trafficking and child pornography. For example, as discussed below, the pseudo-anonymity of cryptocurrency transactions, particularly through unregulated exchanges or peer-to-peer networks, can facilitate transactions that are unencumbered by Know Your Customer (KYC) controls. Traffickers use cryptocurrencies to purchase advertisements and by sex buyers to purchase premium memberships on review board websites. Some members of the cryptocurrency community are specifically catering to traffickers who post advertisements on Backpage and other sites.

While many crypto exchanges collect significant data from the transactions they generate and are committed to addressing AML and modern slavery concerns as a matter of urgency, certain unique characteristics of cryptocurrency make it attractive to criminals seeking to conceal their identity and cover the trail of their illegal activity. There are tools businesses can leverage to better identify and address cryptocurrency transactions involving trafficking and other financial crimes. Although cryptocurrency is known for its apparent anonymity, in fact, cryptocurrency can more accurately be described as pseudonymous. In most cases, the originating address, destination address, and amount of funds associated with a transaction are permanently and, generally, immutably recorded on the blockchain. There is, however, no personal identifying information, such as an individual’s name, birthdate, or Social Security number associated with the transaction. Despite the lack of personal identifiers, there are methods of ascertaining an address owner’s identity, including analyzing blockchain activity for patterns that may provide insight into a user’s identity, the use of blockchain-tracing tools, or leveraging data obtained by regulated cryptocurrency exchanges that collect customer data in accordance with increasing KYC and AML regulations.

Leveraging information collected by businesses engaged in cryptocurrency through the implementation of enhanced data analysis systems, and the use of artificial intelligence and new technological developments is critical to better understand the scope, geography, and victim population and, in turn, more effectively fight modern slavery. As an example of how these tools can be used to identify and prevent trafficking, in 2019, a South Korean national was arrested for operating the darknet market, Welcome to Video, the largest child sexual exploitation market by volume of content, as a result of the combined action taken by US and foreign law enforcement agencies. Welcome to Video contained more than 250,000 child exploitation videos and boasted over one million downloads of child exploitation videos by users. Welcome to Video offered these videos for sale in exchange for bitcoin. Investigators were able to follow the flow of funds on the blockchain to trace payments of bitcoin to the darknet site and identify wallets associated with the site’s administrator. The investigation led to the arrest of 337 subjects around the world.[4]

In addition to the use of data and technology to combat financial crime, it is critical that cryptocurrency exchanges adopt anti-human trafficking policies and procedures and implement strong AML and modern slavery programs with efficient transaction monitoring and KYC and Customer Due Diligence programs to detect traffickers.

Ari Redbord, head of Legal and Government Affairs at TRM Labs, discussed actions crypto companies can take to combat use of their services for trafficking. He advised that cryptocurrency exchanges should be on the lookout for use of obfuscation techniques such as peeling chains, which are a form of structuring on the blockchain that are indicative of money laundering. If a crypto exchange identifies that a certain wallet address is transacting with darknet markets or other sites that sell child exploitation and other sexually exploitative materials, the exchange should flag that address and work closely with law enforcement. If an address is consistently engaging with an unregulated exchange that facilitates illicit activity, it is a red flag for larger regulated exchanges. Redbord stated that the power and promise of cryptocurrency is that it provides unprecedented visibility on financial flows and allows law enforcement and crypto businesses to track and trace funds used in illicit activity like human trafficking.

Seth Sattler, Bank Secrecy Act officer at DigitalMint, believes that companies operating in the cash-to-crypto space need to work together and share their best practices for detecting and preventing transactions related to human trafficking, noting the impact that a group of influential companies can have when they come together to tackle an issue affecting the industry. In addition, public/private partnerships are crucial because any information law enforcement provides regarding industry trends helps companies implement more effective controls. The Cryptocurrency Compliance Cooperative, based in Chicago, is an example of a partnership where industry experts and law enforcement work together to analyze how bitcoin ATMs are being used for human trafficking-related transactions and to determine what additional controls can be implemented to prevent and report human-trafficking activity.

In summary, next steps for those concerned about the role cryptocurrency plays in human trafficking should include information exchange, increased cooperation, focus on education, and the implementation of artificial intelligence for better data analysis and accurate detection of modern slavery-related transactions. In addition, collaboration between private and public sector is important to create industry awareness and promote better financial crime controls. As criminals attempt to exploit crypto exchanges to circumvent detection, enhanced data analytics and technology, in combination with the implementation of strong AML and anti-human trafficking programs, is crucial to ensure that crypto markets do not become a modern slavery haven.

Guest Author: Balki Aydin

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The Mekong Club’s Modern Slavery Toolkit

In 2013, we established the Mekong Club’s business association. Over the years, we have built deep and trusted relationships with over 60 companies across sectors such as banking, hospitality, garment, food and beverage, toys, and footwear. Our members receive up-to-date information and expert training and consultations on issues pertinent to their industry, and we meet regularly to learn and share best practices to further the fight against modern slavery. One of the most important resources we provide is our modern slavery toolkit.

Our modern slavery toolkit was developed based on the needs identified by our association members. During our quarterly meetings, we debate and discuss what they feel is required to assist them with their modern slavery efforts. This results in recommendations from our members. Suggestions might include the development of relevant training materials, analyses of legal requirements, the creation of a modern slavery audit tool, the planning of methodologies to help a company identify or address risk within their business, or a set of modern slavery guidelines on a range of pertinent subjects. Based on each request made, the Mekong Club builds or creates what is proposed. It is then offered back to our community.

What is included in the Mekong Club’s Modern Slavery Toolkit?

Our website includes a range of different resources. Below is an overview of some of our tools.

• Modern slavery guidelines: Our website provides businesses with the following resources: key performance indicators for business professionals within supply chain companies who have responsibilities related to modern slavery; standardised modern slavery prevention language for ‘Request for Proposal’ documents; a range of resource materials highlighting human rights and business best practices; an overview of living wage approaches and trends; an employment description highlighting opportunities for modern slavery survivors; COVID modern slavery guidelines for a range of business sectors; a modern slavery transparency legislation development guide; a collection of ESG indicators; a list of adverse media terms; and a remediation tool that offers a step-by-step guide on how to address the problem if found.

• Training materials: Our extensive training materials include three standardised introductory films that help the viewer understand how modern slavery impacts different industries. Our e-learning course is comprised of two modules, each offering short videos in multiple languages, infographics, quizzes, and reference sources. This tool was created to offer businesses a flexible yet effective way to learn about modern slavery. We also develop bespoke trainings to accommodate the needs of our community.

• Modern slavery technology-based tools: Our modern slavery toolkit comprises technology-based tools with enormous potential for impact. Each of these tools solves a major problem – from auditors who do not speak the local dialect of factory workers, to under-utilised and disaggregated data, to falsified employment contracts. For example, the Apprise App represents a modern slavery audit tool that combats barriers to auditors effectively carrying out worker interviews, including language barriers, lack of privacy, as well as a lack of consistency in addressing all ILO indicators of forced labour. Workers are able to answer a set of questions on a phone by indicating a yes/no/maybe. The answers are correlated to internationally recognised standards. Another modern slavery audit tool is eMIN. This tool uses blockchain technology to underpin key migrant worker documentation, combatting issues within the recruitment process around document security.

• Legal resources: A range of legal resources are available that focus on an analysis of various topics, including Asia labour laws, transparency in supply chain legislation, child labour laws, and recruitment fees. These tools break down complex anti-slavery legislation into easy-to-access, interactive information. Users can understand the key elements of the legislation, how it impacts their business, and the requirements they need to meet to be compliant.

• Knowledge management: Our Knowledge Hub tool consists of thousands of carefully curated new articles, resources, podcasts and more. Our team select the most relevant and interesting modern slavery news each week, and upload it into our knowledge hub. The user can browse by keywords or narrow their search to country or industry to find the needed resources. There is also a platform that contains real-life examples of companies showing industry leadership in combatting modern slavery.

• Sector-specific tools: For the banking and finance community, the modern slavery toolkit includes our library of typologies that provides an understanding of how modern slavery really happens and industry-specific reports on this topic. Our industry-specific typologies demonstrate the typical journey of a modern slavery victim based on real-life case studies and events. Typologies are coupled with red flags and indicators for businesses to use in their risk assessment and remediation plans. There is also an interactive risk assessment map that combines data from various publicly available sources and allows the user to filter by country or commodity. This map helps with risk assessment by aggregating numerous modern slavery data sources in one place and is updated regularly as the data is refreshed.

How can this Modern Slavery Toolkit support/benefit the private sector?

We are very proud that the Mekong Club has brought years of experience working with companies and their many dedicated employees to provide this full range of practical tools. Our modern slavery toolkit is one of a kind. It addresses a full range of needs and requirements by offering a one-stop shop for companies seeking to include modern slavery guidelines in their strategies. In this regard, this resource helps achieve several important outcomes. First, many of the tools help increase general awareness and understanding of modern slavery. Second, the tools help practitioners gauge where they are in their efforts to set up and maintain a modern slavery strategy. Third, they help companies solve problems related to their business effectively and on time without any impediments. Fourth, they help companies to analyse their risk related to modern slavery to determine any vulnerabilities. Finally, they help to ensure that if risks are identified, they can be addressed in an efficient, effective manner.

To access our range of free Modern Slavery Toolkit, register here.

Author: Matthew Friedman

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How Hospitality Harbours Modern Slavery

When the public imagines slavery, a majority might picture men and women being kept as property through the threat of violence. As undeniably evocative as these images are though, modern slavery is multi-faceted, encompassing many different forms of forced labour. While more ‘traditional’ or ‘chattel’ forms of slavery are still prevalent, these cases are only one aspect of a wider issue. Often the means by which people are enslaved in the modern world are more complex and difficult to detect.

It might surprise some, then, that even workers with an employment contract can fall under the definition of modern slaves. However, through processes such as contract slavery and debt bondage, contracted workers can be considered enslaved. In fact, more than many other businesses, the hospitality industry is vulnerable to these forms of modern slavery. Rather than employ in-house workers, many large hotels and casinos will obtain their security team, cleaners, or dishwashers through third-party organisations, meaning that the details of their employment will often be hidden from the businesses’ executives. Another risk is the fact that hospitality businesses generate an enormous quantity of supply chains in order to meet the demands of consumers. The reality is that unless they have maintained a stringent anti-slave policy, every single one of these supply chains is vulnerable to modern slavery. Following the COVID pandemic, many hospitality business may already be in precarious situations, and the fallout from not maintaining modern slavery compliance could be devastating. Therefore, we urge those with positions of authority in the world of hospitality to take immediate action.

How does Modern Slavery Policy Apply to Workers with Employment Contracts?

Part of the nature of employment contracts is that, as well as ensuring that a number of hours of work are completed, the contract acts as a protection against exploitation. It is an obvious red flag, therefore, when workers have not signed an employment contract. Often the case is that these casual workers have immigrated illegally, and a contract would be no use to them as, even if their employer breaks their terms, they have no way to challenge their employer in court without deportation.

Equally, though, it is crucial that modern slavery policy applies to workers with employment contracts as it does to workers without contracts, as although they often do not experience the same issues that casual workers are subject to, there are a separate set of circumstances that determine their status as modern slaves.

The most directly applicable form of modern slavery to contracted workers, including in the hospitality industry, is contract slavery, which involves the victim being misled into signing an exploitative contract from which they cannot escape. Often when this contract is first signed, it is either not written in the worker’s spoken language, or the worker might be illiterate and sign a contract that is not fully explained to them. Consequently, when they arrive at their place of work, often paying expensive travel fees in order to immigrate, the worker is billed extortionate rates for housing, food, and training. Victims of contract slavery are often promised that they will be able to earn enough to pay for their living essentials within a short amount of time, but the exploitative contract is usually engineered so that victims are unable produce savings due to an artificially inflated cost of living. The threat of violence also means that the worker is unable to leave or look for support.

Any businesses’ modern slavery policy must also reckon with the threat that debt bondage poses for the safety of its employees. Put simply, debt bondage is a way in which workers are forced to work by their employers through perpetuating an endless cycle of debt. Workers are paid advances by their employers in order to pay for necessities such as travel costs or healthcare, which are then ‘worked off’. However, these loans are often weighted so that, due to regular increases in interest, it is impossible to ever pay off the debt. Often practitioners of debt bondage will use false accounting methods and extortionate levels of interest in order to maintain this form of bondage, while the amount that remains to be paid off by the worker will be kept hidden so they remain at the job indefinitely. Although the financial aspect of this form of bondage makes it difficult to detect, employers will frequently also coerce victims of debt bondage through physical or mental abuse.

As a result of relocation and related costs, immigrant or trafficked workers are more vulnerable to both contract slavery and debt bondage. Both these forms of movement involve large payments, either for transportation or travel documents. In the case of contract slavery, this further contributes to immigrant workers’ financial restrictions. Sometimes immigrant workers will take loans out from their employers to pay for travel costs, which can begin the cycle of debt bondage. In the hospitality industry, then, modern slavery policy cannot soley apply to casual workers, but must also encompass workers with exploitative contracts or debt bondage.

Modern Slavery Business Risks in the Hospitality Industry

The ways in which contract slavery and debt bondage lead to modern slavery business risks in the hospitality industry are manifold. While monitoring workers within the interior employment structure of an establishment is more manageable, modern slavery becomes a more tenacious issue when engaging with exterior third parties. As mentioned before, some of the contracted workers most at risk include the business’s security team, cleaners, and dishwashers, but can also include caregivers, gardeners, and even construction workers.

Hiring contracted workers is standard practice for most large hotels and casinos in order to save on recruitment, but the downside of this is that because the establishment has no access to the employment contracts of the workers, it becomes harder to ensure that modern slaves are not integrated into the business. Consequently, it is more difficult to guarantee that workers employed by a third party are given sufficient sick or annual leave when they are employed by a third party. Many contracted workers also happen to be immigrants, who, as explained earlier, are more vulnerable to contract slavery due to language differences, and particularly likely to be in a situation of debt bondage as a result of costs incurred by the immigration process.

Supply chain workers constitute another modern slavery business risk, and are frequently harder to monitor than third party workers. The nature of businesses in the hospitality industry means that, as well as exceptional service, they require a broad variety of products to provide the best possible experience for their customers. From bedding and furniture for rooms, to food and drink for restaurants and bars, the amount of materials required is truly vast. As such, numerous supply chains, reaching across multiple industries, are utilized by almost all hotels. This presents a challenge from a modern slavery perspective as in order to fully eliminate business risk, these supply chains need to be effectively monitored.

Responses to Improve Modern Slavery Compliance

So what can employers do in order to improve modern slavery compliance in their businesses? The first and easiest step is having a clearly stated position on the issue. Consider how a brand’s statement could impact the hospitality industry’s culture, and how it could encourage other businesses to take steps to prevent modern slavery.

One potential response in order to improve the job security of workers and protect them from the consequences of modern slavery is to repurpose contracted workers that might otherwise have been laid off. For the safety of workers and customers, it is also necessary that employees feel safe and able to report any incidents or concerns through grievance mechanisms. There must be a clear escalation policy for workers who might be experiencing issues, and employers must ensure that all workers, including contracted workers, are treated fairly and paid appropriately.

Additional training is also essential for all staff, especially on the nexus between modern slavery and the hospitality industry. The training should be delivered to all managers, as well as offered to subcontractors, and delivered in the spoken languages of the employees. This training should include education for all workers on the risks of taking out loans from their employers, and alternative loan sources, in order to reduce the risk of debt bondage. Following from training, increased due diligence from all levels of staff is also crucial for modern slavery compliance. Some of the markers of modern slavery include workers who lack freedom of movement, work involuntary hours, or who have indicators of substantial debt. Signs of physical abuse, confinement, malnourishment, poor hygiene, fatigue, untreated illness, and unusual behavior are also indicators. Some of the most effective ways to monitor modern slavery include comprehensive audits, surprise inspections, worker interviews, and document inspections. Especially important is maintaining positive working relationships with managers and having regular site visits to ensure modern slavery compliance.

If you’re interested in learning more about modern slavery in the hospitality industry and how to implement effective strategies, we’re here to help. Feel free to contact us for a no-obligation consultation to discuss how we can work together to strengthen your modern slavery responses.

Guest Author: Scott Thomson

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“If They Don’t Like Their Job, Why Don’t They Just Leave?” The Reality of Modern Slavery

When speaking about modern slavery in Asia, we have often been asked:

“If they don’t like their job, why don’t they just leave?”

This question highlights one of the most common misconceptions around modern slavery and forced labour in supply chains, that if the constraints on freedoms cannot be physically seen, then they must not exist.

The truth is these people are not usually being held in place by shackles and chains, they may be free to go home to their families each day after work, they may not be beaten each day by the employer, they may have voluntarily walked into this job or even paid a recruiter for the privilege of working. Why would someone in forced labour in supply chains continue to work for an employer who exploits them or who takes their wages? Why would they not simply leave?

Unfortunately, modern slavery has its own challenges. The answer is debt. Debt is one of the most fundamental global drivers of modern slavery in Asia and around the world today. This hidden prison entraps millions of workers into a form of bonded labour that is oppressive, suffocating, and incredibly challenging to escape.

This debt is often initiated during the recruitment period itself and is perpetuated by the common practice of recruitment fee payments by workers wishing to gain employment in oversaturated industries. Recruitment fees may be charged by recruitment agencies, the brokers that they employ to source workers, or even by the employers themselves. In many countries, this practice is entirely legal, and in some industries, it is so commonplace that workers are mistrustful of job offerings that do not include recruitment fee requirements. Workers victimized into modern slavery often willingly pay these fees, especially for jobs where many others are seeking the same kind of employment. Recruitment fees are particularly prevalent amongst migrant workers seeking low-skilled, low-wage jobs such as in factories, construction, domestic work, or agriculture. As such, forced labour in supply chains persists.

While these fees may be technically legal in many cases, unscrupulous actors may charge excessive fees or hide fees within the process that may lead the workers to take on debt to make the payments. Often, these loans are offered by agencies, employers, or related unregulated money lenders and may have staggeringly high-interest rates. Exploiters prey on the desperation of their victims for work and a lack of financial literacy, as well as deception and lies to bring the person under their financial control, resulting in a modern slavery situation.

Once the workers are indebted, they quickly find themselves working to clear their debts. This can very quickly become a cycle of exploitation where they do not receive the wages that they expected, are charged more hidden fees and costs, and must even take on more debts simply to survive. They are no longer working to thrive and provide for their families. They are working simply to tread water in a rising tide of debt and abuse. They have no choice but to continue. This highly effective method of control is used on millions of workers across a multitude of industries in the world today. In the most extreme cases, this debt can transcend generations as these unregulated debts are passed from parents to children with no end in sight from a modern slavery cycle.

Through our work addressing modern slavery in Asia and around the world, the link between debts and forced labour in supply chains is clear. Addressing how workers fall into debt during the recruitment process will be one of the key pillars if society is to end modern slavery for good.

Author: Phoebe Ewen

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Global Diligence in Supply Chain Sustainability

Due Diligence in Today’s Supply Chain Sustainability

COVID-19 has shifted the way we live our lives, both personally and professionally. This has taken a toll not only on the way we consume but also on how easy it is to forget where our products came from to provide, nurture and protect the ones we love. Implications of COVID-19 have caused many businesses to switch to a ‘sink or swim’ mindset, leaving unskilled and disadvantaged communities to feel the aftermath of pandemic-related disruption.

It’s easy to point fingers at industries and who should do what, but in fact we are all in this together. As business professionals, we have the ability to effect change, whereas millions of people at the bottom of the global value chain can only wonder when they will see their families and if the life they’ve been forced into will ever stop.

It’s our responsibility to shift our sourcing patterns to bring about sustainable supply chain practices, to provide the men, women and children with a life outside the deception that has enabled people like you and me to have the sense of security, as COVID continues to affect those whose voices are not being heard.

The Race to Supply Chain Sustainability

During this economic uncertainty, it is worth highlighting that many companies have stepped up to the plate to take the initiative on their sustainable supply chain practices before legislation has come into effect. Not only have initiatives been taken, but corporations that were one step ahead of the game have significantly reduced their modern slavery business risks, increased stakeholder acceptance, and put an immense amount of pressure on their competitors to follow suit to sustain market shares. With increasing expectation from stakeholders on supply chain sustainability and the need to identify where modern slavery business risks lie, businesses are scrambling to find a solution.

Unfortunately, solutions to supply chain sustainability are not as simple as a checklist, and neither is there a cookie-cutter approach. Each industry has its own set of needs, so they require personalised processes to identify what strategy will work best to eliminate their modern slavery business risks.

For example, company ABC has ten factories spread across three countries. Each country has its own recruitment agencies to source workers from two of the surrounding countries that they operate in. Company ABC publishes its anti-slavery policies and codes of conduct annually, ensures that it complies with local labour laws, carefully selects its supply chain mapping, conducts yearly audits, and ensures a high standard of purchasing practices. Company ABC believes that its internal work and efforts in its sustainable supply chain practices have greatly reduced or eliminated the risk of modern slavery in its business.

However, company ABC has not taken into account the roles and responsibilities of its suppliers and sub-suppliers into consideration. Although company ABC has committed to and worked towards a sustainable supply chain, deficiencies in its suppliers and sub-suppliers’ policies, codes of conduct, complicity with local labour laws, supply chain mapping, audits and training have all been missed as part of the process.

This example demonstrates how preventing modern slavery and eliminating business risks quickly become a challenging and daunting task that requires knowledge and expertise to strive towards a sustainable supply chain.

Steps Towards Supply Chain Sustainability

Both small and medium-sized enterprises and multinationals are often faced with the ‘how’ and ‘what’ should they be doing to manage the business risk of modern slavery. Collaborating with non-profit organisations is a company’s best method to work towards sustainable supply chain practices. Non-profit organisations in the anti-modern slavery space have specialised expertise, resources and tools to work with and identify modern slavery challenges specific to each industry.

Both free and paid resources are widely available to help the private sector to enhance and empower sustainable business practices through supporting companies to navigate the anti-slavery landscape. Although cookie-cutter strategies don’t exist, it’s good to understand how and what can be implemented today to set organisations up for success.

1) Knowledge

Understanding industry best practices is a great first step. There are online search tools that help businesses to dive deeper into industry-specific topics by searching archived news articles, blogs and websites from credible resources to understand the complexities of managing the business risks of modern slavery.

2) Roles and Responsibility Checklists

It’s important to know who and what managerial position within an organisation can play an important role in addressing modern slavery compliances and risks within supply chains. Understanding how decision-makers and employees contribute to preventing modern slavery is an essential part of a company’s modern slavery strategy.

3) Free Online Modern Slavery Toolkits

Workers’ vulnerability, workplace pressures, and health and safety concerns are ongoing challenges that impact business sustainability and profitability in the short, medium and long term. Managing supply chain sustainability has been and will continue to be a challenge; therefore, accessing free toolkits to mitigate and prevent modern slavery is key to managing stakeholder expectations.

4) ESG Modern Slavery Indicators

Indicators that articulate sustainability frameworks with stakeholders, such as ESG indexes, provide measurable and attainable data. Measuring the ‘S’ in ESG has been a cornerstone project that the Mekong Club has been developing for modern slavery indicators.

Implementation of indicators has proven to be an effective way to effect change and has already led to victim identification within supply chains.

5) Industry Benchmarking

Understanding where a business is with its modern slavery strategies against industry benchmarks provides an overview of how much work needs to be done. Supply chain sustainability starts with knowing what business risks are currently present and what metrics are being achieved. With governments and regulators globally clamping down, more companies are required to do everything in their power to present their efforts; otherwise, they risk condemnation and brand reputational damages.

One way to do this is to take a Anti-Slavery Scorecard self-assessment. This confidential tool allows companies to identify how their modern slavery strategies rate on a scale of one to a hundred. The score received acts as a comparative to the average scores within modern slavery supply chain sustainability. The free assessment reviews existing performances on modern slavery initiatives, identifies gaps between current and desired performance, and helps managers implement actions to improve performances.

Identifying and addressing modern slavery is a major obstacle to achieving supply chain sustainability. However, with the right training, tools and collaborations, it is possible to make a positive impact to protect and release the men, women and children who have been forced into working against their will.

Author: Nolan Clack

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The Many Faces: Ending Modern Slavery in Finance

The finance world is multi-faceted, and any one bank can employ thousands of staff, each with their own personal responsibilities and interests to fulfil. When we first engage with finance professionals on the topic of modern slavery risk, they often hold preconceptions about who in their organisation is responsible for addressing this crime or may lament over the fact that despite their interest in ending modern slavery, they do not have any personal leverage to do so. In fact, the Mekong Club has collaborated with a spectrum of finance professionals, and we have come to learn that there is no one person or team within any bank that is solely responsible for the modern slavery strategy. Addressing modern slavery in the finance world involves the cooperation and drive of a tapestry of people, each using their unique influence and knowledge to add to the collective response. Below is some information about the key roles and how our self-assessment can help you as a finance professional to understand the part that you have to play in ending modern slavery.

The Chair of the Board

The chair of the board, or equivalent highest level of management within a bank, is expected to set the tone of modern slavery compliance from the very top tier of the organisation. This is important as banks are often siloed between countries, departments, and business lines. Having a clear and consistent message from the top with regards to the bank’s standards and expectations related to modern slavery risk can ensure consistent approaches across the various siloes within any organisation. Banks that are required to produce modern slavery statements, such as under the UK or Australian modern slavery acts, often require the chairman or equivalent to sign the statement. These signed statements are publicly documented and state the company’s stance on modern slavery as well as a set of tangible actions and future commitments that will take place to address the issue. When staff within an organisation see such public statements endorsed by the highest level of leadership, a sense of collective responsibility is established. The chair and other senior leaders therefore have a responsibility to remain abreast of the company’s anti-slavery strategies and demonstrate public commitment to the cause.

The Anti-Money Laundering Compliance Officer

Anti-money laundering (AML) is perhaps one of the most immediate roles that comes to mind when considering who is on the front line of modern slavery prevention. Modern slavery, and related crimes such as human trafficking, are predicate crimes for money laundering and considered to generate at least 150 billion USD annually. Modern slavery is a highly lucrative crime for those involved because one can profit from the exploitation of another human being time and time again. The low-risk, high-reward nature of this crime perpetuates its growth. The anti-money laundering compliance officer is directly responsible for putting in place the safeguards to prohibit the criminals that profit from this crime from accessing financial systems. They create the systems and procedures required to scrutinise new and existing customers, incorporating modern slavery risk factors and modern slavery typologies into the process. They ensure that suspicious reporting procedures are developed and maintained to allow staff to safely and easily report unusual activity. They may oversee the risk assessment framework, ensuring that all crimes, including modern slavery, are part of a comprehensive risk assessment process. The AML compliance officer therefore plays a crucial role in setting the tone across all AML teams and the organisation as a whole – a tone of zero tolerance in allowing access to financial systems for the criminals who exploit other human beings for profit.

The Training Manager

Staff within any financial institution are continually learning, whether that be about new policies and procedures, new risks and trends, or customer service strategies. Training and capacity building form an integral part of any staff member’s workload and is often directly pinned to annual deliverables and KPIs. The team responsible for developing and implementing training therefore have a vital role to play in educating staff on modern slavery compliance and the roles that each department has to play in addressing this crime. Training must be informative and engaging and ideally refreshed on a regular basis to ensure knowledge retention and to account for new information and trends in the modern slavery space. As this crime is ever-evolving, up-to-date training is necessary for effective action against modern slavery risk. There are a wealth of modern slavery experts on hand to deliver in-house training for those teams with specific responsibilities which can further enhance engagement with this topic. Knowledge is power, and the training manager has the influence to leverage this power towards ending modern slavery.

The ESG Investment Manager

ESG investing involves considering ‘Environmental, Social, and Governance’ factors alongside financial factors when considering making an investment decision. Companies and investments can be rated using a range of ESG metrics which seek to score their activity in the three areas and reward those organisations that are making a positive change. Incorporating modern slavery indicators into ESG investments is increasingly expected, and there is a need for clear and measurable metrics in this space. ESG investment managers have a role to play in ensuring that their approach to ESG is holistic and includes modern slavery indicators. This ultimately will serve to encourage positive action, better modern slavery reporting standards, and a greater focus on the positive impact that investments can have on ending modern slavery. The ESG investment manager has the leverage to change how the world prioritises addressing modern slavery.

The Customer Relationship Manager

While analysing data may be one means to identify modern slavery risk, it is often the human interaction and intuition that can lead to the identification of modern slavery in daily life. Victims of modern slavery are found working in nail salons, car washes, construction sites and factories, and some are even taken into bank branches by their traffickers to open bank accounts that will be taken from their control. Relationship managers and branch staff have a unique opportunity to interact with their customers through making transactions, opening accounts or visiting their business premises as part of routine customer service. Modern slavery red flags that may be identified by frontline staff include victims being taken to open bank accounts with their trafficker posing as an interpreter, handling all paperwork and account cards, and speaking on behalf of the supposed account owner. Other modern slavery red flags include high-risk industries such as nail salons populated by staff showing signs of neglect, who may be fearful to interact, or whose business premises may show signs of secondary use as brothels, often tied to unusually high income levels in the form of cash. Customer relationship managers and other frontline staff are the eyes and ears needed to identify potential modern slavery victims and perpetrators.

The Procurement Manager

Banks have their own supply chains and have staff responsible for procuring a range of suppliers, services, and contracted staff. This area of risk exposure may not be one that immediately springs to mind when considering modern slavery risk as it relates to the finance industry, and yet overlooking modern slavery procurement risk could lead to modern slavery being found in the very office buildings used by the bank or in the supply chains of staff uniforms. Modern slavery is prevalent within low-paying jobs with high migrant worker populations, such as security guards, cleaning staff, refuse management, and catering staff. These workers may be coerced into employment through debt bondage perpetuated by high recruitment fees, threats to their families, and fraudulent employment contracts. Often in the case of banks, the hiring and management of such staff are outsourced to third-party labour providers, so the bank may not have direct oversight of the true working conditions of these employees despite their everyday presence in offices and branches across the bank’s network. Similarly, supply chains for branded merchandise and staff uniforms may carry modern slavery risk, and procurement teams have responsibilities to ensure that their suppliers are risk assessed and adhere to their expectations regarding modern slavery. The procurement manager has the power to ensure that modern slavery is not hidden in plain sight.

You!

There are many more people within finance that play a crucial role in addressing modern slavery. If you are a finance professional, take our Anti-Slavery Scorecard Self-Assessment to see how your company compares to others in the finance industry and learn more about the key role that you have to play in ending modern slavery.

Author: Phoebe Ewen

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Measuring Modern Slavery Risk in the Hospitality Industry Through Self-Assessment

Modern slavery, which is defined as the recruitment, movement, harbouring or receiving of children, women or men through the use of force, coercion, abuse of vulnerability, deception or other means for the purpose of exploitation, can be a serious issue for the hospitality sector. Throughout the world, this issue can pose reputational risks for the entire industry, from small budget hotels to five-star hotels at the top of the industry.

Because of the clandestine nature of this problem, many modern slavery situations within hotels are ignored or go unnoticed. There are four main touchpoints where modern slavery can occur in the hospitality industry:

Forced Prostitution: The privacy that hotels offer and the transient nature of their guests mean that they can be prime venues for commercial sexual exploitation, a term used to describe a person in forced prostitution. The victims of this crime are controlled by their captors using threats or debt for the purpose of generating profits through the sale of sex.

Supply Chains: Hotels procure a wide range of products, including seafood, furniture and linen, some of which can be harvested or produced with forced labour. For example, fishing industries around the world have been found to have seafood that is caught by modern slaves.

Third-Party Contractors: Hotels sometimes use third-party service providers as house cleaners, caregivers, gardeners and dishwashers. Some of these people might be migrant workers who are in employment situations that include debt bondage or forced labour.
Construction: Modern slaves can be found working on major hotel construction sites. Within the range of subcontractors supporting a major build, there are sometimes exploitative approaches used to recruit unskilled workers whose wages are withheld and never paid.

COVID-19 and the Hospitality Industry

The hospitality industry has felt some of the largest impacts of the spread of COVID-19. Travel has halted, and many countries have enforced quarantines and social-gathering bans which have resulted in the closure of many bars, restaurants, and hotels. As this situation continues to unfold, many hotels are facing empty rooms, which is having a devastating impact on their overall business. As a result of this crisis, there are many reasons why hotel workers may be more vulnerable to modern slavery during the ongoing pandemic period and beyond. These include loss of income, increased debt, low awareness of workplace labour rights, requirements to work excessive overtime to cover staffing gaps, and the inability to return to home countries safely.

Why Should a Company Carry Out a Self-Assessment?

Understanding the risk of modern slavery within hotel supply chains is now a priority for many hotels. For the past ten years, modern slavery has become an ever-increasing business risk for the hospitality sector. 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 and reputational damages. Beginning in 2012, transparency legislation has been put in place that requires major companies to indicate what they’re doing to address this problem. We are also seeing a rise in the number of class action lawsuits against major companies, including hotels. Modern slavery is now on the radar of the media and NGOs, many of whom are unafraid to publicly shame and thrust brands into the spotlight for failing to address it. Finally, in the investment world, there has been a concerted effort to include metrics related to modern slavery within environmental, social and governance (ESG) frameworks. Hotels that don’t pay attention to this trend may find their investment options will become more restrictive.

Understanding the risks associated with modern slavery is a key step towards protecting the hospitality industry from becoming exposed to them. One way to do this is to have your organisation take the Business Index Self-Assessment. This confidential tool, which can be easily completed in less than ten minutes, will allow your company to identify how it rates on a scale from one to a hundred. The score achieved can be compared with the average scores achieved by similar companies. This assessment will allow a hotel to review its existing performance related to a range of modern slavery initiatives, assess any gaps between the current and desired performance, and assist leadership to put in place actions to improve this performance.

A Good Time to Address the Modern Slavery Issue

The hospitality sector is well-positioned to identify and address modern slavery in all of its forms. With the right training and tools, it can have a positive impact on many vulnerable lives. Following the completion of company self-assessments, the Mekong Club is supporting and advising hotels in our network. The benefit of knowing how a company rates is that it allows a company to explore options. Below are some interventions that can be considered:

Modern Slavery Guidelines: Hotels can update their internal and external policies and codes of conduct to include statements related to modern slavery. This can help them to outline their commitment and operational response. The Mekong Club offers a modern slavery guideline to help with this process.
Modern Slavery Awareness Training: Comprehensive modern slavery awareness training is being provided to employees, contractors and subcontractors to help them understand the issue and address it. To be effective, this training should be provided in the local language of the employees. Infographics and awareness-raising posters can be distributed to employees to remind them of their responsibilities.

Modern Slavery Audit Checklists: More hotels are monitoring service contractors, construction sites and suppliers using comprehensive audits, surprise inspections, worker interviews, and document inspections. The Mekong Club has a modern slavery audit checklist that can be used to identify red flags related to forced labour cases.
Commercial Sexual Exploitation: Addressing commercial sexual exploitation requires hotels to train their employees to identify and report suspicious behaviour. Certain staff, in areas such as security, reception and housekeeping, are in a better position to spot signs of human trafficking. It is important that hotels assign responsibilities to supervisors so that action is taken when a case is identified.

The hospitality sector has a distinct advantage in being able to identify and address modern slavery in all of its forms. With the right training and tools, it can have a positive impact on thousands of lives.

If you are a hospitality professional, take our Anti-Slavery Scorecard Self-Assessment to see how your company compares to others in the hospitality industry and learn more about the key role that you have to play in ending modern slavery.

Author: Matthew Friedman

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Modern Slavery Business risks: Finance and COVID-19

Emerging Business Risks in Modern Slavery

As COVID-19 continues to impact every industry and economy, so does the business risk of modern slavery and criminal economy. Human traffickers operate using profits generated through their crimes and continue to exploit people across the world. With lockdowns still prevalent in many countries, traffickers adapt and find new ways to exploit communities for their own financial gain. In addition, soaring financial online fraud, cybercrime, and scams generate tens of millions of dollars in proceeds; money is taken out of reach from individuals and communities struggling to keep their heads above water.

This quickly changing criminal economy reflects that people are now even more likely to accept any work to keep themselves afloat. Thus, unfortunately, leading many into the trap of deception to a more prosperous life, which only leads to forced labor or sexual exploitation.

The changing forms of human exploitation related to COVID-19 have also placed a significant business risk on companies and their modern slavery strategies to adhere and respond accordingly to criminal activities.

While still challenging to detect, several mitigating measures could be put in place, and a risk-based approach can be applied where activity was known or suspected to occur. The changing nature of the economy means that such risk has shifted, and so new threats may emerge. For example, previous risk profiles may become outdated as exploitation methods turn, so many ways to launder funds and move cash proceeds of criminal activities.

The Challenges in Anti-Money Laundering and Modern Slavery During Covid-19

There are several immediate effects of COVID-19 on the ability of financial institution providers to accurately track their modern slavery and anti-money laundering efforts and safeguarding practices. In many countries, social lockdowns and restriction of movement pose a challenge to carry out routine customer visits, conduct in-person AML checks, and others much more severe and related to the sustainability and profitability of a business in the short, medium, and long term.

The reality of not being able to see business in operation first-hand, the greater chance for illicit activities to not be detected, and for accounts used for money laundering purposes continue to thrive without being scrutinized. Likewise, the barrier to not witnessing and interacting with customers in branches is left undetected by behavioral and suspicious indicators. This poses an ongoing modern slavery business risk that continues to be a challenge.

Industries with Business Risk for Modern Slavery

We are already seeing a significant increase of people and communities falling below the poverty lines worldwide. In addition, many workers who rely on daily wages have suddenly had their incomes come to a halt due to lockdowns, social distancing restrictions, and supply chain distribution.

The industries where workers are most impacted are factories, construction, domestic work, and agriculture. In addition, many of the people impacted are migrant workers who may have traveled across borders to find work and rely heavily on their income to support their families back in their home countries.

Debt begins to build up and result as a critical driver that results in these people being placed in modern slavery situations. Workers start to have no control over their identities, working for little or no pay and increasing their substantial debts, and cannot pay recruitment fees.

When their income stops, they are suddenly significantly more vulnerable to the lure of unregulated financial products, loan sharks, and taking on dangerously high-interest loans to keep afloat.

When people are financially vulnerable, they are much easier targets for exploitation, abuse, and forced labour. This is an area of concern for financial services providers, as they may find their bank accounts being used to process these so-called loan payments. As a result, they may find themselves inadvertently handling illegal or exploitative funding. Financial institutions may also find their commercial clients’ supply chains changing and risk profiles shifting in these uncertain times. For example, where forced-labour risk for a particular client’s factory may have been relatively low before, changing circumstances and increased desperation can lead to previously “safe” customers displaying much higher-risk characteristics.

Overall, modern slavery business risk has never been more prevalent, which is a concern that financial service providers must heed. As the Covid-19 pandemic continues and changes, so will the threat continuing to develop and grow. Financial service providers need to be first-movers to anticipate risk both occurring now and in the uncertain future. This will ensure that they protect their business, protect vulnerable people, and exclude criminals from accessing the financial systems they seek.

Author: Nolan Clack

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Modern Slavery: The Elephant in the Room

A topic often heard of yet still largely misunderstood. Modern slavery exists worldwide and is not just present in developing countries but globally. Often when we talk about modern slavery, a picture is painted of exploitation in factories and farmlands, images that are far removed from the shiny corporate office buildings where a good majority of our usual audience spends their working lives.

When we discuss modern slavery, most become sympathetic to the millions of victims and pledge to support the cause to fight this crime, but still assume that modern slavery is not something that they would ever witness.

But let us ask you this. What would you say if modern slavery could very well exist in the office building that you work in?

While this might seem like an absurd question, take a moment to think about your workday and how this could be remotely possible.

It is easy to take the workers that go far under the radar of our daily office lives for granted. The workers that greet you on your arrival, the people cleaning your office space, and the security guards contracted to help maintain a safe work environment.

These people are often the ones that are hired through external contractors to carry out the low-paying jobs that keep the corporate ecosystem ticking. They may have paid excessive fees to secure their job and been forced into debt to their employer. They may not be paid the wages that they were promised. They may have had their passports taken away, told they would be arrested if they spoke up. They may be told their families are at risk if they try to run away.

Step Forward

We don’t expect our readers to know the full extent of modern slavery within every industry, but self-educating is a great way to start. This can begin by simply looking around at the people working different jobs that you interact with each day, from the security guard outside your office to the people working in your local car wash to the staff in your nail salon. Read up about these industries and how modern slavery can exist in plain sight. You might be surprised to come across information you hadn’t known existed. Better yet, what you have newly discovered interests you so much you decide to share it with a colleague.

A lot like the elephant in the room, a small act of simply sharing information on the subject of modern slavery to others can go a long way to provide clarity on the issue. If 10 million people did a small thing each, that’s 10 million steps of progress.