Six crucial facts you need to know about modern slavery

January 18, 2022

Six crucial facts you need to know about modern slavery

Far from being a thing of the past, slavery continues to exist around the world in the 21st century. For companies operating in the global marketplace, especially those with large and diverse supply chains, the risk of inadvertently being involved with or implicated in this abhorrent practice might be far greater than you realize. To find out more about modern slavery, take a look at these six facts.

There are more than 40 million victims of modern slavery across the globe

The International Labour Organization has collected some sobering statistics about the scale of modern slavery. It estimates that 40.3 million people globally are subject to some form of slavery, including forced labor. Of this number, 11.6 million are men and boys, and 28.7 million are women and girls. Private companies or individuals make up the bulk of exploiters of forced labor: in 2017, 16 million victims of forced labor are in the private economy, out of a global total of 24.9 million. These numbers are linked to the huge amounts of money that can be made from the enslaved.

Modern slavery takes many forms

According to statistics gathered by the UK government, some of the most prevalent types of modern slavery include:

  • Sexual exploitation and trafficking.
  • Domestic servitude (alarmingly, an estimated 24% of victims of this practice are children).
  • Forced labor (in which people are coerced, often by violent means, to work for little or no pay in inhumane and frequently abusive conditions).
  • Criminal exploitation.

According to Walk Free’s 2018 estimate, slavery, in one form or another, exists today in at least 167 countries. The vast bulk of people subjected to slavery live in only 10 countries — India, China, Pakistan, North Korea, Nigeria, Iran, Indonesia, Democratic Republic of the Congo, Russia, and the Philippines — but modern slavery also occurs in G10 countries.

Rates of modern slavery are steeply on the rise in the UK

Despite enacting the Modern Slavery Act in 2015 to control the spread of this practice, the UK has seen modern slavery levels rise. The National Crime Agency reports that referrals of potential victims increased by 300% from 2013 to 2018. Anti-Slavery International estimates that more than 10,000 people are suffering as victims of modern slavery in the UK.

Supply chains are particularly vulnerable to modern slavery concerns

The remarkably high incidence of forced labor in supply chains presents a major issue for many businesses — organizations need to become more aware of this issue and do everything in their power to solve it. Anti-Slavery International notes that, due to the globalized nature of many industries, evidence of forced labor and slavery is found at various stages of the supply chain for many everyday products.

For example, the use of forced labor in the production of cocoa, cotton and the raw materials used to make smartphones means that many companies in the food, textile and consumer technology industries run the risk of being associated with the practice.

Whatever sector your company operates in, you could encounter and even become involved with modern slavery in a variety of ways — some obvious and some obscure. You could inadvertently deal with suppliers who are directly engaged in these abusive and exploitative practices, or simply procure goods with component parts sourced from companies connected to modern slavery. The UK’s Modern Slavery Act requires UK-based businesses to be fully transparent in regards to their supply chains, so that companies can educate themselves and avoid such situations.

Even the slightest connection to modern slavery can harm your business

Being implicated, no matter how tenuously or accidentally, in modern slavery and forced labor can have long-term, negative effects on your company. A report by the UK-based Chartered Institute of Procurement & Supply highlights some of the consequences of having your company associated with products or materials that have been produced unethically. For starters, you can expect to experience a precipitous drop in consumer confidence and a reduced market share. You also have a high risk of legal action. In fact, if any part of your supply chain is found, or even rumored, to be involved in the use of forced labor, no matter how tangentially, your reputation and your relationships with customers, the media, shareholders and other stakeholders will be in danger of significant damage. 

Simple steps can reduce your risk of being tainted by modern slavery

Company ownership rules can be complex, so organizations would be wise to implement procedures to help limit exposure to modern slavery through the supply chain. You can go a long way toward making certain that you stay away from suppliers associated with modern slavery simply by staying informed about the companies and individuals with whom you do business, including being aware of any ownership structures that might conceal unsavory connections. Comprehensively auditing suppliers helps you avoid entering partnerships or conducting transactions with companies that are tied to forced labor or modern slavery.

The right data for the job

The goal of compliance is not to detect money laundering, but to find underlying criminal industries, such as modern slavery, that perpetuate illicit financial flows. You can adopt this approach at scale while maintaining operational efficiencies by using our best-in-class features:

  • Data and content: high-quality and complete entity coverage on modern slavery and other AML/KYC risks, with corporate structures, monitored lists, adverse media, and special research collections through Orbis, Compliance Catalyst, and GRID.
  • Out-of-the-box solutions: best practice designed by experts to tackle specific modern slavery risks, now available in Compliance Catalyst.
  • Product customization: our data can be configured to adjust risk scope, risk stage, look-back period, or to filter by geography or identity. It can also be adapted to meet the needs of adverse media screening in GRID.

Operational efficiencies: managing emerging risks is easy with false positive reduction through Analyst Review and AI Review. Clients with a View subscription can gain insight into their alerts and non-alerted entities to see their portfolio’s configuration and optimize tuning capabilities.

If you have any questions about MA’s solutions or would like to discuss KYC for your business, use our contact form.

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