The FINANCIAL -- Practical guidance designed to support the private sector in the fight against modern slavery has been launched by a group of development finance institutions (DFIs). The guidance helps companies and investors in emerging markets by giving them the practical tools to identify and manage potential risks proactively.
The guidance features in a new Good Practice Note, “Managing Risks Associated with Modern Slavery”, produced by CDC Group plc, the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), alongside the UK’s Department for International Development (DfID).
Modern slavery comprises different forms of slavery, servitude, forced or compulsory labour and human trafficking. The guidance focuses on the concept of forced or compulsory labour as the form of modern slavery which investors and companies are most likely to encounter in their operations or business relationships.
According to recent estimates by the International Labour Organisation (ILO) and Walk Free Foundation, there are roughly 40.3 million victims of modern slavery around the world, of whom 24.9 million people are estimated to be in conditions of forced labour, including 16 million people in the private sector. Modern slavery disproportionately impacts women who are thought to make up 71% of all modern slavery victims.
The private sector increasingly acknowledges the key role that they can play in confronting forced labour risks. The publication does not set new standards. Rather, it distils key concepts and proposes some practical measures - illustrated by best practice examples - that investors and companies can use. From its suggestions to strengthen investors’ environmental and social due diligence or improve companies’ supply chain monitoring, Managing Risks Associated with Modern Slavery provides an understanding of why action is necessary, how to manage and address specific issues, and why cooperation with others is so important.
The Good Practice Note, which was commissioned by the DFIs and produced by Ergon Associates and the Ethical Trading Initiative, provides guidance for DFIs, banks, private equity firms and other financial institutions that provide capital to private companies in emerging markets. The publication offers advice for a range of sectors where risks of modern slavery are high.
These risks tend to be greater in the supply chain and are associated with a number of unacceptable practices, such as abusive and fraudulent recruitment (e.g. use of recruitment fees), the withholding of wages, and document retention, etc - some or all of which can leave workers in a situation of modern slavery. Furthermore, the Good Practice Note is of relevance and practical use for a range of company functions, including management, human resources, sustainability and procurement.