Modern Slavery and COVID — 19

COVID-19 increases the risk for Modern Slavery and creates a window of opportunity to build back better

Photo by Brian Ceccato on Unsplash

The novel coronavirus has now impacted most of the planet: as of May 22, there were over five million people infected in 188 countries. The pandemic has highlighted long-standing inequalities at every level. For many, there is an inherent tension between staying at home to prevent the spread of the virus and being able to sustain a household. Furthermore, only some countries have the capacity to provide bailouts, individual stimulus checks, or other forms of financial relief. It is in this context that there are heightened risks for modern slavery.

A recent article by the team at the Global Fund to End Modern Slavery (GFEMS) conceptualizes modern slavery through a market lens: modern slavery happens at the intersection of 1) a supply of vulnerable workers, 2) demand for low-cost products, and 3) enabling elements in our environment that allow for it to take place. COVID-19 has catalyzed an increase in these three factors. I would add to the GFEMS frame of reference that these three factors are interrelated and that their spike will disproportionately affect poor communities.

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First, global job losses due to the pandemic may lead to nearly half of the global workforce to lose their livelihood and may wipe out progress that had been made to eliminate extreme poverty. On May 19, the World Bank adjusted it’s projections and now estimates that COVID-19 could push 60 million people to extreme poverty. These projections will affect countries in the Global South and people who have lost their source of income and have few other alternatives will be more vulnerable to forced labor and other forms of modern slavery. Those that were already being exploited will have a harder time accessing healthcare, recovering their freedom, or reaching out to the authorities.

Second, the demand pressures will change. Margins are decreasing across the supply chain and there is more pressure than ever to reduce costs. This increases the risk for subcontracting to informal suppliers that may not meet the same social responsibility thresholds that other manufacturers have to meet. As consumer demand drops, some brands and retailers are transferring the risks to their suppliers and canceling orders without payments. This, at its turn, drives more joblessness and poverty in producing countries and increases the supply of vulnerable workers. Other brands have committed to paying their suppliers for orders already in production. The long-term impact of a fall in demand in joblessness and poverty in countries that heavily relied on exports such as Bangladesh or Cambodia are yet to be seen. Protests have already started.

Third, we are starting to see changes in the enabling environment, particularly in regulatory frameworks and budget allocation for enforcement and remediation. India has already changed labor legislation to lower the bar for worker protections by extending work shifts to 12 hours. Several Indian states suspended minimum wages and trade unions for up to three years. Other countries may start to shift their budgets from prosecution of modern slavery or survivor support into pandemic-related relief efforts. Resources from NGOs or international development funders may also focus on COVID relief efforts and leave responses to modern slavery at a standstill. Additionally, there are different state capacities to react to the crisis. Many countries don’t have a single ventilator to meet the healthcare needs of their population.

These three factors are tightly knit and they feed into each other: countries that have lower state capacity and are less able to react to the crisis are precisely those that will be hardest hit with job losses and spikes in poverty. At the end of the day, it is low-income workers that will be disproportionately impacted by the pandemic.

Although COVID presents great risks for Modern Slavery, it also provides a window of opportunity to act. By early May, there were increasing calls to “build back better” and rethink how we want our world to look like and operate in a post-COVID scenario. In the spirit of being propositive and highlighting best practices, here are some steps in the right direction to mitigate modern slavery amidst the pandemic:

For brands

• Maintain (or establish) a commitment to human rights that includes an assessment of your business impacts and a due diligence process
• Cultivate a strategic relationship with your suppliers that is guided by open communication and honoring commitments.
• Invest in assessments and monitoring:
• Assess impacts of Covid on overtime increases, payment of wages, among others. A collaboration between Elevate and GFEMS is using data analytics to identify forced labor hotspots.
• Use metrics to take action. This does not mean that a supplier relationship must be terminated. Rather, assess on a case by case basis and first try to remediate and improve.
• Maintain training of staff on indicators of forced labor and supplier codes of conduct.
• Assess production capacity and consider how your own purchasing practices may be placing undue pressures on the suppliers.
• Remediate if cases of Modern Slavery are found.

For investors

• Keep human rights front and center by maintaining monitoring of these risks.
• Take into account that ESG investing will be part of recovering from COVID with resilience.
• Use the Investor Alliance for Human Rights Toolkit to thread the UNGP throughout ESG and take at least the following actions:
• Formalize your human rights expectations
• Assess human rights policies
• Assess management of salient issues
• Assess human rights outcomes
• Maximize leverage and prioritize opportunities for engagement

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For governments

• Ensure medical treatment and key information on COVID-19 reaches vulnerable populations.
• Continue to support victims of Modern Slavery and prosecute the crime.
• Provide social and financial support to those that are losing their income.

For academia

• Continue to fund research on Modern Slavery prevalence, best practices, and risk hotspots. The Prevalence Innovation Forum is a good place to start.

For consumers

• Know where the products you purchase are made and under what conditions. If you don’t know, ask the brand.
• Invite the brands you love to honor their relationships with suppliers and pay for orders already made.
• Choose brands that are committed to safe and fair working conditions.