Those who do not know me should know that I have always been accused of being (way!) too idealistic (sometimes even naïve), obsessed with unleashing unfulfilled potential and stubborn in the belief that we can achieve a better world. Surprisingly to many, I chose to pursue a career in the private sector and back in 2009 it was not obvious to me what role the sector could play in all this.
Spoiler alert: this article is about the day I realized that even in the private sector I could be an activist for human rights.
It all happened back in 2015 when I was already heavily pregnant with my first child but even so, could not resist a good challenge: I traveled to London to speak on behalf of GRACE at the 2nd partners meeting of Project Briseis regarding corporate prevention on Modern Slavery and Human Trafficking (“MSHT”). There, I engaged in a fruitful task force discussion led by APAV, to elaborate on how the public, private and social sectors could achieve this.
Needless to say, that although we made huge strides forward together, we did not solve the MSHT riddle that afternoon. However, for me, it was a turning point. Today, an array of evidence proves that MSHT penetrates business activities on a global scale (either through direct corporate operations or via complex value chains) and that, without due diligence, companies may be totally unaware of such.
In fact, one of the great challenges is that although Europe has reached a breaking point over organized crime (where MSHT is often carried out), with the pandemic offering more opportunities for illegal activities, the role of law enforcement agencies and member states is a daunting one due to the transnational structure of organized crime, with 70% of its networks active in at least three different countries.
Therefore, despite international legal instruments such as the International Labour Organisation (“ILO”) Convention on Forced Labour condemning “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily” or Directive 2011/36/EU on preventing and combating trafficking in human beings and protecting its victims, which determines that States should take action and ensure punishment when intentional human trafficking takes place, the truth is that if the private sector does not join the fight it is unlikely that we stand a chance at winning this war.
This is why MSHT is also addressed in Sustainable Development Goal 8 (Decent Work and Economic Growth) and was previously included in Principle 4 of the United Nations Global Compact Principles – the UN’s proposal for the private sector on how to do sustainable business.
Moreover, under the United Nations Guiding Principles on Business and Human Rights (“UNGPs”) companies are responsible for respecting human rights, including those referred by the ILO’s Declaration on Fundamental Principles and Rights at Work. The UNGPS includes a responsibility to prevent and mitigate adverse human rights impacts directly linked to their operations, but also those caused by business relationships, within value chains.
In February 2021, the European Parliament’s Legal Committee adopted a Draft Directive on Corporate Due Diligence and Corporate Accountability (“Draft Directive”) that, if approved, will apply to all undertakings governed by the law of an EU Member State or the law of third countries, with the latter applying to undertakings that sell goods or provide services in the internal market.
Under the Draft Directive, a risk assessment relating to human rights, environmental and good governance standards will be expected and, when risks of violations emerge, companies will be required to publicly disclose details and take steps accordingly.
This represents a huge leap forward towards business accountability and confirms the trend set by the UNGPs: companies will increasingly be held accountable not only for direct human rights violations but also for indirect violations within their value chain.
For those aware of major human rights violation scandals but skeptical that such risks are present in industries other than the garment, mining, or agricultural and livestock production, I have news for you: yes, there are industries more prone to human rights violations than others; however, recent data suggest that even sectors apparently shielded from these risks are not, in fact, immune.
For instance, the financial services sector may be contributing directly or indirectly to MSHT depending on investment options. If Boards fail to perform risk assessments and to follow up accordingly, cases of MSHT may end up within their operations, supply chains, customers or staff, without even knowing it. Anti-money laundering (“AML”) legislation already requires companies to take steps to ensure compliance with obligations resulting from this legal framework that may indirectly prevent MSHT cases across business operations or value chains. However, AML obligations and corporate human rights due diligence norms cannot be confused since they concern related but different realities.
Another example that you probably did not expect to see mentioned when talking about MSHT cases, mainly due to its good “green” reputation, is the renewables sector, particularly the solar industry. In fact, a recent report by a consultancy firm has tied this industry to forced labor in China, which is of enormous importance considering that an estimated 50% of the global supply of polysilicon, a critical component of solar modules, is produced in the Xinjiang region.
What does this all mean? It means that even when companies firmly believe they have (near) zero risk exposure to MSHT cases, they cannot be sure without performing regular risk assessments and monitoring the way they (and their partners and suppliers) do business.
But why should any of this concern you? Especially those among you that amidst the challenges brought by the Covid-19 crisis and other pressing issues have not yet managed to focus on becoming a truly purpose-driven company?
Well, the business case here is clear: if you do not stand against MSHT within your operations and stakeholders, in time you’ll risk legal, reputational and commercial damage that could seriously jeopardize the future of your brand and business.
Purpose-driven leaders already embodied their key role. For example, Andrew Forrest from Fortescue Metals Group and the Walk Free Foundation commits “to take a zero-tolerance approach to modern slavery in my supply chain” and endorsed the “Tackling Modern Slavery in Supply Chains”, a guide that aims at eradicating MSHT cases in business operations.
I thus urge you to join this revolution: identify and address your most salient risk exposure, both across your operations and within your value chain, in order to avoid any business, legal or commercial damage while simultaneously enhancing your brand and reputation simply for… making the world a better place.
When are you starting?
Have a great and impactful week!
Maria Folque
Senior Consultant and Pro Bono Manager at the Social Economy and Human Rights Practice at Vieira de Almeida & Associados
This article refers to edition #84 of the "Have a Great and Impactful Week" Newsletter.
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