Covid-19 increases corporate exposure to modern slavery, finds Maplecroft index

The economic fallout from Covid-19 will increase the risk of modern slavery seeping into supply chains, warned Verisk Maplecroft in the 2020 edition of its Modern Slavery Index. The index specifically flags a “surge” in modern slavery within Asian manufacturing hubs as the pandemic bites. Verisk Maplecroft said workers who have lost their jobs in the pandemic could turn to more exploitative forms of labour. Meanwhile, travel restrictions are limiting the effectiveness of supply chain audits, it added. “The reputational risk to brands from association with modern slavery is at its highest level in years,” Verisk Maplecroft warned. “Travel restrictions and other measures to reduce the spread of Covid-19 have left the ability of companies to carry out audits to ensure ethical working practices in their supply chains in disarray,” said Sofia Nazalya, human rights analyst at Verisk Maplecroft. The index identified a “surge” in the risk of modern slavery in Asia’s manufacturing hubs. Verisk Maplecroft said China (ranked 20th), India (25th), Bangladesh (18th), Vietnam (35th), Cambodia (32nd), Myanmar (23rd) and Indonesia (44th) all performed worse in the 2020 ranking. They sit at their lowest point in the rankings than at any point since 2017. Bangladesh and India are now ranked as “extreme risk” of modern slavery for the first time since the index was launched. This takes the total number of countries ranked as extreme risk to 32. Cambodia saw the largest fall in the ranking. It has dropped 48 places since 2017. The Modern Slavery Index tracks 198 countries to measure the risk to business of an association with slavery, trafficking and forced labour in supply chains. North Korea, Yemen, Syria, South Sudan, Iran, Somalia, Sudan, DR Congo, the Gambia and Burundi top the ranking. Verisk Maplecroft said Asian manufacturing has taken a hit from the global collapse in consumer demand and lockdown restrictions to control the spread of Covid-19. It said millions of workers in Asia have already lost their jobs and risk being pushed into the informal economy for work, where labour protections are much lower. Data from the UN reveals that over 65% of Asia’s workforce are already employed in the informal economy and are at risk of falling into forced labour. “Countries where a majority of retail goods and a swathe of raw materials are produced… will be of highest concern for sustainable sourcing departments of companies, responsible investors and ethical consumers across the board,” Verisk Maplecroft said. “Corporate exposure to modern slavery risks will undoubtedly expand, particularly within procurement in countries that were previously already grappling with this issue,” the company continued. It added that modern slavery risks will become even more complex for corporates, especially when it comes to meeting modern slavery and ESG reporting requirements. In the UK and Australia, new guidance has been issued alongside extensions to deadlines for modern slavery reports. Similar legislation is expected in Canada and Germany. “Despite an understanding that companies will face certain challenges in meeting reporting requirements in this uncertain period, there are still expectations for them to respond to emerging modern slavery risks,” Verisk Maplecroft said.

Covid-19 increases corporate exposure to modern slavery, finds Maplecroft index

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