What the latest figures can tell us about the next wave of modern slavery legislation

50 million people around the world are living in modern slavery, according to the latest data.

The estimates are set out in a new report published by the International Labour Organisation (ILO), the International Organisation for Migration (IOM), and Walk Free, a global human rights group.

The report marks the first time these organisations have updated their figures since 2017. The intervening years have seen a worrying 25 per cent increase in the prevalence of modern slavery globally.

What this means for the private sector

Although it also considered state-imposed forced labour, the research found that the highest prevalence of forced labour occurs in the private sector.

86 per cent of forced labour cases were estimated to be caused by private actors, principally in industries such as service, manufacturing, construction, agriculture, and domestic work.

However, of the report’s 14 recommendations on forced labour, few appear to be targeted towards the private sector directly. Its recommendations focus instead on changes required at the governmental level. Nevertheless, it raises three key points which private actors would do well to understand:

1) Deeper due diligence

According to the research, due diligence laws are critical. However, they have, until now, been overly limited to partners operating at the upper tiers of the supply chain. 

The result, the report argues, has been that these laws have had limited impact on advancing due diligence among entities further down the supply chain, including entities in the “informal economy” where modern slavery risks are greater.

2) Institutional requirements

The research also calls for states and financial institutions to “make greater use of their economic power” to ensure that businesses respect human rights in their operations and supply chains.

In practice, the report argues that governments should make human rights due diligence part of their eligibility criteria for officially supported export credits and direct lending.

It also recommends that development financing institutions should include "human rights conditionality" in their loan agreements with private businesses.

3) Forthcoming guidance  

Among the lessons we have learned from the "first wave" of modern slavery legislation, the research claims, is the “impor­tance of clarity” in the obligations and expectations placed on businesses.   

Perhaps referring to the well-documented challenges that private sector organisations have faced in complying with their reporting obligations under the UK Modern Slavery Act 2015, the report calls for governments to explain their modern slavery laws and pro­vide further “compliance guidance”.  

What happens next

With the UK and Australian legislation already set to be updated, these figures and recommendations have come at a time when major legislators are looking back at their "first wave" modern slavery laws with a red pen in their hand.  

They will provide these legislators with some important issues to consider, as well as renewed public pressure on the issue of modern slavery as the statistics make their way through mainstream media.

If the authors of the world’s largest study on modern slavery are given any credence on how we should be tackling the issue, the next steps could feasibly include:

  • requirements for companies to look further down their supply chain when conducting human rights due diligence
  • the incorporation of human rights performance criteria among the conditions for government financing
  • perhaps necessarily, clearer guidance on how these measures will be implemented.

Through the adoption of the Sustainable Development Goals, the global community has already committed to ending modern slavery universally by 2030. This latest report has brought disconcerting news on the scale of the problem we face in meeting this target. However, it also provides the private sector with some early indications of how it can be part of the solution.  

For information on how we are helping our clients to meet their obligations under international modern slavery laws, please contact Michael.Pollitt@KPMG.co.uk or Simon.Stiggear@KPMG.co.uk.

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