Modern Slavery Risks Increasing in Asian Hubs

By Sue Doerfler

Modern slavery is increasing in Asian manufacturing hubs and could intensify due to the coronavirus (COVID-19) pandemic, according to new research in Verisk Maplecroft’s 2020 Human Rights Outlook.

The Bath, United Kingdom-based global risk data and forecasting company’s Modern Slavery Index found that the following countries posted their lowest rankings since 2017: Bangladesh (No. 18 in risk globally), China (No. 20), Myanmar (No. 23), India (No. 25), Cambodia (No. 32), Vietnam (No. 35) and Indonesia (No. 44). The index surveys 198 countries, measuring the businesses’ risk of possible association with (1) slavery, (2) trafficking in persons and (3) forced labor in supply chains, operations and service providers.

The 10 countries with the highest risk of modern slavery, according to the index, are: North Korea, Yemen, Syria, South Sudan, Iran, Somalia, Sudan, the Democratic Republic of Congo, Gambia and Burundi. However, according to the Outlook,  countries where retail goods are manufactured and raw materials are produced are of greater concern for organizations, investors and consumers.

“Both India and Bangladesh, key manufacturing countries for the apparel sector, have dropped into the ‘extreme risk’ category of the Modern Slavery Index for the first time and join China and Myanmar in a group of 32 countries where populations face the highest levels of risk,” a Verisk Maplecroft press release stated. In Bangladesh, there have been increasing violations as well as a weakening of enforcement of labor laws, and India has seen a decline in enforcement, the Outlook noted.

Increasing violations also have been reported in Cambodia, China and Indonesia. The biggest increase was reported by Vietnam, a oft-mentioned manufacturing and sourcing alternative to China since the start of the trade war.

The pandemic has increased the risk of modern slavery issues. In the Asian region, which has experienced decreasing consumer demand and lockdowns closing or downsizing factories, millions have lost jobs, according to the Outlook. “As more workers are pushed into the informal economy in countries where labor protections are already lacking, modern slavery risks will increase,” the press release stated. “Many laid-off workers are left with little choice but to turn to more exploitative forms of work to stay afloat.” The Outlook noted that 65 percent of Asia’s workforce is employed in the informal economy and has little or no access to labor protections. In addition to manufacturing, other sectors at risk include agriculture, services, hospitality and construction.

“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, in the press release. “The reputational risk to brands from association with modern slavery is, therefore, now higher than at any other time over recent years.”

As countries recover from the pandemic and lockdowns cease, modern slavery won’t go away, especially given continued uncertainty, the report states. As a result, corporate exposure to such risk could expand. However, legislation pertaining to reporting requirements — in the U.K. and Australia, and potentially in Canada and Germany — points to an increasing awareness of the problem and an expectation that action should be taken in response to it, the report stated.

 

About the Author

Sue Doerfler

About the Author

As Senior Writer for Inside Supply Management® magazine, I cover topics, trends and issues relating to supply chain management.