In a fight to tackle the scourge of modern slavery, a flurry of antislavery legislation has been introduced in the past decade. How can they help?
In a recent post by Moody’s Analytics, the company outlined how exactly regulations can play a part in fighting slavery around the world.
Back in 2011, the UN’s Human Rights Council released its ‘Guiding Principles on Business and Human Rights’, which offered a framework for companies to follow.
Since then, some jurisdictions have introduced regulation to support the framework. For example, the US, the UK, France and Australia passed laws that require mandatory disclosures or due diligence related to human rights or modern slavery. Similar regulations have also been passed or proposed in other countries.
Moody’s remarked, “This increase in laws that can be broken means more prosecutions. More prosecutions provide a better view of the issue – such as crimes that often surround modern slavery operations. This combination of enforcement and information provides deeper, broader data that you can use to make better risk decisions.”
Another key indicator of such increased attention is the ever-climbing penalties for non-compliance.
A particular case of this was seen in Australia, where the biggest corporate fine in the country’s history was handed down in 2020.
In that case, the regulator agreed that the organization “failed to identify activity potentially indicative of child exploitation risks by failing to implement appropriate transaction monitoring detection scenarios,” including KYC checks for previous child sexual exploitation offenses.
Where are some of these legislative changes taking place? One example is Pakistan, which passed the Prevention of Trafficking in Persons Act in 2018 to enable what was the first human trafficking prosecution in ten years.
Enhanced monitoring allowed the authorities to recognise frequent bride trafficking, where Pakistani women were sold to Chinese men through marriage brokers.
Elsewhere, Australia implemented its own modern slavery act in 2018. Moody’s explained, “The country is ahead of others in recognizing the systemic role companies have in upholding antislavery standards—or not. In the following years, data gleaned from adverse media shows a higher ratio of modern slavery-related prosecutions against organizations compared to other countries. “
The company concluded, “Despite a promising trajectory, sovereign regulatory development remains disparate – a loophole in perpetrating crimes of slavery across borders both in formal supply chains and illegal trafficking networks. In the absence of regional modern slavery laws, many crimes that could be classified as modern slavery are still reported and prosecuted under other labels such as “professional misconduct.
“In such cases, due diligence programs focused on only crimes labeled as modern slavery could miss identifying that risk. Viewing data holistically – in this case screening not only for modern slavery, but also for the types of crime most often related to modern slavery – helps you better identify and understand risk.”
Read the full post here.
Copyright © 2018 RegTech Analyst
