FinTechCyber Security & FraudBribery and corruption: the link to global slavery

Bribery and corruption: the link to global slavery

As world leaders meet in London to discuss how to tackle corruption, this blog examines how it is linked to human rights abuses such as modern slavery.

Slavery is no longer just a human rights issue. It has become a corporate compliance issue. This week in London heads of business and governments meet with non-governmental organisations (NGOs) and campaigning groups at a series of events addressing corruption in our society, starting today May 11 with “Tackling Corruption Together” and followed by the David Cameron-hosted 2016 anti-corruption summit, at which all will seek to agree how we might address it in the 21st century.

High on the agenda will be the links between corruption and other abuses such as the US$150bn generated annually by criminals engaged in slavery. The networks that drive human trafficking touch thousands of companies globally at multiple levels in their supply chain – from bribing top company officials, to delivering individuals as cheap labour.

The links between bribery, corruption and modern slavery are complex and are by their very nature hidden: they form an intricate and interdependent ecosystem, as each compartment cannot survive without the other. This means that although corporations may not be directly engaged with the issue of slavery, they may still be operating in a gray area. It is therefore increasingly important that organisations are aware of the geopolitical risks attached to countries, partners and individuals within their supply chain and the consequences that will follow if these risks are not dealt with.

There is much legislation designed to curtail both corrupt practices and modern slavery in businesses. The Foreign Corrupt Practices Act in the US and the Bribery Act in the UK are two forms of regulation that make it illegal for third parties of any American or British company to receive or pay bribes to officials (both public and foreign). Already a few large companies have felt the million dollar penalties. Recent regulation in the UK and US, as well attention from the media and civil society, have now also put slavery firmly on the business agenda.

Tackling abuses

Recognising that corruption is a key element and driver of exploitation and slavery is crucial to positioning the issue firmly as a matter of criminal and unlawful practice, rather than just unethical business (whether in supply chains or with direct third parties). The intricate environment of corruption, bribery and slavery is no longer just an uncomfortable truth – it is a clear legal, regulatory and financial issue that can no longer be ignored. It is no longer acceptable to say: “We didn’t know”. In fact the current legal and regulatory system provides what has been described as “a perfect storm”, given the extraterritorial jurisdiction of much of today’s legislation on corruption and trafficking.

It is through education that companies can better understand the practical implications of legislation designed to curtail both corrupt practices and modern slavery in business. Recent reports from NGOs such as Liberty Asia and Verité serve as valuable additions to the corporate understanding of the risks businesses are exposed to through global supply chains. These reports bring to light the clear connection and prevalence of human trafficking and corruption amidst supply chains, and the patterns that link migrant labourers, traffickers, industry and corrupt government officials. It is through research like this and collaboration with larger organisations that issues within global supply chains are exposed, which in turn expose corporations to their globalised risks.

Companies often use tools in silos to address third party risk. However, this approach works against its purpose as it doesn’t work to connect the dots in disparate data sets. True corporate compliance starts with a mapping process and a platform that can identify trends in disparate data sets. As supply chain information is notoriously difficult to collect, it is through partnering with organizations that are committed to fighting corruption, and by extension human trafficking, that the corporate world can move towards greater intelligence, and by extension accountability.

The world is currently operating in an economic model that encourages slavery, and realistically it will not change until market participants make moves to eliminate their supply chain risks. This is no easy feat, but it is an issue that can be tackled through partnership. We must work together with civil society, government, NGOs and other companies within the private sector to create a complete picture of slavery in the supply chain and how corrupt practices have far reaching consequences.

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