Innovative Tech Tools Changing Modern Slavery Risk Perception
Human rights violations, including modern slavery and human trafficking are increasingly considered material risks to business and industry. Recent developments in the EU point to a tightening legal and regulatory environment on human rights risk management, holding companies and directors liable for failure to consider these risks. The newly passed French bill on multinationals’ duty of care obliges French companies to adhere to a vigilance plan to prevent violations of human rights and environmental damage throughout their production chains.
Coupled with a growing corporate liability, the failure to identify and manage slavery risk, liabilities rooted in the crimes committed as part of exploitation such as corruption, violence, money laundering, deceit and theft, is also impacting businesses’ ability to draw interest of the investment community. A growing body of investors who look for socially responsible opportunities, such as ABN AMRO Group, include human rights considerations into their investment decisions. Negative business impacts on environment and human rights can decrease its desirability or exclude it completely from the investment portfolio.
These changing expectations of business on human rights risk management require a significant shift in its current due diligence process, specifically in the way risk is identified. The existing process often lacks human rights and slavery risk considerations, making it impossible to correctly identify and evaluate risk presence. At the same time, access to credible information on these risks can be challenging, requiring stakeholder collaboration as well as appropriate infrastructure for sharing risk information. Innovative tools are needed to bring information on the risk of slavery and human rights violations across geographies and industries into existing business due diligence considerations.
This is why Liberty Asia, in partnership with Business & Human Rights Resource Centre, have created a Legal Case Map, providing businesses, directors and their advisors, human rights lawyers and civil society, a detailed understanding of past cases and the cost to society and to the corporations of human rights violations including modern slavery and trafficking. The map plots and describes ways businesses have been held legally accountable for abuses. In many cases, negative human rights impacts proved material to business, impacting its reputation, operational ability, share prices, profits and even license to operate, as in the case of DJ Houghton. The case involves a UK business employing Lithuanian migrant workers found to be systematically underpaid, forced to work illegal hours and living in squalid conditions. The owners lost their industry license and were found guilty, held accountable for the presence of forced labor and human trafficking in their business operations.
Another lawsuit summarized on the map is that of Unocal, where a pipeline was built in Myanmar on lands seized from ethnic minorities, involving forced labor and collaboration with the military regime. The oil company has undergone a lengthy litigation process in the United States, agreeing on a settlement and merging with Chevron shortly after the settlement. The failure to identify and manage the risk of forced labor and human rights violations incurred legal liability and reputational, financial and operational costs to Unocal.
The task of capturing and mapping slavery information is challenging, and certainly requires multi-stakeholder collaboration. The process must involve equipping NGOs working on ground and other stakeholders to capture information correctly, with relevant technology and then analyze and present the information in tools which inform on the risk of slavery. Tools like the legal case map are relevant for investment decisions, as well as litigation, policy-making, advocacy purposes and academic study.
Our hope is that this tool is a key resource for business and human rights risk so business management make better decisions which support society and their businesses. We look forward to growing the map and making it an effective tool for your human rights risk information and we welcome your feedback.