The Independent Anti-Slavery Commissioner, Dame Sara Thornton (the Commissioner), has published a report which highlights the financial service industry’s crucial role in eradicating modern slavery and human trafficking.
The report, titled “Preventing Modern Slavery and Human Trafficking: An Agenda for Action across the Financial Services Sector”(the Report),concludes that there is a significant lack of awareness of modern slavery risks within the financial services sector, and that too many financial institutions only focus on the direct impacts of their business, rather than their connections with wider supply chains. Worryingly, 36% of financial industry employees consider that their organisation has no influence in addressing modern slavery and human trafficking at all.
The Report seeks to oust this misconception and urges financial institutions to do more to train employees on modern slavery, create agendas to tackle the problem, and consider the wider impact their businesses can have as a result of their investment, lending and client relationships. The Commissioner’s key recommendations include:
- acknowledging the possible links between modern slavery, business activities and supply chains;
- providing mandatory company training on modern slavery detection within existing anti-money laundering, bribery and corruption control frameworks;
- undertaking regular due diligence on customers, suppliers and staff to check for abusive practices occurring across supply chains and investments;
- seeking anti-modern slavery assurances as a pre-condition of any investment or lending with investors, lenders and other stakeholders; and
- engaging with stakeholders to eliminate modern slavery risks when they are identified, rather than immediately divesting business interest.
Non-compliance with legal obligations (e.g. the requirement to publish a satisfactory modern slavery and human trafficking statement) or a failure to take appropriate action outside statutory requirements can result in significant financial, regulatory, legal and reputational risk. The Report highlights that it is essential for all companies in the financial sector to respond to the Commissioner’s call for immediate action to avoid such risks and, more importantly, to ensure appropriate action is taken to prevent human exploitation within the UK.
Please do get in touch with the PRM team at Dentons if you require any further information or assistance with these, or similar, issues.