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The threat of forced labor looms for migrant workers in the pandemic—for global businesses, supporting them through the crisis is both a matter of ethics and economics
Low wages, temporary employment and inflexible work. A recent study by the EU Joint Research Centre paints, in stark terms, the uncertainty currently faced by migrant workers. Worldwide, migrants are more likely to work in sectors which have been hardest hit by COVID-19, more likely to face risks to their health, yet less likely to have access to social protections.
On top of these structural inequalities, migrants working in different sectors have faced unique impacts from the virus. In the seafood industry, for example, mariners remain stuck at sea, while replacement crew—also often migrant workers who have travelled to ports with the promise of employment—have found the vessels on which they were meant to be working stranded miles offshore.
A large proportion of migrant workers travel to other countries to send money home to their families. In fact, remittances average 60% of the total income for many of the families of these migrants. $554 billion was sent home by foreign workers in 2019—more than any other cross-border financial flow to developing countries. Migrant workers made redundant in the current crisis are therefore faced with an impossible decision: see the main income for their family cut off or find another job—often at any cost.
Cut loose with limited access to social protections and pressure to send money home, these workers tick all the boxes for criminal networks engaged in labor abuse. Moreover, with a 20% collapse in remittance payments forecast for some of the world’s poorest nations, economic challenges in these countries will push more people to cross borders in search of work. With a depressed job market and tightened border controls, these new migrants will often face a desperate situation, driving many into trafficking and slavery.
With the pandemic elevating the threat of forced labor, it is vital businesses offer their migrant workers the same job security as native-born staff. Failure to do so is not just a moral failing but poor business practice. While short-term financial decisions are at the fore in the present crisis, allowing forced labor to take root in our economies will present businesses with long-term consequences. Looking into the supply of migrant labor is also vitally important at this time to ensure that recruitment practices are ethical and that employers share or wear the cost of recruitment.
Where regulation and monitoring are less robust, unethical businesses will exploit the increase in desperate migrant workers to drive down costs and take market share from legitimate companies. A larger underground sector will also create knock-on costs for major businesses, who must invest in more rigorous measures to keep forced labor out of their supply chain and pick up the bill for the environmental fallout that often accompanies unregulated criminal activity. The seafood sector is a case in point. Illegal, unregulated and unreported (IUU) fishing is worth $23 billion a year—value stolen from local communities and legitimate businesses. Moreover, with consumers and investors demanding major companies demonstrate environmental and social responsibility, global seafood producers are increasingly expected to help repair the damage from illegal overfishing and destructive practices associated with IUU fishing.
Allowing forced labor to rise as a result of the pandemic would not only impose costs on legitimate businesses but also weaken the health of national economies. As a study by the United Nations University has shown, high levels of forced labor cause economic stagnation at the lowest end of the value chain and restrict the investments in human capital needed to stimulate growth. This means less disposable income for consumers to spend on goods and services, hitting the profits of legitimate businesses and feeding a cycle of economic decline.
In addition, where forced labor becomes a systematic issue, countries face the prospect of export sanctions through US or EU programs designed to combat modern slavery. Such measures would present businesses with an unenviable choice: shift to another country or accept a severe hit to their international operations.
For businesses around the world, supporting migrant workers through the pandemic is a question not just of ethics but of effective management. A tainting of international supply chains with slavery and abuse; the costly destruction of shared resources; the threat of economic stagnation and export sanctions: while the pressure to cut labor costs is high, this short-term thinking will come with a heavy price.
Business leaders have a duty to their shareholders, their employees and society to resist a resurgence in forced labor by providing equal job security for all workers. With ever increasing transparency and the growth of stakeholder capitalism, the last few years have seen progress by businesses using the power of their supply chain to combat modern slavery. We must use the opportunity presented to businesses and society now to prevent the skew towards even greater inequality and energize our efforts to fight trafficking and slavery in defiance of the pandemic.
Darian McBain is Global Director of Corporate Affairs and Sustainability at Thai Union
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