Last week, the United States government issued its annual Trafficking in Persons (TIP) report. This report forms the basis of U.S. policy with other countries on human trafficking, and includes a country-by-country assessment of anti-trafficking efforts. The assessment uses a four-tier system that reflects a government’s efforts to meet minimum standards in eliminating trafficking. In this year’s update, 21 countries were upgraded our last year in recognition of progress made.
For the first time, the TIP report includes a section on State-Sponsored Trafficking in Persons, specifically highlighting the involvement of governments in trafficking crimes; eleven countries show a “government policy or pattern” of human trafficking.
Other points in the TIP report:
- The push for alternative energy brings a higher risk of slavery in supply chains. Examples include metals (such as cobalt) in EVs and polysilicon in solar panels (which has been identified as a “high priority sector” under the Uyghur Forced Labor Prevention Act.)
- Ukrainian refugees fleeing the Russian incursion are at high risk of exploitation by slavery particularly in hospitality and agriculture sectors in arrival countries.
- Survivors should play more of a role in developing and implementing anti-trafficking efforts, “to support, normalize, and secure the meaningful and ongoing inclusion of survivors as leaders, experts, and equal partners in decision-making processes.”
… [a] comprehensive dataset on human trafficking and the broader range of exploitative practices that fall under the modern slavery umbrella… covering approximately 7,400 companies, help[ing] investors assess their portfolio exposure to modern slavery by providing granular data on location, industry, and product risk; and by identifying gaps in risk mitigation….
The ISS ESG Modern Slavery Scorecard evaluates a company’s mechanisms for identifying risk, carrying out due diligence, and implementing corrective action in the company’s supply chain. ISS ESG’s assessment indicates that more than half (53%) of utilities companies, including those that engage in the generation and distribution of renewable electricity, are poorly prepared to address forced labour risks. Similar performance is seen for companies that are linked to cobalt through their auto components, semiconductor, and electronic supply chains…
The TIP report’s guidance, along with the assessments of the ISS ESG Modern Slavery Scorecard, may provide investors with the tools they need to help identify potential investment in human trafficking, and manage the associated risks.