Modern Slavery and Your Business

Modern slavery is more widespread than most people realize. Here is what everyone should know about the ugliest phenomenon of our time.

“The Basics” provides essential knowledge about core business sustainability topics.

Snejina Michailova is a Professor of International Business at the University of Auckland Business School, New Zealand.

No doubt you have read at some point about instances of modern slavery. You were probably intrigued and read the story. Likely, you concluded that this was an isolated instance of modern slavery, that it was good that a journalist discovered the case and revealed it on the pages of the outlet you were reading.

Sadly, modern slavery is more widespread than you think. Hardly any country is immune to it, and almost no industry is shielded from it. It exists in regulated businesses and in “informal” economies, where small businesses and entrepreneurs act without government oversight. Some modern slavery occurs within a single country, and some of it crosses borders.

Exploring Modern Slavery in Multinational Corporations

I study people-related issues in multinational corporations. Over the last few years, some of my research has focused on modern slavery in multinationals and domestic firms. In this article, I provide some essential background on what a colleague and I have called the ugliest phenomenon of our times. ^[1] I describe its key characteristics and how it relates to businesses and outline what companies can and should do about it.

Understanding Modern Slavery

The term “modern slavery” is used to differentiate slavery nowadays from historical slavery. It’s also called “modern-day slavery,” “present-day slavery” and “contemporary slavery” — more on this in the next section. The Global Slavery Index ^[2] reported that in 2016, 40.3 million people lived in modern slavery on any given day. In 2021, the number increased to 49.6 million. There’s no universally accepted meaning for modern slavery, though, so estimates vary across sources, depending on how they are calculated.

However, these statistics are not the point of this article on modern slavery in business. Two other points matter.

The Human Cost of Modern Slavery

The first is the suffering, the humiliation, and the tragedy humans find themselves in caused by others. Modern slavery means exploitation at its worst. This is because it is severe, deprives human beings of their free will, and is used for someone else’s personal or commercial gain.

Profit Maximization Drives Modern Slavery

The second key point is the relationship between the enormous human suffering that modern slavery represents and the big (corporate) drive for profitability. 

In this relationship, firms try to externalize (outsource) low-value and/or risky activities to minimize costs and reduce risk and liability. For example, they might subcontract foreign workers. Such subcontracting often leads to distant relationships between firms and suppliers, often in regions where governance and monitoring capacities are weak and/or not enforced. The almost never-ending downward pressure on employee wages, combined with the fragmented nature of production, contributes to detached corporate responsibility. From there, it is a slippery road to modern slavery resulting in (substantial) profitability.  

Key Characteristics of Modern Slavery

What is modern slavery about? In modern slavery, victims experience several of the conditions listed below. I draw this list from different meanings of the term, and so not all conditions need to be present for someone to be a modern slavery victim. Typically a victim would experience several of these attributes:

• Being controlled by another person (or entity). “Control” here doesn’t mean a boss directing a task. It means entirely depriving someone of their ability to act independently. Victims don’t voluntarily offer their work or service; they are forced to do so.

• Being treated as a commodity, not as a human being. Victims are viewed as objects that, in extreme cases, can be sold — and typically for not that much money.

• Working under inhumane conditions. Imagine being forced to work for 36 hours without a break until you collapse. No safety regulations, no concern for health or life.

• Not being allowed the freedom to exit employment relationships or challenge working conditions. Victims often lose the freedom to move from one location to another and even their identification documents. Some describe themselves as being jailed — without being in jail. Questioning working conditions is not on the table.

• Being exposed to violence and/ or threats. Violence is real. The threat of violence is also powerful. Victims of modern slavery are sometimes threatened with severe consequences for their families, even when families are far away. Such psychological coercion creates emotional pressure, becoming unbearable torture.

• Working without contracts or with unreliable or false contracts. Victims rarely have legitimate contracts. Or, when contracts do exist, they may be written in a language workers don’t understand, or not be enforced.

• Working without any pay or for poor wages. Some modern slavery victims are even forced to pay their “employers” money themselves; otherwise the “employer” would report their questionable visa status to the authorities or because the “employer” lured them with an initial loan.

In whatever combination, these characteristics and conditions make modern slavery a deliberate, brutal, and cynical-to-the-core violation of human rights.

Modern Slavery Includes a Spectrum of Practices

Modern slavery appears in many different forms. The Continuum of Exploitation diagram shows a spectrum of business practices — from serious (in blue) to extreme (in red). These are some, but not all, of the forms of modern slavery.  

As you see, legal ownership does not need to be present for modern slavery to exist. This is a key difference between modern and historical slavery.

“Continuum of Exploitation”

^{Source: “Combating Modern Forms of Slavery: Draft Plan of Action against Forced Labour, People Trafficking and Slavery, 2020-2025” (p.5), from the New Zealand Government.}

How Modern Slavery Relates to Your Company

What does this mean for organizations? First, it’s essential to recognize that modern slavery is happening around you – whether you see it or not.

Modern Slavery Happens Globally

No country or economy is immune, not even advanced economies that pride themselves on sound business practices. European nations, the U.S., Canada, Australia, and New Zealand all have modern slavery networks operating within their borders. Often, corporations based in these countries have traces of modern slavery in their supply chains. For example, Marshalls, a UK landscaping organization, found instances of child labor in its supply chain in India. But they also found human trafficking at construction sites in the UK. For more information on modern slavery in supply chains, read the NBS case study.

Modern Slavery Exists Across Industries

Modern slavery exists in any industry. The beginning stages of the value chain are often associated with more labor-intensive production and, thus, with modern slavery. Construction, agriculture, fishing, and mining are examples of this dynamic. But modern slavery is also present in the high-fashion, electronics, jewelry, and medical equipment sectors. ^[3] It’s present in manufacturing, service, and retail. You often don’t know what is going on in the kitchen of the restaurant where you enjoy your meal or behind the walls of the liquor shop where you stopped by to buy your favorite wine. ^[4]

Complex Nature of Exploitation

Modern slavery goes beyond physical entrapment. Exploitation arrangements can be sophisticated and refined. For example, victims of modern slavery can be indebted to a recruitment agent or exploiter and have to work for free to pay this off.

What Your Company Can Do about Modern Slavery

Modern slavery is driven by some more significant trends your company may have little influence over. Poverty and political instability contribute to modern slavery, for example. But modern slavery is also shaped by multinational organizations. It thrives because of particular business conditions and management practices. These are factors that are “closer to home” and, hence, more manageable.

Raise Modern Slavery Awareness

A key obstacle is the lack of organizational awareness. Managers and employees are often unaware of modern slavery, typically seeing the issue as a distant matter. “Surely not in our country and surely not in our company” would be a common reaction… Until it is in your country and your company!

Redefine Management Roles

Another obstacle is how management roles in companies are defined. If professionals know of the existence of modern slavery, do they see tackling it as part of their role in the multinational corporation? Identifying, tracing and fighting modern slavery is rarely part of a management job description. However, modern slavery is strategically important to companies; it should be addressed at the strategy level and filtered into every appropriate role.

Not all is doom and gloom though. Despite obstacles, a lot can and should be done.

Key Messages for Businesses Tackling Modern Slavery

In an award-winning article, a colleague and I identified four important messages for multinationals dealing with modern slavery. ^[5] These are themes for companies — and individual employees — to consider as they start tackling the issue.

1. Let’s stop denying modern slavery exists; let’s instead talk about it.

Talking about modern slavery is the first important step. Yes, it is emotional and yes, it can be confrontational. Multinational organizations are often hesitant to acknowledge that modern slavery is an issue. But the conversation is needed.

2. Combatting slavery is costly, but it is worth the investment.

It is not cheap to address such a complex issue as modern slavery. It requires time and money to monitor and investigate subcontractors’ practices, comply with legislation where it exists, and keep a record of steps that the organization takes to detect and eliminate modern slavery. But without such investments, there won’t be any results or improvements. You can make a compelling case for why the investment is worth it. In some regions, it’s an issue of regulatory compliance, as with the UK’s Modern Slavery Act. It’s also about credibility with stakeholders. Fundamentally, it’s about not being part of suffering, humiliation, and tragedy.

3. A single company cannot do much; together, companies can make a difference.

If firms collaborate in fighting modern slavery, they can achieve far more than if they opt for isolated, non-collaborative measures and initiatives. A collective voice matters; collective actions matter even more. Find partners, learn from each other, and unite efforts. Look for those already active on this issue in your region or sector. Perhaps those actors are other companies, NGOs, or the government. Reach out to see what role you might play in addressing modern slavery.

4. Addressing modern slavery is complicated; long-term solutions are needed.

While tackling modern slavery requires immediate action, this should not be confused with short-term solutions. It is overwhelming to start the journey, but knowing it will be long makes it easier to make the first steps. Don’t wait; start somewhere and know it will take time.

Find Out More about Modern Slavery

Here are some additional resources for companies and individuals starting on this journey.

I recently gave a webinar on why Human Resource Management scholars should research modern slavery and how they can do that.

Mitchel-Hill, E. & Crane, A. (2019). Fight Slavery in Your Supply Chain. Network for Business Sustainability.

Stringer, C., Kartikasari, A. & Michailova, S. (2021). ‘They make a business out of desperate people’: The role of recruitment agents in cross-border labour chains. Australian Journal of Management, 46(4), 672-689.

Stringer, C. & Michailova, S. (2018). Why modern slavery thrives in multinational corporations’ global value chains. Multinational Business Review, 26(3): 194-206.

About the Series

“The Basics” provides essential knowledge about core business sustainability topics. All articles are written or reviewed by an expert in the field. The Network for Business Sustainability builds these articles for business leaders thinking ahead.