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Modern slavery risks across key Asian manufacturing markets have increased over the last four years, with this likely to intensify as the full economic damage of the pandemic is revealed, according to new research.

The Modern Slavery Index, an annual report by Verisk Maplecroft, a global risk analytics and advisory company, finds that Bangladesh, China, Myanmar, India, Cambodia, Vietnam and Indonesia have fallen to their lowest point in the ranking of 198 countries since 2017.

The index ranks markets, one being highest risk and 198 deemed least risky, and measures the risk to business of the possible association with slavery, trafficking and forced labour in supply chains, operations and service providers.

The data shows a major reason for the drop in rankings is the increase in the severity and frequency of violations (Figure 1), which for most of these countries is deemed an ‘extreme risk’. Growth in such encroachments have been recorded across Asian manufacturing hubs, according to the report.

 

Figure 1: Key manufacturing markets in Asia are high risk when it comes to modern slavery

 

Vietnam, which sits at 35 in the ranking, has recorded the biggest rise in violations in recent years, finds Verisk Maplecroft. Cambodia has seen the largest fall in rankings, dropping 32 places in the last year to 32, because of growing violations and a significant deterioration in enforcement capabilities. Sitting at 20 in the index, China’s increasing risk is largely due to poor labour law enforcement.

Meanwhile, India (25) and Bangladesh (20), have both moved to the ‘extreme risk’ category for the first time, joining China and Myanmar (23). The research finds that Bangladesh has not only seen an increase in violations, but also a weakening of enforcement of labour laws. In India, a decline in enforcement is responsible for its risk growth.

As demand for goods collapsed across Asia in the first half of the year because of the pandemic, supply chains in the region were hit hard. This lack of demand has pushed more workers into the informal economy – where economic activity is not subject to government regulation or taxation and labour protections are minimal, resulting in the increased risk of modern slavery. “Many laid-off workers are left with little choice but to turn to more exploitative forms of work to stay afloat,” reads the report. Outside of manufacturing, these risks are also visible in construction, agriculture, services and hospitality.

“As the world’s manufacturing hub, Asia’s heightened modern slavery risks will present an increasingly complex picture for corporates, especially when it comes to meeting mandatory modern slavery or other ESG-related reporting requirements,” it says.

 

Global outcry over treatment of Uyghurs

One reported case of forced labour in Asia that has caused a global outcry is in the Xinjiang region in west China, home to Uyghurs, ethnic Kazakhs, ethnic Kyrgyz and other Muslim minority groups.

In July, a coalition of more than 180 organisations called out major clothing brands and retailers, including Nike, Amazon, Ikea and Zara, accusing them of having links to forced Uyghur labour in Xinjiang. The group of organisations cited “credible investigations and reports” by media, non-profit groups, government agencies and think tanks to support its claims.

“Brands continue to source millions of tonnes of cotton and yarn from the Uyghur region. Roughly 1 in 5 cotton garments sold globally contains cotton and/or yarn from the Uyghur region; it is virtually certain that many of these goods are tainted with forced labour,” reads the statement by the organisations.

The same month, the US government warned businesses with supply chain exposures to the Xinjiang region to be aware of the “reputational, economic and legal risks of involvement with entities that engage in human rights abuses, including but not limited to forced labour in the manufacture of goods intended for domestic and international distribution”.

It says that abuses include mass arbitrary detentions, severe physical and psychological abuse, forced labour and other labour abuses, oppressive surveillance used arbitrarily or unlawfully, religious persecution, political indoctrination, forced sterilisation, and other infringements of the rights of members.

Later in July, the US’ Office of Foreign Assets Control (OFAC) sanctioned one Chinese government entity and four current or former government officials in connection with serious rights abuses against ethnic minorities in Xinjiang.

More recent reports reveal that the US Customs and Border Protection (CBP) is planning to block key exports from Xinjiang due to allegations that the goods are made using forced labour. The proposed bans include cotton and tomato products, two important commodity exports for China. CBP is preparing ‘withhold release orders’ which will allow it to detain shipments based on suspicions of forced labour involvement, reports the BBC on September 9.

Elsewhere, in the UK, 135 cross-party MPs have signed a letter dated September 8 to Liu Xiaoming, Chinese ambassador to the UK, condemning what they described as “a systematic and calculated programme of ethnic cleansing against the Uighur people” in Xinjiang.