Finance sector failing to tackle modern slavery

Top UK official says lack of monitoring promotes human trafficking

Boys and men enslaved in illegal gold mining in Ghana. Lisa Kristine

Banks are doing too little to prevent the estimated $150 billion annual profits from modern slavery flowing unchecked through the global financial system, according to a report.

Finance firms have a key role in identifying proceeds from a crime that affects about 40 million people globally, but they have failed to put in place adequate checks and training for staff to disrupt gangs, the report said.

“While slavery is illegal in every country in the world, our economic and financial systems appear to tolerate and even promote practices which result in this abuse,” said Sara Thornton, the UK’s anti-slavery commissioner, who supported the research.

More than 40 million people were held in slavery in 2016, nearly half of them victims of labour exploitation by private businesses, the report said. Modern slavery and trafficking is said to be one of the top three international crimes, alongside drug trafficking and the trade in counterfeit goods.

A financial sector survey carried out for the study, Preventing Modern Slavery and Human Trafficking, found that large numbers of senior bank staff were unaware of the problem. There were insufficient procedures to monitor trafficking profits through accounts and a failure to address the issue of human trafficking in business decisions, it said.

“It is no longer acceptable to look the other way,” said the report, written by financial intelligence company Themis and anti-slavery charity Tribe Freedom Foundation. “Ignorance is not a line of defence. If companies look hard enough, they will find it in their supply chains, but will they be prepared to respond?”

Ms Thornton’s predecessor as anti-slavery commissioner Kevin Hyland also criticised efforts to tackle the trade.

He told The National that industrialised nations had put less than one per cent of criminals' $150bn profit into addressing the problem, and that little would change until a chief executive was in court facing a jury over their company's use of slave labour in the supply chain.

Businesses that tolerate modern slavery have lower labour costs but face huge fines and reputational damage if such practices are exposed.

The money transfer company Western Union in 2018 was forced by New York’s financial regulator to pay $60 million over failure to report suspected criminal financial cash flows, including those linked to modern slavery.

Senior executives and managers ignored suspicious transactions to Chinese Western Union locations, including money transfers linked to human trafficking.