80% of global population live in areas rated high or extreme risk for modern slavery
by Jess Middleton,
The European Commission’s newly unveiled plan to ban products made with forced labour from entering the EU market is the latest in a growing list of human rights due diligence laws. If it comes into force, the ban will join the United States’ Uyghur Forced Labour Prevention Act (UFLPA) in attempting to eradicate forced labour from global supply chains. Our analysis shows that doing so will be no easy task.
A quarter (47) of the 198 countries featured on our Modern Slavery Index (MSI) – which measures the threat posed to businesses through association with, or exposure to, slavery – have witnessed a significant increase in risk since the dataset launched in 2016. And of the world’s 3,316 states, provinces and other subregions, two-thirds reflect a high or extreme risk for modern slavery violations. These subregions are home to 80% of the global population – some 6.25 billion people.
Figure 1: Modern slavery risks prevalent in global population centres
The data shows that poverty and climate change are driving up modern slavery exposure as uprooted workers seek out alternative livelihoods, in turn becoming vulnerable to exploitation. Workers in the developing world are set to face the greatest risks, but threats are climbing in several economically significant countries, including Turkey, South Africa and China. Even the US could be impacted as climate-driven migration swells the number of undocumented workers within the domestic labour force.
“Regulators, investors, shareholders and consumers are all becoming acutely aware of the modern slavery risks that have been evident for years to NGOs, activists and exploited people,” says Dr James Sinclair, our Director of Human Rights Consulting. “But with data from the ILO showing that 50 million people are trapped in modern slavery globally, the problem is getting worse, not better – meaning that organisations need to work harder to keep goods tainted by forced labour out of their supply chain.”
Figure 2: A quarter of countries register a ‘significant’ increase in modern slavery risk
Poverty and modern slavery linked, but developed countries not immune
Poverty has long been a key determining factor in the prevalence of modern slavery. Households lacking economic security are more likely to become dependent on employment agents within the informal economy, which can lead to exploitation.
This is reflected in the data: 17 of the 24 extreme risk countries on the latest edition of the MSI are low and lower-middle income economies. This group includes Myanmar and Pakistan, two leading exporters of goods including clothing, cotton fabric and rice.
But workers in developed economies aren’t immune to exploitation. The number of high and upper-middle income economies rated high or extreme risk on the MSI has risen to 44, up from 39 when the dataset launched in 2016. Several higher income economies feature among those that have seen the largest increase in risk in that time.
Figure 3: Higher income countries among those that have seen the sharpest fall in the rankings
A good example is Turkey, which has plummeted 46 places in the index to 62nd most at-risk country. This drop, which leaves Turkey within our high risk category, was triggered by an increase in reported cases of forced labour involving Syrian migrants, including children, within the garment industry and the agricultural sector.
South Africa, a leading exporter of commodities including precious metals and vegetable products, has also entered the high risk category, after falling 19 positions to become the 103rd highest risk country.
At the same time, regions that companies might have previously assumed to be relatively free from modern slavery have seen an uptick in risk. In Europe, for example, Romania is ranked 108th and high risk, down from 123rd and medium risk in 2016. In western Europe, the UK (170th) has fallen 17 places, leaving the country within the Index’s medium risk category – a drop which could worsen as a result of former home secretary Suella Braverman’s move to reclassify modern slavery as an illegal immigration and asylum issue.
Chinese human rights abuses not limited to Xinjiang
China (ranked 18th) is by far the largest sourcing country rated extreme risk in the latest edition of the MSI. This should come as no surprise, given that reports of human rights violations in Xinjiang are widespread. Indeed, the UFLPA effectively bans the importation into the US of goods made wholly or in part within Xinjiang.
However, China’s commanding position within several industries means eradicating its abuses from global supply chains is easier said than done. This includes renewable energy, where China controls over 80% of the solar photovoltaic manufacturing supply chain, with 45% of the world’s polysilicon capacity located in Xinjiang.
But if Xinjiang products are now considered unacceptable, other provinces merit fresh scrutiny. Yunnan – a global production hub for tin and zinc – and Tibet are both rated extreme risk for modern slavery within our subnational data, with the rest of the country rated high risk.
Diversifying production away from China might seem the obvious solution, but alternative markets are far from risk free. For example, most of the primary players in solar and wind power supply chains are rated high or extreme risk on the MSI, highlighting the potential for modern slavery to taint ‘clean’ technologies within the green economy.
Climate-driven upheaval could spark modern slavery risk contagion
In July, our research warned that the world is unprepared for cascading risks triggered by climate change, including escalating human rights violations. As rising global temperatures threaten food security and drive mass migration, more people will seek out alternative livelihoods, in turn increasing their susceptibility to modern slavery.
Indeed, 14 of the 24 countries rated extreme risk in the latest edition of the MSI fall into the same category of the Climate Change Sensitivity Index (CCSI), which assesses a population’s susceptibility to the impacts of climate change. Populations within these vulnerable countries – including Pakistan, Papua New Guinea and DR Congo – will be the worst affected, but developed economies will also be impacted as climate-driven upheaval transcends borders.
Figure 5: Modern slavery risks run highest in countries that are sensitive to climate change
Take the US, where climate change is fuelling a humanitarian crisis at the Mexican border. US Customs and Border Protection data shows that over two million people have attempted to cross into the country since October 2021, often from Central American countries that are already reeling from the impacts of rising temperatures and more extreme weather.
Those that make it into the US are vulnerable to exploitation; particularly in agriculture, where undocumented workers make up half of the labour force. US agriculture is rated high risk for modern slavery in our Industry Risk Analytics dataset and is the country’s worst performing sector.
It is a similar story for Europe, which could receive up to a million migrants a year by 2050 if emissions continue at their current trajectory. Currently, around 20% of undocumented entries into the EU are from sub-Saharan Africa – home to all 10 of the most at-risk countries in the CCSI.
But Bulgaria, a major entry point for migrants entering the EU, is rated high risk on the MSI. France, Italy and the UK all receive a high risk score for modern slavery in agriculture, highlighting that reaching Europe does not guarantee safety from exploitation, even for those that risk their lives trying to escape the worst impacts of climate change.
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Human rights due diligence key as negative headwinds grow
The factors driving the negative global trend in modern slavery risk are set to worsen in the coming years. Rising inflation and fears of a global recession suggest the world is headed for a period of prolonged economic instability which will leave millions more people vulnerable to exploitation. At the same time, even the most optimistic warming scenarios suggest that climate-driven migration will ramp up by mid-century.
This, combined with the expansion of the regulatory landscape governing forced labour, presents a growing dilemma for companies that had traditionally relied on sourcing low-cost labour abroad.
“Growing reputational and regulatory scrutiny means that companies increasingly need to walk the talk when it comes to tackling human rights violations,” adds Sinclair. “This is easier said than done, particularly for organisations with poor visibility over their supply chains. Those that take the time to identify risks and implement best-practice sourcing standards will be best placed to manage these growing threats.”