IN today’s increasing modernised world of digitalisation and globalisation, it is only appropriate for everyone to believe that every single individual living on this planet must have the right to a life free from slavery. Is this really happening?

       Unfortunately, the answer is no. It is being said that now, millions of children and adults are trapped in slavery in every single country in the world that includes in Malaysia. It is estimated that more than 40 million people are trapped in modern slavery globally.

       What is modern slavery?

       Modern slavery is the severe exploitation of other people for personal or commercial gain. People can become entrapped making our clothes, serving our food, picking our crops, working in factories, or working in houses as cooks, cleaners, or nannies. When looking from the outside, the jobs being carried out look like a normal job.

       However, when one looks at the details, it appears to be that the people are being controlled. They can face violence or threats, be forced into inescapable debt, or have had their passport taken away and are being threatened with deportation. Many fall into this cruel trap simply because they were trying to get away from poverty, insecurity, improve their lives, or support their families. Unfortunately, they are unable to do so.

       Today’s modern slavery comes in many forms. And the most common are:

       It appears that some of the problems are systemic, occurring on numerous plantations. And interestingly, palm oil is hidden on labels as an ingredient

       > Human trafficking: The use of violence, threats or bullying to transport, recruit or harbour people with the aim to exploit them for purposes like forced prostitution, labour, criminality, marriage or organ removal.

       > Forced labour: People are forced to do any work or services against their will under threat of punishment.

       > Debt bondage and bonded labour: The most widespread form of slavery where those who are trapped in poverty borrows money and are forced to work to pay off the debt, losing control over both their employment conditions and the debt.

       > Descent–based slavery: An old-fashioned way where people are treated as property or commodity and their “slave” status is passed down the parental line.

       > Slavery of children: A child is exploited for another person’s gain which includes trafficking, soldiers,marriage and domestic slavery.

       > Forced and early marriage: A person is married against their will and is unable to leave.Closer to home...

       The issue of modern slavery has been buzzing in Malaysia for sometimes now. It has been well documented in many of the economic sectors, ranging from domestic work right up to construction, agriculture, mining, manufacturing, and services.

       For instance, our palm oil industry was impacted. This came about after a couple of big names were unveiled to have practised forced labour and other abuses on their plantations that feed into the supply chains.

       Abuses against workers that included physical and sexual violence, restriction of movement, intimidation and threats, debt bondage, withholding of wages and excessive overtime, regular harassment by authorities, swept up in raids and detention in government facilities are some of the issues highlighted.

       It appears that some of the problems are systemic, occurring on numerous plantations. And interestingly, palm oil is hidden on labels as an ingredient. It is found in more than half of the products on supermarket shelves, cosmetic brands, paints, plywood, pesticides, pills, animal feed, biofuels and even hand sanitisers. Hence, it can be a challenge to avoid modern slavery.

       Besides palm oil, modern slavery also became apparent during the Covid-19 pandemic, especially in the glove industry. The pandemic placed pressure on labour standards in this industry due to a sharp surge in demand for gloves and risk of the virus transmission among workers.

       Besides palm oil, modern slavery also became apparent during the Covid-19 pandemic, especially in the glove industry. The pandemic placed pressure on labour standards in this industry due to a sharp surge in demand for gloves and risk of the virus transmission among workers.

       There was a shift in power towards glove manufacturers in relation to distribution, pricing, and payment terms. It increased pressure on existing workers and reduced opportunities for ethical procurement.

       But the forced labour issues were there even before the pandemic. It has been longstanding. The United States placed import bans on gloves produced by two major manufacturers in Malaysia due to findings of forced labour.

       And the so-called shift in power to the manufacturers due to the pandemic is not permanent. So, it is vital to ensure improvements in labour standards be part of the supply chain resilience strategies.

       The industry should not be merely focusing on “profiteering” or “bottom-line”.

       And the electronics industry is now the latest. We are one of the world’s largest exporters. Most of the global best-selling electronic brands are in one way or the other sourced from us. In the process, it appears that we have become addicted to the labour force issues under modern slavery. It is because, the modern-day slavery issue in this industry was already highlighted even before the pandemic. It exposed us to a system of exploitation that has deepened and expanded over the years.

       With the high-tech home appliance maker Dyson Ltd having cut their ties with supplier ATA IMS Bhd due to the issues of forced labour under modern slavery, is this the tip of the iceberg for this industry?A need to address the damage

       With the high-tech home appliance maker Dyson Ltd having cut their ties with supplier ATA IMS Bhd due to the issues of forced labour under modern slavery, is this the tip of the iceberg for this industry?A need to address the damage

       Underpinned by the modern slavery issue, there is an urgent and serious need to address this matter quickly before it becomes irreparable to our economy. Immediate attention is needed. It is to be in line with our global commitment towards sustainability.

       Risk of many global businesses will exclude our companies that are accused of engaging in forced labour practices and modern slavery from the supply chain is high. Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities.

       This is where the environmental, social and governance (ESG) comes into play.

       Based on the ESG components, both the ‘E’ and ‘G’ includes modern slavery directly. The ‘S’ accounts for polluted or dangerous conditions where people are forced to work in.

       > SEE next PAGE And so, the ESG reporting provides guidance that the company is social- conscious and aims for a positive impact in the long-run on ESG and business performance.

       It demonstrates a holistic approach to sustainability. However, in today’s environment, what can be seen is that the modern slavery is an “underweighted” element within the ESG framework.

       Indicators on this area are non-standardised. So, it makes things difficult.

       Companies will not disclose enough information on modern slavery. They tend to be less transparent in this area largely because they want stable earnings. Poor disclosure retards investor’s ability to understand how companies manage their risks related to modern slavery.

       Nonetheless, this issue must be addressed fast. It is more than just an ethical issue. Modern slavery can become as costly and urgent like climate change and Covid-19 pandemic in the public eye.

       Investment risk will escalate related with potentially catastrophic outcomes for businesses found dealing with human rights violations.

       The government alone cannot resolve this issue

       Malaysia has been downgraded by the United States Trafficking in Persons (TIP) report.

       After being on a watch list for three years, Malaysia has been dropped to “Tier 3,” its lowest ranking.

       This is for countries whose governments fail to fully meet the minimum anti-trafficking standards and are not making significant efforts to do so.

       The downgrade has kicked Malaysia into the same category as North Korea, Myanmar, China, Syria, and Turkmenistan.

       It means that Malaysia could lose some United States assistance, although the United States President can choose to issue a waiver. Decisions on whether to impose penalties will not be made until later this year.

       The downgrade should not come as a surprise. The issue of modern slavery emerged even before the Covid-19 pandemic for our rubber glove manufacturers, palm oil producers and electronics sector.

       And what about the other economic activities ranging from domestic work right up to construction, agriculture, mining,manufacturing, and services?

       It is time for us to seriously embark on reforms in our labour policies to address matters relating to modern slavery. Policy must ensure business supply chains must improve their ESG. Failing to do so must be prosecuted, even if there is an “opportunity loss” from the said business.

       Such drastic measures will instill fear in businesses and raise ESG values and not just focus on earnings.

       By procrastinating on the modern slavery issues, it will pose serious investments risks. This will include reputational and brand damage and regulatory changes and general business risk. Potential investment flow will take a strong hit.

       But the government alone cannot eliminate modern slavery. No number of policies formulated will work effectively and efficiently without developing a strong ecosystem embedded with ESG. To this, we need the government, businesses, and the people.

       Anthony Dass is group chief economist and head of AmBank Research. He is a member of the Economic Action Council Secretariat and Adjunct Professor, UNE, Australia. The views expressed here are the writer’s own.