New York

13 July 2020

Deputy Secretary-General's remarks at the High-level Political Forum virtual Side Event on Sustainable Finance's Role in Reducing Modern Slavery: COVID-19’S Lessons on Protecting the Most Vulnerable [as prepared for delivery]

Excellencies, Distinguished guests, Dear Colleagues,
 
I thank the Government of Liechtenstein and partners for organizing this critical discussion today and putting a spotlight on modern slavery.
 
This is 2020. Centuries have passed since the end of the transatlantic slave trade.
 
Yet, more than 40.3 million people remain victims of modern slavery. Five in every 1,000 people in the world.
 
Victims are often the most vulnerable in our societies. Those suffering multiple forms of discrimination - women, children, indigenous peoples, people of African descent, and persons with disabilities.
         
Modern slavery is a blight in our world that we must eradicate.
 
From the outside, modern slavery can take on the face of a normal job.
 
But behind that external front, the freedom and dignity of people are being stripped away --- Violence or threats of violence on a daily basis; forced prostitution; domestic servitude or other forced labour for little or no pay; passports taken away and unpayable debts.
 
These are some of the ways through which modern slavery is perpetuated. 
 
Modern slavery is a matter of human rights and dignity. But it is also tragically linked to sustainable development – or the lack thereof.
 
Many have fallen into this oppressive trap trying to escape poverty - or in search of an opportunity to improve their lives and support their families.
         
The COVID-19 pandemic has increased vulnerability to modern slavery. And the lockdowns, necessary for public health, have increased risks of exploitation and violence.
 
We do not need to look far.
 
In our host country - the United States, calls to the national anti-trafficking hotline almost doubled in the span of one month.
 
Similar trends are being seen across the globe:

In the forefront of the informal economic sectors, women are particularly vulnerable. 

Millions of children risk being pushed into child labour as a result of the COVID-19 crisis; this could lead to the first rise in child labour after 20 years of progress. 

Migrant workers are also at risk of exploitation in host communities, and of exclusion from assistance when they make it home. 

The costs of forced labour do not end with its victims. The effects of modern slavery ripple through the economy, snowballing into large-scale, inter-generational effects.
 
With forced labour, economies end up with supply-chains built on artificially low-wage labour.
 
As a consequence, our societies grow more unequal, with employers extracting huge rents from stolen labour.
 
History has shown - as some have estimated - that over 70 per cent of income disparity between African nations and the rest of the world today could be due to historic inequalities entrenched by the transatlantic slave trade.
 
The good news is that we are not condemned to repeat our past.
 
Humanity has a plan.
 
In dealing with modern slavery as for other major world challenges – the 2030 Agenda remains humanity’s best compass.
 
Achieving this SDG target 8.7 to end modern slavery and human trafficking is not only a matter of prohibiting slavery in domestic law throughout the world.
 
It is primarily about fighting its root causes. This means ending structural inequalities and discrimination; strengthening efforts to secure convictions of perpetrators, expanding access to justice for victims, and increasing provisions for rehabilitation. 
 
Excellencies,
 
Crucial answers lie with the global financial sector.
Modern slavery and human trafficking are among the top three international crimes with significant costs to society and economy. 
 
What are we asking the financial sector? Let me flag four specific asks:
 
First and foremost, the financial industry must be aware. Counter-slavery and counter-human trafficking activities must be an integral part of any businesses’ due diligence policies and procedures.
 
While many in the financial industry already perform human rights due diligence for their own company, this must be expanded to their business relationships – in particular looking at the supply chains in which companies invest in or whose securities they trade.
 
Second, private lenders and investors have a responsibility to use their leverage with clients and borrowers to ensure they respect human rights in their own business practices and those of their suppliers.  For example, the London Stock Exchange Group incorporates strict anti-slavery and anti-trafficking clauses into their supplier contracts. 
 
Third, credit and bond ratings agencies also can factor modern slavery and human trafficking risks into emerging ESG ratings. 
 
Finally, the finance sector has a key role to play in enhancing financial inclusion, including access to credit. Credit helps vulnerable people and business ride out the crisis and prevents them falling into debt bondage and labour trafficking.

But in many countries, credit is drying up. 
 
Microfinance institutions are seeing non-payment rates of around 90 per cent. This threatens the microfinance system.
 
These institutions should be given a lifeline in COVID-19 response and recovery measures, with a view to their long-term sustainability.
 
Excellencies,
 
The Secretary-General’s initiative on Financing for Development in the COVID-19 Era and Beyond continues to support solutions towards increased international liquidity, debt standstills, reigning in illicit financial flows, and to ensure public resources are invested in was that ensures the world recovers better.
 
Ultimately, thus would mean we are able to lock the doors on modern slavery.
 
What is clear is that all sectors must work together to ensure that our economy works not just for profit, but also for people and the planet.
 
I trust that the panel today - and the work of the Liechtenstein Initiative for Finance Against Slavery and Trafficking – can help move us closer to that goal.
 
As the report of the Liechtenstein FAST initiative states, the leadership and innovation ushered in by the financial sector helped to formally abolish slavery in the 1830s.
 
We can do it again. The world needs the commitment of all to help end modern slavery and human trafficking by 2030.
 
Ending modern slavery and human trafficking would have significant pay-offs for society at large.
 
But above all, it is a moral imperative and our common responsibility.
 
Thank you.