Fintelekt Advisory Services and the Asian Bankers Association (ABA) jointly conducted the webinar on “A Financial Approach to Tackling Modern Slavery – Imperatives for Governments, Regulators, Banks and Financial Institutions” on March 14, 2023 in association with the United Nations University Centre for Policy Research (UNU-CPR)..
Shirish Pathak, Managing Director, Fintelekt Advisory Services hosted the webinar, which featured speaker Andy Shen, Government and Multilateral Organizations Lead, Finance Against Slavery and Trafficking Initiative, UNU-CPR.
Andy started by providing an introduction to the Finance Against Slavery and Trafficking (FAST) Initiative of the UNU-CPR. He also provided a background to the Sustainable Development Goals of the United Nations which were adopted in 2015, covering three dimensions in sustainability, namely social, economic and environmental.
He cited in particular Target 8.7, which falls under Goal 8 (Decent Work for All), which is a commitment by member states to take immediate and effective measures to eradicate forced labour and modern slavery and trafficking and secure the prohibition and elimination of the worst forms of child labour including the recruitment and use of child soldiers, and by 2025 end child labour in all its forms.
He noted that, unfortunately, there isn’t adequate progress towards the achievement of Target 8.7 in the committed timeframe, which necessitates reflection and stronger measures going forward.
Andy also elaborated on the role of various stakeholders in the fight against human trafficking and modern slavery.
He stressed that while governments are involved in regulation, providing guidance, convening, capacity building, implementation and enforcement of law, the role of the financial sector depends on its connection with trafficking and modern slavery.
“The private sector alongside government and civil society is key to ending modern slavery and trafficking as global estimates of modern slavery show that forced labour touches virtually all parts of the private economy,” Andy remarked.
He reported that currently, anti-financial crime and environmental, social and government (ESG) departments within banks may both address modern slavery but from different angles and in response to different regulations. When it comes to investments, loans and insurance, the role of the financial sector is in terms of human rights due diligence. When it comes to handling of proceeds of crime, the financial sector is expected to file suspicious activity reports, and put in place AML measures including cooperation with the government on freezing, seizing and confiscation of illicit assets. The third role of the financial sector is in ensuring financial inclusion for survivors and vulnerable communities in order to prevent re-exploitation.
Andy further touched on the following topics:
(1) The role of Public Private Partnerships (PPPs) in the detection of trafficking and slavery
PPPs can play a crucial role in detection by collaborating to provide financial intelligence about these crimes. This requires red flag indicators and knowledge of both operational and strategic nature of the crimes which can be exchanged in a trusting environment in the PPP.
The PPP can also assist in creating Anti-Human Trafficking and Modern Slavery standards for the respective national financial sectors, owing to the heightened understand of the needs of the law enforcement while taking into account the practicality of implementation by financial institutions.
(2) The role of National Risk Assessments:
Most countries currently do not address the human trafficking risk comprehensively through their National AML/CFT Risk Assessments (NRAs). As a result, the issue does not feature as a priority in the country’s fight against ML/TF and its predicate offences including trafficking in persons. This in turn results in the financial sector not focusing on human trafficking and leads to the lack of data and information on these crimes, creating a vicious circle whereby human trafficking remains a low priority for governments.
FAST is addressing the issue through several activities:
- In collaboration with the IMF, World Bank and the Council of Europe, it is working on developing a guidance document on how countries can better address the trafficking risk in their NRAs. This will also help governments align the NRAs with national action plans on human rights, trafficking in persons and anti-modern slavery strategies in general.
- FAST is organising a series of round tables and events to raise awareness on the issue, especially for financial sector actors, and is helping to discuss and develop red flag indicators.
- FAST has launched an online training course for Financial Intelligence Units (FIUs) in cooperation with the Egmont Group, which can be used by FIUs in turn to train stakeholders within their countries.
(3) The role of the financial sector in ensuring the survivors have access to financial services
The financial sector has the challenge of providing financial services to the vulnerable populations or survivors while adhering to AML/KYC obligations at the same time. However, if survivors are excluded from the formal financial system, it can increase their vulnerability to being re-trafficked or re-exploited.
A multi-stakeholder collaboration is required where survivors can be onboarded using simplified due diligence on a risk-based approach. Andy shared a few case studies of countries where this has been achieved successfully, and which can serve as
(4) Raising awareness amongst various stakeholders
There is insufficient knowledge about how the financial sector is connected to modern slavery and trafficking and what governments and other stakeholders can do about it. To address this knowledge gap, FAST along with the Australian Department of Foreign Affairs and Trade has worked on an e-learning programme that uses case studies and examples to provide a basic explanation of what modern slavery is, the connections to the financial sector and recommendations on how the issue can be addressed.
The course is free and publicly available and those who go through the course can receive a Certification of Completion from FAST and UNU-CPR.
More information on the course can be accessed HERE.
(5) Video recording
Please view the webinar’s video recording at the Fintelekt’s learning platform Fintelekt Academy HERE.
Registration on Fintelekt Academy is free and more than 80% of the content is free to view HERE.
A copy of the video is also available at the ABA YouTube channel