Guest blog by Hope Sherwin, Head of Social Impact, Themis.

When we think of slavery, we tend to think of a heinous practice that was abolished two hundred years ago. When we think of modern slavery, we might think of people working for very little pay on plantations or in garment factories thousands of miles away. While both these scenarios might in some cases be accurate, the reality is that modern slavery exists in every country in the world, and in every industry. There are an estimated 136,000 people living in conditions of modern slavery in the UK today. And yet a survey conducted by Themis last year found that 30% of financial services professionals polled did not think modern slavery was something that exists in the UK.

According to the Home Office, between October and December 2020, 3,042 potential victims of modern slavery were referred to the UK National Referral Mechanism (NRM), the government framework for identifying potential victims of modern slavery and ensuring they receive appropriate support. Of these referrals, 57% claimed to have been exploited in the UK. 43% of the referrals were for children. The largest nationality identified was British (31%), followed by Albanian (15%). These statistics illustrate the fact that modern slavery is much closer to home than we’d like to think. 

Today, the term modern slavery is used to encompass any form of human trafficking, slavery, servitude or forced labour. The national modern slavery Helpline operated by the charity Unseen reports that some of the most common types of cases include those that involve construction sites, nail bars, and restaurants - activities that go on all around us. According to the National Referral Mechanism, a large proportion of children in slavery in the UK are exploited through county lines operations. Criminal gangs prey on vulnerable young people who are exposed to physical, mental and sexual abuse, and in some instances will be trafficked to areas a long way from home in order to increase their vulnerability and dependence on their traffickers.

Modern slavery is a business in its own right, generating an estimated $150 billion in profits every year globally. For obvious reasons, the crime is most frequently associated with industries such as fast fashion or fruit picking, yet every abusive employer and trafficker is in it for the money. As an organisation you may have considered the working conditions of your contract cleaners, or catering staff, but have you considered how traffickers might be using your banking services? These criminals interact with financial institutions through investment, by laundering their money, or taking out loans. Money is at the heart of this crime, and financial institutions need to be at the heart of the solution.

In 2015 the UK introduced the Modern Slavery Act in an attempt to curb these abuses. Section 54 of the Act requires companies with over £36 million in turnover to publish a statement setting out the steps they have taken, if any, to detect and prevent modern slavery within their business. Banks and building societies have a responsibility to meet these requirements and publish a modern slavery statement if the business meets the turnover threshold. Many, such as Nationwide, are going beyond simple compliance with the act by rolling out training across their organisation, partnering with survivor charities to support victims, establishing internal working groups to coordinate the work being done by financial crime teams, front line staff, CSR departments, procurement teams and many others.

Adopting a joined up approach to tackling this crime is critical to success, not just within a building society, but also across our communities. The UK’s largest ever modern slavery investigation, known as Operation Fort, was successful primarily due to the collaboration between law enforcement agencies and financial institutions. The case involved almost 400 victims who had been trafficked from Poland and exploited in the UK. The use of information from financial institutions played a critical part in this investigation. According to the police investigation into this trafficking ring, the victims were placed into different types of employment, usually through employment agencies, in low-skilled work in various industries, and wages were paid into bank accounts, ostensibly set up by the victims, but, in reality, in the control of the traffickers. The gang would withdraw the victims’ wages in cash from ATMs every Friday, giving the victims as little as £20 for a week's work. The investigation identified 275 bank accounts from seven high street banks, with thousands of transactions.

The Modern Slavery Police Transformation Programme indicates that no part of the UK is free from slavery and exploitation, and cases are increasing year on year. Unsurprisingly, COVID-19 has only served to increase vulnerability. With these abuses being so widespread, it is important that all bank and building society employees are adequately equipped to spot the signs and take action when suspected cases of exploitation are recognised. Although it takes courage to speak up, and it can be intimidating to challenge a customer, a wide range of training and support is available to building societies to address these challenges.

Earlier this year Themis published a report in partnership with the UK Independent Anti-Slavery Commissioner, and TRIBE Freedom Foundation. The report represents a call to action for the financial services industry and sets out recommended action in five key areas:

• Tone at the top - Senior leaders can change attitudes by publicly acknowledging the links between MSHT and their business activities.
• Detect and disrupt - MSHT due diligence can be incorporated into existing financial crime controls and screening processes that identify other types of risk such as money laundering and fraud.
• Monitor and report - Ongoing monitoring will enable companies to detect and manage potential linkages cases of MSHT.
• Invest and engage - Investors and lenders have leverage over a wide range of companies they invest in. Through regular monitoring and engagement with clients they can influence behaviour.
• Support and collaborate - Working with others across the industry, in the public and NGO sectors, nationally and worldwide is vital, particularly in supporting victims of slavery and crime to rebuild their lives.

Dame Sara Thornton, the UK Independent Anti-Slavery Commissioner, noted that, “Governments bear significant responsibility in this and have made a commitment through the United Nations to eradicate forced labour and to end modern slavery, human trafficking and child labour. However, businesses themselves must focus on preventing harm in their organisations and their supply chains.”

Every financial institution should therefore ask themselves the following question: Can we be sure that our organisation is not directly or indirectly supporting modern slavery and human trafficking?

For more information on this subject contact Hope Sherwin, Head of Social Impact, Themis

The views, opinions and positions expressed within guest blogs are those of the authors and do not necessarily represent those of the BSA.