A new study by UNU-CPR's FAST initiative and the United Nations University Institute for Natural Resources in Africa (UNU-INRA) provides a unique insight into the nexus between modern slavery and natural resources – and suggests new ways the financial sector can synchronize efforts with governments and multilateral actors to tackle risks and abuses.
The study, Earth Shattering, is being launched to coincide with the International Day for the Abolition of Slavery and FAST: Convening Africa, an event held in Cape Town this week to initiate thinking on how financial sector actors can better address modern slavery and human trafficking.
Modern slavery, a term that encompasses forced labour, debt bondage, and forced marriage, has increased substantially in recent years; the number of victims rising from 40.3 million people in 2017 to 49.6 million last year. Across Africa, approximately 3.8 million people are now estimated to be in forced labour – a crisis driven in large part by the COVID-19 pandemic, conflicts, and climate change.
Earth Shattering is the outcome of a rapid research project that focused specifically on modern slavery in the high-risk gold mining and cocoa growing areas of the Ashanti and Western Regions of Ghana. Researchers found that both sectors intersected with environmental issues, pandemic policy responses, and climate change in ways that collectively exacerbated modern slavery vulnerabilities within affected communities.
Often located in the same geographical area, artisanal small-scale gold mining and cocoa cultivation are important livelihood options for many poor, unemployed, and low-income people in Ghana’s mineral-rich rural areas. Both sectors have long been known as high-risk for environmental damage and labour exploitation – but also make significant contributions to Ghana’s economy.
Although focused on Ghana’s cocoa and gold mining sectors, recommendations outlined in Earth Shattering are applicable to other interconnected extractive and agricultural value chains vulnerable to modern slavery.
The adverse impacts of climate change
Rising temperatures and more frequent extreme weather (high winds, droughts, and heavy rainfall) are devastating Ghana’s cocoa yields – reducing incomes and persuading many farmers to sell land to the country’s small-scale (and often illegal) artisanal gold mines. This decision results in more environmental damage that jeopardizes the lives of surrounding communities and threatens to reduce cocoa yields even further.
Like farmers, miners are also feeling the impact of climate change which is creating increasingly hazardous conditions in mines. As a result, many are losing income and accruing debts with ‘sponsors’ – that have to be repaid irrespective of whether they are able to work or not. Mining and farming households have both been forced to send their children to work and seek out informal financing, often leading to situations of exploitation, debt bondage, and wage theft.
Mobilizing the financial sector
The financial sector has a critical role to play in addressing human trafficking and modern slavery risks. The International Labour Organisation (ILO) estimates that forced labour generates USD 150 Billion in earnings every year; this figure implies that significant proceeds from modern slavery and human trafficking pass through the global financial system.
Unfortunately, Earth Shattering, found little evidence of the internal structures and processes that are required for the financial sector to manage these issues effectively in Ghana; awareness of these challenges and the financial sector’s role in identifying, addressing, and preventing modern slavery was generally low.
In response, the study outlines several critical measures that the financial sector can adopt to improve the livelihoods of farmers and miners and address their vulnerabilities. These include:
Providing appropriate financial products and services for workers and small businesses in cocoa and gold value chains to strengthen climate resilience and reduce modern slavery risks.
Ensuring financial institutions and investors actively address the connections between environment, social and governance risks and goals in the terms of their investments and apply environment and human rights due diligence to protect labour rights and the environment in communities affected by cocoa and gold mining value chains.
Ensuring that countries and financial institutions include modern slavery and environmental risks in their assessments of financial crime-related risks (e.g. National Risk Assessments)
Integrating the financial sector into multi-stakeholder institutional governance mechanisms for action on business and human rights, especially relating to modern slavery and human trafficking.
Read ‘Earth Shattering: Opportunities for Financial Sector Engagement at the Nexus of Modern Slavery and Natural Resources’ here.