Modern Slavery & Remediation – An Investor’s Guide

Background

Modern slavery impacts every country, region, company and supply chain in the world, with almost 50 million people estimated to be living in modern slavery globally. As business and investors may be exposed to modern slavery and forced labour through their operations or supply chains, they are increasingly expected to assess and address modern slavery risks and provide or enable remediation of modern slavery cases in their operations and investments. Investors can leverage their role as stewards of capital to enable and encourage best practice in providing redress and resolution for adverse human rights impacts.

Meaning of remedy

Remedy is the provision of redress and resolution for human rights impacts incurred as a result of business activities.* It can take a variety of forms such as an apology, prevention of future harms, financial or other compensation, access to healthcare services, repatriation of affected individuals, and other forms of remedy agreed by the parties. Actions should be informed by the affected stakeholders such as workers, and care should be taken to ensure that remediation is always adequate and appropriate – remedy ultimately aims to make amends. A key component of remedy is the prevention and mitigation of future harm. Measures may include conducting due diligence to detect business practices that could be placing workers at risk and introducing additional safeguards to mitigate that risk.

This report analyses the role that investors can play in facilitating remedy and provides case studies which demonstrate examples of remediation in practice.

Remedial actions investors can pursue before, during, and after finding cases of modern slavery

Remedy stage	Examples of how investors can enable remediation
1. Before – to prevent investee companies causing or contributing to harm and prepare for finding and fixing cases	Require investee companies to have grievance mechanisms. Consider establishing a grievance mechanism accessible to stakeholders adversely affected by financed projects or investments. Strengthen the remedy ecosystem by advocating for robust business human rights and due diligence legal frameworks which include provision of remedy.
2. During – to support investee companies through the remedy steps a. Investigate and verify	Support investee companies to identify the human rights impact and their relationship to harm. Where serious cases are reported, suggest the investee company appoints an internal investigative team.
b. Remediate harm	Advise investee companies of their expectations to provide satisfactory remedy. Make time-limited demands for a company to provide access to remediation.
c. Mitigate and prevent future harm	Use leverage to ensure an investee company follows up on their remediation commitments. Recommend investee companies develop corrective action plans.
d. Escalation	If an investee company is uncooperative, be prepared to escalate engagement in order to increase leverage for providing remedy. Please note that divestment should be considered as a last resort, as it rarely goes hand in hand with remedy.
e. Incident reporting and tracking	Require investee companies to develop and maintain modern slavery incident reporting and tracking systems in order to comply with relevant disclosure regimes and refine their approach to risk identification and remediation.
3. After – to assist investee companies to learn lessons to better prevent cases	Encourage investee companies to review complaints and complaint handling, and take measures to prevent similar harm from reoccurring in the future.

Key takeaways

Recommendations that investors can consider in providing or enable remedy can include:

Understanding existing obligations for businesses to provide or enable remedy, including relevant international frameworks, and national legislation including human rights due diligence laws.
Maximising leverage to influence company behaviour to effectively facilitate provision of remedy.
Being prepared to engage with companies across various stages the remediation process.
Considering wider stakeholder cooperation to strengthen the remedy ecosystem and joining innovative initiatives that aim to enable or provide remedy, such as collective remedy schemes.

* Walk Free: Modern Slavery response remedy framework