$3trn investor coalition engages on Gulf migrant workers protection
A group of 38 institutional investors, primarily British and with total assets of $3trn, has written to 54 companies regarding their approach to the safeguarding of migrant workers in Gulf states. Among signataries are Aviva Investors, Schroders, M&G, First Sentier (ex-First State) and also Church of England as well as Brunel Pension Partnership.
This initiative, led by British investment manager for religious and charity organisations CCLA, focuses on high-risk sectors of construction, oil and gas and hospitality. Thus, a number of mutlinational companies operating in Gulf countries were sent the letter including Eiffage, Bouygues, Total, Royal Dutch Shell, McDonald's, Marriott, Hyatt, Hilton, Exxon, Samsung, Starbucks. US alternative asset manager Brookfield Asset Management was also a recipient of the investors' letter.
The coalition shared concerns regarding illegal practices in the recruitment of migrant workers in Gulf countries. Migrant workers are coerced into paying large fees to agents and middlemen as part of the recruitment processes for roles supporting major international businesses. These recruitment practices may result in debt bondage, as well as the retention of their passports. This means for the coalition that these workers are at high risk of forced labour and modern-day slavery.
'Ensure that we are not profiting from modern slavery'
The investor group said that migrant workers form around half of the Gulf population and up to 90% of the region's workforce. Besides, the Covid-19 outbreak has aggravated the situation of migrant workers. “The global Covid-19 pandemic has resulted in many migrant workers’ roles being revoked or in workers losing their jobs. This has left many facing substantial debts that they will likely find impossible to repay and the prospect of rising rates of suicide and other social harms.”
The investors asked targeted companies if they were using any labour outsourcing firms or migrant workers within their operations in the Gulf states and if so, how do they work with these agencies. The coalition also demanded details about the policies and processes in place to identify, reimburse and provide other forms of remedy to migrant workers who have been impacted by recruitment fees and/or passport retention.
CCLA's CEO Peter Hugh Smith, commented : “The International Labour Organisation regards the payment of recruitment fees and costs as a significant indicator of forced labour with debt bondage estimated to be a factor in over half of the 25 million cases of forced labour worldwide. A quarter of the forced labour victims globally are comprised of migrant workers . As investors, we have a moral duty to ensure that we are not profiting from modern slavery in any shape or form and CCLA will continue to encourage the investment community and leading companies to do more to uncover and prevent modern slavery.”
Steve Waygood, chief responsible investment officer at Aviva Investors, added: “There is no place for modern day slavery in the economies of today, nor any practice which exploits at-risk groups in our society. Human rights issues have a material impact on corporate performance and investors are increasingly recognising the long-term costs associated with employers mistreating workers. As shareholders, investors have the right – and responsibility – to use their voting powers in holding firms to account and promoting positive change.”