Press Releases

Covid-19 creates breeding ground for labor exploitation in corporate supply chains

May 20, 2021

Pandemic-related disruptions create a “perfect storm” for modern slavery to thrive — and business leaders need to be more vigilant to the risks, says Dow Jones

New York [May, 20, 2021] – Companies could be unwittingly falling foul of anti-slavery laws as a result of the disruption caused by Covid-19, as new research from Dow Jones’s business information services division suggests.

Released today, indicates that human traffickers have responded to lockdowns by diverting their focus away from sex work towards forms of labor exploitation that are more likely to be part of company supply chains. Distracted by the demands of the pandemic, many business leaders could be unaware of the rising risks. 

These conclusions are based on analysis of over 30,000 global news articles from Factiva, Dow Jones’s global news database, alongside NGO case data from the Traffik Analysis Hub and conversations on Twitter. 

According to the research, news coverage of supply chain disruption spiked by 2,000 percent in March 2020, as closed borders in the face of Covid-19 caused widespread material and labor shortages. Dow Jones’s findings suggest that traffickers were quick to respond and plug the gaps in those very supply chains. Labor exploitation overtook sexual exploitation as the most reported trafficking type following the onset of the pandemic, making up 41 percent of all cases reported to NGOs (other forms include trafficking for organ removal and criminal activities). 

This is all happening at a time when business leaders have had to focus all their attention toward getting through the pandemic and managing its impact on operations. The result is a perfect storm for modern slavery to thrive in the operations of legitimate businesses, while eyes have been averted. 

Although the risks have increased, the Dow Jones research found that Covid-19 has taken media focus away from the slavery industry, which generates $150bn in illegal profits a year. News coverage of modern slavery incidents fell by 25 percent between January and June 2020 compared to the previous year. In addition, the number of modern slavery cases reported to NGOs within the Traffik Analysis Hub dropped by 79 percent over the same period. But those NGOs say these figures reflect a shift in media priorities rather than a sign slavery is becoming less prevalent. 

“We know from experience that slavery blooms in the dark, so a fall in reports about it rings alarm bells,” says Neil Giles, CEO of Traffik Analysis Hub. “It makes life much easier for traffickers if they can do their dirty work while no one’s looking. With governments, the media and companies all distracted by the pandemic, we strongly suspect modern slavery is actually as widespread as ever, if not more so.” 

Although the pandemic has diverted attention away from the issue, certain sectors are facing growing public scrutiny. Media coverage linking financial services firms with modern slavery has risen by 131 percent, while the technology sector has seen a 25 percent increase. 

Complacency about modern slavery poses legal and reputational risks for companies operating in countries like the UK and Australia, where they are required to demonstrate they have made efforts to eliminate slavery from their supply chains. 

“Obviously, people should care about whether they’re participating in a global industry founded on capitalizing on human misery,” says Ingrid Verschuren, Head of Data Strategy at Dow Jones. “But modern slavery presents particular challenges when it comes to operating global supply chains, especially given the disruption created by Covid-19. Once headlines about the pandemic begin to recede, it will free up space for slavery to be back on the news agenda — and companies need to get ahead of the curve if they want to guarantee the integrity of their supply chains, and keep their names out of those headlines.”

This report is the first in a new research series to come from Dow Jones’s business information services division and draws on analysis of news articles from Factiva and other data sources to help business leaders better understand the changing risk landscape and their potential impact.

“The onset of Covid-19 has added a whole new layer of complexity and risk for corporate decision makers to navigate,” said Frank Filippo, EVP for Dow Jones’s business information services division. “Our world class data and content equips business leaders with insights that can help them and their organizations better manage risk in a fast changing global operating environment.”

View the full research report

ENDS

About the research

Analyzing 30,000 news articles obtained from 1,156 global media outlets via the Factiva API, in addition to Twitter data and modern slavery case information from the Traffik Analysis Hub, Dow Jones partnered with Edelman Data and Intelligence, a multidisciplinary research, analytics and data consultancy, to identify and document how global coverage of modern slavery has evolved in the age of Covid-19 – specifically for selected 6-month time comparisons in January-June 2019 and 2020. 

About Dow Jones 

Dow Jones is a global provider of news and business information, delivering content to consumers and organizations around the world across multiple formats, including print, digital, mobile and live events. Dow Jones has produced unrivaled quality content for more than 130 years and today has one of the world’s largest news-gathering operations globally. It produces leading publications and products including the flagship Wall Street Journal, America’s largest newspaper by paid circulation; Factiva, Barron’s, MarketWatch, Financial News, Dow Jones Risk & Compliance, and Dow Jones Newswires. Dow Jones is a division of News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV).