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Risk of Forced Labor in Asia’s Manufacturing Hubs ‘Higher Than Ever’

The risk of modern slavery in Asia’s manufacturing hubs, which was already on the rise, is poised to worsen as the fiscal impact of the Covid-19 pandemic bulldozes over already-weak labor protections and spotty regulatory oversight, a global risk data and forecasting company warned Friday.

The latest edition of Verisk Maplecroft’s annual Modern Slavery Index, which measures the risk to business of possible associations with human trafficking and forced labor in supply chains, gave Bangladesh (rated 18th in terms of global risk), China (20th), Myanmar (23rd), India (25th), Cambodia (32nd), Vietnam (35th) and Indonesia (44th) their lowest marks since the ranking of 198 countries began in 2017.

Bangladesh and India, in particular, fell into the “extreme risk” category of the Modern Slavery Index for the first time, joining China and Myanmar in a group of 32 countries where populations face the highest risk of working in exploitative conditions tantamount to modern slavery, which can include involuntary servitude, debt bondage or the use of deceptive and coercive practices to compel employment. More than 40 million people are estimated to be trapped in conditions of modern slavery, including 24.9 million in forced labor, according to the International Labour Organization.

Not only has Bangladesh, the world’s second largest exporter of apparel after China, produced a spike in violations, Verisk Maplecroft said, but it has also seen an erosion of labor laws over the past few years. In India, a “notable decline” in enforcement is by and large responsible for its demotion from “high” to “extreme” risk. (Indeed, in July, a group of garment brands, including Adidas, Bestseller, C&A and Next, sent a letter to Prime Minister Narendra Modi expressing concern that some Indian states have adopted legislative proposals to “significantly relax or suspend labor protections” to cope with the impacts of the pandemic.)

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Still, it’s Vietnam that experienced the biggest surge in violations in recent years, the organization said. Though Verisk Maplecroft gave the Southeast Asian nation a label of “high” rather than “extreme” risk, the fallout from the pandemic could easily nudge the country into the latter category, especially as more workers, hurting for jobs in the wake of the contagion’s economic damage, are driven into the informal sector where the risk of exploitation is greater and they have no access to labor protections.

Cambodia, the index noted, saw the largest fall in ranking, dropping 32 places in the past year and 48 spots since 2017, because of an uptick in violations and a “significant deterioration” in enforcement capabilities. Likewise, China’s sinking score can be traced to lackluster labor law enforcement, which is now likely to be poorer still because of pandemic-related constraints on movement.

“Travel restrictions and other measures to reduce the spread of Covid-19 have left the ability of companies to carry out audits to ensure ethical working practices in their supply chains in disarray,” Sofia Nazalya, human rights analyst at Verisk Maplecroft, said in a statement. “The reputational risk to brands from association with modern slavery is, therefore, now higher than at any other time over recent years.”

Asian garment workers lost up to nearly $6 billion in wages from March to May as some of the world’s biggest brands canceled, suspended or imposed steep discounts on their orders, according to an analysis published last month by the Clean Clothes Campaign, a consortium of labor-rights groups.

Any government relief or international aid has proven to be insufficient in any country but China, which has better government measures to bridge wage differences. Garment workers in South and Southeast Asia received 38 percent less than their regular income during the months, the organization said. In some regions in India, this number exceeded 50 percent.

The consequences have been severe: A survey of 1,269 garment workers in Bangladesh conducted in July by the South Asian Network on Economic Modeling and Microfinance Opportunities found, for instance, that 25 percent of respondents have been siphoning from their savings to stay afloat, 18 percent borrowed money and 9 percent used family help. Just 18 percent said the Covid-19 crisis had no impact on their livelihoods. Another 15 percent admitted to breaking quarantine rules to earn alternative incomes.