Forced labour generates illegal profits across the globe of at least $150 billion a year, a study by the International Labour Organization (ILO) says. The profits are far higher than previous estimates and the ILO wants governments to tackle the problem. Some 21 million people worldwide are in forced labour, it says, with migrant workers most vulnerable. Over half of all forced labourers work in Asia, with 18 percent in Africa and almost 10 percent in Latin America. The findings of the new report shocked even the ILO itself: “This new report takes our understanding of trafficking, forced labour and modern slavery to a new level,” said ILO Director-General Guy Ryder. The ILO found that none of the illegal profits were going into the pockets of the workers, and none of the money was paid as tax revenue. Yet as much forced labour is controlled by organised crime networks, it is very difficult to combat. In response to its findings, the organisation is asking governments to address the root causes of forced labour: poverty, lack of training and job opportunities. (BBC News)
Environment
Food groups under fire from Oxfam over carbon emissions
The world’s 10 biggest food companies emit more greenhouse gases than the whole of Scandinavia, and contribute more carbon emissions than any other industry, apart from fossil fuels, according to a new report from Oxfam, which says they are failing to tackle the risks of climate change adequately. Sally Copley, Oxfam’s UK director campaigns and policy, said: “they need to look at the whole picture from how their ingredients are grown to how their goods are produced to cut emissions.” The report says that although companies including Nestlé, Unilever, Danone, Coca-Cola, Mondelez and Mars have all committed to reduce carbon emissions, they understate the extent of the problem by excluding emissions from agriculture in their supply chains, which account for about half of their total emissions. Moreover, the companies were “standing on the sidelines” by failing to use their influence to put pressure on governments and other industries over climate change action, the group said. (Financial Times*, Business Green)
World Cup 2014: Greenpeace investigation reveals sportswear ‘toxic scandal’
Global sportswear brands Adidas and Nike have been criticised by Greenpeace for producing football merchandise containing high levels of hazardous chemicals ahead of the 2014 FIFA World Cup in Brazil. A recent investigation by the environmental organisation discovered hazardous substances in 33 items purchased across three continents – including boots, goalkeeper gloves and the official ‘Brazuca’ football. Both Nike and Adidas are members of the Joint Roadmap of Zero Discharge of Hazardous Chemicals – a commitment agreed by a group of major clothing and footwear brands and retailers to help lead the industry towards zero discharge of hazardous chemicals by 2020. A Nike spokesperson said: “Nike is committed to the goal of zero discharge of hazardous chemicals by 2020. Since we announced this commitment in November 2011, we have made meaningful progress toward our goal. The Nike products in the report tested within the limits set by Government agencies and below the levels set in Nike’s own Restricted Substances List (RSL).” (Edie)
Strategy
SEC and Thaipat Institute launch CSR indicators for Thai companies
The US Securities and Exchange Commission (SEC) and the Thai Thaipat Institute have launched Thailand’s first corporate social responsibility (CSR) and anti-corruption progress indicators for Thai listed companies. The indicators were developed to encourage sustainable development by providing listed companies with the means to measure their own success in terms of CSR and anti-corruption efforts while enabling them to showcase these achievements internationally. “The indicators are similar to odometers in a vehicle, which show you how far you have come, and can be compared to a compass, which can show you where to go in the future. Apart from this, the indicators also made it easier for other people to assess you,” said Vorapol Socatiyanurak, SEC secretary-general. He added that listed companies could use the information on their progress on CSR and anti-corruption development to formulate business strategies that would enhance their sustainability. (The Nation)
Corporate Reputation
Credit Suisse pleads guilty in felony case
Credit Suisse has become the first bank of its size in over two decades to plead guilty to criminal wrongdoing, in a high profile US tax case. In a sign that banking giants are not immune to criminal charges, despite concerns that financial institutions have grown so large and interconnected that they are too big to jail, federal prosecutors demanded that Credit Suisse’s parent company plead guilty to helping thousands of American account holders hide their wealth. As part of a deal announced on Monday, the Swiss bank met the demands, agreeing to one count of conspiring to aid tax evasion in a scheme that “spanned decades.” Credit Suisse will pay about $2.6 billion in penalties and hire an independent monitor for up to two years. The rebuke from federal prosecutors as well as from the Federal Reserve and New York’s state banking regulator, Benjamin M. Lawsky, is intended as a blow against overseas tax dodging and the “shadowy” world of Swiss bank secrecy. The deal also signals a shift in prosecutors’ tactics. It is the most prominent bank to plead guilty in the United States since Drexel Burnham Lambert in 1989, and the largest to do so since the Bankers Trust in 1999, a bank a fraction the size of Credit Suisse. (NY Times)
UK Banking standards oversight body to be set up
The UK’s main banks have agreed to report each year on their behaviour and competence and to set up an independent body to oversee the industry, which has been dogged by stories of mis-selling and interest rate-rigging over the past few years. The measures, set out by former Confederation of British Industry chief Sir Richard Lambert, include training programmes for bankers. The new Banking Standards Review Council (BSRC) will be funded by the banking industry, with Barclays, HSBC, Lloyds, RBS, Santander, Standard Chartered and Nationwide all accepting the proposals. A panel chaired by Bank of England governor Mark Carney will appoint the chairman of the BSRC. Membership of the new body will be voluntary and it will not have powers to independently verify the banks’ reports, or to impose any sanctions. Mr Carney said: “I encourage all banks that operate in the UK, both domestic and foreign, to support this endeavour. We need a financial system that is safe, fair and acts with integrity.” (BBC News)
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