In the broader ESG (Environmental, Social, Governance) debate, it is often noted that environmental issues dominate the agenda; sometimes at the expense of social and governance concerns. This imbalance is also reflected in discussions within IUMI’s ESG Working Group. One possible reason is that environmental challenges like climate change are already complex enough; social and ethical issues, such as modern slavery and forced labour, can be even harder to identify and address. Yet, marine insurers are facing increasing scrutiny from regulators, investors and business partners regarding the ethical practices of the clients they underwrite.
Prompted by IUMI’s Executive Committee, the ESG Working Group took on the task of developing an information paper on modern slavery and forced labour, highlighting what marine insurers should be aware of.
Research into the matter revealed the alarming scale of the problem. According to the Global Slavery Index 2023, an estimated 50 million people were living in modern slavery on any given day in 2021. This figure, jointly produced by the International Labour Organization (ILO), Walk Free, and the International Organization for Migration (IOM), underscores the global scope of the issue. Modern slavery takes many forms: Forced labour, human trafficking, debt bondage, forced marriage. All involve the systematic removal of a person’s freedom for personal or commercial exploitation.
Our paper aims to raise awareness of the issue, outline the actions taken by international bodies and national governments, and examine industry sectors with heightened exposure to modern slavery risks. It also references actual cases of abuse that may be relevant to marine insurers.
We fully acknowledge that insurers may have limited visibility into the inner workings of the businesses they cover. There are policy provisions and legal mechanisms in place, including model clauses like the Joint Cargo Committee’s forced labour clause, which can help insurers mitigate risk. However, we also recognise that marine insurers, while at least one step removed from day-to-day operations, still have a role to play.
By underwriting companies engaged in exploitative practices, we risk enabling and legitimising unethical behaviour. The marine insurance sector must therefore understand the reputational, legal, and moral implications of such associations. Taking a proactive stance through due diligence, ethical underwriting, and robust ESG policies can help avoid complicity in human rights abuses across global supply chains.
The full paper can be downloaded here from our website: https://iumi.com/category/position-papers/
