Daily perspective: exploitation of migrant workers - closer to home than we think
And it could have material implications for investors
Exploitation of migrant workers does not only take place in the global south, it's also an issue in Europe as well, especially in the agriculture industry.
We often think about the exploitation of migrant labour as something that happens in the "Global South" or if it happens on our back door, it's something that happens at a small scale. But perhaps we need to look harder.
How should investors think about this. Many investors want to see their capital used to do good, or at least meet the "do no harm" criteria. So, for this group, avoiding investing in companies that exploit migrant workers should be a "no brainer" - assuming of course they know it's going on.
But even for those investors who argue that their fiduciary duty means they should invest in those companies that, assuming they are not breaking the law, offer the best financial returns, the world is changing.
I discussed the changing nature of human rights law, and how it will impact companies in a blog for The Sustainable Investor, as part of the series on the way that investors need to respond to changing social and political priorities.
A recent article on the BBC website highlights the widespread use of migrant labour in the European agricultural industry. The UN estimates that there are between 450,000 and 500,000 irregular migrants working in the country's agricultural sector - about half of its total workforce. The gangmaster system, known in Sicily as "caporalato", means the migrants do not work directly for the farmers - and their illegal status means they are incredibly cheap, with pay often as low as $2 an hour.
Leaving aside for a moment the rights and wrongs from a moral perspective, the exploitation of labour, often called modern slavery, in company supply chains is increasing becoming an important investor issue. Some of this is to do with reputation and brand value, but increasingly, regulation is making companies legally responsible. Which means, for investors, it should be a material element of our investment cases. Why take the risk - isn't it better that we are proactive in identifying and fixing this.