05 November 2014
Assessing Risks in Global Industries

Recent study by Citi Research examined child labor, modern slavery and human trafficking issues, and where they may intersect with the activities of ASX-Listed Companies.

Citi Research investigated 44 ASX-listed companies’ (Australian Securities Exchange) policies on child labor and/or slavery across their businesses and supply chains, and their implementation. A framework was then developed to put the companies into three categories based on whether they provide: 1) no information; 2) policies and frameworks; 3) policies and frameworks plus some implementation details.

ASX100 companies were chosen based on the nature of their operations or supply chains, and some smaller companies in sectors like retail. Various industries were looked at where modern slavery and/or child labor are known to exist: electronics and electrical goods, construction and property, mining, food and beverage, fashion and clothing. Key research findings include:

Modern slavery and child labor
An estimated 21-30 million people are in slavery around the world - this includes forced labor, bonded labor, human trafficking, and child slavery. There are estimated to be 168 million child laborers, including 85 million children in hazardous work. Child labor that interferes with education helps to perpetuate poverty and can hinder a country’s economic development.

Relevance to investors
Association with human rights controversies including modern slavery and child labor could be detrimental to company earnings and shareholder value. It has financial performance implications for long-term investors. Companies could be excluded from procurement opportunities, partnerships or project opportunities, as governments and corporates implement supply chain policies, or attempt to avoid

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