Fostering Information Flows to Achieve Target 8.7

7 February 2019
Research Innovation

Luis Fabiano de Assis  | Chief Research and Data Officer, the Brazilian Federal Labor Prosecution Office

To effectively fight forced labour, modern slavery, human trafficking and child labour, law enforcement needs to go beyond traditional investigations. Harnessing the power of big data techniques, they can determine hotspots for exploitation and improve resource allocation. Governments can put into place legal instruments to foster more effective flows of information between private and public organizations who share the burden of responsibility of ending these human rights violations. Furthermore, most businesses acknowledge that flouting human rights can affect their credibility and reputation given the risk of national and international naming and shaming, which can lead to retaliation by consumers and markets, and are keen to find ways to share information to prevent any potential public backlash.

Knowing this, the Federal Labour Prosecution Office (FLPO) in Brazil established a working group of prosecutors tasked with promoting the achievement of Target 8.7 in a way that connects to the need for better transparency of public institutions, sustainable labour law compliance and better corporate governance, while understanding that the financial sector has a role to play as well. The working group aims to make sanctions against people and companies that have violated labour laws more effective and establish preventive measures that are jointly developed by public and private stakeholders in order to protect human rights at work

Focusing on the ways business, financial sector institutions and value chains share data and information, some initiatives developed by the working group draw upon Brazil’s “Dirty List,” which, since 2004, enables the public shaming of companies or individuals involved in modern slavery. Those on the Dirty List can have their assets frozen, be denied government subsidies and be made ineligible to tender for government projects, among other penalties.

Information flows. Unknown author/Pixabay.

In 2010, the government passed a law that prohibits banks from granting rural credit to companies and individuals on the Dirty List. To ensure compliance, the records from the Dirty List—including personal and corporate identification numbers and names—must be cross-referenced by financial institutions during profile checks and as part of the decision-making process of whether or not to grant credit or other financial services to clients. However, FLPO investigations found that financial institutions often fail to follow these procedures, issuing credit to institutions and individuals on the Dirty List.

This led the FLPO to file a lawsuit against the Central Bank of Brazil, demanding immediate identification of all financial institutions in violation of the law. The court ruled that all the data concerning credit transactions involving names on the Dirty List must be turned over to prosecutors. Data analysis performed by the FLPO of the transactions uncovered that at least 10 financial institutions were supplying credit to individuals and organizations whose names were on the Dirty List, leading to further lawsuits and investigations.

Following recommendations from the FLPO, the National Development Bank of Brazil (BNDES) changed its data collection systems to include automatic monitoring aimed at preventing registration and credit for those on the “Dirty List.” The FLPO is now holding hearings with major Brazilian banks to discuss improvements to credit systems that could help prevent perpetrators of labour law and human rights violations from benefiting from any loopholes or data-sharing failures. These efforts are strengthened by counter-trafficking recommendations issued by Brazil’s Financial Sector Task Force (FATF) and its affiliated institutions, such as the Brazilian Council for Financial Activities Control (COAF), which consistently improves the models for monitoring suspicious financial flows and works in partnership with the FLPO.

Good data and information flows are also important in relation to the stock market, which can contribute to achieving Target 8.7 and protect investors and the economy at large. For example, based on previous requests from the FLPO about the meatpacking sector, Brazil’s “Comissão de Valores Mobiliários” (CVM)—equivalent to the United States’ Securities and Exchange Commission—improved its data collection systems and requirements for all relevant information companies must report to their investors. As a result, companies are now expected to improve their human rights due-diligence mechanisms and are obliged to inform the market if they face lawsuits concerning labour law violations.

The approach taken by the FLPO can be applied elsewhere, and the FLPO has participated in national and international discussions about using data across agencies and organizations. For example, the FLPO participated in the event “Breaking the financial chains: disrupting financial flows associated with slavery, human trafficking, forced labour and child labour”, organized by the United Nations University in 2017. From this event, 25 recommendations were put forth in the final report, and the FLPO is already acting on 17 of them in Brazil and demanding other organizations to do so as well.

As the FLPO has shown in Brazil, making data and information flow in new ways can help to achieve Target 8.7 of the Sustainable Development Goals.

Luis Fabiano de Assis is a Federal Prosecutor, Chief Research & Data Officer at the Federal Labour Prosecution Office (FLPO – Ministério Público do Trabalho, MPT, in Portuguese) and Law & Policy Professor at the National School of Public Prosecutors. He is also head of the Smartlab Initiative.

This article has been prepared by Luis Fabiano de Assis as a contribution to Delta 8.7. As provided for in the Terms and Conditions of Use of Delta 8.7, the opinions expressed in this article are those of the author and do not necessarily reflect those of UNU or its partners.

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