Financial institutions engaging in “outright hypocrisy”

Many global financial institutions like BlackRock, Carlyle, Blackstone, have made pledges promising “responsible investing to combat human trafficking”. However, a recent article in the Hong Kong Free Press points out almost all are failing to hold third-party companies accountable for trafficking-related crimes committed by their employees in the financial hub of Hong Kong.  

Turning a blind eye to exploited domestic workers 

It is well documented that migrant domestic workers across Asia and other regions are frequently trapped in debt-bondage, a form of modern slavery. This is often due to recruiters’ fees paid to secure a job. In Hong Kong, many migrant workers are charged these recruitment fees. But despite Hong Kong’s legal limit of $499 HKD ($65 USD), those fees are frequently as high as HK$8,000, (just over $1,000 USD). That’s an exorbitant amount for migrant workers. The fees leave them trapped and financially dependent on their employers. It also means they are extremely vulnerable to further abuse and exploitation as they are afraid or can’t afford to leave their job.  

One migrant worker in Hong Kong said: 

“My employer hit me. When I tried to quit, they wouldn’t let me. They kept my passport and told me I was not allowed to quit.” 

Another stated: 

“They hired nine helpers over four years and were very abusive, so all quit or were fired. I didn’t know this before I started. It’s hard to quit because it costs so much to get another job.” 

Proportionately, expatriate financial firm executives spend more than any other group in Hong Kong on hiring domestic help. But in order to keep fees low for their corporate employers, hiring agencies are illegally shifting costs to the workers. That means expat employers are benefiting from these unscrupulous and exploitative hiring agencies. 

The brave few who do quit abusive jobs still have the first debt to pay. So, they face the choice of going home carrying debt or going even deeper in debt to find a new job. And the cycle starts again. 

Unwitting or not, executives may be party to a felony 

It is true that most of the expat executives themselves may not be aware of the illegal fees charged by the agencies they hire. They may also be unaware of the vulnerable position debt bondage puts migrant workers in. But in this day and age, ignorance is no excuse. Domestic Workers Justice Initiative (DWJI) recently ran a campaign designed to showcase both the role of financial institutions in this form of modern slavery, and a solution, based on a successful initiative by the U.S. State Department. But according to Robert Godden, campaign adviser to DWJI and Founder/Executive Director at Rights Exposure, the response from the finance sector has been apathy and deflection.   

Godden stated: 

“By ignoring the issue, these companies, along with their investors, are helping perpetuate a system that exploits vulnerable women workers in the Global South and places their employees into the unenviable position of being part of the exploitation.” 

Institutions who publicly claim to prioritize ethical investing are unwilling to hold companies accountable for trafficking-related crimes tied to their own employees. In Godden’s view, it is the employer’s responsibility to understand how these illegal hiring practices continue a cycle of exploitation and abuse for migrant workers. 

Addressing the disconnect- what institutions say and what they do 

Global financial institutions love to say they champion compliance and corporate responsibility. It follows that once made aware of their role in this cycle of debt bondage, they would want to help counter these illegal and exploitative practices. But sadly, nothing could be further from the truth. This problem is not a secret, and the solutions are not difficult, nor do they have to be expensive. In fact, DWJI estimates it would cost companies as little as HK$400,000 ($51,000 USD) annually to implement meaningful changes. That’s pocket change for most large finance firms. 

Godden said: 

“Institutional investors and financial firms, especially the large number that profess zero tolerance on trafficking matters, cannot continue to ignore the exploitation happening under their watch. It’s time to close the gap between words and actions.” 

Around the world, there are at least 67.1 million domestic workers. And women, like the ones working in Hong Kong, make up 73% of migrant domestic workers globally. We need tougher rules to protect domestic workers everywhere. 

Join DWJI and Freedom United and stand up for domestic workers. Send a message to the Government of your country and help us start a domino effect to protect domestic workers in Hong Kong and all over the world.