- 28 million people are affected by modern slavery, says Lars Lange.
- High-risk sectors include fishing, shipping, garment production, and seafaring.
- Lawsuits and new regulations increase accountability for companies and financiers.
Marine insurers are being encouraged to broaden their understanding of modern slavery and forced labour within maritime and global supply chains, especially as the pressure from regulators, investors, and clients continues to grow. In a recent Information Paper, the International Union of Marine Insurance (IUMI) highlights that insurers are facing increasing reputational and legal risks when they underwrite operations tied to exploitative labour practices. While insurers may not be directly involved in these abuses, a lack of thorough due diligence could inadvertently support unethical activities, reports IUMI.
Modern Slavery Impact and Industry Responsibility
“Modern slavery is impacting an estimated 28 million people”, said Lars Lange, IUMI Secretary General. “Marine insurers must be aware of the potential consequences of insuring unethical clients and consider integrating ethical underwriting practices to support responsible business.”
The paper highlights industries closely tied to marine insurance, like fishing, shipping, textiles, agriculture, and manufacturing, as particularly at risk for issues like forced labour, human trafficking, and exploitative recruitment practices. It specifically points out distant-water fishing, garment production, and seafaring as sectors that face significant risks.
Key Recommendations for Insurers
The report encourages marine insurers to enhance their ethical practices by:
- Carrying out thorough due diligence during the underwriting process.
- Adopting ESG policies that take human rights into account.
- Working together with stakeholders to boost transparency in the supply chain.
Recent legal actions against major seafood and agriculture companies underscore the growing legal risks, while regulations like the EU Corporate Sustainability Due Diligence Directive and the UK Modern Slavery Act are increasing the accountability of businesses and their financial backers.
Rising Concerns in the Maritime Sector
The maritime industry is still grappling with labour-related issues, such as seafarer abandonment and the denial of shore leave. The International Maritime Organisation (IMO) has reported an all-time high in abandonment cases in 2024.
“Insurers are one step removed from these operations and it is important to acknowledge that they often face practical limitations in detecting these abuses given their indirect role and the complexity of global supply chains”, said Lars Lange. “However, as far as possible, marine insurers should take a proactive stance – not just to protect reputations, but also to align the insurance industry with global human rights standards.”
ESG Pressures Drive Industry Change
As ESG expectations continue to rise, IUMI is urging marine insurers to take part in wider industry conversations and improve their frameworks. By bolstering due diligence and transparency efforts, insurers can help combat modern slavery and uphold global human rights standards.
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Source: IUMI
