Investors call for Gulf action to protect workers

October, 2020 Print

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Major investors including Schroders and Aviva Investors have banded together to urge companies with operations in Gulf nations to protect migrant workers.

The group of 38 investors, with over $3 trillion in assets and led by CCLA, have written to 54 companies to request details about their approach to safeguarding the rights of workers.

It follows reports that some migrant workers in Gulf states, who have been recruited and employed through labour and outsourcing agencies, are coerced into paying large fees to agents and middlemen as part of the recruitment processes for roles supporting major international businesses.

The payment of recruitment fees, often only made possible by taking out excessive loans at high interest rates or by signing over assets and property, can mean that workers are left in a position of “debt bondage”, and are therefore at high risk of forced labour and modern-day slavery.

Migrant workers make up around 50% of the population in the Gulf nations and in some states, up to 90% of the workforce. The global Covid-19 pandemic has resulted in many migrant workers’ roles being revoked or in workers losing their jobs.

The investors’ letter focuses on the high-risk sectors of hospitality, construction, and oil and gas and recognises that, due to the complicated nature of migrant worker recruitment supply chains and layers of labour outsourcing, many end-user companies may be unaware of these risks that impact upon the migrant workers who work in their operations.

It asks companies whether they use labour outsourcing companies or migrant workers within their operations in the Gulf states and for details about the policies in place to identify, reimburse and provide other forms of remedy to migrant workers who have been impacted by recruitment fees and/or passport retention.

Human rights issues have a material impact on corporate performance, said Steve Waygood, chief responsible investment officer at Aviva Investors, and investors are increasingly recognising the long-term costs associated with employers mistreating workers.

“As shareholders, and therefore the ultimate owners of these businesses, investors have the right – and responsibility – to use their voting powers in holding firms to account and promoting positive change,” he said.

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