Skip navigation Menu Home MAG/NET Sustainability Print Social Links SOCIAL SUSTAINABILITY Modern slavery is widespread: “It’s about seeing what is happening” July 19, 2021 reading time: 8 minutes by Klaus Rathje, guest author The Principality of Liechtenstein has launched an initiative against modern slavery. Countries, but also banks have an important role to play in the fight against slavery. From questionable financial flows to criminal activity: Daniel Thelesklaf has witnessed a lot during his career. Thelesklaf has been involved in fighting financial crime for 30 years. He has uncovered money laundering in Eastern Europe, tracked down money linked to corruption and investigated terrorist financing. Now, he sits at the helm of FAST, a project of the Liechtenstein Initiative, which operates out of New York under the umbrella of the United Nations. FAST stands for Finance Against Slavery and Trafficking. The 57-year-old Austrian and Swiss citizen certainly does not lack experience. However, even he was shocked by the enormity of the issue of modern slavery, which FAST has declared war on. “I didn’t realize that the problem was so big,” he says. What is modern slavery? Modern slavery comprises more than just human trafficking. “Modern slavery encompasses everything from the severe consequences of dependency, such as forced labor, through to child labor,” explains Daniel Thelesklaf. “In the sex trade, it’s a well-known phenomenon. But the fact that it also takes place in the construction and fishing industries, in the hotel and hospitality sectors, at cleaning companies and in nail salons, is less well known.” The United Nations estimates that 40 million people worldwide are currently in a working and living situation that can be categorized as modern slavery – and this trend is growing. Daniel Thelesklaf, director of the "Finance against Slavery and Trafficking" Initiative: "I didn't realize that the problem was so big." © FAST The FAST director has met with people who were able to escape such situations and whose stories provide important insights into the perfidious system behind modern slavery. “The inability of the people concerned to escape their situation, as if they were chained to it, is definitely a common characteristic. This can happen if their ID is taken away, or in the case of foreigners without work permits. What can they do? They can’t even go to the police for fear of making themselves liable to prosecution, ” says Thelesklaf. He then goes on to provide another example: a young man from Ghana who had been abducted as a boy and forced to work on a fishing boat off the coast of Africa. The financial sector can fight modern slavery “In the fight against organized crime, the hope has been that when people are freed from these situations, they will testify against their oppressors. But that strategy hasn’t proven successful so far,” Thelesklaf notes soberly. “But I firmly believe that finance can play a big role in combating these crimes,” he says. Slavery is also widespread in the construction industry. There is, in fact, a lot of money circulating that has been made through modern slavery – an estimated 150 billion dollars per year. “Some of these profits undoubtedly remain in cash, but in the case of organized crime, these funds can also be found in bank accounts – which means that the banks have a responsibility,” says the FAST director. “Our initiative can help banks better identify such transactions because we know the corresponding indicators.” The Liechtenstein Initiative The "Liechtenstein Initiative" is to develop a catalog of measures for the global financial sector to combat modern slavery and human trafficking. The commission's work focuses on uncovering illegal financial flows and on responsible investment and credit practices. The commission, which is structured as a public-private partnership, is financially supported by LGT. Tying loans to humanitarian conditions But Thelesklaf also sees modern slavery as “a market failure”, and believes that to combat this, greater leverage could be applied at an earlier stage. In the case of a T-shirt that can be bought for five euro in wealthy industrialized countries, he says by way of example, it is clear that the labor has not been fairly compensated. “The market has failed here, because economically speaking, modern slavery is unfortunately very lucrative.” The United Nations estimates that 40 million people worldwide are currently in a working and living situation that can be categorized as modern slavery. According to Thelesklaf, financial institutions can put the power they wield in the market to greater use, for example, by making loans for a factory conditional on it being constructed under fair labor conditions. “Insurance companies also have a role to play here. If I insure a ship or an entire fishing fleet – which is vital for the operator – then I can insist that safe working conditions be ensured.” Daniel Thelesklaf sees his job at the helm of FAST as a personal mission that enables him to help people directly. “It’s a matter that is close to my heart,” he says. Against slavery: Asking the right questions FAST is backed by countries such as the Principality of Liechtenstein, Norway, Australia and the Netherlands, as well as numerous financial institutions and NGOs. LGT is also committed to fighting modern slavery through this initiative. “I think we need to increase the focus on this issue in the investment industry and make it a priority,” says Ursula Finsterwald, Head Group Sustainability Management at LGT. "Economically speaking, modern slavery is unfortunately very lucrative.” “Many people think modern slavery only exists in Asia or Africa, but the issue is also present in Europe. We want to help ensure that it is taken into greater account, for example, by embedding it more firmly in our processes so that we can ask the right questions,” she says. But ultimately, the financial sector as a whole must take a more critical stance. “Often, people just don’t want to look too closely at such sensitive issues. But that’s exactly what we’re trying to achieve with FAST: it’s about seeing what is happening – and taking action.” Title image: © KEYSTONE/STEVE O. TAYLOR Facebook Twitter LinkedIn XING Whatsapp More from the LGT Online Magazine? Enter your E-mail address and get regular newsletter updated of the LGT Online Magazine. Subscribe to newsletter Related SUSTAINABLE INVESTING Pioneers in impact investing Feb 22, 2021 FINANCIAL KNOWLEDGE What does sustainable investing mean? May 26, 2021 Facebook Xing Twitter Linked in Domicile: Publications or investment products of LGT are shown depending on your country of domicile. 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