Shippingtelegraph: Marine insurers urged to raise their awareness of modern slavery risks

by Shipping Telegraph

Marine insurers are being called to widen their understanding of modern slavery and forced labour across the maritime and extended global supply chains as scrutiny intensifies from regulators, investors, and clients.

In a new Information Paper, published on August 19 by the International Union of Marine Insurance (IUMI), the growing reputational and legal risks facing insurers that underwrite operations linked to exploitative labour practices is highlighted.

While insurers are not directly involved in operational abuses, they may be indirectly and unwittingly enabling unethical practices if due diligence is lacking.

“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 reports that modern slavery including forced labour, human trafficking, and exploitative recruitment, affects a range of industries that have links with marine insurance, from fishing and shipping to textiles, agriculture, and manufacturing.

Sectors such as distant-water fishing, garment production and the maritime industry/seafaring are identified as particularly high-risk.

Recent cases, including lawsuits against major seafood and agriculture companies, underscore the growing legal exposure for businesses complicit in forced labour.

Legislative measures such as the EU Corporate Sustainability Due Diligence Directive and the UK Modern Slavery Act are increasingly holding companies and their financiers accountable.

“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.”

IUMI encourages marine insurers to conduct robust due diligence during underwriting processes, implement clear ESG policies that address human rights and collaborate with all stakeholders to improve transparency in the maritime supply chains.