Finance firms in Hong Kong shut their eyes to exploited domestic workers

By Robert Godden

Many of the world’s largest financial institutions have made bold promises to promote responsible investing and combat human trafficking. Yet behind these commitments lies exploitation much closer to home, literally. 

In the Asian financial hubs of Hong Kong and Singapore, where many of these institutions have offices, migrant domestic workers – often hired by expatriate finance executives – are frequently trapped in debt bondage, a form of modern-day slavery. 

Despite these well-documented human rights abuses, the financial sector has largely turned a blind eye to the problem, leaving its expatriate executives to use, often unwittingly, unscrupulous agencies that charge illegal fees. This makes these executives a party to a transaction that involves a trafficking-related felony.

Expatriate executives with financial firms and other highly paid professionals proportionately spend more on hiring domestic help than any other sector of Hong Kong society, and benefit from this criminal activity as agencies shift costs to the workers to keep fees low for employers.

Workers are frequently charged illegal recruitment fees that can be as high as HK$8,000, far above the legal limit of HK$499. These fees often leave workers indebted and trapped, financially dependent on their employers and vulnerable to abuse. 

Employers, particularly expatriates in high-paying roles, must be made aware of how illegal hiring practices harm the domestic workers in their homes and understand the role they can play in countering such practices. Moreover, the firms they work for must encourage the use of ethical employment agencies to break the cycle of exploitation. 

One might expect that global financial institutions, which champion compliance and corporate responsibility, would want to help counter these illegal and exploitative practices.

But we reached out to more than 100 of the largest pension funds and endowments – which invest in financial firms such as BlackRock, Carlyle, Blackstone and many others with Hong Kong offices – in an attempt to influence them. Despite presenting clear and actionable solutions, the result was largely one of apathy and deflection. 

A clear path forward: the CARE programme

One of the simplest ways to address this problem would be through a system similar to the CARE programme proposed by the Domestic Workers Justice Initiative (DWJI), which stands for: Contact, Anti-trafficking, Education, Resolve, Exit.

Modelled on a successful initiative by the US State Department, the CARE programme suggests that an independent expert interview newly hired domestic workers, to ensure no illegal fees have been charged and to act as a contact in cases of abuse. This would also provide data on which agencies are charging illegal fees, something that would be useful to employers, workers, consulates of sending countries, and the Hong Kong government. 

What’s more, this programme would cost companies as little as HK$400,000 annually – pocket change for most large finance firms. Yet, despite the obvious benefits and minimal costs, no major financial firm in Hong Kong, or elsewhere for that matter, has agreed to adopt this solution. 

By ignoring the issue, these companies, along with their investors, help 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. 

Institutional investors – the pension funds, endowments, and asset managers that hold tremendous sway over private equity firms – often sign on to global pledges like the United Nations Principles for Responsible Investment (UN PRI), which commits them to addressing human rights abuses, including trafficking. 

While the exact language varies, the commitments can generally be summed up as an expectation that investors will use their leverage to address human trafficking risks in their business relationships. Despite these commitments, institutional investors have refused to even raise the issue with their private equity suppliers. 

Nothing requires an institutional investor to join the UN PRI or to make these far-reaching pledges of ethical conduct. But in the view of DWJI, when they do, then they must live up to the commitments they have made. 

The contradiction is stark: institutions that publicly claim to prioritise ethical investing are unwilling to hold companies accountable for trafficking-related crimes tied to their own employees. The fact that the employees enter into this transaction unwittingly is immaterial. 

This isn’t just a failure of responsibility; it’s outright hypocrisy. If financial firms can’t act when the issue is this clear and so close to home, how can we trust them to honour their commitments to social justice on a broader scale?

It’s time to lead by example

The problem of domestic worker exploitation in Hong Kong is not hidden. Financial firms, which employ many expatriates, are uniquely positioned to lead the way in implementing solutions. By educating their employees about trafficking risks and promoting the use of ethical agencies, they can ensure they are not complicit in these crimes.

DWJI’s efforts may not have achieved immediate reforms but they’ve revealed a much deeper issue: the disconnect between what institutions say and what they actually do. 

Institutional investors and financial firms, including 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.

If we’re serious about ending modern-day slavery, then the next time a company touts its commitment to corporate responsibility, we must ask them – what are you doing to stop the exploitation happening right here in Hong Kong?

Robert Godden is campaign adviser to the Domestic Workers Justice Initiative. He is the founder of Rights Exposure, a consultancy supporting the work of non-profits, and previously worked for Amnesty International and Human Rights Watch. 

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