Tackling modern slavery in supply chain and pay disparities in the GCC region

Slavery is assumed to be long gone, yet it persists in new forms, now formally described as modern slavery, a term initially derived from the UK Modern Slavery Act 2015. Defined as a human rights abuse in which people cannot refuse or leave work because of threats, coercion, human trafficking, forced labour, deception or debt; they are denied voice, choice, and fair pay. It is the antithesis of decent work.

Modern slavery is, at the core, an instrumental organisational risk and a human rights emergency hiding in plain sight. For companies operating across international markets, particularly in labour-intensive sectors, addressing modern slavery risks in supply chains has become a central part of responsible business conduct and ESG risk management.

The International Labour Organisation (ILO) estimates that 50 million people were living in modern slavery in 2021, including 28 million in forced labour. In the Gulf Cooperation Council (GCC) region, forced labour risks are deeply embedded in key growth sectors, including construction, hospitality, and domestic services. These risks are often overlooked due to limited transparency and weak monitoring mechanisms. The situation is further exacerbated by complex supply chains that obscure labour conditions, unregulated recruitment practices that trap workers in debt and unequal power dynamics.

Addressing this issue requires robust human rights due diligence, supply chain due diligence, and responsible sourcing strategies to ensure workers’ rights are protected and upheld. 

The reality behind the institutional bias: Inequality and hidden profit

Two individuals performing the same role can receive vastly different wages depending on nationality, accent or visa route, with gender gaps continuing to persist and women often concentrated in lower-paid or informal roles and under-represented in decision-making, enabling discrimination. This disparity undermines employee morale, fuels attrition, and erodes trust in an organisation’s brand and values.

Racial discrimination also plays out based on sector and stereotype. In parts of the GCC, higher‑paid professional roles (finance, technology, senior management) skew towards Westerners; mid‑tier roles are more mixed among Arabs (non-GCC); and lower‑wage segments such as construction, cleaning, security, agriculture and domestic work are dominated by South and Sout-East Asians. In many corporate environments, stereotypes around “leadership potential”, or “cultural fit” often hardwire pay differentials unrelated to competence, combined with visa policies and recruitment practices, these perceptions often hardwire inequalities into organisational structures which further entrench this hierarchy.

Modern-day exploitation increasingly presents itself as “ordinary” work, characterised by withheld wages, passport confiscation, restricted movement, and excessive overtime. These practices are clear red flags under the International Labour Organization’s (ILO) eleven indicators of forced labour, as outlined in the ILO Special Action Programme to Combat Forced Labour (ILO SAP-FL).

Most organisations and, by extension, their consumers may benefit indirectly from unethical profits extracted through the exploitation of vulnerable workers or through goods and services sourced from regions where labour is chronically underpaid. This model is neither sustainable nor morally defensible, and it presents growing risks to brand integrity, legal compliance, and long-term value creation.

Why sustainability demands action now and the critical risks of inaction

Addressing this issue requires robust human rights due diligence, supply chain due diligence, and responsible sourcing strategies to ensure workers’ rights are protected and upheld.

Social sustainability is not a “nice to have”; it sits at the core of Sustainable Development Goal (SDG) 8 (Decent Work), SDG 10 (Reduced Inequalities), and credible ESG performance. The global policy landscape, investor expectations, and public scrutiny are converging and shifting rapidly. Global legislations and regulations are raising the stakes; organisations are now expected to actively identify, manage, and disclose human rights and social risks across their operations and supply chains. This expectation is being enshrined in law and regulation: the UK Modern Slavery Act & Australia’s Modern Slavery Act, the EU Corporate Sustainability Reporting Directive (CSRD), and the EU Corporate Sustainability Due Diligence Directive (CSDDD).

Ignoring equity is no longer an option. Organisations that fail to address wage inequality and workers’ rights face legal penalties and even import restrictions as due-diligence laws tighten. Investors are pricing in ESG underperformance, raising the cost of capital for non-compliant firms. Perceptions of fairness directly influence consumer trust and brand equity. A living wage, safe working conditions, and equal pay are no longer aspirational goals. They are the minimum baseline expected by regulators, investors, consumers, and employees alike.

Human Rights: Impact on people & planet; and priority actions for organisations

Addressing human rights risks in supply chains requires a focused set of priority actions centred on equity, accountability, and worker protection. These actions need to be embedded into core business practices rather than treated as standalone initiatives.

Key priority actions for organisations include:

• Ensure equal pay for equal value by implementing transparent pay frameworks based on role, skills, and experience, not nationality, and conducting regular audits to close gaps.
• Reform recruitment practices by adopting the Employer Pays Principle, ensuring workers do not bear recruitment costs, and auditing labour providers to eliminate fee-related exploitation.
• Embed accountability into governance by assigning ownership of modern slavery and pay equity at the executive or board level, with KPIs linked to measurable outcomes.
• Strengthen human rights due diligence by mapping risks across geographies, sectors, and worker groups, with a focus on high-risk areas such as recruitment, subcontracting, and accommodation.
• Establish a living wage pathway aligned with international guidance, prioritising high-risk sites and working with suppliers to progressively improve wage conditions.
• Strengthen worker voice and remedy mechanisms through safe, multilingual grievance channels supported by strict non-retaliation policies.
• Ensure decent worker accommodation by auditing living conditions against standards for space, hygiene, privacy, heat protection, and transport.
• Use procurement as a lever for change by embedding human rights clauses, fee-free recruitment, and audit rights into contracts, and evaluating suppliers on social performance alongside cost.

When implemented effectively, these measures contribute to stronger communities, improved worker well-being, and more inclusive growth. They also support responsible sourcing, enhance reputation, build investor confidence, and strengthen long-term operational stability and climate resilience.

At the same time, organisations must remain vigilant to the established indicators of forced labour, including:

• abuse of vulnerability
• deception
• restriction of movement
• isolation
• physical abuse
• intimidation and threats
• retention of documents
• withholding of wages
• debt bondage
• abusive working conditions
• excessive overtime

Recognising and addressing these risks is fundamental to protecting workers and building credible, resilient supply chains.

Addressing human rights risks in supply chain requires robust human rights due diligence, supply chain due diligence, and responsible sourcing strategies to ensure workers’ rights are protected and upheld. Improving equity across supply chains, through fair wages, ethical sourcing, and inclusive practices, plays a critical role in strengthening both social outcomes and environmental resilience.

At the same time, organisations must proactively identify and manage risks across complex value chains. The ILO's eleven indicators of forced labour provide a structured framework to detect and address hidden forms of exploitation. Meaningful progress requires moving beyond compliance, with greater transparency, stronger supplier engagement, and structural shifts in sourcing and procurement practices.

Progress worth recognising and a regional opportunity

Over the past two decades, the Middle East and North Africa (MENA) region has seen measurable progress in labour rights, driven by legal reforms and enforcement. The UAE’s Wage Protection System now mandates electronic salary payments, making late or withheld wages easier to detect. The UAE also issued regulations prohibiting the confiscation of workers’ passports, with fines imposed on companies that breach this law.

Qatar dismantled key parts of the kafala system, introduced the region’s first non-discriminatory minimum wage, and approved hundreds of thousands of job-change applications.

In Saudi Arabia, the Labour Reform Initiative under the National Transformation Program introduced mobility, automatic exit and re-entry visas, and greater worker independence from sponsors.

As the region scales up renewables and sustainable industries to mitigate the impacts of climate change, there is also an opportunity to embed social sustainability more deeply. Sectors such as construction, logistics, retail, and consumer goods, all heavily reliant on migrant labour and complex supply chains, can demonstrate that fair pay, responsible sourcing, and strong grievance mechanisms are as critical to resilience as carbon reduction.

Conclusion

As the region scales up renewables and sustainable industries to mitigate the impacts of climate change, there is also an opportunity to embed social sustainability more deeply. Sectors such as construction, logistics, retail, and consumer goods, all heavily reliant on migrant labour and complex supply chains, can demonstrate that fair pay, responsible sourcing, and strong grievance mechanisms are as critical to resilience as carbon reduction.

Strengthening ethical supply chains, implementing living wage strategies, and improving labour governance will be essential for organisations seeking to build resilient ESG strategies and responsible business practices in the GCC region. Several organisations are implementing voluntary action, which is possible and impactful. Dulsco Group has invested heavily in worker welfare, from fair pay and safe housing to skills training and career mobility, as part of its broader sustainability commitments. Chalhoub Group has made diversity, equity, and inclusion central to its people strategy, connecting employee well-being to brand value.

These examples highlight how advocacy for human rights and fair pay is becoming not only a compliance requirement but also a strategic differentiator for ESG leadership.

Investors are already rewarding transition plans that integrate people metrics alongside carbon. If governments and companies align their economic ambitions with a rights-based labour agenda, the MENA region can turn today’s reputational risks into tomorrow’s competitive strengths.

HOW NEW RIVER CAN SUPPORT

At New River Consulting, we support organisations in integrating social considerations, including labour and supply chain risks, into broader ESG frameworks aligned with evolving regulatory expectations.

Our expertise in ESG reporting enables alignment with frameworks such as GRI, DFM and CSRD, supported by value chain analysis, stakeholder engagement, and structured risk and impact identification. We also help strengthen data, governance, and internal processes to deliver consistent and decision-useful disclosures.

This approach enables organisations to move beyond compliance, using ESG as a tool to enhance transparency, build investor confidence, and support long-term value creation.
Find out more about our services.

Related New River insights: TISFD & Social Disclosure · What Is ESG? (UAE Guide)