Blockchain Solutions: Moving forward to achieve United Nations Sustainable Development Goals (SDGs)

Four years have passed since 193 nations pledged to join the United Nations in achieving the 17 Sustainable Development Goals (SDGs) — to end poverty, fight inequality and injustice, and provide inclusive and sustainable economic growth for all. While progress has been made on these goals, there are still millions of people that are victims of modern slavery and communities that lack access to financing or basic resources. In this modern age, we believe blockchain technology has the power to help institutions and individuals to achieve these SDGs, but it will require partnerships — the cooperation of both private and public sectors to do so. Amongst the 17 SDG initiatives, there are three goals for which we believe blockchain applications have the strongest use case: creating decent work opportunities to help eradicate forced labor, fostering inclusiveness and innovation, and improving income equality and financial regulation.

How blockchain helps eradicate modern slavery and provide decent work (Goal #8)

According to the United Nations, over 40 million[1] people remain trapped in modern slavery through force, fraud and coercion on a global basis. Almost half of these victims are found in the supply chains of modern consumer goods and services, such as textile production and fisheries. In 2018, a partnership between Diginex and anti-slavery NGO the Mekong Club created eMin[2], a blockchain-based tool to protect against worker exploitation.

 

Jessica Camus, Head of Partnerships and Impact at Diginex, says: “We’ve seen countless examples of victims of modern slavery that were deceived into agreeing to unfair or illegal employment contracts. Recruiters would gain the trust of victims or their family members, then offer false promises of well-paid employment. In some cases, oppressive or illegitimate contracts were used to justify forced labor. Often, these fraudulent agreements were signed by victims who didn’t understand the language and threatened with penalties or fines for terminating a contract.”

 

To protect these workers, eMin was designed to store immutable copies of contracts from the employers or recruitment agencies on the blockchain. The tool anonymizes all data and can perform periodic surveys to audit for any abnormalities or agreement breaches. This means migrant workers have access to tamper-proof documentation, thus reducing the risk of contract substitution and illegal fees being charged. eMin has already been implemented in supply chain monitoring tools across Thailand’s agribusiness, with the goal of helping thousands of workers on hundreds of farms and is expected to be rolled out in at least five more countries.

 

The Mekong Club is one example of a private-public partnership and we are seeing an increasing number of government agencies and recruitment firms working together to utilize blockchain technology for data integrity and transparency in their hiring processes. Diginex and the International Organization for Migration (IOM), a United Nations migration agency, have built a blockchain-based tool called IRIS-SAFER earlier in 2019. IRIS-SAFER is a self-assessment system used by recruitment agencies that employ Hong Kong-based migrant domestic workers. Recruitment agencies can use the tool to assess their level of adherence to global ethical recruitment principles as set forth by the IRIS Standard.[3] According to a recent survey, more than half of domestic migrant workers were charged illegal fees by recruitment agencies. Mark Blick, Head of Government Solutions at Diginex, says: “We are proud to be partnering with IOM and with many more intergovernmental agencies in the future to build these purpose-driven blockchain solutions. IRIS-Safer is one example of blockchain technology showing great potential to strike out unethical practices and drive responsible supply chains.”

 

How blockchain helps foster inclusiveness, innovation and resilient infrastructure (Goal #9)

Blockchain technology can not only help to ensure high standards in working conditions but can also aid in creating job opportunities and boosting worker productivity. Thanks to this technology, the world is becoming ever more interconnected, enabling the sharing of resources globally. The UN SDG initiative encourages businesses and communities to bridge the digital divide, invest in innovation and build resilient infrastructure to facilitate sustainable development.

 

How does blockchain help to promote inclusiveness? Blockchain is a peer-to-peer network that connects ‘peers’ or various parties together without the need of appointing an agent or intermediary. It’s a secure platform for storing data where the participants validate and verify transactions; thus, eliminating the need for an intermediary to authenticate data; ultimately reducing costs and time, and connecting individuals who previously lacked resources to link with one another.

 

Blockchain can also help to protect infrastructure of many sectors and industries by mitigating risks of cybercrime or hacks. The biggest advantage of blockchain is that it is immutable. Once information is stored and entered onto the blockchain, it is extremely difficult to alter. Each transaction on a blockchain is secured with a digital signature that proves its authenticity. If a hacker tries to attack the network or change information of any specific block, the digital signature related to a transaction will not match the original and can be easily detected. This tamper-resistant feature has been instrumental to corporations, preventing data manipulation, fraud and enabling corporate governance.

 

How blockchain helps to reduce income inequalities and improve financial regulation (Goal #10)

The United Nations describes income inequality as a global issue. We believe to reduce poverty, access to education and financial inclusion must improve, whilst financial regulation must evolve. Having access to financial services is a crucial aspect of having the opportunity to participate in economic activity. With blockchain, the opportunity to improve financial inclusion (lower cost remittances, decentralized banking, digitized micro loans etc.) are endless. For example, two thirds of sub-Saharan Africans do not have access to a bank account or payments provider. Blockchain technology can help family members and businesses transfer payments cheaply and securely around remote areas of the continent. It can connect under-served businesses to obtain additional financing and liquidity through digital tokens (converting existing assets into tradable digital securities) registered on a blockchain system. Small businesses and individuals can build up their digital identities and credit scores to obtain microloans.

 

The technology has also been heralded for helping financial institutions to reduce fraud (no single point of failure for collusion), speed up Know-Your-Client (KYC) processes with a central registry for existing or new customer information, and track signatories on trade finance documents.

 

The blockchain ecosystem needs partners to realize its full potential

 

Today, the global community stands at a crossroads. While we have made progress with some of UN SDG goals, there is still much work that needs to be done. We believe blockchain technology has the power to deliver a great contribution to society but it cannot do this in isolation. We have seen the impact of the blockchain-enabled eMin tool on preventing exploitation of migrant workers — a project that engages global NGOs and intergovernmental organizations with corporates on the efficacy of social responsibility. In order to accelerate progress towards the SDGs, long-term partnerships with trusted blockchain solutions providers, supranational working groups, policymakers, private enterprise, academia, lawyers, investors and NGOs are required. Jessica Camus concludes: “When challenges are shared and incentives are aligned between public and private actors, the agility of blockchain can be fully harnessed and remarkable sustainable innovations can be created.”

[1] United Nations website. General Assembly – Third Committee Press Release. (October 2018) (link)

[2] eMin is a blockchain-enabled tool to allow migrant workers access to a copy of their employment contract which is validated and tamper-proof. (link)

[3] Diginex website. News. (December 2019) (link)

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Diginex is a digital financial services and blockchain solutions company. We partner with institutional investors, corporations, and governments to make digital assets more accessible, business processes more efficient, and societies more secure.

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