Banks need to account for risks of human rights abuses and "exploitation" when deciding if they should provide credit to companies, Bank of Valletta's ESG guru has argued. 

Clint Flores, an economist and Bank of Valletta head of Environmental Social Governance (ESG), was among a panel of experts discussing the social element of ESG at a conference organised by Times of Malta and the education ministry. 

Just as countries impose sanctions to deter human rights abuses, banks can do the same thing by withholding credit, Flores said. 

"If you don't conform to respect the environment and the social element under the guiding principles of the ILO (International Labour Organisation) and the OECD (Organisation for Economic Co-operation and Development), you will not be given credit," he said.  

Flores said that banks are screening clients that might be exploiting their workers, adding some sectors are more likely to carry those "risks" than others. 

He said that sectors need to be categorised according to the level of risk of human rights violations they carry. 

"If there is a very high-risk sector when they (companies) are coming to banks, we need to ascertain that what we are financing is not of a reputational risk". 

"If it is of a reputational risk, you either give them credit at a very high-interest rate or else you exclude them completely," he said.  

Times of Malta has reported extensively about precarious working conditions in Malta, including reports about food delivery couriers claiming to earn less than the minimum wage.   

The Malta Malayalee Association, an NGO for Indians in Malta, have also claimed that Indian nationals often pay thousands of euros in agency fees to work for temping agencies only to find that the job that was promised to them does not exist.  

In February, Times of Malta reported how Some migrant workers are made to sleep on construction sites and the "rent" is deducted from their wages. 

On Monday, Flores said that a system to monitor worker exploitation would mirror an existing traffic light system that determines environmental risks.    

For the environment, BOV devised a questionnaire that determines risks to the environment.  

'Voluntary does not mean amateur'- voluntary organisation commissioner 

Amanda Holmes from Melita, Catherine Calleja from Insurance Association Malta, and commissioner for voluntary organisations Jesmond Saliba sat alongside Flores in a panel moderated by Malta ESG alliance and Malta Council for Economic and Social Development chair David Xuereb.  

Saliba said that voluntary and not-for-profit organisations need to be seen as partners by businesses and not as recipients of charity.  

Many not for profit organisations employ serious professionals, voluntary organisation tsar Jesmond Saliba said Photo: Jonathan Borg

He said many organisations are "serious professional organisations" that are run with a mission and a purpose.  

In fact, the government spends €52 million in public-social partnerships where the government engages not-for-profit service providers to carry the social dimension of certain areas.  

He said the not-for-profit sector employs 5,000 people in Malta.    

"Why shouldn't we have public-private-social partnerships," he said.