The EU has reached a provisional agreement to ban the entry or exit of products made with forced labor from the Union’s single market. The regulation was proposed by the EU Commission back in September 2022, aiming to create a legal framework for ‘investigating and removing products made with slave labor from corporate supply chains‘.
It is estimated that 27.6 million people worldwide are exploited through forced labor, while the ‘Global Slavery Index‘ (GSI) states that 49.6 million people were trapped in modern slavery in 2021, with North Korea, Eritrea, Saudi Arabia, Turkey, India, and China leading the way.
– “This heinous crime must be eradicated, and the first step to achieve this is to dismantle the business model of companies that exploit workers,” said Pierre-Yves Dermagne, the Belgian Minister of Economy and Employment.
If formally adopted, the new rules will allow authorities to ban a product from the market if it is found to be made using forced labor, regardless of whether it was imported into the EU or produced within the EU.
– “This new law will be product-based, not company-based, meaning all companies will have to comply with the ban if forced labor is discovered at any step in their supply chain,” said MEP Maria-Manuel Leitão-Marques.
In such cases, products will be donated, eliminated, or recycled, unless they are of strategic or critical importance to the Union, in which case they will be retained until it is proven that there are no longer traces of forced labor. Furthermore, if only part of a product is affected, that part can be replaced without removing the entire product from the market, for example, if a vehicle component can be replaced.
– “This is a step forward in achieving fair trade and cleaning up supply chains, prioritizing human rights,” said Dutch liberal Samira Rafaela.
The provisional agreement is welcome but has some shortcomings.
For instance, the text does not include any assumption of forced labor imposed by the state, but only a list of high-risk geographical areas and sectors where such practices exist, which will have to be compiled by a commission.
– “As it stands, the regulation will not adequately address state-imposed forced labor to help the 3.9 million people forced to work by the very institution that should protect them, their government,” said Helene de Rengervé, a senior advisor to the EU at Anti-Slavery International.
The regulation also does not include an obligation to provide remediation to victims, which civil society organizations are complaining about.
The lack of mandatory remediation for affected workers in the text weakens incentives for companies to prevent forced labor and its recurrence, and to implement mitigation measures,” said Carolina Rudnik, president of the NGO Fundación Libera.
In case of non-compliance, companies will face a proportional monetary penalty determined by member states, but the regulation still does not specify a minimum or maximum prescribed penalty. The agreement still needs to be formally approved by both the Council and the European Parliament, and once it comes into force, member states will have three years to start applying the new rules.
Many brands under suspicion
As Insider reported in 2022, a large number of well-known brands have been linked or are currently linked to forced labor, particularly in the Xinjiang region of China.
Nike was accused in January 2020 of having forced female workers, mostly Uyghur women, in a factory in Qingdao.
In 2021, an investigation by The Information revealed that seven of Apple’s suppliers were linked to alleged forced labor of Uyghur Muslims and other persecuted groups in China. A report by the Australian Strategic Policy Institute in 2020 stated that Apple’s suppliers in China used thousands of Uyghurs in four factories as labor under a ‘forced relocation’ program.
The Tech Transparency Project, a nonprofit organization, accused Amazon of working with suppliers linked to forced Uyghur labor. The report states that five companies on Amazon’s supplier list for 2021 had publicly known connections to forced labor programs called ‘labor transfers’, which forcibly relocated Uyghurs to other parts of China. The report adds that evidence was found of third-party sellers on Amazon listing products containing Xinjiang cotton, which has been banned for import into the U.S. since September 2020.
In 2021, Reuters reported that a Microsoft supplier arranged the relocation of at least 400 Uyghur workers to its factory, which human rights groups called a forced labor arrangement, while the 2020 report by the Australian Strategic Policy Institute identified Microsoft among the companies that could directly or indirectly benefit from forced labor in China.
These are just some examples of companies that have found themselves in the ‘dock’, but there are many such examples across the textile, fashion, food, and tech industries.
