EU acts to break the forced labour business model

The EU may have ditched the Corporate Sustainability Due Diligence Directive (CSDDD) for the time being but opponents of strict liability for human rights and environmental abuses within European organisations’ supply chains now face a new regulation banning products made with forced labour. Human rights groups were shocked by the refusal of leading EU member states such as Germany and Italy to approve the CSDDD, saying that they were effectively rubber stamping the abuse of labour and the environment by European corporations worldwide. But they will be pleased to hear that shortly after the CSDDD debacle, the Council and the European Parliament have reached a provisional deal on a regulation prohibiting products made with forced labour from the EU market, which was originally tabled by the Commission in September 2022. The provisional agreement supports the main objective to prohibit the “placing and making available on the EU market, or the export from the EU market, of any product made using forced labour,” said the EU. The deal introduces significant modifications to the original proposal that clarify the responsibilities of the Commission and national competent authorities in the investigation and decision-making process. “It is appalling that in the 21st century, slavery and forced labour still exist in the world. This hideous crime must be eradicated and the first step to achieve this consists in breaking the business model of companies that exploit workers. With this regulation, we want to make sure that there is no place for their products on our single market, whether they are manufactured in Europe or abroad,” said Pierre-Yves Dermagne, Belgian deputy prime minister and minister for the economy and employment. Co-legislators have agreed that, to facilitate the implementation of this regulation, the Commission will create a database containing verifiable and regularly updated information about forced labour risks. This will include reports from international organisations, such as the International Labour Organisation. The provisional agreement sets clear criteria to be applied by the Commission and national competent authorities when assessing the likelihood that the regulation has been violated. These criteria are: The scale and severity of the suspected forced labour, including whether state-imposed forced labour may be a concern. The quantity or volume of products placed or made available on the Union market. The share of the parts of the product likely to be made with forced labour in the final product. The proximity of economic operators to the suspect forced labour risks in their supply chain as well as their leverage to address them. The Commission said that it will issue guidelines for economic operators and competent authorities to help them to comply with the regulation, including best practices for bringing to an end and remediating different types of forced labour. These guidelines will also include accompanying measures for micro, small and medium-sized enterprises, which will be available through the Commission’s Forced Labour Single Portal. Under the proposed rules, the Commission will be leading investigations outside the EU territory. National competent authority’s will investigate within their own borders. “If competent authorities, while assessing the likelihood of violations of this regulation, find new information about the suspected forced labour, they must inform the competent authority of other member states, provided that the suspected forced labour is taking place in the territory of that member state. Similarly, they must inform the Commission if the suspected forced labour is occurring outside the EU,” said the EU. “The final decision (i.e. to ban, withdraw and dispose of a product made with forced labour) will be taken by the authority that led the investigation. The decision taken by a national authority will apply in all other member states based on the principle of mutual recognition,” it added. “In cases of supply risks of critical products made with forced labour, the competent authority can decide not to impose its disposal, and instead order the economic operator to withhold the product until it can demonstrate that there is no more forced labour in their operations or respective supply chains,” it explained. “The provisional agreement clarifies that if a part of the product which is found to be in violation of this regulation is replaceable, the order to dispose of applies only to the part concerned. For instance, if a part of a car is made with forced labour, that part will have to be disposed of, but not the whole car. The car manufacturer will have to find a new supplier for that part or make sure that it is not made with forced labour. However, if tomatoes used to make a sauce are produced using forced-labour, all the sauce will have to be disposed of,” added the EU.

EU acts to break the forced labour business model

Council and parliament focus on forced labour law despite failed CSDDD

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