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EU and US Forced Labor Laws
HUMAN RIGHTSLAWFORCED LABOURSUPPLY CHAIN
Sophia Monney
8/27/20247 min read
Over the last 24 years, human trafficking has undergone “labourfication”, morphing the term known today as modern slavery, which brings forced into the picture. As per the international definition, found within the ILO Forced Labor Convention of 1930, forced labour can be defined as “all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily” except for any person conducting work under compulsory military service or person convicted in the court of law (ILO Forced Labor Convention). It has repercussions across all population groups, although some are more vulnerable than others such as children, women and migrant workers. Consequently, it has become a great concern for nation states, especially the European Union (EU) and the United States (US), who both play an active role in the global supply chain.
These regions have continued to be the primary beneficiaries of these practices. The ILO highlights that the EU, combined with Central Asia, receive a profit of US$84 billion from forced labor with similar figures found in the Americas (US$52 billion). However, due to the underground and transnational nature of these acts it is important to note that this is only an estimate, and the correct amount may vary. Nonetheless, the growing focus of the EU and US to tackle this issue, enforce the right, and induce companies to comply with state regulations has caused both regions to adopt more stringent regulations in recent years. As a result, this article endeavors to compare and contrast the labor laws that are currently in place in the EU and the US, with the ultimate goal of comprehending the potential global trends.
Regulations found in the US and EU:
To start, the US initially established the definition of forced labor through Section 307 of the Tariff Act of 1930, emphasizing the significance for businesses to acknowledge and mitigate forced labor in their supply chains. Their definition is consistent with the ILO Convention, while also delving into the realms of indentured, convict, and child labor (Human Trafficking Legal Center). In addition, as a response to the ongoing Uyghur crisis, Congress enacted the UFLPA in 2021 with the purpose of addressing concerns surrounding the use of forced labor in the manufacturing process. This regulation encompasses not just the end products, but also encompasses any constituent or raw material incorporated in the production, which may have been procured from the Xinjiang Autonomous Uyghur Region of China (Rivlin, 2024). The scope of these regulations encompasses activities within the country’s boundaries, but also extends extraterritorially to include US citizens and companies operating abroad (Rivlin, 2024). Nevertheless, the implementation of extraterritorial enforcement measures has been somewhat limited.
Conversely, the European Union has persistently prioritized the elimination of forced labor by consistently advocating for fair employment and the absence of coerced labor. As a case in point, the EU charter of Fundamental Rights clearly prohibits the use of forced labor, imposing obligations on both EU institutions and member states in the execution of EU legislation (Hennig, 2024). Moreover, the trade policy of the European Union, in both unilateral and bilateral trade relations, guarantees the inclusion of a commitment to ratify and enforce the ILO Conventions №29 and 105 in trade agreements (Hennig, 2024). Nonetheless, the European Union’s ongoing presence in the global forced labor supply chain has compelled them to implement additional regulations, including the most recent one enacted on April 23, 2024. The regulation, commonly referred to as the Forced Labor Regulation, forbids the presence of products made using forced labor or child labor in the EU market (Hennig, 2024). This includes products manufactured within the EU for both domestic and export purposes. This aligns with the requirements for supply chain monitoring outlined in the Corporate Sustainability Due Diligence Directive (CSDDD), officially endorsed by the Council on March 15, 2024 (Hennig, 2024). Clearly, this reinforces the EU’s commitment, as well as that of its member states, to combat forced labor. Importers and exporters must now dissociate from suppliers employing forced labor in their production processes.
Both the United States and the European Union have taken decisive actions to strengthen their dedication to eliminating forced labor in their supply chains and addressing infringements on these rights. Nevertheless, the degree of accountability for companies and individuals who contravene these regulations is heavily influenced by the enforcement and monitoring mechanisms implemented within each region.
Enforcement and monitoring mechanisms in the US and EU:
Firstly, the United States has introduced an enforcement mechanism, led by the Customs and Border Protection (CBP), to restrict the importation of goods produced either wholly or partially using forced labor. The process of their enforcement is displayed beneath.
CBP Forced Labor Enforcement Process
https://www.cbp.gov/trade/forced-labor#Enforcement%20Process
The principal enforcement mechanism employed is the Withhold Release Order (WRO), which is initiated by the CBP upon obtaining substantiated evidence suggesting the use of forced labor in the production of goods. In this case, the authorities detain the merchandise and await the firm’s response, which should substantiate that the product was not manufactured using forced labor. Should the findings reveal insufficient evidence, the goods will be seized and the importer may be subject to further penalties. Additionally, the importation of goods into the United States, which are believed to be produced in China’s Xinjiang Autonomous Uyghur Region, constitutes a clear violation of UFLPA and will be denied entry, unless the importer meets the criteria for an exception, provided they fully adhere to any requests made by CBP. The extent to which these regulations were effective was examined by the Anti-Slavery International Organisation. Their research indicated that the UFLPA enabled US customs to detain over 4,000 shipments, valued at approximately US$ 1.4 billion (Turner, 2023). Moreover, there has been a growing demand for companies to disclose their supply chains and enhance transparency regarding the materials and processes involved in goods production (Turner, 2023). The consequences of this transcend the regulation itself and establish a firm groundwork for companies that persist in arguing the difficulty of tracing the origins of their goods, as they are now mandated to do so under the right circumstances (Turner, 2023).
However, it is worth noting that although 1.4 billion may seem significant, it represents only a small proportion of the profits amassed by US companies. The United States ought to enhance and fortify their enforcement endeavors through the targeting of indirect import routes, the expansion of sectors prioritized by the CBP, and the prevention of firms from clandestinely smuggling complicit goods via small shipments (Turner, 2023).
Conversely, the regulations imposed by the EU regarding forced labor require every member state to incorporate EU law into their domestic legislation. To illustrate, in relation to the new regulation (FLR), the EU Commission is assigned the duty of issuing guidelines to both economic actors and the concerned authorities, aiding them in meeting the requirements of the new legislation (Hennig, 2024). Additionally, the FLR will encompass the development of a database containing verifiable and indicative information on forced labor risks (Hennig, 2024). Its purpose is to enable member states to ensure their adherence to regulations. Moreover, the determination of whether to ban goods will be entrusted to the investigating authority. The Commission has oversight over goods beyond the EU, while national authorities will take the lead in investigations for risks within their own territory (Hennig, 2024). Nonetheless, in the event that a national authority chooses to prohibit a product, the decision will extend to all other Member States, as per the principle of mutual recognition (Hennig, 2024). The condition for overturning this lies in the ability of the economic operator to substantiate the complete elimination of forced labor from their operations and supply chains. The impact of such strict regulations necessitates that firms gather detailed information from manufacturers and suppliers to maintain transparency in their operations. Failure to comply with decisions from national authorities and the EU will result in penalties under national law, with penalties designed to be effective, proportional, and dissuasive (Hennig, 2024).
Clearly, this new regulation has the potential to enhance social sustainability initiatives and cultivate consumer confidence and public trust in products within the EU market. This will enhance the existing efforts of the CSDDD, which mandates large corporations to conduct due diligence in order to identify their current and potential negative effects on human rights and the environment (Hennig, 2024). However, it is worth noting that the FLR implemented by the European Union does not provide clear guidelines regarding the ban on logistical services, particularly in relation to product distribution and transport (Hennig, 2024).
To summarize, the development of forced labor legislation in the EU and US provides hope for a future that prioritizes human rights. There has been a growing awareness about the immediate need to confront forced labor, both within supply chains and in other areas. Notable efforts have been made by both regions to reinforce legislation, strengthen enforcement mechanisms, and promote collaboration among stakeholders. Despite the persistent challenges posed by global supply chains and the necessity for enhanced international cooperation, the advancement of forced labor legislation in the EU and the US is unquestionably optimistic. By persistently placing human rights at the forefront, empowering workers, and ensuring accountability, these regions can establish themselves as exemplars in the global effort against forced labor.
References
Hennig, Denise. “EU’s Forced Labour Regulation Adopted by the European Parliament — Scope and Impact.” Gorrissen Federspiel, 24 Apr. 2024, gorrissenfederspiel.com/en/eus-forced-labour-regulation-adopted-by-the-european-parliament-scope-and-impact/.
Rivlin, Kevin. “Increased Focus on Forced Labor in the US and EU.” Increased Focus on Forced Labor in the US and EU — A&O Shearman, 27 Mar. 2024, www.aoshearman.com/en/insights/increased-focus-on-forced-labor-in-the-us-and-eu-enforcement-and-legislation.
Turner, Jess. “What Is the Impact of the US Uyghur Forced Labor Prevention Act One Year on? — Anti-Slavery International.” Anti, 26 June 2023, www.antislavery.org/latest/uyghur-forced-labor-prevention-act-one-year-on/.
Human Trafficking Legal Center. “Short Guide on Section 307 of the US Tariff Act of 1930.” The Human Trafficking Legal Center, 2017, htlegalcenter.org/wp-content/uploads/Short-Guide-to-Section-307-of-the-Tariff-Act_English.pdf.