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14 Sep 2022

European Coalition for Corporate Justice

European Commission announces new tool banning forced labour goods

The European Commission has today released its plans for a European ban on products made with forced labour. This comes as the number of people in modern slavery has risen significantly in the last five years, with 86 percent of cases found in the private sector.

Unlike the proposed Corporate Sustainability Due Diligence Directive, the proposed regulation is not a company law instrument applicable to companies of a certain size. Rather, the ban is product-based and is therefore applicable to all companies manufacturing, selling, and importing forced labour goods within and into the EU internal market.

The proposal does not respond to the demands of civil society and victims of forced labour in several key ways. First and most importantly, there are no provisions that facilitate, compel or otherwise provide for the remediation of victims of forced labour in global value chains.

It is impossible to eradicate forced labour without remedying victims, who require remedy in order to rebuild their lives and dignity. Examples from the US Tariff Act show that it is possible for enforcement agencies to withhold banned goods in order to compel companies to exert leverage over their suppliers, as a way of ensuring remediation of victims.

The returning of passports and other essential documents as well as stolen wages are key to providing forced laborers relief from debt bondage. However, the proposed EU ban does not enshrine this powerful approach that puts victims and their rights first.

In addition, the burden of proof will be on EU authorities, not on companies. The onus will be on under-resourced EU authorities to investigate and provide determinative evidence that goods have been made with forced labour, rather than companies being expected to prove that they haven’t been. Similar to the proposed regulation on deforestation-free products, the burden to prove that their products have not been made forced labour or derived from illegally deforested areas should be carried by companies – and not overstretched authorities.

The proposed regulation is also weak on supply chain mapping and disclosure, an essential requirement needed for civil society and EU authorities to determine whether forced labour has occurred somewhere in the chain. The Corporate Sustainability Due Diligence Directive proposal also forgoes meaningful obligations on value chain disclosure, thereby hindering the capacity of civil society to assist in the process of human and environmental protection.

The Commission proposal will need to be improved by the European Parliament and the Council in these three key areas.