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12 Apr 2021

Re:Structure Lab

Re:Structure Lab brief highlights inadequacy of transparency legislation in addressing forced labour in global supply chains & calls for mandatory due diligence

“Due Diligence and Transparency Legislation”, April 2021

  • Forced labour and human rights abuses of workers are endemic across several sectors of the global economy … governments … have introduced legal frameworks designed to encourage … [corporate] responsibility for tackling this abuse in global supply chains.
  • Transparency legislation, a dominant mode of regulation, is not working. Academic research has highlighted major weaknesses in the effectiveness of transparency legislation to influence corporate behaviour…
  • Fortunately, there are potential solutions … mandatory human rights due diligence legislation (mHRDD) should be passed requiring companies to address adverse human rights impacts, including forced labour, linked to their supply chains. mHRDD introduces a new duty on corporations to carry out robust human rights due diligence across their entire supply chains and it can be combined with strong sanctions…
  • Whilst governments should focus efforts on introducing mHRDD laws, work should also be taken to reform transparency legislation where it is in place, through the addition of criminal, civil, and administrative accountability measures for false reporting or failure to report…
  • These measures will contribute to, and can be complemented by, broader legal reforms and initiatives to effectively regulate 21st century corporations and their supply chains to ensure they are no longer hard-wired to produce exploitation…
  • Implementing effective mHRDD legislation and practices will necessarily disrupt the status quo of how business is currently done in global supply chains, including value distribution and the role of workers within governance. These issues are explored within other briefs in this series.