Brand watch: Business offers careful support for the EU’s ban on forced labor goods

July 19 – Businesses are broadly behind a proposed ban on products linked to forced labor in Europe, despite various important provisions.

The new rules will see goods detained at EU borders where there is “sufficient evidence” of forced labour.

BusinessEurope, the Brussels-based confederation of 40 national industry bodies and employers’ associations, reaffirms its broad position in condemning forced labor by EU-based companies as a human rights violation.

According to the International Labor Organization (ILO), an estimated 24.9 million people are victims of these abuses, which include debt detention, restrictions on movement and denial of identity documents, and other illegal practices.

The issue is “not new”, but the Brussels-based lobby group argues that any new rules should take account of initiatives launched at company level and sector-wide to tackle the problem.

“Companies are increasing their efforts to solve problems in their supply chain (and) it is important that these efforts are recognized and supported,” the business group says.

In addition, BusinessEurope is asking for the extension of the public consultation process, which generated 107 responses over a four-week period until 20 June 2022.

The business group argues that this delay will allow for a formal assessment of the impact of the ban, including rules governing product classification in the EU, which it argues have “worked well for decades”.

Similarly, the International Chamber of Commerce (ICC) has stated that any activity that could “further complicate” companies’ existing obligations should be avoided.

Florence Binta Diao-Guye, ICC Global Trade and Customs Policy Manager, said: “As more and more countries introduce laws related to forced labour/modern slavery with different requirements, it risks becoming a complex regulatory environment.

The global lobby group, which counts 45 million businesses with 1.2 billion workers among its members, supports the continuation of a “risk-based approach” based on guidelines from the United Nations, the ILO and the Organization for Economic Co-operation and Development (OECD). .

More specifically, the ICC draws the attention of European legislators to the new US Uyghur Mandatory Labor Protection Act, 2015. Effective June 21, 2022.

This new act would prohibit companies in the United States from importing any goods from China’s Xinjiang province, where reports of forced labor are most common. The only exception is if importers can show “clear and convincing evidence” that international employment standards are met at all levels.

The case raises further concerns about the applicability of the EU-wide ban. To be effective, governments must be open to sharing information and co-developing best practices with “good actors” in the business community.

An influential group of US trade groups, including the National Retail Federation, the Fashion Industry Association of the US, the Retail Industry Leaders Association and the Apparel & Footwear Association of America, argues that.

As the group said in a joint statement to the EU Commission: “Without these features, enforcement becomes more of a game of gotcha, targeting good and bad actors and making it ineffective and ineffective.”

Of particular concern is the over-reliance of government officials on press reports and activist surveys as evidence of corporate culpability. Although such resources may be grounds for further investigation, the group, by themselves, will not be proof of guilt.

Such reports may be based on “outdated or inaccurate” data, the trade association added, adding that “the industry should have an opportunity to respond before concluding that some supply chains are tainted by forced labour.”

In addition to their own internal processes, large buyers now rely heavily on checks by third-party verifiers to detect labor issues in their supply chains.

According to Swedish retailer IKEA, such checks are often carried out under multi-stakeholder initiatives or independent certification schemes.

So far, however, the home goods brand has “not been aware” of any approach that could address the extent of forced labor, he says.

In order to pursue a “mutual understanding” between businesses and governments, IKEA believes that the European authorities should check the existing plans to determine which ones are in line with the EU requirements and which improvements can be made.

In the meantime, companies should be allowed to declare themselves “certain international standards” strictly, the Swedish retailer argues.

Determining where accountability lies in the supply chain is another bone of contention. The issue is important because forced labor often occurs among small firms on the fringes of a large buyer’s supply base, thereby absolving the latter of liability.

To avoid such a situation in the future, IKEA would like to see EU rules place the ultimate responsibility on the trader or operator who places goods into the European single market.

Similarly, IKEA would like to see the European Commission provide financing, training and capacity building, among other support mechanisms, to support companies operating in high-risk regions.

Such a move would reduce the risk of buyers suddenly withdrawing from countries where the risk of forced labor is high, with “adverse effects” on people legally employed in these markets, the company said.

Similar concerns about the knock-on effect on legal workers are shared by labor groups and human rights organizations.

The Corporate Accountability Lab, a US-based non-profit, has in the past warned of “disastrous consequences” for buyers fearing import bans.

“Instead of dealing with forced labor issues, companies may close and lay off workers, leaving workers in a worse situation – in some cases unemployed in foreign countries with no way to pay debts or return home,” he said. The campaign team explains.

Anti-Slavery International, a UK-based charity, voices similar concerns, although it takes a hard line on state-imposed forced labour. In such cases, consideration of unintended consequences is “nothing acceptable,” he says.

To avoid the problem, the charity suggests that the enforcement authorities should set a grace period. The proposal gives companies time to introduce preventive, mitigation and corrective measures.

A grace period of weeks or months would provide “a stick to force corrective measures and solutions and promote transparency by companies,” Anti-Slavery International continues.

According to the current timetable, the European Commission intends to formally adopt the import ban proposal before the end of September 2022.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and impartiality under the principles of integrity. Continuous Business Review, part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.