Last week, the European Commission proposed a comprehensive ban on products made using forced labor(Opens in a new window) coming in and out the EU market, which follows a European Parliament’s call for such a law over human rights concerns in China's Xinjiang region. Even though the proposal hasn’t specified a single country or region, it would increase pressure on companies to monitor their supply chains.
The new proposal is still at its early stages, but a few main points are:
- Prohibit products made with forced labor from being imported into the EU market or exported, regardless of where they were made.
- Come into effect 24 months after the rules are placed on the statute books, meaning it would apply from 2025 onwards, at the earliest.
- Use the ILO’s definition of forced labor: “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”
- Member-state customs authorities will be responsible for investigations based on information collated by the EU and external submissions from civil society organizations. They will also prevent products from freely circulating within the EU and exports when forced labor usage is discovered. Businesses would then be required to dispose of the products.
- Empower member-states to penalize non-compliant companies, however, no further detail is provided.
- Allow authorities to take decisions based on best available evidence, in the event companies and non-EU countries refuse to cooperate.
- Unlike the corporate sustainability and supply chain due diligence proposal(Opens in a new window), which applies solely to larger companies, the new proposal will cover smaller companies.
- The new proposal does not want to explicitly single out China, like America’s Uyghur Forced Labor Prevention Act, but will have implications to companies who source from China.