With an estimated 25 million people in forced labour positions globally, the European Commission (EC) recently published guidance for EU businesses on due diligence to reduce the risk of forced labour in their supply chains. We break down the key points below.
What is forced labour?
The EC refers to the internationally recognised definition of forced labour (ILO Convention No. 29 on Forced Labour) as “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily”. Examples include:
- Imposing forced labour on detained individuals;
- Use of irregular, delayed, deferred or non-payment of wages as a means to bind employees to employment;
- Restrictions of the ability of workers to change employers or allowed to leave host country without the permission of employer;
- Forced overtime or the use of irregular, delayed, deferred or non-payment of wages as a means to bind employees to employment.
Effective due diligence in the context of forced labour
As stated in the guidance, effective due diligence is an ongoing, proactive and reactive process aimed at achieving continuous improvements in the supply chain. Due diligence should be commensurate with risks and bespoke to the specificities of an organisation and extends to all stakeholders and operations within its supply chain.
Using the OECD due diligence framework as a reference, effective due diligence consists of a six-step framework :
- Embed responsible business conduct into the company’s policies and management systems
- Identify and assess actual or potential adverse impacts in the company’s operations, supply chains and business relationships
- Cease, prevent and mitigate adverse impacts
- Track implementation and results
- Communicate how impacts are addressed
- Provide for or cooperate in remediation when appropriate
When implementing due diligence procedures in the context of forced labour, the guidance lays out the following specific considerations:
- Tailoring policies and management systems to the risk of forced labour. This includes stipulating a “zero-tolerance policy” for forced labour, providing a safe space for whistleblowers and ensuring all stakeholders understand what constitutes forced labour.
- Paying attention to ‘red flags’ when sourcing suppliers, such as countries that have poor track records of compliance with international labour laws, employing migrants informally or coercive debt risk factors.
- Strengthening risk assessments based on the risk level of suppliers or supply chain segments with independent and announced assessments, interviews with workers in a secure environment and other engagement/ assessment measures.
- Providing support for suppliers and business partners to implement agreed on corrective action plans, including financial support where appropriate.
In its guidance, the Commission also refers to its forthcoming Sustainable Corporate Governance legislation, which was announced in the European Commission 2021 Work Programme. This will also include corporate due diligence obligations concerning forced labour.
Responsible supply chain conduct by European countries is crucial in ensuring that EU human rights and forced labour policies are effectively implemented and upheld.
CSR experts within the Eurofins Consumer Products Assurance network can tailor-make ethical programmes that best suit the needs of your company. Find out more now or contact us to discuss your proposal.