Our key takeaway: What happens in the U.S. does not stay in the U.S… unless it’s forced labour. A trade ban on goods made by forced labour is coming our way here in the EU. Those who have been following this recall that European Commission President Ursula von der Leyen announced last year that a ban was coming, and the European Commission confirmed this in its February 2022 communication on decent work worldwide for a global just transition and a sustainable recovery. The European Parliament has now just made clear that introducing a ban on products made by forced labour is a political priority of both the Parliament, and the EU as a whole. Its resolution makes clear that products made by forced labour should be stopped at the EU borders; and that NGOs, affected workers and other stakeholders should be able to provide relevant information on company activities to public authorities to enable this ban to happen. Companies would be able to get their products unblocked if they provide evidence that proves an absence of forced labour based on ILO standards. The European Parliament makes clear that this trade instrument is one piece of a broader puzzle, bigger picture items include tackling the issue at its roots and undertaking human rights due diligence under the proposed Corporate Sustainability Due Diligence Directive. The European Commission is expected to present its proposal after the summer.
On 10 June 2022, the European Parliament adopted a resolution calling for an import ban on products produced with forced labour from entering the EU market:
- The trade ban in short: This trade instrument would ban the import and export of products made or transported by forced labour. In other words, “under the new EU instrument, public authorities, on their own initiative or acting on information they have received, should detain goods at the EU border when they consider that there is sufficient evidence that these goods were made or transported with forced labour.” The importer would be provided “the opportunity to refute this accusation by proving that the goods were not made or transported with forced labour, which may then lead to the release of the goods.” The resolution makes clear that the European Commission, as well as national authorities, should be empowered to launch investigations. In addition, “public authorities should be able to act on the basis of information provided by stakeholders, NGOs or affected workers and through a formalised and secure complaints procedure such as through the Single Entry Point.” The determination of forced labour would be based on the ILO forced labour indicators, including its ‘Hard to see, harder to count – Survey guidelines to estimate forced labour of adults and children.’ In addition, the trade instrument would “allow for bans on forced labour products from a particular site of production, a particular importer or company, those from a particular region in the case of state-sponsored forced labour and those from a particular transport vessel or fleet.”
- Focus on remediation: The resolution calls on the European Commission “to ensure that the new EU instrument requires the responsible companies to provide remediation to the affected workers prior to import restrictions being lifted” and “calls for the monitoring of remediation and corrective actions to be undertaken in cooperation with relevant stakeholders, including civil society organisations and trade unions.” Note however that the European Coalition for Corporate Justice, in its reaction to the resolution, emphasizes further the need for the future trade instrument to “put victims first and be remedy-centered.”
- Effectiveness and complementarity: The resolution emphasizes that the ban by itself will not tackle forced labour. Specifically, “forced labour is a complex phenomenon and a ban on forced labour products will not be sufficient to eradicate forced labour and tackle the issue at its roots.” Therefore, “the EU should also focus on dialogue with non-EU countries, technical assistance, capacity building and awareness raising” and “actively work at multilateral level to find collective solutions in order to eradicate forced labour.” The resolution makes clear that the effectiveness of this ban “will depend on several factors such as the percentage of global sectoral demand that participates in the boycott; the costs and viability for exporting firms of trade diversion, trade reallocation or product transformation; suppliers’ market power; and how the host government responds to external pressure.” The resolution also speaks to complementarity with the corporate sustainability due diligence rules, and the need to build on relevant experiences with trade bans in the U.S. and Canada.