Our key takeaway: Can import bans be used as a tool to ensure effective remedy for those in situations of forced labour? Yes, but they are not currently being utilised to this end. The Remedy Project and The Freedom Fund draws on the US Tariff Act of 1930, which imposes an import ban on goods made in whole or in part by forced labour, to highlight how the connection between import bans and providing substantive remedies that goes beyond reimbursement of recruitment fees is not being realised. This is due to several reasons which range from a more limited definition of remediation than that referred to in the UN Guiding Principles of Business and Human Rights (UNGPs); a focus on removing indicators of forced labour rather than the provision of remedies to decide if and when to remove an import ban; a lack of engagement with workers or workers’ representatives to understand which type of remedy to provide and how workers and rights holders can be involved in the design, and implementation of the remediation processes. What can companies do now to leverage import bans as a mechanism to provide effective remedies? Quite a lot it seems. Companies can involve stakeholders, especially workers and rights holders, in the design and implementation of remedies; move away from a ‘tick-box’, compliance-based approach to addressing human rights abuses; support suppliers in their remediation efforts by using its leverage and resources; and disengage responsibly if it decides to move away from a supplier.
The Remedy Project and The Freedom Fund have published Putting things right: Remediation of forced labour under the Tariff Act 1930 (April 2023):
- Why are import bans important to companies?: The report - using the US Tariff Act of 1930 (the Tariff Act), that imposes an import ban on goods made in whole or in part by forced labour, convict labour, or indentured labour as an example - highlights how import bans present a whole host of risks for companies. This includes, inter alia, financial risk: “An import ban can place significant commercial pressure on companies to address forced labour in their supply chains or risk losing access to the valuable US export market”; and legal risk: “Import bans have also given rise to follow-on civil lawsuits against upstream companies who have been associated with suppliers that are subject to import bans.” This has driven companies to take the issue of human rights abuses much more seriously: “forced labour and human rights risks have been elevated to a boardroom level issue in many industries”; companies and industries “proactively seek to identify indicators in their supply chains”, as well as “implement systemic-level responses to address them.” All this is to say that import bans on goods made by forced labour, whether or not it was initially intended by law-makers and policy-makers, drive changes to corporate behaviour and the way that companies assess and manage human rights risks within their value chain.
- Import bans can be leveraged to provide effective remedies to rights holders as defined under the UNGPs, although this connection is not currently realised: The report states that the Tariff Act’s definition of ‘remediation’ refers to the "removal of indicators of forced labour”, which does not necessarily equate to the “provision of substantive remedies to people” as referred to in the UNGPs. This limits the Tariff Act’s effectiveness as a tool to provide remedy. While import bans have led to legal, policy, and operational level reforms to address forced labour, reimbursement of recruitment fees is the primary form of direct remedy; missing a golden opportunity to provide a more substantive remedy package to affected rights holders. The success of import bans as a tool to provide remedies is further limited by several factors: i) companies’ remediation efforts are spearheaded by a “risk-driven audit/compliance approach” which relies on social audits to demonstrate compliance with regulations; ii) efforts also involve “limited stakeholder engagement”, where workers and their credible representatives, trade unions, and civil society are not included in the development of corrective action plans, nor consulted with on the type(s) of remedies they would like to receive; and iii) “[t]here is a lack of transparency and effective communication around Remediation”, which limits the ability of civil society to hold companies accountable and ensure that remedies are provided. Notably, data shows that social audits “have limited usefulness in effectively identifying forced labour, and can, in fact, increase human rights risks.”
- Three key recommendations for companies to ensure effective remedy to workers and rights holders: The report sets out key recommendations on how to use import bans more effectively to secure access to remedies for those in situations of forced labour; with specific actions that can be taken by workers, trade unions, civil society organisations, Customs and Border, governments, and the private sector. Companies can i) “Meaningfully engage with workers and civil society in the design, development, and implementation of Remediation processes; ii) “Adopt a rights-based, not a compliance-based, approach to remediation”, which places people at the centre of the response. “Companies that choose to adopt a ‘tick box’ or compliance-driven approach to remedy may find that they have failed to properly identify and address the root causes of forced labour - leaving them exposed to future enforcement action”; iii) “[Support] Remediation efforts undertaken by their suppliers.” If a supplier receives an import ban, the company should “avoid immediately ‘cutting and running’ - especially if the supplier is willing to undertake Remediation. Instead, the international company should seek to use its leverage and offer its resources to help the supplier with its Remediation efforts.” In the event that the company has decided to terminate its relationship with a supplier, it should ensure that it “responsibly disengages in a way that minimises the potential adverse effects for workers and rights holders.”