From Disappointment to Determination: Navigating Beyond the Stalled EUCS3D Towards an EU Ban on Products Made Using Forced Labour.
Natasha Peacock
Sustainable and Inclusive Supply Chain/ Human Capital/ Human Rights/ Socially Transformative Businesses
27.6 million people in forced labour.
As the dust settles on the disappointment of the EU's failure to reach an agreement on the much-anticipated Due Diligence Directive, there remains a chance to move the agenda forward. While not a direct replacement, we can still pin our hopes on the success of the trilogue negotiations for the EU ban on goods with forced labour, scheduled for March 4. Should both the directive and the regulation eventually come through, we will begin to make real progress toward ensuring consumers can trust in products being free from forced labour.
Forced labour, including forced child labour, is still widespread. The International Labour Organization (ILO) estimates that globally there are around 27.6 million people in forced labour, of whom 3.3 million are children. Forced labour, as defined by the ILO, is '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'. It refers to situations in which persons are coerced to work either using violence or intimidation or by more indirect means, such as manipulated debt, retention of identity papers, or threats of denunciation to the immigration authorities.
Whether the voices of discontent are loud enough to put pressure on the EU members to find a last-minute alignment on the due diligence directive is yet to be tested. Still, hopefully, the show of support for legislation that tackles forced labour in economies will give further backing to the trilogue negotiations on an equally important regulation to address the same topic. The proposal for a regulation on prohibiting products made with forced labour on the Union market is in trilogue negotiations next week, 4 March 2024. An agreement then would make up for some of the disappointment of the failed show of support for the due diligence directive.
The proposed regulation is a ban on products made using forced labour, including child labour, on the European Union (EU) internal market. The proposal covers all products made available in the EU market, whether made in the EU for domestic consumption and for export or imported. EU Member States would oversee enforcing its provisions, and their national authorities would be able to withdraw products made using forced labour from the EU market. Customs authorities would identify and stop such products at EU borders.
The due diligence directive is much needed but the import ban under deliberation, whilst it has attracted less attention in media than its peer, should still begin to put more accountability into supply chain management, possibly with faster impact as well.
Narrow focus on forced labour: The regulation, if passed, will be narrower than the CS3D. CS3D would cover a broader set of sustainability ambitions with both human rights and environment. The proposed forced labour import ban regulation covers only forced labour, one of many human rights topics.
Import bans and due diligence directives are complementary: Both types of legislation are needed as they complement each other and are not interchangeable. Import bans are a way for governments to add short term compliance with immediate sanctions whereas due diligence requirements address broader risks as part of day-to-day business operational controls. The due diligence requirement is clear on steps that need to be taken so may feel higher in administrative burden. Regardless of which type of legislation is enacted companies will need to take steps for greater supply chain visibility to ensure business continuity and reduced risk.
Regulation is faster to enact than a directive: In the context of the European Union a regulation is binding and directly applicable in all EU member states, while directive is not directly applicable and requires transposition into national law by each member state. Because of this, a regulation will come into effect faster than the directive would have should the trilogue negotiations be fruitful.
Another benefit of a regulation is that a regulation does not allow any flexibility or discretion on how to implement it which increases the chance of a harmonised enforcement. A directive like CS3D would provide guidelines and objectives for member states to achieve but at the same time granting them some room for adaptation and variation.
We should not give up hope on a resuscitated CS3D directive, but as a fall-back, we can pin our hopes on successful trilogue negotiations of the EU ban for goods with forced labour on March 4. Should both the directive and the regulation come through eventually, then we can really start making headway into ensuring consumers can be confident in products free from forced labour.
I previously wrote about how Boards and Leaders can support risk-based due diligence by clarifying the businesses’ honest intent to enforce sustainability, to provide clarity of organisational ownership and to ensure resourcing is in place. These are the foundations for operational initiatives to be sustained. You can read more here.
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Sources
Prohibiting products made with forced labour on the Union market | Subject files | Home | IMCO | Committees | European Parliament (europa.eu)
EU confirms guidelines on forced labour ban amidst criticism - Business & Human Rights Resource Centre (business-humanrights.org)
As a proud Generation Xer, the qualities of being resourceful, independent, and balanced are the ones that define me. I have used these qualities to carefully craft my career as a Business Professional.
10moNatasha Peacock To further fight against forced labor, increased monitoring in supply chains, promoting ethical sourcing practices, empowering workers' rights, and fostering international cooperation are essential steps to eradicate this inhumane practice.
VP, Strategy and Marketing
10moThank you Natasha. Really like your nuanced perspective on such a key topic.