Upcoming ban on the EU market against products made with forced labour

Today, nearly 28 million people worldwide are in forced labour, the majority of which takes place in the private sector. As part of combating this, the Commission has on 14 September 2022 adopted a proposal for a directive to ban products produced with forced labour on the EU market. The proposal has a comprehensive approach and covers all products, both those manufactured within the EU for national use or export, as well as imported goods. The aim of the proposal is not to single out certain countries or industries, but to effectively ban the sale of products that have been produced with forced labour.

Background

The proposal follows a commitment made by the Commission last year, when Commission President Ursula von der Leyen gave a speech on the working conditions in the Union. In July 2021, the Commission and the European External Action Service presented guidance to assist EU companies on how to address the risks of forced labour in their respective operations and supply chains and thus promote decent working conditions. This was a step towards mandatory and comprehensive due diligence legislation. In the proposal for a directive on corporate sustainability due diligence for companies (which we have described, inter alia, in this previous article) that was adopted in February this year requirements were proposed for companies to have due diligence processes in place to identify, prevent, minimize and report actual and potential negative consequences for human rights, here including workers’ rights, and the environment in the companies’ global supply chains.

The proposal for this directive builds on internationally agreed definitions and standards, and underlines the importance of global partnering. National authorities will have mandate, after careful investigation, to stop the sale of products on the EU market that have been manufactured with any type of forced labour.

Definition of forced labour

The definition of forced labour shall be in line with definition by the International Labour Organization (ILO) Convention No. 29, adopted 1930, namely “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”. Convention No. 29 is one of ILO’s core conventions and aims to combat forced labour around the world.

How to ensure that forced labour does not occur?

The proposal means that authorities in EU Member States will be able to carry out investigations of products when there are well-founded reasons to believe that these have been produced with some form of forced labour. The authorities can then request information from companies and carry out inspections, including in countries outside the EU. If an authority finds that a product has been produced with forced labour, it must stop the production of the product, withdraw existing sales and ban the export of the product. Companies that have produced or purchased the product may not continue to sell or export it, but must dispose of the product.

In their investigations, the authorities shall apply a risk-based method and observe the principle of proportionality. In the proposal, it is taken into account that small and medium-sized enterprises (SMEs) are not always as resourceful as bigger companies and this will be taken into account when the authorities make their respective investigations. The SMEs are thus not exempted from the requirements, but their size and financial resources will be considered in connection with the execution of an investigation into whether a product was manufactured with forced labour.

What are the next steps?

The proposal will now be discussed by the European Council and the European Parliament. This means that amendments may be made to the proposal before a final directive is in place. The directive will apply 24 months after its entry into force. Given the broad scope of the proposed rules and the European Commission’s accompanying proposal for a directive on Corporate Sustainability Due Diligence, there is reason for companies to review their operations, their production and their supply chains already at this point.