Products Of Forced Labour: Actions For Businesses Selling Into (And From) The EU

• Published date: 13 October 2022
• Subject Matter: Corporate/Commercial Law, Government, Public Sector, Compliance, Corporate and Company Law, Human Rights
• Law Firm: Gowling WLG
• Author: Mr Kieran Laird and Emma Kensett

On 14 September 2022, the EU Commission published its legislative proposal to ban all products made with forced labour from the EU market, irrespective of their type and provenance (the Forced Labour Regulation).

In this article, we outline the key processes underpinning the Forced Labour Regulation and consider the actions that businesses may take to prepare for its implementation. Due diligence will be one of the most important of those actions and, as such, the Forced Labour Regulation comprises part of the same human rights package as the proposal for a new directive on "Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937" published on 23 February 2022 (the DD Directive).

Background

The Forced Labour Regulation was first addressed in President von der Leyen's State of the Union speech on 15 September 2021 and subsequently in the Commission Communication on Decent Work Worldwide presented on 23 February 2022.

We have previously explained the obligations that are going to be imposed on companies of a certain size through the DD Directive, both in an earlier insight article on business and human rights and in our webinar on supply chains in March 2022.

The proposed DD Directive will require companies falling within its scope to identify and, where necessary, prevent, end or mitigate adverse impacts of their activities on human rights (including forced labour). Such considerations will be key to a business' ability to demonstrate compliance with the Forced Labour Regulation.

The DD Directive currently remains with the European Parliament and the Council for review. Once in force, Member States will have two years to transpose the Directive into national law. The obligations it imposes are unlikely to come into force earlier than 2025.

It is expected that the Forced Labour Regulation will come into force on the same timeline and will be directly effective across EU Member States, without the need for implementing national legislation.

The new instrument is designed to prevent barriers to the movement of goods arising from divergent national approaches; to promote a uniform enforcement regime; and to ensure a level playing field for businesses operating within the EU.

What will the ban look like in practice?

The central provision of the Forced Labour Regulation is a broad prohibition laid down in Article 3. This states that: "Economic operators shall not place or make available on the Union market products that are made with forced...