Today, the European Union approved a law forbidding the sale in the EU of products made with forced labor, a decisive step in combatting this abusive practice and holding corporations to account.
The Forced Labor Regulation (FLR) will require authorities of all EU states to ban from the EU market any products or components which have been made, in part or whole, with forced labor. It will target perverse incentives enabling companies to benefit from forced labor in their supply chains.
The 2022 ILO Global Estimates on Modern Slavery estimated that 17.3 million people are victims of forced labor exploitation in the private sector worldwide; an 8 percent increase between 2016 and 2021. Another 3.9 million people are victims of state-imposed forced labor (SIFL) in areas such as the Xinjiang Uyghur Autonomous Region in China, Turkmenistan and North Korea. According to a recent ILO report on the economics of forced labor, companies’ profit from forced labor in the private sector is US$63.9 billion annually.
The regulation, if properly enforced, will prompt companies to eradicate forced labor from their operations and supply chains. It will complement the adoption, earlier in 2024, of the EU Corporate Sustainability Due Diligence Directive which requires big companies to set up meaningful due diligence processes throughout their supply chain to identify, prevent, mitigate, and remedy environmental damages and human rights abuses according to a risk-based approach.
Effective enforcement, however, will require the European Commission and EU member states to significantly boost their capacity to investigate and effectively ban products made with forced labor. The Commission should begin by identifying Xinjiang, Turkmenistan, and North Korea as high-risk countries or regions experiencing state-imposed forced labor in a new forced labor risk database, mandated by the legislation. That will make it easier for investigators to target products tainted by forced labor and lay the ground for a systemic change.
EU’s Commissioner-designate for Trade, Maroš Šefčovič, has promised to rebalance ties with China and to be “more assertive in challenging structural imbalances and unfair practices” including “non-market policies driving overcapacity.”
The next European Commission should make sure the FLR will finally empower the EU to legally tackle this severe form of human rights violations, and the unfair business advantage it provides to all industries, including when it is state-imposed.
