The instrument would complement the European Commission’s Proposal for a Directive on Corporate Sustainability Due Diligence which was published on February 23rd 2022, as well as the Commission’s due diligence guidance, released in July 2021. Whilst the due diligence law is focused on companies’ behaviour, restrictions or bans would be placed on products stemming from severe human rights violations on the basis that they should not be allowed to enter the EU at all.

Parliament recommends that such products be banned on the basis of production site, importer, company, transporter, or the particular region in case of state-sponsored forced labour. It is recommended that national authorities with “sufficient evidence” of forced labour have the power to immediately stop the goods at their borders. Evidence of forced labour in this context would be measured against the International Labour Organisation (ILO) indicators.

“Although we cannot always control companies’ behaviour, nor address all human rights concerns around the globe, we can and should stop products at our borders from coming in when they are made through forced labour and require the importers to show evidence that the situation is addressed.”- Anna Cavazzini, MEP.

The instrument is recommended to be implemented on a legal trade basis. This approach and the principles behind the proposed instrument are analogous to the U.S approach towards Withhold Release Orders (WROs) placed on goods suspected to have been produced using forced labour under the Tariff Act. WROs have led to organisations having their goods held at port for up to nine months without the ability to import further goods into the country.

Like the U.S approach, targeted bans can be placed on individual entities, including ‘a particular site of production, a particular importer or company, those from a particular region in the case of state-sponsored forced labour and those from a particular transport vessel or fleet’.

The onus would then be on the company importing the goods to prove that the indicators of forced labour are no longer present, or to take action to remedy the situation so that the products are released by border control. Parliament’s recommendation also underlines that “the evidence to prove an absence of forced labour must be based on ILO standards”. Import bans could tie into incoming mandatory due diligence requirements in this regard as evidence of robust due diligence would be required to rebut any suspicions of human rights violations.

Parliament’s recommendation suggests that national authorities should be able to act on the basis of information provided by stakeholders, NGOs or affected workers to impose bans imposed in a more targeted way than the Tariff Act. It has been argued that the issuance of bans in the U.S may not be sufficiently evidence-based, uniform and apolitical.

It is as yet unknown whether an import restriction or banning mechanism would tangibly improve the protection of human rights in global supply chains, but an increasing number of jurisdictions are considering implementing them. For example, a recent Australian private senator’s Bill proposed to ban the import of goods produced by Uyghur forced labour in China.  In Canada, the latest iteration of the Modern Slavery Bill 2018 amends the Custom Tariff, wholly excluding goods from entering Canada if they are manufactured by forced labour or child labour.  It remains to be seen how these controls will be implemented and how companies will be able to effectively challenge bans. In the context of the EU, it is possible that compliance with the upcoming due diligence legislation could provide companies with a basis to discharge their evidential burden by showing documented evidence that the supply chain is free of negative human rights impacts, or that instances have been effectively remedied.

In light of the upcoming proposal, businesses should consider the following actions:

• Conduct a risk mapping exercise to establish where there are potential risks in the supply chain;
• Identify what, if any, due diligence processes your organisation currently has in place regarding human rights;
• Consider whether the current due diligence framework aligns with international standards such as the UNGPs and OECD guidelines;
• Assess whether additional data or evidence is required in order for the organisation to rebut any suspicions of human rights violations in the supply chain;
• Establish whether the organisation has a grievance mechanism that acts as an early warning mechanism for risk awareness and can serve as a mediation system;
• Ensure your organisation is able to cooperate with the remediation process where it is directly linked to an adverse impact on human rights.

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¹ Towards_an_EU_import_ban_on_forced_labour_and_modern_slavery_February.pdf (annacavazzini.eu)

² TA MEF (europa.eu)

³ Towards_an_EU_import_ban_on_forced_labour_and_modern_slavery_February.pdf (annacavazzini.eu)

⁴ Customs Amendment (Banning Goods Produced By Uyghur Forced Labour) Bill 2020.

⁵ Canada Modern Slavery Bill 2018 (Bill S-216)

How can Ardea International help?

Ardea International understands that businesses have to ensure that they establish robust due diligence procedures. We support our clients by helping them identify how to manage human rights impacts and risks, ensuring they meet legal compliance obligations and integrate best practices into their policies and procedures.

Ardea International has developed a number of effective compliance solutions, including a human rights and environmental disclosure legal register. The legal compliance due diligence register allows businesses to track incoming legislation as well as current laws they may be subject to. We can also assess your business’s compliance with human rights regulations, including preparedness to comply with new legislation. In addition, Ardea can examine your business’ due diligence procedures and provide priority steps to improve performance.

We have an upcoming workshop on Developing an environmental and human rights mandatory due diligence framework.  This course will equip you with an understanding of the key legislative developments and how to develop a due diligence framework to implement in the business.

We also have a range of free and paid resources on our website and we hope that you will enjoy browsing!

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 Next Steps

For more information, please contact colleen.theron@ardeainternational.com