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Is Another Forced-Labor Law on the Horizon?

U.S. lawmakers are pressing for legislation that would take a more sweeping approach to tackling forced labor in the global supply chain beyond China’s northwestern Xinjiang Uyghur Autonomous Region, where reports of Muslim minority persecution have cast an unmistakable pall over the Beijing Winter Olympics.

Senators Kirsten Gillibrand, a Democrat from New York, and Josh Hawley, a Republican from Missouri, introduced Monday a bill that would require large corporations involved in mining, manufacturing and the production of goods such as clothing to conduct regular audits aimed at rooting out forced labor in their operations—or face stiff penalties.

“The scourge of global slave labor must end and multinational corporations complicit in this moral atrocity must be held accountable,” Hawley, who introduced a version of the proposal in July 2020, said in a statement. “The bipartisan Slave-Free Business Certification Act takes important steps to make American supply chains slave-free, protect American workers, and end labor exploitation across the globe.”

Under the bill, which targets companies earning more than $500 million a year, all audits must be certified by the CEO, submitted to the Labor Department and made available to the public. The Labor Department will also be required to report any uncovered abuses to Congress. Violations can result in civil fines of up to $100 million and punitive damages of up to $500 million.

“This bill is an important step towards ending the use of forced labor by holding businesses accountable for the workers used throughout their supply chains,” Gillibrand said in a statement.

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Though the measure makes no mention of China, the Slave-Free Business Certification Act comes at a time of escalating scrutiny of human-rights abuses in Xinjiang, which the Chinese government has vociferously denied. President Biden signed in December a law that creates a “rebuttable presumption” that all products from Xinjiang have been made under conditions of modern slavery—and therefore barred from entering the United States under the 1930 Tariff Act—unless “clear and convincing” evidence proves otherwise. It’s poised to kick into gear on June 21.

Though U.S. law has for decades prohibited the import of any product that was “mined, produced or manufactured wholly or in part by forced labor, including forced or indentured child labor,” reporting requirements have hitherto been weak. The California Modern Slavery Act, which took effect in 2012, for instance, only obligates businesses of a certain size to disclose their efforts to eradicate human trafficking and slavery within their supply chains on their website.

Critics of the Fashion Sustainability and Social Accountability Act, which was introduced in the New York Assembly last month, have also urged its sponsors to fortify the measure by requiring affected companies to mitigate or redress any supply-chain shortcomings in accordance with international guidelines, not just report on them.

The United States isn’t alone in wanting to crack down on forced labor, whether from Xinjiang or otherwise.

Canadian legislators filed a modern slavery bill in the House of Commons Tuesday pressing Ottawa to pay attention to Canadian businesses conducting businesses abroad. “I’m getting calls from the relevant ministers’ offices saying, ‘We’re prepared to do something,’” Member of Parliament John McKay, who helped draft the measure, told the Star.

Over in Australia, the Human Rights Law Centre and other organizations called into question last week the effectiveness of the country’s own modern slavery laws. Many companies are failing to identify red flags in their supply chains or take the appropriate action to address them, they said.

In an analysis of more than 100 companies from sectors with known risks of coerced labor, including clothing from China and gloves from Malaysia, researchers found that 77 percent of them failed to comply with the basic reporting requirements mandated by Australia’s Modern Slavery Act. More than half (52 percent) failed to mention obvious modern-slavery hot spots in their operations. Just one in four garment companies sourcing from China, for instance, acknowledged the risk of forced Uyghur labor in their supply chains. Even worse, only 27 percent of the companies appeared to be taking “some form” of effective action to tackle forced-labor risks.

“The Modern Slavery Act was meant to drive a ‘race to the top’ by business to address modern slavery in global supply chains, but our research indicates most companies have barely left the starting blocks,” Freya Dinshaw, a senior lawyer at the Human Rights Law Centre and the report co-author, said in a statement. “Many companies have published modern slavery statements, but when you drill down into the detail, many aren’t even at the point of identifying the most obvious risk areas in their supply chains, let alone taking meaningful action to address them.”

Reporting alone is not enough to “drive fundamental change,” she added. “When you speak to a glove worker in Malaysia forced to work around the clock to make PPE for the Covid crisis, or a migrant worker on an Australian farm working in terrible conditions, it brings home just how much more needs to be done. If the government is serious about eliminating modern slavery, it must strengthen the Modern Slavery Act to make it enforceable and require companies to take action.”

British fashion e-tailer Asos, which helped inaugurate the formal opening of the Migrant Resource Centre in Mauritius on Monday, has also asked that U.K. legislators strengthen the 2015 Modern Slavery Act. In October, it joined Primark, the Business & Human Rights Resource Centre and others in lobbying for a legal requirement for companies and investors to carry out human-rights—and environmental—due diligence in the United Kingdom, citing a desire to “prevent abuse of human-rights and environmental harm in global operations and value chains.”

“As we recover and rebuild, we recognize the need for new binding standards which benefit all and promote sustainability,” the organizations said at the time. “Mandatory human-rights and environmental due diligence is key to ensure that efforts by companies that respect people and the planet, both during and after the Covid-19 recovery, are not undercut by the lack of a uniform standard of conduct applying to all business actors.”

The European Union is wrestling with its own attempts to mandate human rights and environmental due diligence. On Tuesday, more than 100 companies, business associations and initiatives, including apparel brands such as Armedangels, Mammut, Patagonia and Vaude, called on the European Commission to adopt a legislative proposal “without further delay.”

A draft proposal was initially set for publication in June 2021, but the deadline kept getting bumped, prompting countries such as the Netherlands to move forward with their own mandatory due-diligence proposals because they didn’t want to wait. Belgium, France, Germany and Norway have already greenlit national legislation independent of the bloc.

“Our view has always been that the due diligence expectations set out in the [United Nations Guiding Principles] and in the [Organisation for Economic Co-operation and Development] Guidelines should form the core requirements on business in [mandatory human-rights and environmental due diligence] legislation,” the letter said. “We firmly believe that strong and ambitious EU legislation would make a tangible contribution to improving human rights and environmental conditions along global value chains, while helping businesses become more resilient and future-oriented.”