human-rights 16 July 2021

EU guidance on forced labour; new OFAC Xinjiang advisory

The European Union has published what it calls ‘practical guidance’ to help European companies ‘implement effective human rights due diligence practices to address the risk of forced labour in their supply chains.’

It said, ‘The guidance explains the practical aspects of due diligence and provides an overview of international standards on responsible business conduct and due diligence that are relevant for combatting forced labour.’

Examples of forced labour, it says, include, ‘

· State-orchestrated programmes imposing forced labour of administratively detained persons, prisoners in pre-trial detention, political prisoners, persons detained for trade union activity or peaceful assembly;

· Debt bondage linked to recruitment fees and/or in the context of trafficking in human beings

· “Forced cropping”, i.e. compulsory cultivation that ties farmers to their land and forces them to sell their produce to a mandatory concession holder;

· Reliance on “labour discipline” for production, i.e. an obligation to work as a sanction for violating company rules or failing to complete production quota;

· Recruitment of children into the armed forces or paramilitary organizations,’

…amongst others.  

It notes, ‘Effective due diligence allows companies to identify and address the potential and actual adverse human rights and environmental impacts linked to their operations, products or services, including in their supply chains and business relationships. It is an on-going, proactive and reactive process aimed at achieving continuous improvements.’

Meanwhile in DC

On 13 July, the US Treasury’s Office of Foreign Assets Control (‘OFAC’) published a new advisory on ‘Risks and Considerations for Businesses and Individuals with Exposure to Entities Engaged in Forced Labor and other Human Rights Abuses linked to Xinjiang, China’, which cautions, ‘Businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating U.S. law. Potential legal risks include: violation of statutes criminalizing forced labor including knowingly benefitting from participation in a venture, while knowing or in reckless disregard of the fact that the venture has engaged in forced labor; sanctions violations if dealing with designated persons; export control violations; and violation of the prohibition of importations of goods produced in whole or in part with forced labor or convict labor.’