The European Union is proposing a policy called REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on prohibiting products made with forced labour on the Union market -- 2022/0269 (COD) Ideally, this could be very effective but if and only if the wording isn’t filled with loopholes, vague language provisions of self policing. Unfortunately the proposal given out for recommendations is just that. It needs to be a lot tighter or nothing will change. The following is an assessment by US attorney Terry Collingsworth of International Rights Advocates. I hoping to get an assessment from someone in the EU and I will post that as well.
Assessment of the European Union’s Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on prohibiting products made with forced labour on the Union market -- 2022/0269 (COD)
By: Terry Collingsworth Executive Director
International Rights Advocates tc@iradvocates.org/www.internationalrightsadvocates.org
By way of context for commenting on the proposed EU forced labour ban, International Rights Advocates has extensive experience using the U.S. law that allows for import bans on products made in whole or in part by “forced labor.” That law, section 307 of the Trade Act of 1930, 19 U.S.C. § 1307, and its implementing regulations, 19 C.F.R., Chpt. 1, § 12.42, establish a process whereby “[a]ny person ... who has reason to believe” that imported products are made with prohibited forced or indentured labor shall provide to the Commissioner of U.S. Customs and Border Protection (CBP) “(1) a full statement of the reasons for the belief, (2) a detailed description or sample of the merchandise, and (3) all pertinent facts obtainable as to the production of the merchandise abroad.” 19 C.F.R. § 12.42 (b). The Commissioner is then required to conduct an investigation as per 19 C.F.R. § 12.42(d).
Then, considering all of the evidence, if the Commissioner of CBP finds at any time that information available reasonably but not conclusively indicates that merchandise within the purview of section 307 is being, or is likely to be, imported, he will promptly advise all port directors accordingly and the port directors shall thereupon withhold the release of any such merchandise...” 19 C.F.R. § 12.42 (e). Once the Commissioner makes such a finding, then all merchandise in the class is an “importation prohibited by section 307 ... unless the importer establishes by satisfactory evidence that the merchandise was not ... manufactured in any part with the use of a class of labor specified in the finding.” Id. Thus, the regulations appropriately shift the burden of proof to the importer to establish their specific products are not made with forced labor.
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The U.S. law looks good on paper. But, unfortunately, it is entirely dependent on the CBP bureaucracy for enforcement. This can lead to extensive delays and uncertainty once the Petition enters the bureaucratic black hole. There is no requirement for transparency or timely processing.
One glaring example of what can happen, particularly when powerful multinationals are targeted with a Petition is the attached Petition IRAdvocates and Corporate Accountability Lab filed to ban the importation of cocoa from Cote D’Ivoire by Nestlé, Cargill, Incorporated, Barry Callebaut, Mars, Incorporated, Olam International, the Hershey Company, World’s Finest Chocolate, Inc., and Blommer Chocolate Co. These companies all signed the Harkin-Engel Protocol in 2001 and pledged to end by 2005 their reliance on forced child labor and the other worst forms of child labor as defined by ILO Convention No. 182. The companies have yet to keep their pledge and they have given themselves four extensions of time, now claiming that by 2025 they will reduce by 70% their reliance on illegal child labor. Thus, they admit they are still using it, and the Petition we filed includes extensive supporting evidence that has been supplemented as well. Essentially, it is undisputed that cocoa imported from Cote D’Ivoire by these companies was produced “at least in part” by forced child labor.
We filed our Petition on February 14, 2020. Now, over two years and eight months later, no action has been taken. We have sent requests for status reports, and we sent a letter signed by hundreds of concerned organizations and individuals, but have yet to receive even the courtesy of a reply. During all of this time that no action was taken by CBP, cocoa produced by forced child labor, with many of the children trafficked from Mali or Burkina Faso, continues to flood the U.S. market. A recent study by the U.S. Department of Labor estimates that 1.56 million children are harvesting cocoa in Cote D’Ivoire and Ghana.1
The U.S. law, with a single bureaucracy operating for a single country, is not functioning as it should. The EU proposal, while well-meaning and containing solid substantive rules, has bureaucratic obstacles baked into it, and this is the primary problem that should be addressed before there is a final version of the law. Here are some examples from the language of the proposal:
Whereas Clause (19) provides:
In appointing those competent authorities, Member States should ensure that those authorities have sufficient resources and that their staff
has the necessary competences and knowledge, especially with regard to human rights, value chain management and due diligence processes. Competent authorities should closely coordinate with national labour inspections and judicial and law enforcement authorities, including those responsible for the fight against trafficking in human beings in such a way as to avoid jeopardising investigations by such authorities.
1https://www.norc.org/PDFs/Cocoa%20Report/NORC%202020%20Cocoa%20Report_English.p df
The competent authorities of the Member States should monitor
the market to identify violations of the prohibition.
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Comment: The law thus envisions that every EU state, all 27 of them, is directed to set up a bureaucratic system with “competent authorities” not yet named, but charged with monitoring “the market to identify violations of the prohibition” and coordinating with their own labour and judicial authorities, as well as each other. This complex bureaucratic jumble is doomed to fail or allow violations to persist for years before a result can be obtained.
Whereas Clause (20) provides: In order to increase the effectiveness of the prohibition,
Comment: First, as the cocoa example from our U.S. case graphically demonstrates, the “economic operators” have enjoyed years of broken pledges and delay already. To now give them an unspecified “reasonable time” to address their supply chain violations is simply allowing them to continue to get away with the violations.
Whereas Clause (26) provides:
To ensure their right to due process, economic operators should have the opportunity to provide information in
their defence to the competent authorities throughout the investigation.
Comment: In most cases, the offending economic operators have codes of conduct, policies, or other forms of pledges to the public that they are in compliance with basic human rights norms, including the prohibition on forced labor. As with the CBP process, once there is an initial showing of a violation, the burden of proof should shift to the companies to demonstrate they are not violating the law. They made the promises, and they have the internal facts that they have not made public. If they can’t by now prove they are in compliance, then their products should be assumed to be tainted with forced labor.
Whereas Clause (28) provides: In that decision [finding a violation],
. The Commission should be empowered to adopt the implementing acts necessary to specify the
details about the information to be contained in such decisions.
Comment: Once again, allowing a “reasonable time” means unnecessary delay. A specific, but reasonable time must be set – like 90 days.
competent authorities should grant reasonable time to economic operators to identify, mitigate,
prevent and bring to an end the risk of forced labour.
Competent authorities should bear the burden of establishing
that forced labour has been used at any stage of production, manufacture, harvest or extraction of
a product, including working or processing related to the product on the basis of all information
and evidence gathered during the investigation, including its preliminary phase.
competent authorities
should state the findings of the investigation, and the information underpinning the findings, and
set a reasonable time within which the economic operators should comply with the decision, as
well as information allowing for the identification of the product to which the decision applies
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Whereas Clause (31) provides:
labour. Competent authorities should withdraw their decision where they establish on the basis of that new information, that it cannot be established that the products have been made with forced labour.
Comment: It is fair to allow for post-finding review, but it is not clear if merely seeking review suspends the decision. The prior decision should be lifted only if there is a subsequent finding that the product in question was not made with forced labor. If the finding is lifted merely upon filing an appeal, every company will routinely do so.
Whereas Clause (44) provides:
. That network should also aim at streamlining the practices of the competent authorities within the Union that facilitate the implementation of joint enforcement activities by Member States, including joint investigations. That administrative support structure should allow the pooling of resources and maintain a communication and information system between Member States and the Commission, thereby helping to strengthen the enforcement of the prohibition.
Comment: This is asking for years of delay in setting up the mechanisms and is based on mere hope that some form of coordination will emerge. The law should instead be specific on the enforcement processes.
Article 4 Provides:
Preliminary phase of investigations
1. Competent authorities shall follow a risk-based approach in assessing the likelihood that economic operators violated Article 3. That assessment shall be based on all relevant information available to them, including the following information:
(a) submissions made by natural or legal persons or any association not having legal personality pursuant to Article 10;
(b) the risk indicators and other information pursuant to Article 23, points (b) and (c);
(c) the database referred to in Article 11;
(d) information and decisions encoded in the information and communication system referred to in Article 22(1), including any past cases of compliance or non-compliance of an economic operator with Article 3;
(e) information requested by the competent authority from other relevant authorities, where necessary, on whether the economic operators under assessment are subject to and carry out due diligence in relation to forced labour in accordance with applicable Union legislation or Member States legislation setting out due diligence and transparency requirements with respect to forced labour.
Economic operators should have the possibility to request a
review of the decisions by the competent authorities, after having provided new information
showing that it cannot be concluded that the relevant products have been made with forced
To ensure effective enforcement of the prohibition, it is necessary
to establish a network aimed at structured coordination and cooperation between the competent
authorities of the Member States and, where appropriate, experts from customs authorities, and
the Commission
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2. In their assessment of the likelihood that economic operators violated Article 3, competent authorities shall focus on the economic operators involved in the steps of the value chain as close as possible to where the risk of forced labour is likely to occur and take into account the size and economic resources of the economic operators, the quantity of products concerned, as well as the scale of suspected forced labour.
3. Before initiating an investigation in accordance with Article 5(1), the competent authority shall request from the economic operators under assessment information on actions taken to identify, prevent, mitigate or bring to an end risks of forced labour in their operations and value chains with respect to the products under assessment, including on the basis of any of the following:
(a) applicable Union legislation or Member States legislation setting out due diligence and transparency requirements with respect to forced labour;
(b) the guidelines issued by the Commission pursuant to Article 23, point (a);
(c) due diligence guidelines or recommendations of the UN, ILO, OECD or other relevant international organisations;
(d) any other due diligence in relation to forced labour.
Comment: This, along with Article 5, is as close as I could find to being the map for the enforcement process. It seems like a maze of consultations and requirements for subjective assessments led by no one in particular.
Article 5 Provides: Investigations
1.
2. Competent authorities that initiate an investigation pursuant to paragraph 1 shall inform the economic operators subject to the investigation, within 3 working days from the date of the decision to initiate such investigation about the following:
(a) the initiation of the investigation and the possible consequences thereof;
(b) the products subject to the investigation;
(c) the reasons for the initiation of the investigation, unless it would jeopardise the outcome of the investigation;
(d) the possibility for the economic operators to submit any other document or information to the competent authority, and the date by which such information has to be submitted.
Comment: This is the enforcement process mechanism that follows on the consultations etc. in Article 4. Based on this language, yet unnamed “competent authorities” must have a “substantiated concern” about a violation and then “shall decide” to investigate. This seems to leave a tremendous amount of discretion with no mandatory rules about when or how an investigation must begin.
Competent authorities that, pursuant to Article 4(5), determine that there is a substantiated
concern of a violation of Article 3, shall decide to initiate an investigation on the products and
economic operators concerned.
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Article 6 Provides:
Decisions of competent authorities
1. Competent authorities shall assess all information and evidence gathered pursuant to Articles 4 and 5 and, on that basis, establish whether Article 3 has been violated, within a reasonable period of time from the date they initiated the investigation pursuant to Article 5(1).
Comment: Again, having a “reasonable time” applied to bureaucratic processes is asking for interminable delays. A specific time must be set, perhaps 90 days.
Article 12 Provides:
Competent authorities
1. Member States shall designate one or more competent authorities responsible for carrying out the obligations set out in this Regulation. Designated Member State competent authorities shall be responsible for ensuring the effective and uniform implementation of this Regulation throughout the Union.
2. Where Member States have designated more than one competent authority, they shall clearly demarcate the respective duties and establish communication and coordination mechanisms that enable . . .
Comment: This reinforces the certainty of the coming bureaucratic jumble. There should be clarity and certainty as to who is in charge. If each of the 27 Member States sets up a different process with different levels of responsibility, coordination will be nearly impossible. Further, given the powerful economic actors seemingly subject to the law, it is a certainty the companies will pressure the weaker members to have a lax system that will prove to be the weakest link in the EU-wide enforcement mechanism.
Recommendations and Conclusion
While it is clear that this law was drafted with sensitivity of the EU towards Member State autonomy, the law is doomed to fail unless there is stronger central organization scheme and more specific requirements for how each Member State must participate. Establishing an effective ban on forced labour should not be controversial. If we can’t come together and agree that this vestige of slavery still haunting our so-called modern global economy must be stamped out and effectively prohibited, then we have failed humanity. To the extent possible, to avoid the problems with the U.S. Tariff Law and create a meaningful enforcement process to ban products from the EU produced by forced labor, the law should be substantially revised to:
A. Establish a clear, central authority to implement and enforce the law. If this is not possible, then provide for central coordination and offer clearer and uniform direction to the Member States on organizing their own bodies of “competent authorities.”
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Create a simpler and much clearer mandatory enforcement mechanism. Articles 4 and 5 leave too much room for discretion and delay.
In addition to enforcement stemming from Member State (or Central Authority) investigations, allow for a complaint or petition driven system so that evidence is submitted by third parties that then would trigger an investigation.
Establish firm timelines for conducting and completing investigations. Also, to avoid relying entirely on enforcement from the bureaucracy established, create a private right of action. Coordinated with setting deadlines, there are effective models for a two-tier deadline so that after, for example, 180 days, if no action is taken, any person harmed by the forced labor in a product under investigation could bring a private civil suit. Regardless of whether a civil suit is filed, any investigation must result in a decision within a year.
Create safeguards for transparency. Treat all evidence gathered or submitted as public records.
These recommended changes would, I realize, essentially require a complete redraft of
the law. However radical that may seem, it is a better option than waiting a decade or so to see that the current scheme will not be effective and will result in a bureaucratic morass.
Since signing the 1948 Universal Declaration of Human Rights and ratifying the 1989 Convention on the Rights of the Child, all Member States, and the EU itself, have had a legal obligation to protect children in their supply chains.
It has been 73 years since the declaration was signed and 32 years since the convention was ratified, and 2021 was the International Year for the Elimination of Child Labour, yet child labour has increased and the EU is still the main financial beneficiary of misery and child labour in rural communities that produce coffee, cocoa and many other agricultural products.
This is due to exploitative business models, disregard for the rule of law, ineffective development aid and ‘certifications’ that deceive consumers.
There is a humanitarian crisis in many rural communities that supply the EU[1].
President von der Leyen has committed to zero tolerance of child labour in EU trade but her zero tolerance policy has not materialised and has not stopped corporations continuing to increase their profits by using child labour to reduce costs.
When will the Commission use all legal means available to eliminate child labour in EU trade?