The human trafficking and slavery regulatory landscape expanded again in 2019, adding more texture to the ask on modern business. For those evaluating scope of their requirements, the question to ask yourself is simple: Are you a company? If so, then yes — you have an obligation to perform due diligence, if not through legislation, than through consumer expectations for responsible business practices at the very least.
However, determining your requirements under the current regulatory landscape is more nuanced than all that. Depending on the region you operate in and that which your company ships into, you may be required to comply with several requirements, some of which overlap. It’s important to understand how the scope of regulations applies to you, so you can comply and report properly.
The most important legislation for companies are the:
- California Transparency in Supply Chains Act (Section 1714.43)
- Commonwealth (Australia) Modern Slavery Act
- Countering America’s Adversaries Through Sanctions Act
- EU Non-Financial Disclosure Directive
- French Duty of Care of Parent Companies and Ordering Companies (Law No. 2017-399)
- UK Cabinet Office Procurement Policy Note
- UK Modern Slavery Act (Section 54)
- U.S. Federal Acquisition Regulation Final Rule on Combating Trafficking in Persons (52.222-50)
- U.S. Trade Facilitation and Enforcement Act
This list is not exhaustive and continues to grow. The Dutch Child Labor Due Diligence Act could come into force in 2020, while Canada began the process of enacting its own Modern Slavery Act when it tabled Bill S-211 in Parliament on February 5, 2020. Like its predecessors, the UK and Australian Modern Slavery Acts, Canada’s Modern Slavery Act will require companies to publicly report on steps they have taken to prevent child labor and forced labor in their supply chains.
With the Trafficking Victims Protection Act and its reauthorizations only beginning to be utilized, and many more pieces of legislation on the way, the scope of requirements is exceptionally broad.
Influential Federal Procurement Requirements
The UK Cabinet Office Procurement Policy Note is the newest requirement on the list. In 2019, both Canada (not listed above) and the UK committed to federal procurement policies that require vendors to report on human trafficking and slavery risk mitigation efforts. It is expected vendors perform supply chain due diligence as a foundation of their programs.
This update brings those regions in step with the U.S., where government suppliers must comply with stringent anti-forced labor and human trafficking standards under the Federal Acquisition Regulation (FAR) to maintain procurement contracts.
U.S. Customs and Border Protection is also demonstrating their commitment to combatting forced labor and human trafficking by detaining goods through withhold release orders (WROs) under powers granted by the Countering America’s Adversaries Through Tariffs Act (CAATSA) and the Trade Facilitation & Trade Enforcement Act (TFTEA). This has made it more difficult to sell goods tainted with forced labor into the most lucrative selling region on the planet.
While federal supply chains are getting stronger, companies that submit UK Modern Slavery Act disclosures without demonstrating due diligence are receiving poor reviews from non-governmental organizations (NGOs) and agencies. One such agency, the UK Home Office, has yet to name and shame, but are evaluating next steps.
Further, if companies also sell into Australia — as do many of the largest enterprises in the world — due diligence reporting is mandatory, not simply implied. This, in turn, means every company that sells into a larger assembly will be asked for the data to maintain respective contracts.
Product Teams Should Evaluate Scope
Human trafficking and slavery legislation has grown so much in the past six years that companies can no longer afford to think of compliance as a matter of corporate social responsibility and brand reputation. Enforcement can interfere with manufacturing to the extent that it’s become a product problem. Enforcement can interfere with production in a number of ways, including:
- Damage to the reputation of your products.
- Lost access to selling regions.
- Voided federal contracts.
- Withheld shipments of crucial goods.
It’s important for in-scope companies (the vast majority of organizations) to understand that legislators and civil society don’t expect to eradicate the epidemic overnight, but they do expect companies to demonstrate due diligence and year-over-year improvement. Media agencies and enforcement bodies tend to focus on companies not performing effective due diligence to set an example.
Build value and best practices into your human rights due diligence program with Assent’s Human Trafficking & Slavery Solution.
Supply Chain Due Diligence & Technology
A supply chain data management solution can build efficiency into your human trafficking and slavery program, automating send-outs, follow ups and verifications. This allows your company to enhance and redeploy resources toward your company’s core business goals, such as product design.
In addition to performing these tasks, the Assent Compliance Platform can provide companies with regulatory expertise and Managed Services that go above and beyond a standard software offering. That’s why Assent has the market-leading human rights due diligence solution.
For more information about how Assent can help your company build cost and operational efficiencies into your human trafficking and slavery due diligence program, contact our experts.