Managing forced labour obligations as part of your ESG strategy

Abstract

The evolution of environmental, social and governance (ESG) frameworks has created challenges for corporations to embrace and remain compliant with global goals that lack an aligned and cohesive standard from one country to another. This could not be more evident than in the global effort to eradicate forced labour from supply chains by 2030, which has resulted in a plethora of regulations, some with mandatory reporting obligations and others with simple due diligence requirements. This paper outlines a strategy to develop a comprehensive alignment across an organisation’s supply chain, encompassing recommended forced labour initiatives that will meet or exceed applicable legislative mandates. The paper’s focus is specifically on the USA Uyghur Forced Labor Prevention Act (UFLPA), because it requires a unique approach that immediately affects any company shipping to the US. UFLPA authorises the US Customs and Border (CBP) agency to stop, seize and/or detain a shipment at the border and hold indefinitely until the US importer of record (IOR) can clearly and concisely demonstrate the shipment has not been made through forced labour, wholly or in part thereof. The impact of this legislation and CBP’s initiative has affected US importers and their foreign suppliers, with 3,605 shipments seized, detained or destroyed in 2022 alone. UFLPA enforcement is making more of an impression than most penalties associated with other legislation seeking the same outcome.