New US legislation aims to tackle forced labor in corporate supply chains

The US Senate introduced the ‘Slave-Free Business Certification Act,’ which aims to target forced labor in global supply chains and make huge corporations, including those within the apparel sector, account for.

According to the bipartisan bill, introduced by US Senators Josh Hawley and Kiri Gillibrand, it mandates “some corporations to declare the use of forced labor in their direct supply chain, among other purposes”.

The bill relates to enterprises that mine, produce, or manufacture commodities for sale and have an annual global receipt of more than US$500 million, which means it will apply to huge garment corporations. While the phrase ‘forced labor’ is defined under the bill as any form of labor practice or human trafficking activity that violates national and international standards.

In a statement, Hawley adds that the measure will impose new corporate supply chain disclosure rules, conduct frequent audits, and hold CEOs “responsible” for their company’s use of forced labor. He also claims that it imposes severe fines on businesses that fail to upload minimum human rights criteria.

Hannah Bruce, the Ethical Trading Initiative’s head of global partnerships, said that they appreciate the US Senators’ move to draught regulations aimed at businesses to embrace techniques to combat forced labor in supply chains. If they are to make progress in reducing such heinous abuses, they must conduct effective due diligence on serious labor rights infractions. However, they strongly want the bill to go beyond auditing. There are severe constraints on audits’ ability to properly identify, mitigate, and remediate some of the most serious human rights abuses, including gender-based violence, forced labor, and discrimination in global supply chains, which have been well-publicized.

Audit and reporting obligations for applicable apparel companies must begin no later than a year following the act’s enactment and must be carried out each year thereafter.

The bill also includes a number of audit standards for firms and explains that if any failure to meet the requirements set out in the Act following notice and chance for a reply, civil damages of up to $100 million might be levied against the company.

Punitive damages of up to $500 million may also be imposed on a covered corporate entity or supplier, including a direct supplier, secondary supplier, or on-site service provider if it is determined that offenses were committed intentionally following notice of an opportunity.

Hawley added that the scourge of global slave labor must be ended, and multinational firms complicit in this moral outrage must be held accountable. The bipartisan Slave-Free Business Certification Act takes crucial steps to make American supply chains slave-free, safeguard American workers, and put an end to labor exploitation around the world.