International developments on modern slavery
- US Customs has seized four shipments seeking to enter the US this year. This follows developments early in 2016 when President Obama signed the Trade Facilitation and Trade Enforcement Act of 2015, which closed a loophole in Section 307 Tariff Act 1930 allowing the importation of goods made by forced labor. Businesses need to be prepared to provide evidence that specific goods are not produced with forced labor.
- A private members Bill has been published that would insert public bodies into the UK Modern Slavery Act part 6 section 54 on transparency in supply chains, requiring both them, and commercial organisations, to include a statement on slavery and human trafficking in their annual report and accounts. In addition, contracting authorities would be required to exclude from procurement procedures companies that have not provided such a statement. The Bill would also require the Secretary of State to publish a list of all the commercial organisations that have to publish a statement in an accessible format for ease of use by consumers and NGOs. The Bill will have its second reading on 13 January 2017. However, only a minority of private members Bills become law. This is a dynamic and fast changing area of law and practice, businesses should ensure they have adequate data to address developing requirements.
- A Canadian court has allowed a case alleging modern slavery in an Eritrean mine against Nevsun, a Vancouver-based company to go forward. This could have implications across industries for hundreds of Canadian companies that have business in countries with questionable human rights records.
- A Californian Federal court judge has ruled that the court has sufficient jurisdiction to hear a lawsuit brought by Cambodian victims of trafficking against four seafood importers, including two US and two Thai companies that supply seafood to major US food retailers. This is after the defendant filed a motion to have the case dismissed on the basis that the alleged conduct took place outside the US. Courts are increasingly willing to hear cases brought against companies for actions abroad.
- The Interfaith Centre on Corporate Responsibility, an investor group of 300 member organizations that comprises faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $200 billion have welcomed a benchmark study of forced labor risks in food and beverage sector. Investors increasingly use this type of data to engage companies on these issues and make investment decisions.
- A new report and survey finds that the UK Modern Slavery Act is galvanising leadership action in progressive companies. 97% of companies surveyed see the reputational risk of modern slavery as the biggest driver for change and 86% see corporate action on human rights as a critical business responsibility.
- A new Forced Labor Protocol has entered into force, requiring countries to take effective measures to prevent and eliminate forced labour, and to protect and provide access to justice for victims. Ratifying countries will need to ensure that workers in all sectors are protected by legislation, that labor inspections and other activities aimed at protecting workers from exploitation are strengthened and that people are educated about crimes that involve labour exploitation, such as human trafficking. Businesses should ensure they are aware of domestic implementation and how it will affect their operations across jurisdictions.
Parallel developments in Business and Human Rights
- At the recent UN Forum on Business and Human Rights in Geneva, DLA Piper and the University of Pretoria organized a panel discussion simulating a boardroom discussion on how a company should address a number of adverse human rights impacts that have been identified in relation to a government contract. DLA panellist, Jonathan Extent-Wright was quoted in Forbes following the panel, "A responsible board must address any actual or potential involvement in adverse human rights impacts as part of their risk management. If not, they will be inadequately prepared for future events, answerable to stakeholders for a failure to do so and may even expose themselves to liability."
- On 29 November, the French National Assembly adopted a Bill, "devoir de vigilance" that, if enacted, would require certain French companies to have a due diligence plan in place to identify and address involvement in adverse human rights impacts in their operations, supply chains and through business relationships. The draft law will now go before the Senate for consideration and should return for final adoption by the National Assembly in early 2017. If enacted, companies may be liable if they default on commitments made in their plan, if there are faults in the plan or its implementation or if they fail to produce a plan at all.
- The Swiss government is considering a popular initiative that would compel Swiss-based multinational corporations to undertake human rights and environmental due diligence in all activities abroad. If enacted, companies will need to identify and put in place a plan to manage involvement in adverse human rights and environmental impacts, including for entities under their control.
If you have any related queries please contact Jonathan Exten-Wright or Tim Marshall