Knowledge about forced labor is not a crime in itself. But modern anti-slavery transparency laws around the world are increasingly placing a duty of care on firms to examine one’s supply chain. Any claims of not knowing about the possibility of forced labor in the supply chain, or complacent sourcing, creates risks for a company. A comprehensive overview of many laws can explain the risks.

Under the disclosure requirements of the U.K., Australian, and California laws, a company’s decision to not examine its supply chains will be noticed by academics, media, civil society, journalists, and governments.

Under France’s human rights’ due diligence law and related legislation under consideration in a number of countries, firms have an affirmative duty, a duty to examine human rights issues in their business practices.

Under the Trade Facilitation and Trade Enforcement Act, an entity that benefits from forced labor “knowing or in reckless disregard of the fact” that it has occurred, might be criminally liable as if they themselves were the trafficker or enslaver. Moreover, goods suspected of being tainted with forced labor, will be held at U.S. ports of entry, adding costly delays to a construction project. 

This is exactly what is happening with goods that are suspected of containing forced labor that are produced in the Xinjiang Uyghur Autonomous Region of China, where a reported one million Uyghurs are being held in forced labor conditions. The Uyghur Forced Labor Prevention Act (UFLPA) requires that goods that are mined, produced, or manufactured wholly or in part in Xinjiang may not be imported into the U.S. unless the importer of record has complied with specified conditions and, by clear and convincing evidence, that the goods, wares, articles, or merchandise were not produced using forced labor.

One of the newest laws to take effect to ensure supply chain transparency is in Germany. German companies are now required to monitor their supply chains more closely for human rights violations such as trafficking and forced labor. The Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, “LkSG”) applies to “companies that have their central administration, principal place of business, administrative headquarters, registered seat, or branch office in Germany and have 3,000 or more employees in Germany. Starting January 1, 2024, the number of employees will be reduced to 1,000. Employees that are posted abroad are included for domestic companies.”

Canada has also recently passed Bill S-211, An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff which will take effect on January 1, 2024. The Act imposes reporting obligations on a broad range of entities including government institutions, domestic companies, and many foreign companies that do business or own assets in Canada.  The Act requires filing annual public reports on practices taken to address and prevent forced labor in their supply chains. The first reports are due on May 31, 2024. Companies violating the law such as failing to report could be fined up to 250,000 Canadian dollars or (U.S.) $184,000.