I recently had the privilege of participating in a webinar with colleagues from Crowell Moring, the International Society for Human Rights, and our partner Kharon on the challenges of addressing Forced Labor in the Global Supply Chain. You can watch the webinar on demand and access other resources here.
While the issue has been on our collective minds since the 2015 implementation of the U.S. Forced Labor Prevention Act (FLPA), it has been gathering momentum over the past year as more legislation has been passed (Uyghur Forced Labor Prevention Act, German Supply Chain Act, etc.) and U.S. Customs and Border Protection (CBP) has begun enforcing the regulations.
As discussed during our webinar, here are the Top 3 things to know about Forced Labor in the Supply Chain:
1. Forced Labor Regulations have Teeth:
The U.S. Forced Labor Prevention Act (FLPA) is a law that was enacted in 2015 to help prevent the use of forced labor in global supply chains. The FLPA applies to all goods imported into the United States and requires companies to disclose information about their efforts to identify and address forced labor in their supply chains.
More recently, the Uyghur Forced Labor Prevention Act (UFLPA) “establishes a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China, or produced by certain entities, is prohibited by Section 307 of the Tariff Act of 1930 and that such goods, wares, articles, and merchandise are not entitled to entry to the United States.”
CBP has recently begun publishing enforcement statistics. Click here for a real-time dashboard Uyghur Forced Labor Prevention Act Statistics | U.S. Customs and Border Protection (cbp.gov)
2. Forced Labor is a Business AND Human Problem:
Forced labor in the supply chain refers to situations where workers are coerced, threatened, or otherwise compelled to work against their will, often under inhumane and abusive conditions.
This can occur at any point in the supply chain, from the sourcing of raw materials to the manufacturing of goods and their distribution. It is a serious violation of human rights and a form of modern-day slavery that affects millions of people worldwide.
3. While challenging, there are steps organizations can take TODAY to address this critical global issue:
Global supply chains are immensely complex and constantly in flux, which makes appropriate due diligence and ongoing visibility very difficult to establish. Moreover, government agencies do not publish a list of all entities suspected of engaging in forced labor, making the background vetting of potential suppliers even more vexing. However, organizations like Kharon use their proprietary research methods and global network of analysts to compile risk profiles for thousands of companies, including their potential connection to Forced Labor practices. This content can then be fed through an automated due diligence solution, like those offered by Descartes, to perform ongoing reviews of all 3rd parties in your supply chain.
In summary, all companies have a responsibility to ensure that their supply chains are free from forced labor. This includes conducting due diligence to identify and address the risks of forced labor in their supply chains, engaging with suppliers to promote fair labor practices, and implementing mechanisms to monitor and track their suppliers' compliance with labor standards.
Descartes Can Help Minimize the Risk of Forced Labor Compliance Violations
The heightened focus on forced labor within global trade carries with it increased enforceable regulations and expensive consequences for organizations that are non-compliant.
Descartes offers restricted party screening and global trade intelligence technologies to help your company conduct the necessary due diligence activities and combat forced labor in its supply chain.
Descartes Visual Compliance and Descartes MK solutions are flexible and modular, allowing organizations to pick the specific and exact functionality and content they need for their particular compliance needs and scale up later as and when necessary. Also, read what our customers are saying about Descartes Denied Party Screening on G2 – an online third-party business software review platform.
Ready to bolster your export compliance practices to mitigate the risk of costly fines and penalties? Contact us today to speak to an export compliance specialist. You can also read this essential buyer’s guide to denied party screening to help you select a solution that fits your needs.
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Director, Industry Strategy, Global Trade Intelligence, Descartes Systems Group
