The Global Challenge of Forced Labor in Supply Chains: Strengthening Enforcement and Protecting Workers

July 21, 2021

Forced labor on global supply chains is not an aberration or the choices of a few badly behaved contractors or supervisors.

Forced Labor is a predictable consequence of business models that profit from exploitation, governance gaps that rely on multinational corporations to police their own behavior through voluntary initiatives, and insufficient enforcement of laws that create market consequences for illegal supply chain actions.

In other words- forced Labor is rooted in choices made in board rooms and governing halls not just factories, farms, or fishing fleets.

To meaningfully prevent forced labor on global supply chains, we must therefore similarly focus our efforts in that direction.

Even with increased Tariff Act enforcement following Congressional action to remove the consumptive demand loophole, our experience shows clear gaps remain which could undermine the Tariff Act Section 307’s effectiveness as a tool to curb forced labor.

For example, consider these three examples of WROs issued in response to petitions filed in the sectors where we work:

First, cotton: The first region wide WRO was issued on cotton from Turkmenistan in 2018; however, we are unaware of any enforcement actions taken to date. Meanwhile U.S. Corporations including Amazon, Walmart, Wayfair, and Overstock continue to advertise and sell Turkmen cotton products.

Second, palm oil: Lack of transparency on enforcement and troubling public statements by the importer leave us concerned that some products with tainted palm oil continue to reach the U.S. market, and that the 2020 WRO on Malaysian Palm oil products sourced to Proctor and Gamble could be lifted without sufficient independent evidence and remediation.

Third: seafood: While the recent WROs on Taiwanese distant water fishing vessels and for the first time, on an entire Chinese fishing fleet are an important step forward, enforcement will determine the impact. Meanwhile the 2021 State Department Trafficking in Persons Report disappointingly retained Taiwan in its higher-level Tier 1 ranking.

Where do we go from here?

These are some key recommendations. (For more detailed recommendations including references to materials developed by the Tariff Act Advisory Group , see this written testimony submitted before the House Ways and Means Subcommittee on Trade as part of its July 21 Hearing on The Global Challenge of Forced Labor in Supply Chains: Strengthening Enforcement and Protecting Workers.)

• Increase the market consequences for Multinational Corporations and investors at the top of supply chains who rely on forced labor. This includes structuring WROs for maximum market impact up the supply chain and issuing conduct changing penalties and fines to importers.
• Revenue from fines and fees should go to fund a worker emergency fund. This would augment and not replace the remediation required of global supply chain actors. The fund would protect workers who participate in exposing forced labor and are at risk of losing their jobs due to a decision higher up the global supply chain that results in mass layoffs.
• Standards for modification or removal of existing or future WROs must be clear and independently verifiable including by workers.
• CBP and ICE should enact specific protocols for a swift response when workers face retaliation including additional penalties for the corporate entity subject to the WRO. We also recommend training for CBP staff on workplace retaliation, conducted by agency and NGO colleagues with experience in workplace reprisals. This is particularly important given closing of civil society space and threats to labor rights defenders in multiple regions.
• Promotion of anti-discrimination and equity-based labor rights including ending gender-based violence and harassment also contributes to preventing forced labor conditions. Forced Labor conditions often take advantage of structural vulnerabilities of worker populations including gender, race, caste, religion, and migration status.
• A key antidote to forced labor is freedom of association and assembly and the right to collective bargaining — workplace democracy. Worker agency to monitor, report, and negotiate for decent work is fundamental to long term change.
• This includes increasing appropriations for USDOL’s International Labor Bureau and the State Department’s Bureau of Democracy Human Rights and Labor. We have confidence in the experience of DOL Deputy Secretary Julie Su and ILAB Deputy Undersecretary for International Affairs Thea Lee who understand what it takes to build capacity for workers, employers, and governments and to combine enforcement, corporate accountability, and worker protections and worker power building.
• And finally, Congress should act to close the governance gap and expand corporate and investor accountability.

The consequence of falling short is not a failed compliance report or dollars on a spreadsheet. The workers who make the clothes many of us are wearing today, the food in our lunches, the electronics that connect us to each other, and the medical equipment our families have relied on during the pandemic — these workers deserve a fair day’s pay for a fair day’s work that enables them to provide for our families and work and live with dignity.