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EU forced labor regulation: a tool against modern slavery

May 15, 2024 • Reading time: 10 Min

EU-Zwangsarbeitsverordnung

A dark reality lurks in the shadows of the global economy: modern slavery. Despite progress in the 21st century, millions of people around the world are victims of exploitation and forced labor. However, this cruel reality is not only to be found in distant countries, but also in this country. One example of this is the reports on working conditions in the textile industry, where seamstresses have to work in inhumane conditions to meet our constant demand for cheap clothing. However, this exploitation does not only take place in the textile industry. In other industries such as agriculture, construction and the service sector, people are forced to work under similarly harsh conditions. The victims of modern slavery often remain invisible and their voices unheard. However, there is a prospect of improvement: the EU Forced Labor Regulation takes a firm stand against this practice. The introduction of the regulation, also known as the Forced Labor Regulation, means that in future no more products from forced labor may be sold. In the following, we will take a closer look at the definition of modern slavery, its causes and the scope of the EU Forced Labor Regulation.

In short: The EU Forced Labor Regulation at a glance

Millions of people worldwide are currently victims of modern slavery. According to the International Labor Organization (ILO), around 27.6 million people are trapped in forced labor, including 3.3 million children. Modern slavery manifests in forms such as forced labor, human trafficking, and debt bondage.

The causes of modern slavery are diverse and range from economic exploitation to inadequate legal regulation. Poverty, lack of educational opportunities, and discrimination increase the risk of becoming victims of modern slavery. Globalization and heavily interconnected supply chains also facilitate exploitation and oppression. Modern slavery is a global phenomenon, and there are cases of it in Germany as well, especially in the areas of labor exploitation and forced prostitution.

The EU Forced Labor Regulation (FLR) plays a significant role in the fight against modern slavery. Its aim is to combat forced labor in global supply chains and establish clear regulations and measures to prevent exploitation and forced labor. Companies must be transparent about their suppliers and working conditions. The regulation sets standards and sanctions to protect the rights of workers.

According to the FLR, companies must monitor all products distributed or exported in the EU to ensure that there is no forced labor involved and that the rights of workers are protected. Although the regulation has been criticized for not being extensive enough, companies can still play a crucial role in the fight against modern slavery through strict control mechanisms in their supply chains. Compliance with human rights standards is crucial to prevent exploitation, which is why companies should strengthen their compliance measures and carefully examine the risks of forced labor. Monitoring and audits are important tools to ensure these standards are met. Global cooperation is essential to combat modern slavery and end exploitation.

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The definition of modern slavery

Estimates by the International Labor Organization (ILO) show that around 27.6 million people worldwide are trapped in forced labor, including 3.3 million children.

In today's world, there are various forms of modern slavery that exploit people in the most brutal ways. Millions of victims, including women and children, suffer from forced labor and human trafficking. The International Labor Organization (ILO) defines modern slavery as a blatant violation of human rights that exists worldwide. The precise definition of modern slavery plays a central role in drawing attention to the various forms of slavery and developing effective countermeasures. Every single case of forced labor is one too many, and it is time to take joint action against this abhorrent practice.

What is modern slavery?

The term forced labor is defined by law, including in ILO Convention No. 29, the Convention on Forced or Compulsory Labor and the Supply Chain Due Diligence Act (LkSG).

Slavery is unfortunately still an existing phenomenon today. Modern slavery refers to situations in which people work under duress, are deprived of their freedom and have no control over their working conditions. This can take various forms, such as forced labor, human trafficking, debt bondage or forced prostitution.

Victims of slavery are often trapped in a vicious cycle of exploitation and violence, with no means of escape. In many cases, they are kept in conditions that violate their basic human rights. The right to decent working conditions, fair pay and humane treatment is often disregarded. This not only leads to the exploitation of workers, but also to a violation of international occupational health and safety standards.

Modern slavery can be found in various industries such as agriculture, textiles, construction, care and others. It is important to be aware that slavery still exists today and that measures must be taken to combat this crime and protect its victims.

What are the signs?

The signs of forced labor are diverse and can manifest themselves in different ways. The International Labor Organization (ILO ) has developed various criteria for identifying forced labor. Identifying cases of forced labor requires a precise and sensitive approach as well as an awareness of the various manifestations of this problematic practice. The presence of a single clue in a specific situation may in some cases indicate the presence of forced labor. On other occasions, however, several signs may need to be considered together to indicate a case of forced labor.

The critical indicators according to the ILO are

Background and distribution

Causes and extent

The causes and extent of modern slavery are complex and alarming. Despite international efforts and legal measures, the problem remains widespread. Millions of people, including women and children, are held captive in various forms of forced labor and exploitation worldwide. The victims of modern slavery suffer under inhumane conditions and have limited opportunities to free themselves from this situation.

One of the main causes of modern slavery is the economic exploitation of vulnerable population groups in particular. People in situations of poverty, unemployment or lack of education are often exploited as they are willing to work under exploitative conditions out of desperation. This economic pressure and the prospect of a better life lead to people being forced into dangerous and inhumane working conditions, which form the basis for modern forms of slavery.

Globalization and the pressure on companies to cut costs and maximize profits often lead to working conditions that promote modern slavery. Complex supply chains often put workers in precarious situations without adequate rights or pay.

An important aspect that contributes to modern slavery is the inadequate legal regulation and enforcement of labor rights in many countries. There is often a lack of clear laws to protect workers from exploitation and inhumane working conditions. This gives unscrupulous employers and companies the opportunity to exploit workers and force them into a kind of modern slavery. This legal vacuum allows them to violate basic human rights without being held accountable. The lack of effective legal regulation thus creates an environment in which modern slavery can thrive.

Social structures also play a role in maintaining modern slavery. Discrimination based on gender, ethnicity or social background means that certain population groups are particularly at risk.

It is important to understand these complex causes and take action to effectively combat modern slavery. Only through joint efforts at a political, economic and social level can we create a world in which exploitation and oppression no longer have a place.

Where does slavery still exist today?

Slavery still exists in some parts of the world today, particularly in countries such as North Korea, Mauritania and Eritrea. In these regions, there are reports of modern forms of slavery, including forced labor, debt bondage and human trafficking. Those affected are often poor and vulnerable, which enables the perpetrators to exploit and enslave them. Walk Free estimates that on any given day in 2021, around 50 million people were living in modern slavery. This number exceeds ILO estimates and can be explained as follows: 28 million people were in forced labor, while 22 million were in forced marriages.

Walk Free's Global Slavery Index is a report that quantifies the number of modern slaves in 160 countries worldwide. It is based on a variety of data sources and serves to raise awareness of this pressing issue. A key aspect of the Global Slavery Index is the methodology used to collect and analyze the data. The data is based on thousands of interviews with survivors collected through nationally representative household surveys in 75 countries, as well as country risk assessments. The final result is an index value that corresponds to an estimated value for the prevalence of modern slavery per 1000 inhabitants in the country in question.

According to the 2021 report, modern slavery is most widespread in North Korea, followed by Eritrea, Mauritania, Saudi Arabia, Turkey, Tajikistan, the United Arab Emirates, Russia, Afghanistan and Kuwait. The data refer to 1000 inhabitants. North Korea is at the top with a value of 104.6 and over 2 million people affected.

Although forced labor is mainly found in low-income countries, there is a strong link to demand from higher-income countries. The complex and opaque supply chains created by the production and transport of goods between countries - from the sourcing of raw materials to manufacturing, packaging and transportation - are often linked to forced labor. A frightening example: In 2021, G20 countries imported $468 billion worth of goods produced under conditions of modern slavery. According to the organization International Justice Mission, which frees people from slavery worldwide with its important work, every German indirectly owns 60 to 70 slaves through this consumption.

No country in the world is exempt from modern slavery. Regardless of their size, population or economic situation, this insidious crime spreads across national borders and permeates global supply chains. Even here in Germany, there are cases of exploitation and forced labor that are not always obvious. Although Germany has a good ranking of 158 out of 160, it is estimated that around 47,000 people are affected by modern slavery in this country, according to Walk Free. This figure is mainly made up of labor exploitation and forced prostitution. The number of unreported cases could even be higher, as cases of exploitation and forced labour often remain hidden and are difficult to detect.

Forced labor today: Which areas of work are affected?

In today's world, modern slavery unfortunately occurs in many forms and areas of work. According to the International Labor Organization, forced labor takes place in the private sector, affecting 17.3 million people, excluding commercial sexual exploitation. In addition to the textile industry, agriculture, mining, construction, domestic workers and the food and electronics industries are also heavily affected. In these industries, people are often forced to work under exploitative conditions without receiving adequate pay or labor rights.

These are often hidden forms such as forced prostitution, forced labor on fishing vessels or in the home, which are less obvious but still represent extreme exploitation and mistreatment of people. These less obvious forms of exploitation and oppression of people must also be brought into focus in order to put an end to these inhumane practices.

EU Forced Labor Regulation

The EU Forced Labor Regulation in the fight against modern slavery

As previously highlighted, according to the ILO, almost 28 million people worldwide are in forced labor. The goods they produce also reach the European market via global supply chains.

The EU Forced Labor Regulation (FLR) plays a key role in the fight against modern slavery. Through clear regulations and measures, it aims to combat forced labor throughout the supply chain. Companies are obliged to report transparently on their suppliers and their working conditions in order to prevent exploitation and forced labor. The regulation sets clear standards and penalties for violations in order to protect the rights and dignity of workers. It applies to all products manufactured under forced labor that are sold in the EU or exported from the EU (including online trade). The act also applies to all sectors of the economy.

Through consistent implementation and monitoring, the EU Forced Labor Regulation can help protect millions of victims of modern slavery worldwide and shape a future without forced labor.

On 14 September 2022, the Commission proposed a ban on the sale of goods produced using forced labor on the European market. On March 5, 2024, the representatives of the European Parliament (EP) and the Council of the EU reached a provisional agreement in the trilogue negotiations on this ban. In the end, the EU Parliament voted in favor of the regulation on March 23, 2024 with 555 votes in favor, 6 against and 45 abstentions.

The following steps include formal approval by the Council of the European Union and publication in the Official Journal. Once these final steps have been completed, the EU member states must begin implementing the regulation within 3 years, i.e. probably from mid-2027.

How does the Forced Labor Ordinance interact with other laws?

Although the Forced Labor Ban Regulation does not introduce any new supply chain-related due diligence obligations, in many cases the EU Forced Labor Regulation applies in conjunction with existing due diligence obligations (for example, the Supply Chain Due Diligence Act (LkSG ) and the Corporate Sustainability Due Diligence Directive (CSDDD)). These laws oblige companies to ensure compliance with human rights and labor standards along their entire supply chain. Nevertheless, both laws lack concrete measures against forced labor, such as an import ban or more extensive regulations. The Forced Labor Regulation therefore represents an extended duty of care to ensure that forced labor has no place in EU value chains. In contrast to the LkSG and the CSDDD, it regulates the issue in a stricter manner with bans and prohibitions, which represents important progress.

Companies that violate these laws not only risk legal consequences, but also reputational damage. It is therefore important that companies keep an eye on the EU Forced Labor Regulation, the Supply Chain Due Diligence Act and the Corporate Sustainability Due Diligence Directive and take appropriate measures to comply with these regulations.

In practice, this means that if the existing due diligence obligations (CSDDD and LkSG) do not lead to an end to forced labor in the supply chain, these products can be excluded from the EU market in accordance with the EU Forced Labor Regulation. As a result, forced labor should be excluded from the supply chain without exception. However, effective implementation of these measures requires close cooperation along the entire supply chain as well as regular review and updating of due diligence obligations.

Evaluation and outlook

The FLR has both advantages and disadvantages. One of the main advantages is that it serves to protect workers from exploitation and forced labor. Companies are now legally obliged to ensure that their employees work under fair conditions. This promotes human rights and social justice. Another benefit is that the regulation requires companies to be more transparent about their labor practices, which can increase consumer confidence. Thus, the Forced Labor Regulation can help raise public awareness of labor rights and ethical labor practices. Consumers are sensitized and have the opportunity to consciously choose products and services from companies that are actively committed to fair working conditions. This not only leads to a positive corporate image, but can also contribute to social change with regard to labor standards in the long term.

However, the EU regulation has been criticized for not fully protecting human rights and for not being ambitious enough. Although the regulation represents a glimmer of hope for those affected, reparation measures have not been introduced. This is criticized by the European Network of National Human Rights Institutions (ENNHRI), as the lack of redress measures could lead to companies merely getting rid of problematic cooperation without achieving real improvements for those affected. Remediation is an important aspect of ensuring that the ban on products covered by the EU Forced Labor Regulation does not only lead to superficial changes in supply chains, but also to real change. Adequate redress could consist of those affected having their identity documents and outstanding wages returned, being freed from debt bondage and seeing their working and living conditions improve significantly.

What other laws are there against forced labor?

There are other laws that combat forced labor and provide important protections for workers. These laws set standards to effectively combat and eliminate forced labor in all its forms. These international provisions are critical to achieving global outlawing of forced labor and upholding fundamental human rights.

The following is a non-exhaustive list:

  • Voluntary commitments from the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises
  • UK Modern Slavery Act of 2015 requires companies with a turnover of more than 36 million pounds to publish an annual modern slavery statement. This statement should provide information on what measures the company is taking to prevent modern slavery and human trafficking in its supply chain. In addition, companies must be transparent about how they ensure that no form of forced labor or child labor is used in their production processes.
  • The French Devoir de Vigilance (Duty of Care Act) of 2017 introduced proactive measures for companies to protect human rights. With the "Duty of Care", companies with at least 5,000 employees in France and 10,000 worldwide must take steps to prevent human rights violations and communicate them transparently.
  • The Commonwealth Modern Slavery Act 2018 requires companies with an annual turnover of more than 100 million Australian dollars to take measures to prevent modern slavery and human trafficking as part of their business operations. This act includes mandatory disclosure of company activities and the introduction of internal control mechanisms to identify and prevent breaches of the regulations.
  • The U.S. Uyghur Forced Labor Prevention Act aims to prevent the import of products made by forced labor of Uyghurs from the Xinjiang region of China. Companies that manufacture or sell such products have the burden of proof and are obliged to prove that their products were not manufactured using forced labor from Xinjiang. The law also provides for penalties for companies that violate these regulations. It serves as an important step in the fight against human rights violations and exploitation in the region.
  • The Norwegian Transparency Act (entered into force in 2022) requires larger companies to disclose information about their business practices to ensure that they act ethically and responsibly. To be classified as a larger company, they must meet or exceed two of the following three conditions: 50 full-time employees (or equivalent annual working hours), an annual turnover of at least NOK 70 million and a balance sheet of at least NOK 35 million. Companies are then required to publish an annual human rights compliance statement and respond to requests to disclose their efforts. The public has the right to request this information, which is a special feature of Norwegian law.
  • The Canadian Modern Slavery Act (Bill S-211) came into force on January 1, 2024. The law requires companies to take measures to prevent forced labor and child labor in their supply chains. Violations are punishable by fines. Transparent reporting on compliance is expected from companies in order to effectively support the fight against forced labor and child labor.

The role of companies in combating modern slavery

Companies play a crucial role in the fight against modern slavery. By implementing strict guidelines and control mechanisms, they can ensure that forced labor has no place in their supply chains. Transparency and due diligence are essential to prevent exploitation. As key players in the business world, companies have a responsibility to uphold human rights standards and actively work against forced labor. It is time for companies to take their social responsibility seriously and stand up for the rights and dignity of all people.

What obligations do companies have?

  • Although the FLR is not expected to apply until mid-2027, work on product-related risk management should start now. It is essential that the company creates the necessary compliance structures in good time in order to meet the obligations resulting from the Forced Labor Regulation. Failure to do so may not only result in serious sanctions, reputational damage and competitive disadvantages, but also import bans.
  • It could be challenging if the provisions of the German Supply Chain Due Diligence Act, the EU Forced Labor Regulation and the CSDDD overlap. It would therefore be important to conduct an in-depth analysis with other relevant regulations, such as on conflict minerals.
  • In order to ensure that their own products can continue to be sold, it is essential for companies to carefully examine and exclude the risks of forced labor in their supply chain. The analysis of these risks and the implementation of risk mitigation measures are therefore becoming increasingly important.
  • Comprehensive monitoring and regular audits are crucial to ensure compliance with this regulation and to ensure that human rights standards are met.
  • Even if the EU Commission or national authorities are responsible for providing evidence of forced labor in the supply chain, companies are included in the investigations. You have the opportunity to provide your own evidence of compliance with the ban on forced labor, for example by implementing standards and certificates. By providing such evidence, you can not only strengthen your credibility, but also gain the trust of your stakeholders.

Only together is a future without forced labor possible!

In a world where millions of people are still victims of modern slavery, it is important to take action together to end this exploitation. We must realize that modern slavery does not only exist far away in other countries, but also here, in our immediate surroundings.

Effectively combating modern slavery requires global cooperation and coordinated action. International organizations such as the International Labour Organization play a crucial role in developing and implementing strategies to prevent forced labour. By working with governments, non-governmental organizations and other stakeholders around the world, programs and initiatives to detect and combat forced labor can be made more effective. Sharing best practices, harmonizing standards and strengthening legal frameworks are critical to combating modern slavery at the international level. Only through joint efforts and solidarity actions can we create a future where forced labor has no place.

In addition, legal regulations such as the Forced Labor Regulation (FLR) help to create a framework for ethical business practices and raise companies' awareness of compliance with human rights and labor standards. The implementation of such regulations promotes a culture of social responsibility and transparency, which ultimately contributes to sustainable and fair economic development.

A future without forced labor is possible if we act together and stand up for the protection of human rights. Only through united efforts can we create a world in which no one is exploited.

Overview of central FLR standards

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