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July 27, 2016

Corporations Forced to Start Taking Responsibility for Human Trafficking in their Supply Chains

By Lewis Golove

Approximately 21 million people are victims of modern day slavery worldwide, and 68 percent of these are victims of forced labor in the private economy.

President Obama took a large step forward in the fight against forced labor in February 2016 when he signed the Trade Facilitation and Trade Enforcement Act of 2015 into law. It closed a longstanding loophole in the Tariff Act of 1930 that allowed goods made with slavery to be imported into the United States as long as domestic demand exceeded supply. Now that the loophole has been closed, U.S. Customs and Border Protection (CBP) agents are empowered to block the importation of goods made by slaves.

The CBP has already begun to enforce the new law. In three separate orders since the act was signed into law in February, the CBP has detained goods linked to forced Chinese convict laborers, including chemicals, textile fibers, and the sweetener Stevia. These were the first withhold release orders made with regard to forced labor in over a decade.

The U.S. Department of Labor (DOL) produces a list of goods produced by child and forced labor that would be a good starting point for future enforcement. The DOL has already identified 136 products from 74 countries on this “dirty” list.

Importers now have to take extra care to protect their supply chains from slavery, lest they find their shipments delayed or rejected at the border. Multinational companies have begun to consider and implement a wide range of anti-trafficking measures, including internal training for employees, risk-based assessment of suppliers, increased transparency, and cooperation with local authorities.

But the onus doesn’t rest solely on the shoulders of corporations. It is also essential for governments to take responsibility for forced labor happening within their jurisdictions and have strong laws to hold corporate bad actors accountable, ensuring a level playing field for those that act responsibly.

The State Department issues an annual Trafficking in Persons (TIP) report ranks governments based on their efforts to combat human trafficking and includes concrete recommendations to strengthen their efforts. To potentially improve their ranking, governments should work with U.S. businesses that have operations and suppliers in their jurisdictions to root out forced labor in a sustainable way.

To make sure their products don’t run afoul of the amended Tariff Act of 1930, companies can utilize due diligence standards to ensure their own operations are free from forced labor, leveraging their purchasing power to apply pressure on their entire supply chain to adopt policies that reduce labor exploitation. They should also work with the U.S. government and foreign governments to ensure that those supply chains remain free from vulnerabilities in the long term.