Corporate due diligence law one step closer in EU

Corporate due diligence law one step closer in EU

Corporate due diligence law one step closer in EU

The European Council has unveiled an updated strategy to address the issue of forced labor within the European Union (EU). Just Style shares that the current draft policy is aimed at aligning both international standards, including the robust U.S. Uyghur Forced Labor Prevention Act, and EU legislation. This includes a few new measures to strengthen the prohibition of products made with forced labor in the EU market.

Key points of the plan:

  1. Expanded scope to online sales: The move to extend the regulation’s scope to include online products ensures that online platforms are also subject to the ban on goods produced through forced labor.
  2. Creation of a Union Network and a single portal: The plan includes the creation of a Union Network against Forced Labor Products and a single portal. This will enable better coordination among authorities in the European Commission and offer a platform to access information, tools, and guidelines to enforce the ban effectively.
  3. Investigation process: If the Commission finds that there is concern over products made with forced labor, they will automatically take over the pre-investigation phase. This will streamline cross-border investigations, designating a lead competent authority and involving the Union Network to ensure transparency and a unified approach.
  4. International collaboration: To tackle forced labor cases outside the EU, the Commission will initiate contact with third countries and ask the third country governments to conduct inspections on the suspected cases of forced labor.

Following the Council’s negotiating mandate, the Commission will play a crucial role in assessing cases and making final decisions on banning specific products.

If passed, this regulation would mark a significant shift in the global regulation of labor and environmental practices within the supply chains of major corporations.

Belgian Deputy Prime Minister and Minister for the Economy and Employment Pierre-Yves Dermagne says,

“It is appalling that in the 21st century slavery and forced labour still exist in the world. ILO estimates that 27.6m people were in forced labour. This hideous crime must be eradicated and the first step to achieving this consist of breaking the business model of companies that exploit workers. With this regulation we want to make sure that there is no place for their products in our single market, whether they are manufactured in Europe or abroad.”

Read full summary here