The EU External Action Service Guidance on Due Diligence to Address the Risk of Forced Labour (July 2021) is non-binding.
It summarises international standards which are relevant for combatting forced labour, and gives practical guidance on due diligence. In particular it builds on the OECD Due Diligence for Responsible Business Conduct, which sets out how to prioritise human rights risks.
The assessment of human rights impacts such as forced labour should include an evaluation of the severity, likelihood and nature of the adverse impact. It should include assessment not only of the company’s own impacts – direct, indirect and contributing - but also those impacts linked to the company’s business relationships including subsidiaries, suppliers and contractors.
Human rights due diligence should also help companies decide how to respond to prevent or mitigate impacts, including evaluating what leverage the company has, from asserting influence to improve behaviour to completely disengaging. In the forced labour context, it is particularly important for companies to encourage reporting risks or instances of forced labour without fear of reprisal for reporting.
The guidance sets out the following “specific considerations for forced labour”:
- policies and management systems (e.g. tone from the top, employee awareness, whistleblowing mechanisms);
- understanding red flags;
- country risk factors – e.g. countries lacking relevant legal protections or known for forced labour,
- migration and informality risk factors – e.g. employment of migrant workers, informal employment arrangements, workers speak different languages, live onsite, or
- debt risk factors – whether workers are in credit arrangements with their employers, have access to their documents, or free movement.
- carrying out enhanced assessments for higher risk situations; for example
- assessing where there are “choke points” such as recruitment agencies,
- enhancing staff training in high risk areas,
- interviewing workers in a secure environment, or
- assessing worksites unannounced.
- taking appropriate action or remediation; for example
- setting out plans for corrective action and threatening to disengage if necessary to influence behaviour,
- communicate serious concerns for state-sponsored labour and request international attention,
- responsible disengagement as a last resort, ensuring to comply with national laws, and attempting to report the forced labour issues and seek remedies if possible.
- considering impacts (i.e. the nature of the impact) specific to forced labour including:
- on gender, considering the different harms and presentation of forced labour between men and women,
- on ethnic or religious minorities (in these cases, EU companies should seek not to directly nor indirectly contribute to discriminatory policies, and should also seek to mitigate adverse impacts even where they haven’t contributed), or
- associated with raw materials, seeking to credibly obtain and verify information on origin in partnership with suppliers and other business partners. If not feasible, source material outside of the high risk area.
The guidance also refers EU companies to incorporate the 6 OECD Due Diligence Procedures: Steps and Actions, which are set out in more detail in an Annex to the guidance:
- Embed responsible business conduct into the company’s policies and management systems
- Identify and assess actual or potential adverse impacts in the company’s operations, supply chains and business relationships
- Cease, prevent and mitigate adverse impacts
- Track implementation and results
- Communicate how impacts are addressed
- Provide for or cooperate in remediation when appropriate
Effective due diligence should be supported by efforts to embed responsible business conduct into policies and management systems and aims at enabling enterprises to prevent and mitigate adverse impacts that they cause or to which they contribute. Businesses are encouraged to assess the potential exposure of their supply chain to activities causing or contributing to human rights abuses or violations and to implement appropriate due diligence policies to ensure compliance with international due diligence and labour standards on forced labour.