c) National instruments: 2. Instruments dedicated to supply chains

In addition to the instruments dedicated to the fight against trafficking, adopted on the model of the Palermo Protocol, several national legislations regulate supply chains.

 

It seems important to highlight some particularly notable national instruments that contribute to the fight against human trafficking through the control of supply chains. As demand is one of the root causes of trafficking, it is important to approach the fight against trafficking by controlling the purchases of products and services by public authorities, businesses and consumers, so that these purchases are free of slavery.

 

The duty of care or duty of vigilance requires companies to operate in a responsible manner, without social and environmental damage.

 

At the international level, due diligence is defined by the OECD Guide as “a

processes that companies should implement to identify, prevent, and mitigate actual and potential negative impacts of their operations, supply chain, and business relationships, but also to be accountable for how those impacts are addressed.”

 

  • This duty is reflected in the United Nations Guiding Principles on Business and Human Rights through references to the standard of “human rights due diligence”. These principles concern States and companies and specify their duties and responsibilities with regard to the protection and respect of human rights. The Guidelines are not an international instrument that States ratify and they do not create new legal obligations, but they do encompass provisions and principles from binding instruments.
  • Some international anti-trafficking instruments also refer to due diligence. While the Palermo Protocol refers to combating demand in a general way, the Warsaw Convention (Article 22) and Directive 2011/36 (Article 5) specifically states that Member States must ensure that a legal person can be held liable where a failure to supervise has made possible the offence of trafficking.

 

While due diligence is mentioned in some international texts, it is not the subject of a specific binding instrument at the international level, despite the work of the United Nations and the European Union. However, national legislation increasingly concerns “due diligence”: instruments on transparency in corporate supply chains (California, Norway), transparency provisions in modern slavery laws (UK, Australia) and instruments on corporate duty of care/diligence (France, Germany). Chronologically:

 

→ California law (California Transparency in Supply Chains Act, 2010):

 

California’s Supply Chain Transparency Act went into effect in January 2012 and affects retailers and manufacturers doing business in California and earning more than $100 million in annual gross revenue.

 

This law requires them to publish on their websites or in written responses to consumers upon request, the measures and efforts they are taking to assess and address human trafficking risks: auditing supply chains, auditing suppliers, certifying that materials used are free from trafficking, maintaining internal standards of employee and contractor responsibility, and providing trafficking and slavery training to company personnel and management. 

 

 

→ UK law (Modern Slavery Act, 2015):

 

The UK’s Modern Slavery Act 2015 dedicated Section 54 to transparency in supply chains by requiring certain commercial organizations to publish an annual statement describing the steps they take to prevent modern slavery in their operations and supply chains. These organizations include humanitarian and religious organizations that meet the turnover criteria.

 

 

→ French law (Loi relative au devoir de vigilance des sociétés mères et des entreprises donneurs d’ordre, 2017):

 

This law is the first in the world to require large companies to prevent and remedy human rights abuses, including human trafficking, and environmental damage through the establishment and implementation of a due diligence plan.

  • It is intended for French companies with at least 5,000 employees in France or 10,000 employees in France and abroad.
  • It applies to the activities of the parent company itself, to all French or foreign subsidiaries it controls, and to subcontractors and suppliers with which it has stable and established links.

 

 

The plan that is established and implemented must contain several elements, including a risk map and regular assessment procedures.

 

The starting point of this plan requires companies to analyze each of the group’s activities and identify risks to the rights of individuals. This may include verifying the age of workers, working and housing conditions, and recruitment methods,among others, in order to adopt effective actions to combat trafficking. This vigilance plan and a report on its implementation must be made public.

The Delta 8.7 platform summarizes: “French law requires companies to identify risks rather than simply reacting retroactively, and it provides avenues of redress for affected individuals and communities.”

In fact, when faced with a failure to publish or implement, there are two types of recourse:

  • The first allows the company to be put on notice if it does not meet its obligations. The judge may be called upon to order the company to comply with its obligations, if necessary under penalty (Article 1).
  • The second allows the company to be held civilly liable when damage is observed that could have been avoided with an effective due diligence plan (Article 2).

Numerous NGOs (Actionaid, Friends of the Earth, Amnesty, Terre Solidaire, Collectif éthique sur l’étiquette, Sherpa) have come together to make an initial assessment of the implementation of the obligations laid down by this law. Published in 2019, this assessment highlights that the plans published in application of the law on duty of care are “largely insufficient”:

  • Many companies have not published any
  • For most of the other companies, the plans were not considered satisfactory and did not meet the level of requirements of the law (focused on the risks for the companies, plans of only a few pages, not very readable, vague, etc.)

While the French law was very innovative on some points (although it could have been even more ambitious), the efforts in the first year of application seem insufficient to limit human and environmental risks. Companies need to be more rigorous in their application of the law, and much more needs to be done.

The recommendations proposed by the authoring NGOs throughout the report are intended for all companies (whether or not they are subject to the law) and the French public authorities and are summarized on page 47.

→ Australian law (Modern Slavery Act, 2018):

 

With this legislation, Australia establishes a national requirement for reporting modern slavery to large corporations, market entities and government contracts.

 

Entities are required to make a modern slavery risk statement in the form of an annual report. To do so, they must provide information on their structures, operations, and supply chains, and discuss the potential risks of modern slavery in their operations. They must also take steps to assess, address, and remedy these risks when they are identified. All declarations are published on a central public registry managed by the government and are freely available on the Internet to civil society, which has the power to hold the various entities accountable.

 

However, given the fact that no sanctions (apart from the publication of information relating to non-compliance and the disclosure of the identity of the offending company) are provided for, the text of this law is considered, as a whole, to be far too lax.

 

→ German Law (Law on the Duty of Care of Companies in Supply Chains):

 

This law was passed in June 2021 and will come into force in 2023. It will require large companies (with 3,000 or more employees and 1,000 or more in 2024) to ensure compliance with social and environmental standards within their supply chains. They will have to monitor their operations and those of their suppliers and take action if they find violations.

 

Within this framework, companies will have to put in place processes to identify, assess, prevent, and remediate risks – impacting human rights and the environment – such as forced labor, child labor, discrimination, unsafe working conditions or environmental degradation.

 

Finally, to increase transparency, the law also requires companies to publish an annual report describing the measures taken to identify and address these risks.

 

→ Norwegian law (Norway’s Transparency Act – 2021): 

 

Norway has a transparency law however – similar to France and Germany – it requires large companies to put in place due diligence mechanisms to operate responsibly with respect to human rights throughout their supply chains. Unlike the French and German laws, the Norwegian law currently only addresses human rights without consideration for environmental impacts.

 

In concrete terms, the companies concerned will have to identify, address, prevent and mitigate human rights risks and violations and, where appropriate, cooperate to provide redress. All activities carried out in this sense must be visible on the company’s website.

 

More than that, the Norwegian Transparency Act:

  • Applies to large companies established in Norway, as well as foreign companies selling goods or services in the country.
  • Requires companies to respond to public requests for information about their human rights practices.

 

Compliance with the duty of vigilance is entrusted, as in Germany, to an administrative authority (in this case the Consumer Protection Agency) which has the power to impose financial penalties on companies. Unlike in France, it is not the judge who has the power of injunction, and the civil liability of the company cannot be engaged.

 

→ European Union:

 

For its part, the European Union is actively working on a directive on duty of care:

 

The proposed directive would apply to large companies established within the EU that generate at least 50% of their turnover in a sector identified as being at risk (fashion, agriculture, mining), as well as to certain companies operating within the EU, although established outside its borders.

 

Thus, the following will be subject to the duty of care:

  • the operations of the company and its subsidiaries
  • the value chains of all entities with which companies have a commercial relationship. The concept of “value chain” chosen by the drafters of the proposal is very broad and includes all production and service provision activities, including sales and distribution activities.

 

The proposal also creates obligations for the companies concerned, as well as a duty of care towards the directors of these companies, who will be responsible for the implementation of these measures. Finally, Member States will be required to set up administrative authorities to ensure the implementation of the provisions.

 

At the national level, the French National Human Rights Consultative Commission (CNCDH) welcomed the adoption of this first proposal which would fill the gaps in positive law and contribute to sustainable development. However, in view of the human and environmental stakes, the CNCDH has formulated some recommendations to improve the text through its declaration for an ambitious European Union directive on the duty of care of companies with regard to human rights and the environment in global value chains:

  • broaden the scope of the directive
  • strengthen due diligence requirements by bringing them more in line with relevant international standards
  • provide for better definitions and the involvement of stakeholders
  • solidify control procedures to facilitate access to remedies and redress

 

Public procurement: a tool in the fight against trafficking

 

Given the sheer volume of public contracts, it is critical that governments lead the way in applying the same due diligence to their business contracts.

 

In this context, some legislation and provisions dedicated to public procurement include criteria of quality, sustainability and respect for human rights:

→ France in its Code de la commande publique, which came into force on April 1, 2019 – transposing Directive 2014/24 – allows the buyer to impose environmental and social criteria and considerations in the execution of all or part of the contract (Article L2112-4). Also, Article L.2141-1 excludes from the procurement procedure persons who have been the subject of a conviction for, among other things, the offence of trafficking in persons.

→ Switzerland in its Federal Law on Public Procurement (LMP) of June 21, 2019, which came into force at the beginning of 2021: One of the goals of the law is “an economical use of public money with sustainable economic, ecological and social effects” (Article 2) and the contracting authority shall take into consideration several criteria, including sustainable development (Article 29-1).

 

Taking it a step further, Australia, with the Modern Slavery Act (2018), has created an anti-trafficking tool that includes government procurement. It is a national advance that applies to public procurement by establishing a national modern slavery reporting requirement for large businesses, the Commonwealth of Australia, and Commonwealth of Australia corporations and societies (Section 5).

 

 

See
 – Sharan BURROW, General Secretary, International Trade Union Confederation, “Eliminating Modern Slavery: Due diligence and the rule of law” Business & Human Rights Resource Centre, 8 August 2017
 –IOE/Konrad Adenauer Stiftung. Key developments in mandatory human rights due diligence and supply chain law. Considerations for employers (September 2021). 

-LEXOLOGY. “Supply Chain Due Diligence Laws”. (April 6 2022)

 

The California Transparency in Supply Chains Act – Resource Guide, 2015 Kamala D. Harris, Attorney General California Department of Justice

 

Guidance, Publish an annual modern slavery statement, Gov.uk

 

Law on the duty of care of parent companies and businesses

Year 1: Companies must do better,

Amnesty and other NGOs, February 2019, decoding the law pp. 8-9

 

Noëlle LENOIR Avocats “Norway is one of the three countries in the world to have adopted a law on the duty of care”.

 

Conference on “Public Procurement as a Tool in the Fight against Trafficking. Towards new legal frameworks directly limiting the demand for goods and services linked to human trafficking” by the Ambassador of the Order of Malta, Prof. Michel Veuthey at the Institute of Peace and Development of the University of Nice