New US legislation could require forced labour audits

Modern countries are fighting forced labour and human trafficking with legislation that makes it harder to use forced labour in their supply chains and profit from it. Modern slavery acts in the United Kingdom, United States, and other countries around the world are requiring large companies to disclose information regarding their efforts to eradicate human trafficking and slavery within their supply chains. The legislation also requires companies to take concrete steps to combat modern slavery when it is discovered. The US has recently introduced the Slave-Free Business Certification Bill 2022.

Slave-Free Business Certification Bill of 2022: What is it?

With this recent bill, the US is joining the growing list of countries requiring businesses to examine more extensively possible problems with modern slavery in their supply chains. If passed, the bill will require large companies to undergo mandatory audits that will identify if they are or are not using forced labour within their supply chains.

Introduced on February 3, 2022 by Senators Josh Hawley (R-MO) and Kirsten Gillibrand (D-NY), the new bill aims to provide U.S. policymakers with greater assurances that companies are taking concrete steps to eliminate forced labor from their direct supply chains.

In discussions about the bill, Senator Gillibrand stated that “This bill is an important step towards ending the use of forced labor by holding businesses accountable for the workers used throughout their supply chains.”

The Slave-Free Business Certification Bill will:

Require organisations to disclose what they’re doing to eradicate forced labour, slavery and human trafficking from their supply chains
Instruct large companies to undergo independent audits to make sure they are not enabling or using forced labour and trafficking in their supply chains
Require organisations to share the results of their independent audits to the Department of Labour in the form of public reports
Require CEOs to confirm that their supply chains are free from slave labour, and if they are not, requires them to report all instances of forced labour they have identified in their organisation

On an earlier version of this bill that was introduced in 2020, Senator Hawley commented:

“If corporate America wants to be the face of social change today, they should have to certify they are completely slave-free. Participate in independent audits to verify it and disclose steps to ensure slave labor won’t become part of the equation later on. And if they refuse to do so, they should pay the price. That’s social responsibility.”

The current bill is part of a series of legislative actions meant to address the use of forced labour in businesses. Specifically, President Biden recently passed the Uyghur Forced Labor Prevention Act, which requires organisations to certify that they are not facilitating forced labour in China’s Xinjiang region.

Who will it apply to and how will it affect your business?

The bill would apply to businesses with annual revenue greater than $500 million, requiring them to audit their supply chains for labor practices or human trafficking activities that violate specified national or international standards and report the results to the Department of Labor. This means the bill will likely affect businesses in industries such as communications, textiles and mining. The audits must then be submitted to the US Labor Department and be made available to the public. The Labor Department will report on companies that fail to comply with the bill.

Complying with the bill will involve a detailed investigation and audit process, which require the following:

Discussions with managers and employees
Collecting and reviewing relevant documents such as payroll records, age verifications, and others
Conducting discussions with labour organisations and advocacy groups
Conducting a subsequent meeting with management to report findings and agree on further actions

How can VinciWorks help?

If passed, the bill will mean a significant increase in companies’ due diligence burdens, but that does not have to be cause for panic: VinciWorks offers tools that make all of the necessary risk-based monitoring and due diligence practices seamless, easy, and customised to your needs. Our best-practice modern slavery reporting solution allows businesses to collect all necessary data from their suppliers, easily flag high-risk countries and take any action required to reduce the risk of slavery in the supply chain.

All responses that require action can be flagged, allowing procurement officers to take immediate action when necessary. The centralised dashboard gives a full view of any risks that have been flagged. Both the questionnaire and dashboard are fully customisable.

As more and more organisations wake up to the importance of fighting modern slavery, the importance of robust workforce training and company record keeping are becoming even more apparent. Click here to learn more about our solutions.

How are you managing your GDPR compliance requirements?

GDPR added a significant compliance burden on DPOs and data processors. Data breaches must be reported to the authorities within 72 hours, each new data processing activity needs to be documented and Data Protection Impact Assessments (DPIA) must be carried out for processing that is likely to result in a high risk to individuals. Penalties for breaching GDPR can reach into the tens of millions of Euros.

“In a world older and more complete than ours they move finished and complete, gifted with extensions of the senses we have lost or never attained, living by voices we shall never hear.”