In today's business landscape, sustainable and equitable considerations are essential for responsible investors. However, the reality is that many daily products have ties to forced labour, an abhorrent form of exploitation that deprives people of their freedom and subjects them to degrading and abusive working conditions.  

Despite increasing awareness of the issue, the business response to prevent and address forced labour risks has been inconsistent and insufficient in reducing its global prevalence. Following the lead of landmark legislation in the United States which prohibits the trade of goods made with forced labour, namely the Tariff Act and the Uyghur Forced Labour Prevention Act (UFLPA), the EU's proposed forced labour regulation is an ambitious step towards better business practice and eradicating forced labour worldwide. However, civil society remains deeply concerned about the slow pace of negotiations in the Council of the EU. 

Investors have continued to engage with companies to address workers’ rights and forced labour risks in supply chains. In January, over 80 institutional investors overseeing assets exceeding US$2.44 trillion (Euro € 2.29 trillion) voiced their support for a robust EU-level forced labour regulation that incorporates a worker- and remedy-centered approach, includes mandatory human rights due diligence, requires complete value chain tracing, and addresses systematic state-sponsored forced labour. 

As the legislative proposal to remove forced labour goods from the EU market progresses, investors should use their individual and collective leverage to urge EU policymakers to keep the legislative process on track, calling for a comprehensive and rigorous EU forced labour regulation that is remedy- and worker-centric. 

The current state of play 

Globally, around 17.3 million people are in forced labour in the private sector and a further 3.9 million are estimated to be in state-imposed forced labour. To tackle this endemic problem, a group of MEPs published a paper advocating for import controls on products made with forced labour in February 2021. This was catalysed by the European Green Deal and the value-driven approach the EU had taken with Coronavirus. Subsequently, and encouraged by civil society, the European Commission proposed a forced labour regulation in September 2022. 

To understand how the proposed law can incorporate the above elements, see the model law against forced labour proposed by Anti-Slavery International, the European Center for Constitutional Human Rights (ECCHR), and the Greens/EFA Group in the European Parliament. 

Investors should continue to engage with policymakers on the forced labour regulation 

As a follow-on action to the January 2023 Investor Statement in Support of Robust Forced Labour Regulations, which remains open for sign-on here, investors should use their power and voice to urge EU member states, notably Spain in its capacity as the presidency of the Council of the EU, to push the regulation forward to its final stage: the trilogue. More generally, it remains paramount for investors to actively engage with any EU policymakers they hold relationships with to continue to emphasise their support for the regulation.  

As stewards of capital, investors play a vital role in eradicating forced labour from global supply chains. Embracing an effective EU law with global impact is a strong step towards ending forced labour. We cannot risk an indefinite delay for this crucial piece of legislation that has the potential to set a global standard and level the playing field across businesses and industries.