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Human Rights

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Note that this post originally appeared on Baker McKenzie’s Sanctions and Export Controls Update blog. On July 1, 2020, the US Department of State, jointly with the US Department of Treasury, the US Department of Commerce, and the US Department of Homeland Security, issued an advisory (the “Advisory”) to caution US businesses about the risks of supply chain links to entities that allegedly engage in human rights abuses including the forced labor of Uyghurs, ethnic…

Corruption and sourcing-related human rights risks are top of mind for many companies, and for good reasons. Both risk categories potentially carry substantial legal and PR risks and can be outside of a company’s direct control to the extent they are implicated by the conduct of third parties. However, corruption and responsible sourcing risks are often managed by different corporate functions. Corruption risks traditionally fall under the ambit of the legal/compliance department, whereas responsible sourcing…

Child labor and other human rights violations occur around the world, and completely eliminating them from corporate supply chains is a daunting task. However, companies can take several steps to mitigate the risk of violations in their supply chains while demonstrating a firm commitment to responsible sourcing. A recent British documentary highlights both the importance of these steps as well as the limits of even the most aggressive measures. Britain’s Channel 4 Dispatches recently aired…

Governments around the world continue to signal that companies should prepare for a future where responsible sourcing programs that include supply chain human rights due diligence become a legal obligation. On February 20, 2020, the European Commission published a report titled “Study on due diligence requirements through the supply chain” (“the EC Study”) which examined the need for a EU-level regulation of corporate due diligence obligations aimed at identifying, preventing, mitigating and accounting for human…

On March 11, 2020, the Congressional-Executive Commission on China (“CECC”) announced new proposed legislation, the Uyghur Forced Labor Prevention Act, to establish a rebuttable presumption that all labor occurring in Xinjiang, China, or by persons anywhere in China who are involved with the “re-education through labor” program targeting Chinese Turkic Muslims constitutes forced labor within the meaning of the U.S. forced labor import ban, 19 U.S.C. § 1307. The proposed act would also impose sanctions,…

On March 9, New York Governor Andrew Cuomo announced that in response to the hand sanitizer shortages caused by the spread of the novel coronavirus, New York State will purchase hand sanitizer from a company that employs prison labor.  According to Cuomo, the goal is to make 100,000 gallons of hand sanitizer a week.  This hand sanitizer will reportedly be provided to state schools and prisons. The announcement has been met with criticism from politicians…

The U.S. Department of Labor (“DOL”) has reiterated its commitment to combating child and forced labor in supply chains, with an apparent regional focus on South America, Africa, and Southeast Asia. The U.S. government’s continued push on labor violations in corporate supply chains is further evidence that companies should be considering how well their compliance programs cover detection and deterrence of these abuses in their supply chains. On January 27, 2020, the DOL announced that…

U.S. Customs and Border Protection (CBP) is continuing to step up its enforcement of the U.S. import ban on goods made, wholly or in part, with forced labor (19 U.S.C. § 1307). Senior CBP leadership has recently confirmed that it is examining goods and commodities originating in Xinjiang, China, for potential enforcement activity. Separately, the U.S.-Mexico-Canada (USMCA) implementing bill, which was signed into law by President Trump on January 29, 2020 (Pub. L. 116-113), contains…

More evidence that U.S. courts are continuing to shift towards greater accountability for corporations (and associated individuals) for social harm in their supply chains. Although it is too early to declare the ATS raised from the dead, a slew of other statutes on the books and in the legislative pipeline impose growing obligations on companies to both report and prevent forced labor, trafficking and other human rights abuses in supply chains. Bottom line: companies with…

Although the SEC currently does not require public companies to disclose any environmental, social, and governance (“ESG”) information, including human rights issues and labor practices, historically, Congress mandated additional disclosures due to public policy considerations. On July 11, 2019, a discussion draft of the Corporate Human Rights Risk Assessment, Prevention and Mitigation Act of 2019 (“CHRRA Act”) was introduced at a hearing of the U.S. House Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets. The…