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Regulation on prohibiting products made with forced labour on the Union market

In “An Economy that Works for People”

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On 14 September 2022, the Commission put forward a legislative proposal in the form of a regulation that would prohibit all products made using forced labour on the EU market.

The proposal covers all products made available within the EU market, meaning both products made in the EU for domestic consumption and for export, as well as imported goods. It would apply to products of any type, including their components, regardless of the sector. Member States authorities would mainly be responsible for the enforcement. They would conduct investigations following a risk-based approach and withdraw products from the EU market, once there is evidence that these were made with forced labour. Member States' customs authorities would enforce the ban at EU borders. In view of a structured coordination and cooperation between the Member States authorities and the Commission, a new platform, the EU Forced Labour Product Network, would be established. Companies would receive guidelines, SME in particular would benefit from support tools. 

The Committee on Internal Market and Consumer Protection (IMCO) together with the Committee on International Trade (INTA) lead the file in a joint committee procedure, while the Committee on Employment and Social Affairs (EMPL) and the Committee on Foreign Affairs (AFET) are associated committees. 

Ms Maria-Manuel Leitão-Marques (S&D, Portugal) and Ms Samira Rafaela (Renew Europe, the Netherlands) have been appointed as rapporteurs for the file. The draft report was presented at the joint committee meeting of 23 May 2023. 

On 16 October 2023 the Internal Market and International Trade committees adopted the draft report with 66 votes for, 0 against and 10 abstentions. MEPs amended the Commission proposal to the effect that they reversed the burden of proof for goods produced in high-risk areas. For these goods, authorities would no longer need to prove that people have been forced to work, as the burden of proof would fall on companies.  MEPs call on the European Commission to provide a list of of geographical areas and economic sectors at high risk of using forced labour. Furthermore MEPs ensured that products made with forced labour are banned from the internal market until the company demonstrates it has stopped using forced labour in its production or supply chain and workers are compensated for the harm done to them. MEPs have also updated and widened the definitions used in the text. In particular they aligned the definition of forced labour to ILO standards. The report, together with Committee decision to enter into interinstitutional negotiations, were announced in plenary (Rule 71) during Parliament’s November I plenary session; no objection was raised, and the report constitutes Parliament’s position for the trilogue negotiations.

On 26 January 2024, the Council adopted its position. The Council mandate clarifies the scope of the regulation by including products offered for distance sales, envisages the creation of a forced labour single portal, and reinforces the role of the Commission in investigating and proving the use of forced labour, while aligning the proposed measures with both international standards and EU legislation. 

The European Economic and Social Committee (EESC) issued a mandatory opinion on the Commission proposal, on 24 January 2023. The EESC highlights the civil society's role and appreciates the proposed assistance for companies. With regard to the envisaged database, the advisory committee suggests the introduction of a benchmarking system. The EESC also suggests a Public EU Rating Agency for environmental and social sustainability, as well as human rights in the business context.

On 5 March 2024, after interinstitutional negotiations, the Parliament and the Council reached a political agreement. The new regulation would create a framework for enforcing this ban, including through investigations, a list of high-risk goods and areas, new IT solutions and cooperation with other authorities and countries. 

1. Investigations. According to the agreed text, national authorities or, if third countries are involved, the EU Commission, will investigate suspected use of forced labour in companies’ supply chains. If the investigation concludes that forced labour has been used, the authorities can demand that relevant goods be withdrawn from the EU market and online marketplaces, and confiscated at the borders. The goods would then have to be donated, recycled or destroyed. 

2. High-risk goods and areas. At Parliament’s insistence, the Commission will draw up a list of specific economic sectors in specific geographical areas where state-imposed forced labour exists. This will then become a criterion to assess the need to open an investigation. The Commission can also identify products or product groups for which importers and exporters will have to submit extra details to EU customs, such as information on the manufacturer and suppliers of these products.

3. Digital tools and cooperation, including with third countries. A new Forced Labour Single Portal would be set up to help enforce the new rules. It includes guidelines, information on bans, database of risk areas and sectors, as well as publicly available evidence and a whistleblower portal. A Union Network Against Forced Labour Products would help to improve cooperation between authorities. The rules also foresee cooperation with third countries, for example in the context of existing dialogues or implementation of trade agreements. 

The provisional agreement was endorsed by IMCO-INTA on 20 March 2024. On 23 April 2024, the Parliament adopted in plenary the final text of the regulation. 

Once the regulation is formally approved by Council and published in the EU Official Journal, it enters into force the following day. EU countries will thereafter have 3 years to start applying the new rules. 

References:

Further reading:

Author: Stefano Spinaci, Members' Research Service, legislative-train@europarl.europa.eu

 

As of 20/08/2024.