The European Council has adopted a regulation prohibiting products traded across the bloc made with forced labour. The regulation, which was first proposed in 2022, creates a framework on which to base legal action targeting any products exposed to forced labour within the EU. “Businesses have never been more in the spotlight not only for their profits but also their behaviours,” said Lucy Blake, Co-chair of Human Rights and Global Strategy at law firm Jenner and Block. “Those that exaggerate their credentials, even unintentionally, can face regulatory fines, litigation and suffer extensive reputational damage.” The European Commission will now create a database of forced labour risk areas or products for authorities to draw on when assessing possible violations of the regulation. Once it has been signed by the presidents of the parliament and council, the regulation will enter into force and apply after three years. CCLA Investment Management has also published its latest Modern Slavery Benchmark, noting that 30 of the 110 assessed companies found evidence of modern slavery in their supply chains or indicators that some form of forced labour was taking place. This is an increase from 25 companies last year. Companies have continued to underperform in rectifying the damage done to individuals when this abuse it revealed, CCLA said. “Businesses have an obligation to find, fix and prevent [forced labour] and we should not judge them for exposing modern slavery, but on what they do to address it when they uncover it,” said Peter Hugh Smith, CCLA’s CEO. “As an investor, we are determined to do all we can to stamp out modern slavery, including using our influence to bring investors together as well as engage directly with the companies in which we invest – we call on investors, companies and policymakers to do more to address this scourge.”
