Effective January 2024, the “Fighting Against Forced Labour and Child Labour in Supply Chains Act,” or the S-211 bill, introduces reporting obligations on some entities to describe the measures they have taken to prevent and reduce the risk that they or their suppliers are using forced labor or child labor. The first reports are due by the end of May 2024.
Who Does the Act Apply to?
The law expands modern slavery reporting requirements to a host of new companies. Specifically, those that are:
What Should be Reported Under the Act?
Are you planning to meet the Act’s requirements? Our regulatory snapshot provides more details on what’s in scope and what’s required of your business: Canada Modern Slavery Act: Regulatory Snapshot
Applicable to: Australian entities or companies carrying out business in Australia with an annual consolidated revenue of AUD 100 million or more.
This includes: Australian entities companies, partnerships, trusts, universities and charities), entities carrying on business in Australia (irrespective of where they are incorporated), body corporate, Commonwealth corporations and companies.
The Australia Modern Slavery Act anticipates the companies in scope to report on the modern slavery risk in their operations and supply chain, as well as on the actions taken to mitigate any identified risk. Entities required to comply must prepare Modern Slavery Statements every reporting year. The Australian Government publishes these statements through an online, publicly accessible register.
The Modern Slavery Statement must must include the following information:
Applicable to: companies that carry out business in the UK and its turnover (or the turnover of a parent company and its subsidiaries) reaches GBP 36 million or more.
The UK Modern Slavery Act consolidates existing offenses of human trafficking and slavery, encompassing all forms of exploitation. All businesses that carry out business in the UK need to provide transparency on their supply chains and prepare an annual statement on slavery and human trafficking. Such a statement needs to detail what steps a company takes to ensure no exploitation occurs within its lines of business or its supply chain. Although there is no financial penalty for non-compliance, the Secretary of State can seek an injunction requiring the company to file the statement.
Specifically, Section 54 of the act outlines the annual statement must include the following information:
The UK Government is looking to update the legislation to introduce more stringent measures in case of non-compliance.
The EU Corporate Sustainability Due Diligence Directive (CSDDD or CS3D) requires companies to be much more transparent about their human rights and environmental impacts. The CSDDD is a regulation designed to help companies identify and mitigate sustainability-related risks from their supply chains and sourcing operations.
The CSDDD is a companion law to the EU Corporate Sustainability Reporting Directive (CSRD) and a component of the EU Green Deal – the European Union’s strategy to make its economy more sustainable.
In 2024, the CSDDD will become EU law and should be transposed into national law by the Member States by 2026. At that point, the CSDDD will apply to a group of EU companies, only to encompass a host of non-EU businesses in 2029.
The CSDDD will apply to the following companies:
The CSDDD will require companies to:
Getting ready for the CSDDD? Take a look at our Regulatory Snapshot. In this guide, we’ll help you understand what the directive means for your business, what you need to do, and how to do it.
The proposed EU directive establishes a corporate due diligence duty to identify and mitigate potential negative impacts on human rights and the environment within their operations or their value chains. In case of violations, a company must carry out remediation efforts, including financial compensation for the affected parties. Following the directive, the member states should establish legal liability for any reported damages.
Lieferkettengesetzes or LkSG requires companies that have their principal place of business in Germany and that employ at least 3,000 people (and starting January 2024, 1,000 or more) to disclose their due diligence measures to prevent and mitigate the risks of human rights violations and environmental damage. The law also indirectly impacts thousands of suppliers to those companies, not just in Germany.
The companies within the scope of the law are required to:
The law is designed to be consequential – penalties for non-compliance can range up to two percent of a company’s annual turnover. However, it comes with a raft of guidance from BAFA, the German government agency overseeing the implementation of LkSG, and established methodological pathways to be compliant.
Learn more about how EcoVadis solutions can support your company with LkSG-aligned risk analysis and compliance.
Applicable to companies operating in Germany with more than 3,000 employees (as of 2024, lowering the threshold to 1,000). Business that are part of the supply chains of those companies (directly or in tier 2 or more in some industries) will likely be required to respond to their ESG disclosure requests.
The German Supply Chain Act or Lieferkettensorgfaltspflichtengesetz (LkSG) aims to protect human rights and limit environmental harm by making it mandatory for companies in the scope noted above to conduct supply chain due diligence. LkSG mandates organizations to conduct risk identification and management, due diligence activities, and mitigation actions, as well as publish annual reports. Non-compliance can be costly, with penalties and fines ranging up to two percent of the company’s annual turnover.
In other words, companies within the scope of the German SUpply Chain Act must set up the following due diligence procedures:
Applicable to companies established in France, employing more than 5,000 people in France or 10,000 persons worldwide.
Under France’s devoir de vigilance, certain large companies must follow the UN Guiding Principles on Business and Human Rights in the execution of their business. It requires companies to establish due diligence processes throughout the supply chains to prevent human rights and environmental violations. Companies in the scope of the legislation need to do risk mapping to identify supplier risk levels by region or category, conduct due diligence assessments and mitigation, and develop annual plans (“plan de vigilance”), describing the related risks and measures taken to address them. Following a formal complaint, a failure to act with adequate diligence or adhere to standards of reasonable care may lead to civil liability of defaulting company.
To learn more about how the Duty of Care Law (Devoir de Vigilance) affects your business read our whitepaper (in French).
Applicable to companies selling goods and services to Dutch end-users, including companies registered outside the Netherlands.
The Child Labor Due Diligence Law requires companies to investigate whether child labor contributed to any goods or services they are selling or supplying. Companies must issue a due diligence statement, and if they identify any issues, set out a plan of action.
Companies that fail to comply with the requirements face steep fines, while continued non-compliance can result in criminal sanctions. It’s one of the first criminal enforcement tools for a failure to exercise human rights due diligence.
In short, below are the key requirements of the law:
Applicable to companies registered in Norway or companies paying taxes in Norway meeting at least two out of the following three criteria: 50 or more full-time employees; annual turnover of at least NOK 70 million; NOK 35 million balance sum.
The Transparency Act (or Åpenhetsloven) requires companies to carry out due diligence assessments in respect of human rights and decent working conditions. The objective of the assessment is for the companies to identify, address and prevent any adverse impacts in their operations, supply chain or other business relationships. The Act requires businesses to report the findings and make the information available to the public through the company’s website.
The level of due diligence should be carried out in proportion to the size and nature of the business, depending on the severity and probability of the adverse impacts on human rights and decent working conditions. Consequences and penalties for non-compliance are yet to be defined, however, they will be variable as well – the severity of the infringement will determine them.
To learn more about what the Norway Transparency Act means for your business read our blog or watch a webinar.