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Last week the US Department of Labor (“DOL”) published a notice requesting information and comments on the following three reports on child labor and forced labor practices in foreign countries published by the US Bureau of International Labor Affairs (“ILAB”): (1) the 2019 Findings on the Worst Forms of Child Labor report (TDA report); (2) the List of Goods Produced by Child Labor or Forced Labor (TVPRA List); and (3) the List of Products Produced by Forced or Indentured Child Labor (E.O. List).

The three reports are the US government’s key public statements on the issue of forced labor and child labor around the world.  Specifically, the TDA report is mandated by the Transportation Development Act (“TDA”) which requires that countries implement their international law commitments to eliminate the worst forms of child labor to be considered for designation as a beneficiary developing country under the Generalized System of Preferences program.  This requirement is reinforced by the President’s obligation to submit to the United States Congress the Secretary of Labor’s findings with respect to each “beneficiary country’s implementation of its international commitments to eliminate the worst forms of child labor.”  The TDA report details ILAB’s findings on the issue, assesses efforts of 131 countries to eliminate the worst forms of child labor in the relevant year, and reports on their progress.

The TVPRA List is published to fulfill DOL’s mandate under the Trafficking Victims Protection Reauthorization Act to publish a list of goods produced by child labor or forced labor in violation of international standards.  The 2020 edition of the TVPRA List includes 155 goods from 77 countries.  It consists of 437 line items (a line item is a unique combination of a country/area and a good).

The E.O. List identifies products and their countries of origin that DOL, in consultation with the Departments of State and Homeland Security, has a reasonable basis to believe might have been mined, produced, or manufactured with forced or indentured child labor.  As of March 25, 2019 (the latest edition), the E.O. List comprises 34 products from 25 countries.  While the TVPRA List is geared towards the general public, the E.O. List is most relevant to federal contractors who, when supplying products included on the E.O. List, are required by the US Federal Acquisition Regulation to certify that they have made a good faith effort to determine whether forced or indentured child labor was used.

In addition to fulfilling statutory mandates and reporting requirements, the three ILAB reports are an important source of information for companies seeking to assess and mitigate risk in their global supply chains.  Among other things, they can be used as a helpful tool in:

  • determining the focus and extent of due diligence performed on new suppliers;
  • scoping supply chain audits;
  • planning global risk assessments;
  • “localizing” supply agreements;
  • determining the company’s global supply chain strategy.

Violations such as child labor, forced labor, and human trafficking have persisted despite the growth and globalization of corporate supply networks.  According to ILAB, the latest global estimates highlight that 152 million children remain in child labor and 25 million adults and children toil under conditions of forced labor, including in global supply chains.  Today more than ever, civil society, along with shareholders and consumers, demand that multinational corporations play a role in eliminating these practices by “cleaning up” their supply chains.  Resisting this demand can result not only in adverse press but also criminal and civil liability under a variety of legal regimes in the U.S.

Author

Maria Piontkovska is an associate in Baker McKenzie's Washington, DC office. Maria advises clients on reducing anti-corruption compliance risks stemming from operating business in emerging markets and handles internal investigations and related interactions with law enforcement authorities.

Author

Reagan Demas has significant experience working on behalf of companies and investors in emerging markets and high risk jurisdictions. He has managed major legal compliance investigations for a variety of Fortune 500 companies and negotiated settlements before the US Department of Justice, US Securities and Exchange Commission, and other federal and state regulatory entities, obtaining declinations in a number of matters. He has also conducted risk assessments and due diligence in a variety of legal compliance matters for companies across industries, and has worked on the ground evaluating partnerships, investments and other business opportunities worldwide. Reagan has written and spoken extensively on emerging compliance trends, ethics, corruption and doing business in Africa. In 2019, Reagan was selected as a BTI Client Service All Star by corporate counsel in recognition of being a leader in superior client service.