The UK announced a new human rights due diligence law last week in a ministerial statement. This follows discussions earlier this year that recognized the need to address forced labor through legislation. A recent Herbert Smith Freehills memo gives us a look at the law’s major provisions:
- “[the law would] apply to large UK and overseas businesses: UK businesses with global turnover of more than £350 million, and non-UK businesses with UK-generated turnover of more than £350 million, would be in scope.
- Require companies to carry out risk-based human rights due diligence: in-scope businesses would need to identify, assess and address risks of human rights abuses and labour exploitation within their operations and supply chains. The regime would be aligned with the OECD Guidelines for Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights.
- Introduce new enforcement powers relating to goods made using forced labour: a regulator would be able to investigate businesses suspected of placing such goods on the Great Britain market and direct withdrawal where due diligence obligations have not been met and forced labour is identified. The Government separately intends to apply the EU Forced Labour Regulation in Northern Ireland.”
Details on the bill’s timeline are scant. For now, the government has simply announced its commitment to bringing the legislation forward. Future negotiations and debates could alter the law’s structure.
What’s interesting is that this due diligence law includes extraterritorial scoping. Up to now, we’ve seen provisions like this in several EU laws. The UK’s proposal shows that interest in such provisions is growing internationally. It only makes sense. Our economies are fully globalized. You can’t effectively implement forced labor bans and human rights due diligence laws by only looking at a firm’s economic activity in one country. A lot of questions remain to be answered about the UK’s new legislation, but it will bring the UK closer to parity with the EU’s CSDDD requirements.
Our members can learn more about supply chain due diligence here.
