Forced Labour Trade Bans and Human Rights Due Diligence (HRDD): Why Responsible Contracting Matters
RCP Policy Brief
February 2025 – In this Policy Brief, RCP analyzes how international supply contracts can help companies comply with or prevent infractions of forced labor bans in the United States (US) and European Union (EU) markets. Specifically, it reviews Section 307 of the 1930 US Tariff Act, the 2022 Uyghur Forced Labor Prevention Act (UFLPA), and the 2024 EU Forced Labour Regulation (EUFLR).
This Policy Brief makes two central arguments:
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To avoid violating forced labor bans, companies should carry out effective human rights due diligence (HRDD) to identify, prevent, mitigate, and remediate instances of forced labor in their supply chains.
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Responsible contracts are critical for effective HRDD and can help ameliorate the risk of forced labor in supply chains. Companies should review their contracts to ensure they are due diligence-aligned. This means moving away from the traditional risk-shifting approach toward a shared-responsibility approach.
Recommendations
The brief recommends that companies wanting to reduce their exposure to trade ban enforcement while increasing the resilience of their supply chain should:
✔ Implement HRDD processes across their operations and supply chains
✔ Familiarize themselves with the core responsible contracting Principles and work with legal counsel to integrate the Principles into their contracts as part of their HRDD.
✔ Review the table below to understand how responsible contracts enable effective prevention and remediation, which can (1) reduce the risk that an investigation would escalate and result in the issuance of a ban (pre-ban) and (2) expedite resolution after a ban has been issued (post-ban).
We invite you to download a PDF of the Policy Brief below.
1. Forced labour import bans should be interpreted to encourage human rights due diligence (HRDD)
Recommendations to authorities
Recommendations to companies
Authorities should:
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Ensure that they provide incentives for companies to address human rights risks through a comprehensive, on-going, and dynamic HRDD process;
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Avoid creating incentives for irresponsible actions, such as "cut-and-run" exits;
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Avoid interpreting bans as requiring guarantees of no forced labour or immediately ending relationships with suppliers considered at risk of forced labour.
Companies should:
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Implement effective HRDD processes across their operations and supply chains, as outlined in the United Nations Guiding Principles on Business and Human Rights (UNGPs), the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, and relevant US and EU law.
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4. Contracts that are based upon the responsible contracting principles play a vital role in implementing and supporting effective HRDD processes
Recommendations to authorities
Recommendations to companies
Authorities should:
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Consider how traditional contracts may disincentivise the effective HRDD processes;
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Acknowledge that Responsible Contracts provide a collaborative framework that allows buyers and suppliers to jointly and more effectively address potential and substantiated forced labour concerns.
Companies should:
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Integrate responsible contracting principles in their contracts as elements of effective supply chain management.
2. Rightsholder-focused remediation of forced labour helps to avoid and lift trade bans.
Recommendations to authorities
Recommendations to companies
Authorities should:
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Ensure their enforcement efforts explicitly encourage rightsholder-focused remediation—going beyond merely removing forced labour indicators—to enable companies to successfully avoid or lift trade bans.
Companies should:
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Familiarise themselves with the Tariff Act, the UFLPA, and the EUFLR and understand how undertaking robust HRDD — particularly focusing on forward-looking and backward-looking remediation for rightsholders — can help avoid and reverse trade bans.
3. Private-sector forced labour and state-sponsored forced labour need to be treated differently. In the latter case, responsible exit will normally be the right path forward.
Recommendations to authorities
Recommendations to companies
Authorities should:
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Ensure their enforcement efforts explicitly encourage rightsholder-focused remediation—going beyond merely removing forced labour indicators—to enable companies to successfully avoid or lift trade bans.
Companies should:
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Familiarise themselves with the Tariff Act, the UFLPA, and the EUFLR and understand how undertaking robust HRDD—particularly focusing on forward-looking and backward-looking remediation for rightsholders — can help avoid and reverse trade bans.
