Over the past few decades, the culture of consumerism and the demand for goods has grown substantially, particularly in developed countries. This growth has been driven by many factors, including rising incomes, increased access to credit, and advances in technology and e-commerce.1
With the COVID-19 pandemic, online shopping became more popular as people sought to avoid physical stores and social distancing measures that were put in place.2 This led to a surge in demand for products like electronics, home office equipment, and household goods.3
The growth of consumer culture and demand for goods has both positive and negative impacts. On one hand, it can drive economic growth and innovation, create jobs, and provide people with access to goods and services that can improve their quality of life. On the other, it can contribute to environmental degradation, social inequality, and unsustainable patterns of consumption and waste.4 It also means that goods produced using forced labour are sold by businesses and consumed by people all over the world.
The estimates of prevalence presented in this report count forced labour where it occurs. While this is critical in identifying where the need for intervention is greatest and most pressing, it does not paint a complete picture of where responsibility lies. The production and movement of goods between countries — from the sourcing of raw materials to manufacturing, packaging, and transportation — creates supply chains connecting manufacturers, distributors, and consumers across the world. Many of these supply chains are at risk of forced labour, but their complexity makes it very difficult to trace the origin of products and the presence of forced labour.
Understanding the risk imported by G20 countries
Although the highest prevalence of forced labour is found in low-income countries, it is deeply connected to demand from higher-income countries. Nearly two-thirds of all forced labour cases are linked to global supply chains, with workers exploited across a wide range of sectors and at every stage of the supply chain. Most forced labour occurs in the lowest tiers of supply chains; that is, in the extraction of raw materials and in production stages.5
While modern slavery occurs within the borders of wealthier countries,6 the purchasing practices of their businesses and governments fuel exploitation in lower-income countries that are at the frontlines of global supply chains. G20 countries collectively account for 85 per cent of the world’s GDP and over 65 per cent of the world’s population.7 Two G20 countries, China and the United States (US), remain the world’s largest exporting8 and importing9 economies respectively. Given the G20’s level of influence in the global economy, it is critical to examine their efforts to address forced labour through economic and trade measures.
In this chapter we focus on the at-risk products that are imported into G2010 countries and their value. There are two important factors to understanding the movement of risk through supply chains to the end consumer. The first is to identify which globally traded products are likely to be at risk of being produced with forced labour and the second is to match them with their trade value. The methodology used to identify a short list of products at risk of being produced using forced labour and the extent to which they are imported by G20 countries is described in Appendix 3.
The value of products at risk of forced labour
The sheer volume of imports into the G20 demonstrates the power these countries have to influence market standards and combat forced labour. Currently, G20 countries are importing more than US$468 billion worth of products at risk of being produced with forced labour, compared to US$354 billion estimated in the 2018 Global Slavery Index, an increase of US$61 billion when accounting for inflation.11 This estimate considers only the top five most valuable at-risk products imported per G20 country, which for the first time includes solar panels exported from China. Broken down by country, the value of imports ranges significantly across the G20, from a minimum of US$1.6 billion spent by Argentina to a maximum of US$169.6 billion by the US (Table 1).
Table 1: Value of top 5 at risk imports, by country
|Country||Total value of at-risk imports (in billions $US)|
Electronics remained the highest value at-risk import for the majority of G20 countries, worth an estimated US$243.6 billion. This was followed by garments (US$147.9 billion) and palm oil (US$ 19.7 billion). Solar panels were the fourth highest value at-risk product (US$14.8 billion), reflecting the high global demand for renewable energy products12 as governments begin to take steps to combat the climate crisis and seek alternative clean power sources.13 Cocoa has dropped from 5th to 12th highest at-risk product imported by the G20 by value. This is consistent with reports that global demand for cocoa beans and chocolate fell during the COVID-19 pandemic.14
Table 2: Value of top 5 at risk imports, by product
|Product||Total import value (in billions $US)|
As in the 2018 GSI, electronics from China and Malaysia remain the highest value at-risk product imported by G20 countries (Table 2), while for 18 of the 19 G20 country members included in this analysis, electronics are among the top five at-risk products. In Malaysia, there are reported cases of forced labour and debt bondage in the electronics manufacturing industry, which is reliant on migrant labour from Bangladesh, Nepal, Myanmar, and Indonesia.15 In China, factories manufacturing electronics for global brands reportedly force Uyghurs to work under state-imposed forced labour.16 The forced labour of Uyghurs has been found in other sectors in China, including textiles and garment manufacturing17 and renewable energy products.
Labour exploitation is pervasive in the garment industry,34 which is the second most valuable at-risk product. At-risk garments imported into the G20 are manufactured in Argentina, Bangladesh, Brazil, China, India, Malaysia, and Viet Nam. In India, women and girls who belong to ethnic minority groups are exploited in informal factories, which are sub-contracted by global brands’ tier one suppliers to produce garments.35 These garment workers do not earn a living wage and have no formal work agreements, while some work in conditions that amounts to forced labour.36 A 2021 study on the Vietnamese garment industry found that 6 per cent of worker-participants were likely in a situation of forced labour.37 Many noted that they could not refuse work or change employers due to threats of “exit costs,” such as withholding valuables and wages, receiving threats of legal action, and psychological or physical violence.38
Textiles are within the five most valuable imported products in over 70 per cent of the 19 nation states in the G20. Textiles are imported by G20 countries to make many other products within that country, including bedding, PPE, carpeting, upholstery, and garments. Forced labour reportedly occurs in textile factories in China, where Uyghurs have been allegedly forcibly transferred and made to work in textile factories by a labour transfer program.39
There is evidence of widescale abuse in the fishing industry.40 Multiple reports in the last five years have highlighted instances of forced labour onboard flagged fleets from China, Ghana, Indonesia, Thailand, and Taiwan that supply fish to a range of G20 countries, including Australia, Japan, South Korea, the United Kingdom, and the US (see Table 17 in Appendix 3). A 2021 study by Greenpeace identified fishers aboard Indonesian vessels living in forced labour across 45 ships. Workers reported multiple forms of coercion, including withholding of wages and deception.41
The palm oil industry harms both people and planet.42 Nine G20 countries imported more than US$19 billion worth of at-risk palm oil from Indonesia and Malaysia. In Malaysia, migrant workers make up the majority of the palm oil workforce, and once on a plantation they can face heightened risks of debt bondage, restricted movement, confiscation of identity documents, and having their wages withheld.43 Conversely, the Indonesian palm oil industry relies solely on domestic labour, including internal migrants, however the use of a piece-rate system of pay with no mandatory minimum wage or social protections has led workers to involve their children in the work in order to meet the high harvest quotas and earn a survival wage.44
What are G20 governments doing to address this risk?
No country in the world, including among the G20, has taken comprehensive action to stop sourcing goods made with forced labour, but there has been increased action by some countries to address forced labour risks within business and government supply chains in recent years. These actions range from voluntary guidelines and commitments and non-judicial complaints systems to laws establishing disclosure or human rights due diligence regimes and civil or criminal liability for misconduct.45 Among G20 countries, Australia, France, Germany, Brazil, the UK, and the US are taking the most action to eliminate risks of forced labour permeating global supply chains (Table 3).
Table 3: G20 governments’ actions to address forced labour in supply chains a
|Government regulates and investigates public procurement to prevent use of forced labour||Government encourages mandatory reporting||Government encourages mandatory human rights due diligence||Government is using alternative avenues to ensure businesses are tackling forced labour in supply chains e.g. public-private partnerships, investor reporting|
|Australia, Brazil, Canada, France, Germany, Italy, UK, US||Australia, Brazil, France, Germany, Italy, UK, US||France,
|Australia, Brazil, Canada, China, Germany, UK, US|
a: Although a member of the G20, the European Union has been excluded from this analysis as government response data has not been collected at a supranational level for the Global Slavery Index.
b: The Supply Chain Due Diligence Act (LkSG), which entered into force on 1 January 2023,46 sits outside the data collection period for the assessment of government responses in this Index. While the Act will be included for assessment in future rounds of data collection, it is noted in the table above for completeness.
Given their leverage, all G20 governments should do more to tackle forced labour in supply chains. In the G20, half of the members did not address supply chain risks, including those with the capacity to do more, including Saudi Arabia, Japan, and Russia.47 Relative to its resources, Australia is currently outperforming wealthier G20 members such as Canada, China, and Italy in taking action against forced labour in supply chains.48
G20 members have taken more action to address risks of forced labour within public supply chains in comparison to other countries in the Global Slavery Index. Eight G20 nation state members (Australia, Brazil, Canada, France, Germany, Italy, the UK, and the US) have implemented rules to prevent goods and services made with forced labour from being sourced by the government. These rules typically involve guidelines for procurement officers, such as the guidelines in the US pursuant to Executive Order No. 13627 of 201249 or through policies that explicitly prohibit the use of businesses suspected of using forced labour within their supply chains. For example, in Australia, Rule 7.27(f) of the Commonwealth Procurement Rules make specific reference to the Modern Slavery Act 2018 and ensure that procurement officials comply with the reporting requirements under the Act.50 Australia and the UK are the only G20 members that have released public reports on efforts to mediate the risk of products made with forced labour entering government supply chains, as required under their respective disclosure laws.51
Even where rules and guidelines on public procurement exist, pressures caused by sudden surges in demand and insufficient global supply can circumvent these standards.52 In the early stages of the COVID-19 pandemic, governments worldwide raced to procure PPE in a highly competitive global market to respond to the emerging health crisis.53 Textile factories in China producing PPE were reported to have used the forced labour of North Korean workers, who had 70 per cent of their wages taken by the North Korean state.54 Governments also sourced disposable rubber gloves from factories in Malaysia despite continuing widespread concerns of forced labour within the sector; several countries, including the US, lifted bans on the import of Malaysian rubber gloves in 2020 to meet demand.55 In 2022, legal proceedings were launched against the UK government for similarly sourcing disposable gloves for the National Health Service (NHS) from a Malaysian factory that reportedly used forced labour within its supply chain. Workers who brought the suit claimed they were forced to work for up to 12 hours each day for months at a time and that they experienced debt bondage.56 The UK government passed an amendment to the National Health Service Act 2006 that banned the NHS from procuring goods made with forced labour in its supply chain pursuant to Section 81 of the Health and Care Act 2022.57
Mandatory reporting vs mandatory human rights due diligence
Since the 2018 Global Slavery Index, Australia58 has joined the UK59 and the US state of California60 in enacting legislation requiring organisations to publicly disclose whether and how forced labour risks are present in their supply chains, as well as any actions they have taken to reduce those risks. In 2022, three bills were introduced in Canada, each of which require businesses to disclose efforts taken to remove child and forced labour from their supply chains; Canada’s “Modern Slavery Act” passed in May 2023.61 At the time of writing, no bills have been passed into law. In recent years, the efficacy of these disclosure regimes has been questioned. For example, the Modern Slavery Act in the UK was criticised for failing to set legally binding standards that ensure practical rather than performative compliance.62
As a result, there has been a shift towards laws that require businesses to go beyond disclosure and proactively identify and remediate actual and potential risks of human rights violations for workers within their operations and supply chains [mandatory human rights due diligence legislation (mHRDD)]. Laws have come into force in France,63 Norway,64 and Germany65 or have been proposed in Switzerland66 and the Netherlands,67 while the EU Directive on Corporate Sustainability Due Diligence (CSDD) has not yet been adopted.68 In the Netherlands, mHRDD laws adopted in 2017 specific to child labour (including the worst forms of child labour) impose a duty of care on companies to prevent the supply of goods or services made with child labour to Dutch consumers.69 However, the law has not yet come into force; the Dutch government is reportedly developing implementation orders.70 In 2021, Dutch legislators considered the Bill on Responsible and Sustainable International Business Conduct, which obliges large businesses to address human rights and environmental damage and conduct due diligence on their supply chains. However, the bill has not yet been passed.71 In Switzerland in 2020, following the failure to pass a referendum to change the Constitution to ensure companies mandatorily conduct broad human rights due diligence in accordance with the UNGPs,72 amendments were instead made to the Swiss Code of Obligations to narrow the scope of due diligence requirements to child labour and conflict metals and minerals.73 A hybrid approach that includes both mandatory disclosure and due diligence requirements is being considered in New Zealand.74
Enforcement continues to be a key issue across regulatory frameworks for both government procurement and business supply chains. While some laws penalise companies that fail to comply with reporting, due diligence, or other procurement regulations (for example, France, Germany, Italy, the UK, and the US), our government response assessment found no evidence that any country in the G20 enforced such penalties in the last five years. Remedies available for survivors of modern slavery offences are also limited. France is the only country which provides survivors with a cause of action, pursuant to Article 2 of the Duty of Vigilance law.75 The German mHRDD shows promise in this regard by imposing fines for failure to comply with the due diligence requirements and uniquely provides civil liability avenues against businesses.76 Similar civil liability regimes are envisioned at the EU level, under the proposed CSDD Directive.77
Other initiatives: Import controls, Magnitsky sanctions, and “name and shame” lists
Until recently, the US was the only country in the world to explicitly prohibit the importation of goods made with forced, convict, or indentured labour pursuant to section 307 of the Tariff Act of 1930. This law empowers the US Customs and Border Protection agency, either on its own initiation or on external petition, to issue a WRO and prohibit the entry of a particular product into the country if it was reasonably believed that the goods were produced with forced labour.78 Canada has now also taken steps to regulate the import of goods to prevent products made with forced and prison labour from entering domestic supply chains through amendments made in 2021 to Regulation 132(m), which lists banned products under Part 5 of the Customs Tariff Act of 1997.79 A wider proposal to ban all products made with forced labour to reduce the risk of forced labour entering the European market was adopted by the EU parliament in June 2022.80
Other initiatives to reduce the import of products made with forced labour have typically been limited to specific sectors or forms of modern slavery. For example, EU Regulation 2017/821 entered into force in 2021 and requires importers to ensure that certain high-risk minerals and metals do not contribute to forced labour or conflict.81 In response to reports of forced labour in the Uyghur region,82 the US Congress passed the Uyghur Forced Labor Prevention Act in 2021. The law has a broad application aimed at “stopping the importation of any goods made with forced labour, including those goods mined, produced, or manufactured wholly or in part” in the Uyghur region.83 Importantly, the Act envisions collaboration with Mexico and Canada to incorporate the restriction within the US-Mexico-Canada free trade agreement; Mexico and Canada now have both passed similar forced labour import controls.84 A Private Member’s Bill proposed in 2020 sought to amend the Australian Customs Act and introduce a specific ban on goods produced by the forced labour of Uyghurs; however, it was not passed.85
Laws in the US, Canada, the UK, the EU,86 and more recently in Australia, allow for targeted “Magnitsky” sanctions against foreign entities or persons who are involved in serious human rights violations anywhere in the world.87 Similar legislation was considered in Japan in 2022, but no further action has been taken.88 “Magnitsky” sanctions take their name from a deceased Russian accountant and whistle-blower who was imprisoned and abused after uncovering large-scale tax fraud in Russia that involved senior government officials.89 Penalties vary depending on jurisdiction but typically involve travel restrictions and asset freezes90 and have been used to penalise individuals and organisations involved in modern slavery crimes. For example, in the UK, sanctions were levied against two organisations running North Korean prison camps where detainees were forced to work, the leader of a Ugandan non-state armed group that recruited children into armed conflict, and a senior general of the Myanmar Armed Forces operating in the Rakhine State, whose military operations included forcibly exploiting the labour of Rohingya people, among others.91 Lists of individuals and organisations who have received sanctions are publicly available.92
Other government-run “name and shame” efforts have targeted those involved in forced labour offences, particularly in relation to goods and services made with forced labour. For example, the List of Products Produced by Child Labour or Forced Labour has been maintained by the US Department of State since 2005 and currently lists 156 goods from 77 countries.93 In Brazil, the government has updated its “Slave Labour Dirty List” on a biannual basis since it was first established in 2004.94 Updates to the list were temporarily suspended following a 2014 lawsuit brought against the government by the Associação Brasileira de Incorporadoras Imobiliárias (Abrainc), a real estate business association, which alleged that the publication of the list was an unconstitutional use of executive power. While the Supreme Court of Brazil rejected this argument in 2020,95 other issues limit the continued impact of the list. In 2022, researchers found that businesses and individuals circumvent the Dirty List process to avoid punishment.96
Recommendations for G20 governments
Enact legislation to require large businesses and publicly funded entities to undertake mandatory human rights due diligence to proactively identify and remediate forced labour risks.
Require government contractors (and their sub-contractors) to certify that they have specific preventative measures to detect and eliminate forced labour in their supply chains.
Develop and implement rapid response guidelines that provide a practical framework for procurement agents to follow when consumer demand outstrips global supply, such as in response to crises, to reduce the risk of products produced with forced labour being introduced into public supply chains.
Strengthen existing mandatory reporting legislation by adding and implementing penalties and managing a free and publicly accessible repository to file all modern slavery statements to ensure businesses can be held accountable for non-compliance.
Take other legal measures to ensure value chains do not adversely impact human rights, such as import controls on products linked to forced labour, Magnitsky style sanctions, and public lists of those companies that have been found to tolerate forced labour in their supply chains.