In today’s interconnected world, where goods are sourced globally, a dark and omnipresent shadow looms in the background: forced labor. Forced labor generates an estimated $150 billion (USD) in profits and affects over 27 million laborers (about the population of Texas). To avoid this treacherous and complicated pitfall, it is crucial for the logistics, transportation, and shipping industries to be aware of and actively combat the issue of forced labor.  

In this post, we will unravel the supply chain to shed light on this pressing issue and delve into the concept of forced labor, explore the significance of Section 307 of the Tariff Act of 1930, highlight indicators to identify potential violations, and outline strategies to avoid purchasing products or materials manufactured by forced labor.

What in the Labor World is Going On?

Forced labor refers to the exploitation of individuals who are coerced or deceived into working under harsh conditions, often involving physical or psychological abuse. Under the weight of such precarious environments, a worker’s basic human rights are violated—causing shockwaves to trickle down into the ethical and sustainable fabric from which these supply chains are made. Therefore, it is incredibly important to recognize that forced labor can exist across different industries and supply chains, including apparel, electronics, agriculture, and manufacturing. To better understand its implications, let’s explore some specific examples. 

Getting Snippy with it: Forced Labor in the Textile Industry & Apparel Manufacturing Sector

Picture bustling factories in countries like Bangladesh and China, where the threads of forced labor intertwine with the fabrics we wear. Behind the scenes, vulnerable workers—often driven by poverty or the quest for a better life through migration—find themselves ensnared in a sinister lifecycle. These workers often endure grueling hours of labor, toiling under unsafe working conditions that pose risks to their health and well-being. The very garments we purchase may carry the invisible stitching of a system that denies workers’ basic human rights.  

Something Smells Fishy: Forced Labor in Seafood Processing

Now, let’s deep dive into the dark abyss of the fishing and seafood industry, where the waters run murky with tales of forced labor. Aboard fishing vessels across Southeast Asia, unsuspecting workers are trapped in a world of debt bondage, their bodies weary from physical and mental abuse and their spirits confined by the unforgiving chains of exploitation. To make matters worse, these workers are often isolated on vessels from the outside world, leaving them at the mercy of their employers. As their catch makes its way to global markets, the unwitting involvement of companies perpetuates this systemic abuse.  

These examples serve as poignant reminders that forced labor knows no bounds, infiltrating various industries and supply chains. From electronics to agriculture, manufacturing to mining, its insidious reach tarnishes the very essence of fair and ethical business practices. It is our collective responsibility to expose these grave injustices and work tirelessly towards eradicating forced labor from its roots. 

Under the Microscope: Section 307 of the Tariff Act of 1930

Our forefathers (and foremothers) had the insightful ability to begin combating forced labor as early as the 1930s, when the Tariff Act of 1930 was created. The world of logistics has evolved significantly since the days of yesteryear, but one crucial provision of the Tariff Act of 1930 continues to hold immense significance in today’s globalized business landscape: Section 307.  

Section 307, also known as the “Withhold Release Order” (WRO), grants U.S. Customs and Border Protection (CBP) the authority to detain goods that are suspected of being produced using forced labor. And, if the evidence suggests that the merchandise was made, even in part, by forced labor, CBP can issue a WRO, which prevents the goods’ entry into the US. This has served as a critical legal mechanism, allowing the CBP to take a proactive approach against forced labor by holding companies accountable for their sourcing practices. This has sent a clear message that goods tainted by the exploitation of vulnerable workers will not be tolerated; the hope is to foster a more ethical and responsible global trade environment.  

The message is so loud that Congress is now considering addressing a loophole—one that has existed for some time—to better control imports made with forced labor. The loophole involves “de minimis” imports—shipments that are valued under $800 a shipment that enter the country with minimal evaluation or reporting. In 2021, an estimated 446 million packages entered the US without formal entry, mainly from the Xinjiang province in China. Likely because of these statistics, President Biden signed the Uyghur Forced Labor Prevention Act (UFLPA), which covers four main sectors: apparel, cotton and cotton products, silica-based products, and tomatoes and downstream products. Enforcement began on June 21, 2022; it prohibits the importation of goods produced wholly or in part in the Xinjiang Uyghur Autonomous Region of China.  However, unlike products subject to IPR, it contained NO exception for de minimis exports. 

Indispensable Insights & Forced Labor Indicators 

Identifying potential forced labor violations is crucial for supply chain professionals. Recognizing key indicators can help flag high-risk situations and enable proactive interventions.  

Here are some common signs to watch out for: 

  • High-Risk Countries and Industries: Certain countries and industries have a higher prevalence of forced labor. These include regions with weak labor laws, limited enforcement, and inadequate protection mechanisms. For example: Countries with documented cases of forced labor in specific sectors, such as apparel manufacturing or agriculture, should be scrutinized more closely. 
  • Recruitment Practices: Unscrupulous recruitment practices are often associated with forced labor. This includes exorbitant recruitment fees, confiscation of identification documents, and deceptive recruitment procedures, where workers are promised decent wages and conditions that never come to fruition. 
  • Working and Living Conditions: Poor working conditions, such as excessively long hours, unsafe environments, and substandard living facilities, can be indicative of forced labor. Unexplained deductions from wages or limited freedom of movement are also red flags that require attention. 
  • Payment and Debt Bondage: Workers that receive pay significantly below minimum wage or experience wage deductions due to fabricated debts are often victims of forced labor. Debt bondage occurs when workers are trapped in a cycle of debt, making it nearly impossible to escape these exploitative working conditions. 

How to Be-Laboring for Justice & Avoid Violations  

Preventing forced labor requires proactive measures and a commitment to ethical sourcing practices. Let’s take a gander at some of the key implementation strategies: 

Supply Chain Mapping & Risk Assessment  Develop a comprehensive understanding of your supply chain, identifying high-risk areas and mapping out the various tiers of suppliers. Document in detail. This assessment can help identify potential vulnerabilities and prioritize efforts to ensure due diligence, which will prove to be useful in the event you need to argue a case with CBP.
Robust Supplier  
Due Diligence 
Thoroughly evaluate suppliers and conduct risk assessments. Document and implement a comprehensive supplier code of conduct that explicitly prohibits forced labor and adheres to international labor standards. Regular audits and site visits can help assess compliance and identify any signs of forced labor. If willing, collaborate with suppliers to address issues and provide support for remediation. 
Code of Conduct & Contracts  Implement a robust code of conduct that explicitly prohibits forced labor and includes provisions for suppliers’ adherence. Contracts should stipulate compliance with labor laws and enable termination in the event of violations. 
Engage & Collaborate with Industry Initiatives  Join industry associations and initiatives dedicated to eradicating forced labor, such as the Responsible Business Alliance (RBA) or the Ethical Trading Initiative (ETI). They can provide access to best practices, resources, and collaborative opportunities with like-minded organizations. Consider certifications like the Marine Stewardship Council and Fair Trade to help break these chains of exploitation. 
Supply Chain Transparency  
Engage in traceability measures, promoting visibility throughout the supply chain; transparency is a powerful tool to combat forced labor. Encourage suppliers to disclose their own supply chain networks, enabling better risk assessment and identification of potential red flags. 
Worker Empowerment  & Grievance Mechanisms  Establish mechanisms that empower workers to raise concerns and grievances without fear of retaliation. Encourage worker participation, ensure fair wages, and provide safe and healthy working conditions. Promote ethical recruitment practices and support the welfare of vulnerable groups. 

Although we only skimmed the surface of forced labor in this post, we hope that it is abundantly clear that this issue poses significant challenges to the logistics, transportation, and shipping industries at large. Combating forced labor is not only imperative but also crucial for the long-term success and reputation of businesses. 

By understanding the concept of forced labor, recognizing indicators, and implementing proactive strategies, companies can help contribute to the eradication of this heinous practice. And, by championing fair labor practices and prioritizing supply chain transparency, we can work towards a future where every worker is treated with dignity and respect, together. Check out our guide on how to avoid forced labor violations on your imports.