Operationalizing the G7 Commitment to End Forced Labor in Global Supply Chains

In Hiroshima, G7 leaders committed to strengthening their cooperation toward “eradicating all forms of forced labor from global supply chains,” and to promoting “decent work and [protecting] rights-holders in global supply chains.” While this is not the first time G7 leaders have referenced the need to end forced labor—the statement builds on their 2021 and 2022 communiqués—leaders for the first time hinted at a more direct connection between egregious abuses and global economic security, making the case for addressing “non-market policies and practices that exacerbate . . . systemic vulnerabilities” and “harm our workers and businesses.” This should not be surprising—in the eight years since G7 leaders acknowledged the relevance of international human rights norms to the smooth functioning of the global economy, member states’ expanding concerns about supply chain resiliency, unfair economic competition, and China’s domestic human rights practices have all highlighted the relationship between egregious abuses and the sustainability and reliability of supply chains.

The G7 focus on forced labor in supply chains is important. G7 countries are the largest importers of many goods at the highest risk of being produced with forced labor, including apparel (representing five out of the top six global importers), seafood (representing 39.8 percent of global demand for seafood imports in 2021), and solar panels (importing more than $20 billion worth of solar panels in 2021). G7 markets drive demand for products expected to arrive quickly and cheaply, leading to business models that can incentivize the abuse of workers. Finally, G7 member countries are home to many of the world’s largest companies, whose impact on human rights practices in their supply chains can be equally, if not more, influential than those of national governments. Thirty-four of the 50 largest companies in the world are headquartered in G7 countries, including many of the largest consumer goods, electronics, and automobile producers whose supply chains stretch across the globe.

Despite agreeing to work together, G7 members have taken an uneven interest in tackling forced labor in supply chains and have adopted widely varied approaches to address it. This lack of coordination not only undermines G7 influence with target governments, but also makes it more difficult for companies to understand and comply with a growing patchwork of requirements across jurisdictions. To better operationalize these commitments, G7 member countries should agree on shared priority sectors and regions where they have collective influence to create change, coordinate their efforts to deny access to their markets for these goods, and issue clear guidance on how corporate legal liability regimes will be implemented across jurisdictions.

These strategies need not be limited to forced labor; they would also be valuable tools to address a broader range of human rights concerns in supply chains, including the spectrum of worker rights, as well as human rights impacts on communities and human rights defenders. However, forced labor, with its internationally agreed definition, is a useful starting point for enhanced coordination among major market states. 

Agree on shared priority sectors and regions. Given the breadth of potential targets for enforcement, there is a critical need for coordination for G7 action in order to be effective in changing the economic calculus of companies and states benefiting from forced labor.

In particular, G7 members need a coordinated response to the widespread use of forced labor in Uyghur region of China, part of the Chinese government’s campaign to destroy the Uyghur population. While G7 leaders have acknowledged the importance of addressing these abuses, their scattershot approach has allowed China to continue to profit from Uyghur forced labor by finding markets for goods overseas. Researchers have identified more than 30 categories of goods being produced in the Uyghur region in significant quantities, including polysilicon, a component of solar panels (45 percent of global production) and cotton (20 percent), as well as less publicized products such as PVC (10 percent) and aluminum (12 percent). G7 countries drive demand for all these products.

Seafood is another high-risk sector where coordination among the G7 can be powerful. A host of evidence demonstrates that forced labor is common in the industry, driven by the expansion of distant water fishing to accommodate declining fish stocks, heavy reliance on migrant labor, and artificially low seafood prices. Importing states have taken uneven steps to address this. As noted, the G7 generates nearly 40 percent of global demand for seafood imports. The United States and Japan were the largest importers of seafood in 2021, representing 14.1 and 9 percent of global imports respectively, while Canada, France, Germany, Italy, and the United Kingdom were all in the top 15. With existing traceability reporting requirements in the United States under programs managed by the National Oceanic and Atmospheric Administration and the Food and Drug Administration, and Europe’s “red card” system of flagging states that support illegal, unreported, and unregulated fishing (both of which can be better utilized to address forced labor) the seafood industry would be a logical place to focus G7 prioritization efforts.

Coordinate efforts to deny access to markets. Arguably the most powerful way to leverage the economic influence of the G7 is to deny market access for goods produced using forced labor. To date, only two G7 countries—the United States and Canada—have formally banned forced labor-produced goods from their markets, and only the United States has robustly implemented its ban. U.S. Customs and Border Protection (CBP) has detained more than 7,600 shipments worth nearly $2 billion since 2018 under Section 307 of the 1930 Tariff Act and the Uyghur Forced Labor Prevention Act (UFLPA) on suspicion they or their components were produced using forced laborwidespread use of forced labor there. Canada has likewise amended its Customs Tariff to prohibit the entry of goods made with forced labor as it committed to under the United States-Mexico-Canada trade agreement. However, enforcement has been minimal: in the first 21 months, authorities acknowledged blocking only one shipment, and ultimately authorized it to enter Canada.

Meanwhile, G7 member countries in the European Union—France, Germany, and Italy—have not yet taken individual action, but would be subject to a proposed European Union directive that would ban the sale of goods made with forced labor throughout the European single market, if adopted by the European Parliament. Even in that case, however, it could take up to 18 months for the directive to be incorporated into national law, followed by additional time for national authorities to identify priority sectors for enforcement. Neither Japan nor the United Kingdom are considering similar legislation, though the United Kingdom introduced UFLPA-like legislation in 2022 that was not adopted.

Coordination among G7 member states to prevent market access for forced labor-produced goods is critical to avoid forum-shopping by producers and importers. For example, the United States has focused on solar panels as a priority sector for enforcement under the UFLPA, as a result of the dominant role the Uyghur region plays in that industry. Public reporting indicates that the vast majority of the 1,999 shipments of electronics (worth nearly $1.2 billion) detained under CBP between June 2022 and May 2023 were solar panels containing components from China. Despite this, 95 percent of the European Union’s solar-related imports continue to come from China; in 2022, Germany alone imported 3.1 billion euros worth of Chinese solar panels. While the G7 alone cannot close off international markets for Uyghur-made goods entirely, import bans can set an international standard to be emulated by like-minded governments, and can also influence the decisions of Chinese companies that stand to benefit from the government’s “poverty alleviation” and “pairing assistance” schemes.

There is already evidence that shipments initially intended for the United States are being redirected elsewhere as a result of its forced labor import ban. In 2022, the United States Department of Energy (DOE) found that a 2021 Withhold Release Order focused on a single Chinese polysilicon producer resulted in 2.5 gigawatts (GW) of solar panels potentially being redirected to other markets. A DOE estimate that 1 GW typically represents 3.125 million solar panels suggests that nearly 8 million solar panels ineligible for import into the United States on forced labor grounds may have been redirected to other markets (at the time of the report, 1 GW had been redirected and 1.5 GW was pending eventual admission to the United States or redirection to other markets). Also in 2022, Canadian journalists and the NGO Above Ground identified at least 30 companies importing goods into Canada that would be prohibited from entry into the United States on forced labor grounds, including palm oil and rubber gloves from Malaysia and appliances produced in the Uyghur region.

Issue clear guidance on legal liability regimes. Legislative moves to impose legal liability on companies for egregious abuses in their supply chains are growing; a majority of G7 members have or are in the process of adopting some form of legislation focused on corporate responsibility for forced labor or other egregious abuses in their supply chains, albeit with a variety of approaches and widely varying degrees of enforcement. G7 leaders acknowledged this, noting the need for a “smart mix” of “legislation, regulations, incentives and guidance for enterprises” to promote respect for human rights in supply chains.

In Europe, France and Germany now require large companies to carry out human rights due diligence in their supply chains to prevent a wide range of abuses. France’s 2017 Duty of Vigilance Law requires companies to develop plans that detail its actions to identify, prevent, and mitigate human rights abuse in supply chains, including forced labor. A failure to adopt such plans, or to implement them effectively, exposes companies to civil liability—though the scope and circumstances of liability are still being determined as the first cases make their way through the French court system. Germany’s new due diligence law similarly requires large German companies to implement risk mitigation measures to prevent human rights abuses such as forced labor. By 2024, the law is expected to apply to more than 2,900 German companies. Companies violating the law can be fined up to 2 percent of their annual global revenue and can be barred from receiving government contracts. Meanwhile, Italy has taken a different approach to corporate accountability—one that is more similar to the United States’ Foreign Corrupt Practices Act and the direction that any United States accountability law would likely go. Italian law criminalizes certain offenses overseas—interpreted to include specific human rights violations such as forced labor—but takes companies’ institutional efforts, such as compliance programs to prevent such crimes, into account when determining liability.

In addition, companies from all three of these countries will soon be subject to the European Union’s forthcoming Corporate Sustainability Due Diligence Directive, which was approved by the European Parliament’s legal committee on April 24 and is expected to be adopted in late 2023 or early 2024. The directive would require large European companies and non-European companies doing significant business in Europe companies to “identify, prevent, mitigate, and account for” human rights abuses in their supply chains, such as forced labor, and create civil liability for a failure to do so.

Canada, Japan, and the United Kingdom lag behind Europe in adopting broad legal regimes governing the human rights conduct of companies overseas. Canada and the United Kingdom mandate that certain companies report on annually on their efforts to prevent forced labor in supply chains, although with no consequences for reporting minimal or no steps and without a requirement for companies to examine the effectiveness of their efforts. Only recently did the United Kingdom begin tracking companies that report, inviting them to join a government registry on a voluntary basis. Japan has recently issued guidelines to companies on effective human rights due diligence, and has indicated it will consider legal liability if it does not observe Japanese companies complying with the guidelines.

Although the United States has not attempted to pass broad due diligence legislation, it does have legal tools available to hold companies responsible for forced labor in their supply chains. In 2018, the United States Department of Justice gained the ability under the Trafficking Victims Protection Reauthorization Act to prosecute U.S. companies for some forced labor crimes overseas. However, to date, no such companies have been brought to court under this authority, despite the Biden administration’s renewed commitment to do so in its 2021 National Action Plan to Combat Human Trafficking. Civil suits by victims of forced labor are also theoretically possible under the Alien Tort Statute, though the Supreme Court has systematically narrowed the law's scope and limited its applicability to actions occurring overseas.

Engagement with companies to understand these emerging guidelines and legal requirements will be critical to ensure compliance, as is clarity on which companies are subject to requirements across each jurisdiction. In the United States, the Biden administration is expected to issue a National Action Plan on Responsible Business Conduct in the coming months. While not expected to call for new legislation, this is an opportunity for the U.S. government to provide additional guidance to companies on how it views emerging standards in Europe, as well as to outline how like-minded governments might coordinate on priority sectors and regions.

As more governments recognize the linkages between respect for human rights and supply chain resiliency and adopt policies and legislation to address the most egregious abuses in supply chains, coordination among major market states becomes increasingly critical. The G7 is a valuable forum for this coordination, given the market power of its members and the early moves of some members to tackle this issue through import bans and legal liability regimes.

Marti Flacks is the Khosravi Chair in Principled Internationalism and director of the Human Rights Initiative at the Center for Strategic and International Studies in Washington, D.C. Steven Orientale was a former research intern with the Human Rights Initiative at CSIS.

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Marti Flacks

​Marti Flacks

Former Khosravi Chair in Principled Internationalism and Former Director, Human Rights Initiative

Steven Orientale

Former Research Intern, Human Rights Initiative