An abrupt contract cancellation could leave workers unpaid and out of work (Yutao Chou/Unsplash)

Asia’s forced labour bans should fix abuses, not just block goods

Import restrictions can pressure suppliers to clean up their act, but only if there is a clear route back to compliance.

Cory Searcy

27 October 20264 min read

Governments across Asia are banning imports produced using forced labour. Under pressure from Washington’s Section 301 forced labour investigations (Opens in new window), India (Opens in new window), Cambodia (Opens in new window), and Sri Lanka (Opens in new window) are among the countries that have adopted prohibitions this year. The bans raise a difficult question for buyers who find forced labour in their supply chain: should they walk away or fix it?

In 2021, the International Labour Organisation estimated (Opens in new window) that 27.6 million people were in forced labour worldwide, with more than half located in the Asia-Pacific region. Forced labour indicators (Opens in new window) include physical violence, intimidation, restricted movement, and withheld wages, among many others. For workers in forced labour, what matters most is fixing these abuses, not banning the goods they produce.

Import bans may be well intended, but they can also push companies to “cut and run” when forced labour is discovered, rather than undertake the hard work to remediate it. An abrupt contract cancellation could leave workers unpaid and out of work. This is why responsible business guidelines (Opens in new window) often treat ending a business relationship as a last resort after remediation efforts have failed. While enforcement (Opens in new window) of forced labour regulations is critical, Asian governments must also be mindful of adverse impacts (Opens in new window) on workers. Different approaches to this problem are emerging throughout the region.

India illustrates one approach. In July, India added a paragraph (2.20B (Opens in new window)) to its foreign trade policy (Opens in new window) to prohibit imports made, in whole or in part, using forced labour. However, neither the amendment nor the accompanying Handbook of Procedures (Opens in new window) addresses repaying affected workers. They also do not specify how a supplier’s products might return to good standing once abuses are fixed, which could reduce incentives to engage in remediation.

By contrast, Malaysia’s experience shows that a route back to good standing matters. Since 2019, US detention orders against Malaysian palm oil and glove makers have set conditions for lifting them. Meeting those conditions has helped return (Opens in new window) more than US$85 million in withheld wages and recruitment fees to workers.

A harvest from a palm oil plantation outside Kuala Lumpur, Malaysia (Nafise Motlaq/World Bank)

Several draft bills throughout the Asia-Pacific illustrate another approach, which focuses on corporate responsibility in supply chains. Precise obligations will depend on adopted provisions, but this model is instructive. For example, Thailand has considered (Opens in new window) a responsible business conduct law that would require all large companies operating in the country to identify risks across their supply chains and, critically, remediate abuses when they occur.

South Korea has explored options with a similar logic. Under a proposed (Opens in new window) law, buyers could end supplier relationships over serious ongoing abuse, but they must consider the potential harm of cutting ties abruptly.

An import ban can give governments leverage, but it is most effective when combined with a duty to remediate abuses. Asian policymakers should consider three recommendations.

For workers in forced labour, what matters most is fixing these abuses, not banning the goods they produce.

First, laws should require good faith efforts to remediate (Opens in new window) findings of abuse before suppliers are dropped. Termination of a supplier relationship should be reserved (Opens in new window) for cases where remediation has failed, or the abuse is severe and ongoing. Asian nations, such as through ASEAN, should agree to a shared remediation standard and recognise one another’s verified results. This could include a reasonable deadline for remediation, to eliminate incentives for indefinite delay.

Second, laws should also require buyers that suspend orders help pay for the remediation. Suspension is often presented as a middle path between staying and leaving, but it can also deprive suppliers of the revenue they need to eliminate abuses. Establishing requirements for a fund financed by buyers proportionate to their share of the supplier’s output could cover lost wages while orders are on hold.

Third, the conditions for lifting import bans should be clear. Once there is independent confirmation that abuse has ended, including workers being paid in full, goods should be able to re-enter the market. As with remediation standards, common conditions could be set across nations so that the same relief applies to all suppliers. Publishing these conditions in advance would give suppliers a clear incentive to fix abuses rather than conceal them.

These recommendations alone will not eliminate forced labour; auditors face their own challenges (Opens in new window), and often miss abuse. Buyers will likely resist costs and push them down to suppliers where possible. Cooperation across jurisdictions is also critical, but difficult to coordinate and maintain. Any conditions for lifting bans must guard against loopholes. These challenges, however, are not reasons to avoid the problem of remediating forced labour.

Asia’s emerging import bans have made forced labour much harder to ignore. But these rules must consider the workers subjected to forced labour, not just the goods they produce. Import bans must be accompanied by clear requirements for remediation, mechanisms to pay for it, and routes for lifting bans where warranted. Failing to do so may stop product flows, but leave workers worse off.

About the author

Cory Searcy

Cory Searcy is Professor and Assistant Vice-President, International at Toronto Metropolitan University.

Topics

Human rights Trade & investment Asia India Malaysia