Summary

The Fighting Against Forced Labour and Child Labour in Supply Chains Act aims to strengthen the fight against forced and child labour through mandatory reporting requirements for both government institutions and private-sector entities. It specifies clear definitions of child and forced labour and outlines what needs to be reported, fostering greater transparency and accountability.

What it means for you

• Businesses: Companies, especially those making $20 million in assets or $40 million in revenue, will face extensive compliance requirements, raising concerns among small to medium enterprises about their capacity to meet these obligations.
• Employees: Workers might benefit from improved labour conditions if companies take more seriously their obligations to avoid child and forced labour.
• Consumers: Increased public access to reports could influence purchasing decisions, leading consumers to prefer businesses with ethical practices.

Expenses

• For Businesses: Companies will incur costs related to staff training, compliance management, and potentially hiring third-party auditors. The financial burden of strict reporting and the risk of fines up to $250,000 for non-compliance may lead to increased prices for consumers.
• For Government: Government institutions might see an increase in operational costs as they work to fulfill annual reporting requirements and enforce compliance.

Proponents view

Supporters see the Act as a crucial advancement in upholding human rights and ethical supply chain practices. They argue that mandatory reporting will lead to significant reductions in forced and child labour, enhance corporate accountability, and protect vulnerable workers. Proponents believe that consumer awareness will increase, positively affecting business practices in the long term.

Opponents view

Critics raise concerns about the financial burdens the Act imposes, particularly on smaller businesses that may not have the resources to comply with the complex reporting requirements. They question the effectiveness of mandatory reporting in leading to meaningful change, fearing it may result in bureaucratic inefficiencies. There are also worries about privacy violations related to compliance inspections and the potential for unintended negative effects on trade relations and consumer prices.