How governments will enforce the Directive once they have transposed it remains to be seen. Initial action is likely to be prompted by NGO action and therefore focus on commodities from high-risk contexts which are in the spotlight, such as minerals from the Great Lakes, or rare earths from Myanmar.


The Institute for Human Rights and Business, supported by the Swiss Government, has developed initial online guidance for companies in the commodities value chain to help them work out what this means for them, commodity-trading.org. It is regularly updated, with new examples and training, including to reflect legislation. IHRB also intends to organise roundtables, and welcomes feedback and inputs to improve the guidance.


The other new legislation that the sector needs to watch is the EU Regulation banning products made using forced labour from being placed on the EU market. This applies to all commodities, and all companies, regardless of their size. It was adopted by the European Parliament on 23 April 2024 but still awaits the final formal approval by the Council of Ministers. EU member states will then have up to three years to apply the Regulation, but it won’t need to be turned into national law.


Forced labour, which includes child labour, is defined in the Forced Labour Convention of the International Labour Organisation (ILO) as ‘all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily’. It can include agricultural crops produced by migrant workers – including in the EU - whose passports are being withheld, or where workers are working to pay off a manipulated debt. Under the Regulation, national


authorities will investigate suspected use of forced labour in companies’ domestic supply chains. If third countries are involved, the EU Commission will investigate. If the investigation concludes that forced labour has been used, authorities can demand that relevant goods be withdrawn from EU market and online marketplaces, and confiscated at the borders, similar to the Withhold Release Orders being used by US Customs.


For both pieces of EU legislation, it is still early days. The practical impacts on commodity trading companies are not yet clear. But companies can best prepare themselves by ensuring they know the source of products they trade, and the conditions in producer countries, above all relating to forced labour and human rights risks.


Institute for Human Rights and Business Vicky Bowman | Senior Adviser E: vicky.bowman@ihrb.org


Francesca Fairbairn | Shipping and Commodities Programme Manager E: francesca.fairbairn@ihrb.org


15 | ADMISI - The Ghost In The Machine | Q2 Edition 2024


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