EU Move to Ban Forced Labor Goods Poses a Test for SE Asia
The proposed legislation is causing consternation in Southeast Asia where local businesses are currently having to adapt to the EU regulations on the environment and sustainability.
The proposed legislation is causing consternation in Southeast Asia where local businesses are currently having to adapt to the EU regulations on the environment and sustainability.Last September, the European Commission proposed legislation that would ban the import of products made with forced labor, a complicated order that some reckon doesn't go far enough and others say is another thick layer of bureaucracy that foreign companies must now adapt to amid numerous other EU regulations on the environment and sustainability.
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There are an estimated 28 million people in the world suffering under forced labor conditions, up by more than a tenth from 2016, according to a report by the International Labour Organization (ILO), a UN body, released last year. More than half of those were in the Asia-Pacific region.
When the legislation was first suggested last year, there were accusations the EU really intended to target imports from China's Xinjiang region, where the Chinese Communist Party has led a brutal crackdown on Muslim Uyghurs for years. There are also widespread reports of modern slavery in the region's cotton fields, mines and textile factories.
All about China?
Three months before the European Commission proposed this legislation, the European Parliament had called for similar laws to tackle human rights violations in Xinjiang.
The US government has deemed the Chinese authorities actions in Xinjiang region to be a "genocide," a term also adopted by the Dutch parliament. In 2021, Washington introduced legislation that effectively bans most imports from Xinjiang.
Last August, the UN special rapporteur on contemporary forms of slavery, Tomoya Obokata, published a report that stressed "it is reasonable to conclude that forced labour among Uyghur, Kazakh and other ethnic minorities in sectors such as agriculture and manufacturing has been occurring in the Xinjiang Uighur Autonomous Region of China."
However, Brussels opted for a blanket ban on imported goods that used forced labor because of concerns that specific legislation against China would irk Beijing, which many in the EU want to remain on good terms with, or could fall afoul of the World Trade Organization's anti-discrimination laws, some analysts contend.
But the proposed legislation's supporters stress it is intentionally universal in nature and the EU is abiding by international norms. The United Nations Agenda 2030 commits the world to ending forced labor by that year.
Henrike Hahn, a German Green MEP and member of the parliament's China delegation, points out that the EU will use internationally recognized definitions of forced labor set out by the ILO, a UN body, rather than its own classifications.
"Correspondingly, this legislation is not focused on one region in particular, but applies to corporate- or state-driven forced labor across Southeast Asia and globally," she added.
A corporate headache
Nonetheless, it is causing some consternation in regions like Southeast Asia where local businesses are currently having to adapt to EU regulations.
Incoming EU legislation on deforestation and sustainable products has led to a major dispute with Malaysia and Indonesia, the world's two largest producers of palm oil, whose imports the EU wants to phase out by 2030.
"Countries in Southeast Asia are looking at the various sustainability-linked initiatives coming out of the EU with some degree of concern," Chris Humphrey, executive director of the EU-ASEAN Business Council, which represents European businesses in Southeast Asia, said.
While responsibility will fall on the EU member states to investigate whether imported goods are tainted by forced labor, it will add pressure on local businesses to have a detailed picture of their own supply chains. Many of the goods exports from Southeast Asian states to EU markets are processed from raw materials imported from elsewhere, or will include components sourced from other firms.
Cambodia, for instance, exported around €4.3 billion ($4.7 billion) worth of goods to the EU last year, most of that garment and footwear products, according to local government data. But the vast majority of the raw materials used by Cambodia's garment factories are imported from China, where information on sourcing is obscure.
Many small companies will lack the ability to investigate their entire supply chains, experts say.
"There is a clear need for enhanced communications and capacity building support on these initiatives and how they might impact on businesses operating in the ASEAN region," Humphrey added.
EU officials say that those conversations are going on.
"We had several conversations with Southeast Asian colleagues about these proposals, which we will continue in the weeks and months to come," Igor Driesmans, the EU ambassador to ASEAN, told DW.
"We are key trading partners who share an interest to improve livelihoods and help to protect and prevent major human rights abuses and violations by supporting the set-up of the necessary regulatory frameworks within which the business can operate in a sustainable, environmentally friendly and humane manner," Driesmans added.
"Our recent proposals are meant to do just that."
Not far enough
Observers expect the European Commission to make significant alterations when it publishes its draft report, which could be later this year. It could be several years before the legislation is enacted.
On March 3, the European Parliament's Committee on the Internal Market and Consumer Protection proposed a number of amendments, including possible ways of remediation for workers affected by forced labor.
For it to be successful, it requires enormous resources to investigate supply chains across the region, said Sallie Yea, an associate professor focusing on human trafficking and modern-day slavery at La Trobe University.
Questions around the capacity of business — particularly small and medium enterprises — to manage this remain unanswered.
"Like many other demand-side responses to forced labor, bans on imports fail to address the structural causes of vulnerability to forced labor in the region, including displacement due to climate change and conflict," Yea said.
Hahn, the MEP, noted that the proposed legislation won't give EU member states' national authorities the power to hold goods that enter the EU until they prove they are not linked to forced labor. Instead, the proposed system is "retroactive" and the burden of proof falls on national authorities or civil society organizations to investigate.
"There are still too many holes in the system we have to work on," she said.
Edited by: Srinivas Mazumdaru
(The above story first appeared on LatestLY on Apr 04, 2023 09:00 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).