Congress Begins 2024 with New Federal Human Rights Guidance in Sight

A few days before Christmas, the Senate followed the House in bringing its legislative year to a swift but unsatisfying end. Although enough bipartisan goodwill was mustered to pass a massive National Defense Authorization Act for fiscal year 2024, lawmakers remain embroiled in bitter partisan squabbles that are paralyzing critical federal funding measures.

Yet only hours before heading back home for the holidays, Senators from both the mainstream and activist quarters of the parties came together to unanimously pass a novel measure — one that would provide U.S. industry with robust guidance from federal commercial risk experts aimed at improving their ability to identify, assess, and prevent human rights abuses which they could be involved in through their operations and transnational supply chains.

S. 484 – the Combating Human Rights Abuses Act – would require the U.S. Department of Commerce to offer guidance to companies in support of their human rights due diligence and risk management practices, with a particular focus on helping companies comply with the UFLPA and identify/mitigate risks of supply chain linkages to Uyghur forced labor abuses.

Although the measure extends to human rights due diligence in both U.S. and international business settings, its origination in the Senate Commerce Committee indicates a primary focus on U.S. companies whose products are manufactured or distributed through complex transnational supply chains involving regions with systemic human rights problems.

The bill would provide companies with new openings to work closely with federal regulators through the guidance process itself, exchange mutually beneficial information on related challenges, and cultivate a longer-term relationship with key agency officials who want American businesses to prosper in the international market.

While details regarding the congressional intent and scope of the proposed measure are still emerging, S. 484 would assumedly make official federal guidance available to both U.S.-based companies and internationally headquartered companies with major U.S. subsidiaries that are active, or considering investment, in countries where there is a high risk of human rights abuse.

Companies within the legislation’s jurisdiction would also be able to secure guidance from the Commerce Department in support of their existing or prospective commercial relationships with other supply chain partners operating in high-risk countries, and/or that are under the control of governments with a poor record of protecting rights. The measure states that this will especially apply to a U.S. company’s commercial relationships with supply chain partners that are operating in China, under the control of the Chinese Government, or have operations in China where there is high risk of forced labor from Uyghurs or other persecuted Chinese minority communities.

S. 484 first requires officials at Commerce who are already advising U.S. companies on other business practices to undergo training and knowledge-building courses that increase their awareness of human rights challenges, the attendant reputational and legal risks facing companies, and the human rights context in high-risk countries and regions – with forced labor in the Xinjiang region or elsewhere in China once again the focus.

The bill would come at a critical point in corporate forced labor risk management, with the United States, Mexico, Canada, United Kingdom, Australia, and the European Union committed to sweeping new laws against modern slavery throughout the commercial supply chains feeding their economies.  Companies will see greater benefits in the long term, due to the the risk mitigation mechanisms, regulatory predictability, knowledge-building, and transnational consistency that are taking greater form in this expanding global regime.  Key measures that have been or will be enacted include: the U.S. Uyghur Forced Labor Prevention Act (UFLPA), the U.S.-Mexico-Canada Agreement, Canadian Modern Slavery Reporting Act, U.K. Modern Slavery Act Amendments, Australian Modern Slavery Acts, and the E.U. Council of Minister’s new proposal for a E.U. Forced Labor Prevention Law (which will be reconciled with the E.U. Parliament’s original antislavery legislation and likely in effect around late 2025 or first quarter 2026).

Regulators across these jurisdictions are also beginning to shift their focus onto new sectors where forced labor risks are rapidly emerging, most critically products in the renewable energy market.  The latter’s increasing intersection with human exploitation is significant and the potential ramifications for industry be given more attention in future blog articles.  But already, the U.S. Customs and Border Protection (CBP) agency has placed critical and rare earth minerals used in solar panels, wind turbines, electric vehicle parts, microprocessors, and new generation batteries into its highest UFLPA enforcement category.  This comes at the same time that U.S-bound importers and the multinationals supplying them continue to call for clearer regulatory guidance from the agency on how best to predictably minimize forced labor risks and manage the UFLPA’s manifold compliance burdens.     

While the bill may not be immediately consequential to some companies, it is hopefully a portent of expanded federal guidance that will be essential to effective corporate compliance efforts.  S. 484 also requires Commerce to incorporate the new employee human rights training into the agency’s existing training practices, suggesting that issues of forced labor in supply chains will be better appreciated by a wider cross-section of agency regulators. 

An intra-agency expansion of human rights guidance would also help the private and public sectors coalesce around a shared risk management approach and enforcement-compliance partnership.  To continue this momentum, it would make the most sense if similar guidance was instituted by other federal agencies sharing jurisdiction over U.S. forced labor laws – namely the Labor Department’s Bureau of International Labor Affairs, Homeland Security’s CBP, Securities and Exchange Commission, Treasury, and the State Department’s Bureau of Democracy, Human Rights, and Labor.

Presently, there doesn’t seem to be any notable opposition to the legislation in the House, and its passage under unanimous consent in the Senate suggests federal human rights guidance would fare well with House lawmakers should they take S. 484 up this year.

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