Labor rights violations and social due diligence regulatory landscape trends

The garment industry is facing increasing regulatory pressure as governments worldwide introduce stricter laws to combat forced labor and ensure corporate accountability. Legislation such as the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD) and the Uyghur Forced Labor Prevention Act (UFLPA) demand that companies take a proactive approach to identify and mitigate human rights risks within their supply chains.

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The reality of forced labor in supply chains

Recent reports, including The State of Garment Workers in 2024, reveal persistent labor rights violations, including wage exploitation, unsafe conditions, and suppression of union activities. Many of these issues stem from the complex and opaque nature of the textile and footwear industry global supply chains, where subcontracting and lack of oversight allow exploitative labor practices to persist.

International organizations and NGOs have documented cases where suppliers, under pressure to meet cost-cutting demands, resort to exploitative labor practices, including forced overtime and restricted worker movement. Migrant workers, in particular, face higher risks of abuse due to precarious employment status and limited legal protections.

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Legislative responses and corporate responsibilities

Governments and regulatory bodies have responded to these concerns by tightening due diligence requirements. Some are even going one step further, creating customs mechanisms to ban goods produced under forced labor.

Around the world, there are several regulations as mapped out below:

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Europe

• EU Corporate Sustainability Due Diligence Directive (CSDDD): Requires companies to implement due diligence strategies to mitigate human rights violations and environmental impacts. Expected to apply fully by 2027.

• France's Duty of Vigilance Law: In effect since 2017, mandates large companies to create due diligence plans addressing human rights and environmental risks.

• Germany's Supply Chain Due Diligence Act (LkSG): Effective since 2023, applies to companies with over 1,000 employees, requiring risk management systems for supply chains.

• Norwegian Transparency Act (Åpenhedsloven): Requires companies to report, monitor, identify, implement action plan to address human rights and decent working conditions violations in their supply chains.

• Netherlands' Child Labor Due Diligence Act: Focuses on eliminating child labor in supply chains, with implementation pending.

• Belgium and Spain: Proposed laws to enhance corporate accountability for human rights and environmental impacts.

• UK Modern Slavery Act is one of the oldest, 2015. Even if it has criminalized forced labor and the country was pioneer in doing so, the regulation is showing its own limitation. An amendment is under discussion.  
  

‍North America

• US Uyghur Forced Labor Prevention Act (UFLPA): Bans imports linked to forced labor in China's Xinjiang region.

• California Transparency in Supply Chains Act: Requires companies to disclose efforts to combat human trafficking and slavery.

• Canada's Fighting Against Forced Labour and Child Labour in Supply Chains Act: Effective January 2024, mandates reporting on efforts to prevent forced and child labor

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‍Asia-Pacific

• Australia's Modern Slavery Act: In effect since 2019, requires reporting on modern slavery risks in supply chains.¹

• Japan's Human Rights Due Diligence Guidelines: Non-binding, but encourages companies to prevent human rights abuses in supply chains.

Failure to comply with these regulations can result in legal penalties, import bans, reputational damage, and loss of consumer trust. However, enforcement mechanisms remain a challenge, and companies often struggle to navigate the evolving regulatory landscape.

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Challenges in implementation

Despite the existence of regulatory frameworks, enforcing due diligence in global supply chains presents significant challenges.  The lack of transparency is one of the biggest issues, where many brands lack direct oversight of their suppliers beyond the first tier, making it difficult to verify working conditions.

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How Trimco Group’s ProductDNA® supports your brand’s due diligence efforts

Navigating these complexities requires practical tools that help businesses gain full visibility into their supply chains. Trimco Group’s ProductDNA® solution provides brands with a structured approach to risk assessment and compliance by:

• Enhanced supply chain transparency. Solution collects and organizes supplier data to offer real-time insights into labor practices.

• Automated risk assessments. It offers country risk analysis and identifies potential red flags related to forced labor at facility level, enabling proactive decision-making.

• Compliance readiness. ProductDNA® generates reports and audit trails to support regulatory due diligence and brand accountability.

By leveraging ProductDNA®, your brand can streamline their compliance processes, mitigate regulatory risks, and foster stronger, more responsible supplier relationships.

The need for a systemic change

Addressing forced labor requires that businesses adopt comprehensive due diligence processes, including:

• Clear understanding of each sourcing country risk on social rights, political and economical contexts : understand the context in which your suppliers are evolving.

• Advanced supply chain mapping: enhance visibility into supplier networks to identify potential risks from raw material to finished product.

• Worker-centered approaches: engage directly with labor organizations and unions to empower workers.

• Stronger accountability measures: establish grievance mechanisms and ensure that corrective actions are taken when violations occur.

• Re-enforce business relationship with your suppliers: engage in mid-long terms with them. This is a must-do to succeed in your due diligence obligations.

• United efforts within the industry: align with other brands working with your suppliers to talk with one voice and better support your suppliers

While legislation provides an important framework for corporate accountability, effective enforcement, and industry-wide collaboration remain essential. Companies must move beyond risk mitigation to actively engage in systemic change, ensuring that workers’ rights are protected throughout the supply chain. Governments, businesses, and civil society must work together to close loopholes that allow forced labor to persist, ensuring that global trade is not built on exploitation.

Want to know more about Trimco Group’s ProductDNA® and how it can help you in mapping out your supply chain due diligence needs? Get in touch.

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Sources:

The State of Garment Workers in 2024: ‘Fraught’

Beneath the Seams: The Human Toll of Fast Fashion - Earth Day