On 21 October NGO and a human rights law group launched legal proceedings against the UK government for applying preferential tariffs to imported Uzbekistani cotton, citing the use of forced labour in that industry.
Four key risk points:
1. The legal action is the first of its kind in a European court and underscores the international NGO community’s increasing focus on modern slavery risks in global trade.
2. Any ruling on the case is likely to have implications for other EU countries, given that the UK’s preferential tariffs are part of an EU-wide initiative aimed at facilitating trade with Uzbekistan.
3. Companies across Europe are likely to come under increasing pressure from regulators to uphold human rights within their operations and supply chains in the next two years.
4. While Uzbekistan’s leadership is taking measures to reduce the use of forced labour in the cotton sector, the practice persists and will continue to pose high reputational risks to those with Uzbekistani cotton in their supply chains.
First of its kind
NGO the Uzbek-German Forum for Human Rights (UGF) and human rights lawyers the Global Legal Action Network (GLAN) have jointly launched the legal action in the form of a judicial review. They claim that preferential tariffs in place for the import of Uzbekistan cotton promote the import of goods that derive from forced labour.
The UK imports only a small amount of cotton from Uzbekistan. However, it is well documented that forced adult labour is widespread in Uzbekistan’s cotton industry, and more than 300 global companies maintain a boycott against Uzbekistani cotton as a result. UGF and GLAN say that they hope the judicial review will act as an impetus for the UK government (and EU) to draft legislation explicitly prohibiting any goods made with child or forced labour from entering the UK. The US has such legislation in place: the US Department of Labor maintains a list of goods produced by forced or child labour that is updated annually and prohibits their import. The EU does not currently have measures in place to ban such imports but is likely to pass similar legislation in the next two years. The European Parliament in September called for the development of a traceability mechanism for the identification of goods produced using forced and child labour as a first step to implementing an EU-wide ban.
EU-wide initiative
The UK’s preferable tariffs are part of an EU-wide policy, adopted as part of the EU-Uzbekistan Textiles Protocol in 2017. The protocol liberalised textile trade between the two parties. Talks are currently underway to extend that relationship and make Uzbekistan a beneficiary of the so-called General System of Preference Plus. As a result, any ruling on this case will have an impact on trading rules in all EU member states. If not, similar lawsuits against other EU member states are likely in the next year.
Growing scrutiny of supply chains
NGOS are becoming emboldened to take legal action of this kind owing to greater international attention on modern slavery risks in global trade, backed up by an expanding body of extraterritorial legislation. Governments in the next year are likely to come under increasing pressure from NGOs to close loopholes that allow the import of goods derived from forced labour, while companies will in turn come under increasing pressure from governments to tackle human rights violations in their supply chains.
Author
- Eimear O'Casey, Senior Analyst
Taken from Seerist.