Critical risk: cracking down on the use of forced and child labour in supply chains

Governments around the world are tightening regulation on the use of forced and child labour in supply chains by introducing mandatory reporting requirements, human rights due-diligence obligations, import controls and stricter procurement guidelines. 

Canada's S-211 bill came into force on 1 January 2024, requiring covered entities to file annual reports by 31 May that year with the Minister of Public Safety. These must outline measures taken to prevent and reduce forced and child labour risks in the supply chains of goods produced, purchased, distributed or imported into Canada. 

The US has not yet enacted such comprehensive legislation, preferring an approach centred on import controls rather than disclosure. Section 307 of the Tariff Act (1930), strengthened by the Trade Facilitation and Trade Enforcement Act of 2015, allows US Customs and Border Protection to detain shipments suspected of involving forced labour. Many US companies still disclose their risk in good faith, however, or due to investor expectations or global compliance requirements. 

In response to regulatory pressure and because of the reputational risk involved, there has been a focus on identifying risk exposure and diversifying supply chains away from regions at high risk of forced labour. Wood Mackenzie’s labour risk assessment tool pairs country-based labour risk scores and supplier location data to provide a clear, data-driven view of labour risk exposure across a company’s supplier network. 

To find out more about the exposure of US energy-sector supplier networks, fill in the form at the top of the page to receive a complimentary copy of our recent report.