Checklist: Modern slavery in supply chains (USA)

Introduction

This checklist is to assist in-house counsel and private practitioners in understanding the policies, practices, and procedures an organization should implement to combat modern slavery and human trafficking in supply chains and to ensure compliance with legal requirements.

It provides an overview of the key considerations for assessing risk and developing a compliance program, and includes the following steps:

1. Understand your organization’s mandatory compliance obligations
2. Identify applicable standards and voluntary policies
3. Assess and monitor risks
4. Report and monitor compliance

The checklist is presented as a list of points for consideration that you can check off as they are addressed. At the end of the document there are explanatory notes corresponding with each requirement in the checklist.

This checklist can be used in conjunction with the following How-to guides: How to draft a business continuity plan, How to develop a sustainable supply chain and How to assess modern slavery risk in supply chains and Checklist: Supplier contracts and unforeseen events.

Step 1 – Understand your organization’s mandatory compliance obligations

Step 2 – Identify applicable standards and voluntary policies

Step 3 – Assess and monitor risks

Step 4 – Report and monitor compliance

Legal framework

Companies may be unaware of all the suppliers in their supply chains. Complex business relationships and this lack of visibility can put companies at risk of contributing to forced labor and other forms of modern slavery. Growing awareness and concern about this issue among investors, consumers, governments, and the wider public has led to a number of legal developments, with most jurisdictions criminalizing direct involvement in modern slavery. A few take the additional step of imposing obligations on businesses to address the risks of being involved, even indirectly, in modern slavery, and to report their efforts. These requirements are especially stringent when a company contracts to provide services or supplies to a government entity. Some jurisdictions also ban the importation of goods produced, even partly, through modern slavery.

There are important moral and economic reasons why companies should seek to mitigate the risk of modern slavery in their supply chains. It is a basic human right, enshrined in international law, such as Article 4 of the Universal Declaration of Human Rights, that no one should be forced to work under conditions of slavery or coercion. In addition, companies may suffer significant economic and reputational damage if they are linked, even indirectly, to modern slavery. This damage could include fines and seizure of products, in addition to damage to the company’s reputation that could potentially cause the loss of consumers and investors. Due diligence and certification of efforts to combat slavery in supply chains are required for businesses wishing to contract with the US government and other government entities.

Step 1 – Understand your organization’s mandatory obligations

1.1 Identify applicable rules for federal suppliers and contractors

Federal suppliers and contactors are subject to two sets of rules on products produced by forced or indentured child labor and human trafficking.

Pursuant to Executive Order 13126, Prohibition of Acquisition of Products Produced by Forced or Indentured Child Labor (June 12, 1999), the US Department of Labor (DOL) maintains a List of Products Produced by Forced or Indentured Child Labor. Updated to September 5, 2024, the list contains 204 goods from 82 countries and areas. This list is also maintained on the DOL’s website. Under procurement regulations, federal contractors who supply products on the list must prove that they have made a good faith effort to determine if the products were produced under forced or indentured child labor. For more information see 48 CFR section 22.1503.

Additionally, Executive Order 13627, Strengthening Protections Against Trafficking in Persons in Federal Contracts (September 25, 2012), and Title XVII of the National Defense Authorization Act for Fiscal Year 2013 (PL 112-239), imposed regulations prohibiting federal contractors, contractor employees, subcontractors and subcontractor employees from engaging in specific types of trafficking-related activities. For more information see 48 CFR section 52.222-50. For contracts exceeding $550,000 that are performed outside the United States, this includes a requirement that contractors develop a compliance plan with an employee awareness program, a process for employee reporting of violations, and plans for housing, wages, and hours. On January 14, 2014, the Obama administration issued the Federal Strategic Action Plan on Services for Victims of Human Trafficking in the United States 2013-2017, which had eight primary objectives, including:

• Provide federal leadership and direction to improve victim services.
• Coordinate victim services effectively through collaboration across multiple service sectors.
• Establish baseline knowledge of human trafficking and victim service needs through rigorous research and reporting.
• Support the development of effective responses to the needs of human trafficking victims.
• Increase victim identification through coordinated public outreach and awareness efforts.
• Build capacity to better identify and serve victims through targeted training and technical assistance.
• Foster collaborations and partnerships to enhance the community response to human trafficking.
• Improve access to victim services by removing systemic barriers.

More recently, in accordance with the Justice for Victims of Trafficking Act (JVTA) of 2015 the Department of Justice issued the National Strategy to Combat Human Trafficking in January 2022. In keeping with the Trafficking Victims Protection Act (TVPA) of 2000, the Strategy focused on protection of victims of trafficking, prosecution of human trafficking cases, and prevention of human trafficking.

To aid in compliance with these requirements, the DOL offers a guide for companies to develop social compliance systems (ie, ‘an integrated set of policies and practices through which a company seeks to ensure maximum adherence to the elements of its code of conduct that cover social and labor issues’ as defined in the guide). Additionally, the US Department of State offers a responsible sourcing tool, which includes a compliance plan template for demonstrating compliance with the requirements on combatting human trafficking.

In July 2025, the State Department's Office to Monitor and Combat Trafficking in Persons (TIP) reduced its staffing significantly. A key team that was responsible for coordinating federal anti-human trafficking efforts lost nearly two-thirds of its staff. This move is part of a series of reductions across various government agencies concerning human trafficking initiatives, despite Republicans previously highlighting it as a top priority.

1.1.1 Recipients of loans from the International Development Finance Corporation (DFC) and the International Finance Corporation (IFC)

Recipients of loans from the International Development Finance Corporation (DFC) must adhere to social and environmental standards in their supply chains, including due diligence to identify and remedy problems with child and forced labor. Similarly, recipients of loans from the International Finance Corporation (IFC), which is part of the World Bank Group, must comply with performance standards on labor and working conditions. These standards include avoiding the use of child or forced labor, and require the identification of risks in their supply chains.

1.1.2 Healthcare providers

Healthcare providers have reporting obligations when they believe that their patients are potential victims of trafficking. Although these requirements are about medical patients rather than supply chains, a brief overview is worthwhile, as healthcare is a significant public and private industry.

Although federal law does not currently require reporting by healthcare providers who suspect that an adult patient may be a victim of trafficking, children receive greater protections. For example, healthcare providers working on federal land or in federally operated facilities must report suspected child abuse to the appropriate authorities. For more information see 34 USC section 20341. In addition to other forms of child abuse, the reporting requirement includes ‘severe forms of trafficking in persons’ as defined in the Trafficking Victims Protection Act (TVPA) (22 USC sections 7101 – 7114). Additionally, the federal Child Abuse Prevention and Treatment Act of 1974 (CAPTA) (42 USC section 5106a) requires states to implement child abuse reporting laws if the states receive certain federal funds. State laws vary considerably on reporting requirements for healthcare providers when it comes to adults, with many states’ reporting requirements focusing solely on sex trafficking victims.

The American Hospital Association (AHA) provides a comprehensive tool for healthcare providers regarding legal requirements for reporting and education to navigate the various obligations for healthcare providers in the area of human trafficking under federal and state law. The AHA also released ICD-10-CM codes (International Classification of Diseases, 10th Revision, Clinical Modification) for the collection of data on victims of forced labor or sexual exploitation.

1.1.3 Customs and border protection

The 2015 amendment to section 307 of the Tariff Act 1930 (19 USC section 1307) strengthened the ability of US Customs and Border Protection (CBP) to confiscate international imports when information reasonably indicates that the imported merchandise was mined, produced, or manufactured (wholly or in part) by convict, forced, or indentured labor. See 19 CFR section 12.42. After the CBP has issued a withhold release order (WRO), the manufacturer has the option of either re-exporting the goods or providing evidence demonstrating that the goods were not produced by forced labor. See 19 CFR section 12.43. The DOL publishes a fact sheet for importers seeking to prove that seized products should be admitted.

Goods from North Korea (22 USC section 9241a) and cotton and tomato products from the Xinjiang Uyghur Autonomous Region of China (XUAR) (CBP WRO) are presumptively barred from import to the United States. Manufacturers can overcome the presumption by providing clear and convincing evidence demonstrating that the goods were not produced by forced labor.

1.1.4 State requirements

California is the only state to enact disclosure requirements. The California Transparency in Supply Chains Act imposes general reporting requirements on private sector involvement with modern slavery. See Cal Civ Code section 1714.43. Under the California law, which became effective in 2012, covered companies must disclose information regarding their efforts to eliminate human trafficking and slavery within their supply chains. The law applies to all retailers and manufacturers with annual gross revenues of at least $100 million who do business in California. The disclosure requirements cover measures such as the verification of supply chains, audits to ensure compliance with slavery mitigation measures, certification of suppliers, and training of staff and managers to recognize risks. The law simply requires companies to disclose their efforts; it does not force companies to adopt policies to eradicate trafficking in their supply chains. The California Attorney General published in 2015 The California Transparency in Supply Chain Act: A Resource Guide with model disclosures and guidance.

Also in 2015, Texas established the human trafficking prevention business partnership, which is a voluntary program in which participating businesses agree to adopt a zero-tolerance policy on trafficking, ensure their employees comply with the policy, participate in public awareness campaigns, and develop best practices for combatting trafficking. Those businesses that comply with the program receive a certificate of recognition from the secretary of state.

Several states have enacted measures aimed at forced labor and trafficking in specific industries. For instance, California requires all contractors who contract with state agencies for the procurement or laundering of apparel to certify that no work was provided through forced labor or exploitation. Under California’s Sweatfree code of conduct, all bidders on state contracts (except for public works contracts, which are exempt from the requirement) must agree to abide by a contractor responsibility program and code of conduct.

On February 8, 2023, Senate Bill S442, the ‘New York State Transparency in Supply Chains Act’ was introduced in the New York legislature. The purpose of this act is ‘to amend the general business law and the tax law’. Similar to the California law the Act would require businesses within the state to disclose their preventative measures against human trafficking. The bill appears to have died in the Senate Consumer Protection Committee. Similar bills of this nature have been introduced across the country, rendering it important to review local laws to ensure you remain cognizant and up to date on any new requirements.

The National Conference of State Legislatures offers resources related to state laws dealing with human trafficking. In addition, more than 38 states have laws requiring various state agencies and private businesses to train their staff to recognize and respond to human trafficking crimes and victims. Covered public sector professions generally include police, emergency personnel, judicial officers, school employees, medical professionals, and social service workers.

Some examples of private sector training requirements include:

• Connecticut - lodging services must certify that each employee has received training for accurate and prompt reporting of suspected human trafficking;
• Iowa – the Iowa Department of Justice must offer training programs aimed at industries that have a high incidence of debt bondage or forced labor; and
• New Jersey – hotel and motel owners and employees must certify completion of training on handling and responding to suspected cases of human trafficking.

1.2 Is certification required for selling supplies to the federal government?

If the end product (regardless of the country of origin) offered is of a type identified on the List of Products Produced by Forced or Indentured Child Labor, the offeror must certify that:

• subject to the country and price exceptions in 48 CFR section 22.1503(b), the offeror will not supply any end product on the list that was mined, produced, or manufactured in a country identified on the list for that product; or
• the offeror has made a good faith effort to determine whether forced or indentured child labor was used to mine, produce, or manufacture any end product to be furnished under the contract that is on the list and was mined, produced, or manufactured in a country identified on the list for that product; and on the basis of those efforts, the offeror is unaware of any such use of child labor.

More information can be found in 48 CFR section 22.1503(c).

1.3. Is certification required for other federal contracts?

Federal regulations require certifications for other types of supplier contracts. Ultimately, unless they have actual knowledge that the certification is false, a contracting officer must rely on the certification of the offeror when making the decision regarding whether to award the contract. For more information, see 48 CFR section 22.1503(d).

1.3.1 What is the dollar amount of contract?

Consider whether the federal contract, or any portion of it, has the following attributes:

• the contract is for supplies, other than commercially available off-the-shelf items (COTS), acquired outside the United States, or services to be performed outside the United States; and
• the contract has an estimated value that exceeds $550,000.

If both of these conditions exist, a compliance plan is required. For more information, see 48 CFR section 52.222-50(h)(1).

1.3.2 Confirm an appropriate compliance plan is in place

The compliance plan must be appropriate to:

• the size and complexity of the contract;
• the nature and scope of activities to be performed, including the number of non-US citizens expected to be employed; and
• the risk that the contract or subcontract will involve services or supplies susceptible to human trafficking.

For more information see 48 CFR section 52.222-50(h)(2).

The compliance plan must be posted in the workplace and on the contractor or subcontractor’s website.

The compliance plan must include, at a minimum, the following as recommended in 48 CFR section 52.222-50(h)(3):

• An awareness program to inform contractor employees about the Government’s policy prohibiting [certain] trafficking-related activities . . . the activities prohibited, and the actions that will be taken against the employee for violations. . . .
• A process for employees to report, without fear of retaliation, activity inconsistent with the policy prohibiting trafficking in persons, including a means to make available to all employees the hotline phone number of the Global Human Trafficking Hotline at 1-844-888-FREE and its email address at [email protected].
• A recruitment and wage plan that only permits the use of recruitment companies with trained employees, prohibits charging recruitment fees to the employee or potential employee, and ensures that wages meet applicable host-country legal requirements or explains any variance.
• A housing plan, if the Contractor or subcontractor intends to provide or arrange housing, that ensures that the housing meets host-country housing and safety standards.
• Procedures to prevent agents and subcontractors at any tier and at any dollar value from engaging in trafficking in persons including activities in [48 CFR section 52.222-50(b)] . . . and to monitor, detect, and terminate any agents, subcontracts, or subcontractor employees that have engaged in such activities.

1.3.3 Certification

After receiving a contract, the contractor must submit annually to the government contracting officer, a certification that the contractor has implemented the compliance plan, and after conducting due diligence, either:

• To the best of the Contractor’s knowledge and belief, neither it nor any of its agents, subcontractors, or their agents is engaged in any such activities; or
• If abuses relating to any of the prohibited activities identified in paragraph (b) of this clause have been found, the Contractor or subcontractor has taken the appropriate remedial and referral actions.

For more information see 48 CFR section 52.222-50(h)(5).

1.4 Is the organization required to make a report to the Securities and Exchange Commission?

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires manufacturers to conduct due diligence and report on ‘conflict minerals’ in supply chains. See also 15 USC section 78m(p). The law requires all Securities and Exchange Commission (SEC) reporting companies to check their supply chains for tin, tungsten, tantalum, and gold (known as the ‘3TG’ minerals), and to investigate whether these minerals might have originated in the Democratic Republic of the Congo (DRC) or an adjoining country. If a company finds such a potential link, it must take steps to address the risk that the transactions might be funding armed groups or human rights abuses. These companies must disclose their efforts to address these risks annually to the SEC. See 17 CFR parts 240, 249b. Organizations covered by this requirement must file a Form SD Specialized Disclosure Report (Form SD) on May 31 each year.

1.4.1 Is the organization a publicly traded company?

When determining the applicable obligations, it is necessary to consider whether the company is a publicly traded company. If so, it must file reports with the SEC under sections 13(a) (15 USC 78m(a)) or 15(d) (15 USC 78o(d)) of the Securities Exchange Act of 1934.

1.4.2 Are the conflict minerals ‘necessary to the functionality or production of a product’ manufactured by the organization?

In addition to determining whether the 3TG minerals originate in the DRC or a surrounding area, consideration must also be given to whether the minerals are ‘necessary to the functionality or production of a product manufactured or contracted by that [organization] to be manufactured.’ Additional reporting is required if the minerals are deemed necessary. See 17 CFR section 240.13p-1.

1.4.3 Certification to the SEC

A publicly traded company that claims that the conflict minerals are necessary to the functionality or production of a product must file a report with the SEC on Form SD disclosing. See 17 CFR section 249b.400. The report must include the following:

• a description of the ‘measures taken to exercise due diligence’ with regard to the minerals’ sources and custody chains, which must include an independent private sector audit of the report; and
• a description of the products found not to be DRC-conflict free (ie, it cannot be determined that the products do not contain minerals that directly or indirectly finance or benefit armed groups in the DRC or an adjoining country), the entity that conducted the required audit, the facilities used to process the conflict minerals, the conflict minerals’ country of origin, and the efforts to determine the mine or location of origin with the greatest possible specificity.

For more information see 15 USC section 78m(p)(1)(A).

SEC rules do not mandate any particular due diligence procedure, but the rules reference the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas as a suitable framework. The Responsible Minerals Initiative (RMI), an offshoot of the Responsible Business Alliance, has created a free, standardized Conflict Minerals Reporting Template (CMRT) to assist with the certification requirements. The RMI also keeps lists of smelters and refiners that have been assessed against Responsible Minerals Assurance Process (RMAP) standards.

1.4.4 EU standards regarding conflict minerals

The European Union (EU) has a Conflict Minerals Regulation (2017/821/EU) covering the 3TG minerals from all conflict-affected or high-risk areas. As of January 1, 2021, EU importers of these minerals must follow a framework for due diligence to ensure that the minerals have not been produced in a way that funds conflict or other related illegal practices. The EU’s due diligence framework explicitly follows the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

1.5 Is certification required for state or local government contracting?

Businesses contracting with state or local governments may have to certify compliance with additional anti-trafficking measures. As noted above, California’s Sweatfree code of conduct requires all bidders on state contracts for procurement or laundering of apparel to abide by a contractor responsibility program and code of conduct.

Local governments are taking on similar initiatives for their contractors. For instance, Houston, Texas and Los Angeles, California, have instituted anti-sweatshop measures. These types of measures require contractors to adhere to codes of conduct and to report any potential violations. In each case, the specific requirements must be reviewed carefully.

1.6 Are subcontractors in compliance?

An organization that relies on subcontractors will have additional requirements regarding those subcontractors’ compliance with the applicable standards.

1.6.1 Due diligence

Given the length and complexity of global supply chains, it would be impossible for all subcontractors to certify compliance with anti-trafficking standards. This explains the need for due diligence by primary contractors regarding the practices of subcontractors in their supply chains. However, when a business contracts with a government entity, some requirements may pass on to the subcontractors.

1.6.2 Criteria for subcontractors

Federal government contract requirements (ie, a compliance plan and certification) flow down equally to subcontractors whose contracts include at least $550,000 of value and will be performed outside of the United States. See 48 CFR section 52.222-50(i). Additionally, a federal contractor who is required to implement a compliance plan must have procedures in place:

'to prevent agents and subcontractors at any tier and at any dollar value from engaging in trafficking in persons including activities in [48 CFR section 52.222-50(b)] . . . and to monitor, detect, and terminate any agents, subcontracts, or subcontractor employees that have engaged in such activities.'

For more information see 48 CFR section 52.222-50(h)(3)(v).

As noted above, another example of criteria for subcontractors is California’s Sweatfree code of conduct, which requires subcontractors to sign the same statement as the primary contractor agreeing to adhere to applicable standards.

Step 2 – What standards and voluntary policies are applicable?

2.1 Identify applicable standards

In addition to the compliance requirements listed above in the United States and the European Union, additional due diligence and reporting requirements exist in the United Kingdom, the European Union, France, Australia, Germany, and Norway, among others.

These include, for instance:

• Modern Slavery Act 2015 (UK);
• Non-Financial Reporting Directive (EU);
• Duty of Vigilance Law 2017 (France);
• Modern Slavery Act 2018 (Australia);
• Due Diligence in Supply Chains Law (Germany, in force from 2023); and
• Transparency Act (Norway).

Another resource that was published through a combined effort between the UK, Canada, and New Zealand is the Principles to Guide Government Action to Combat Human Trafficking in Global Supply Chains.

2.2 Identify voluntary policies and codes of compliance

A variety of voluntary standards and guidelines are available. For example:

• Guidelines for Multinational Enterprises (OECD);
• Due Diligence Guidance for Responsible Business Conduct (OECD);
• Guiding Principles on Business and Human Rights (United Nations Office of the High Commissioner on Human Rights);
• Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (ILO); and
• Combatting trafficking in persons in global supply chains (United Nations Office of the High Commissioner on Human Rights).

2.2.1 Model standards

Model compliance systems are available for adoption and implementation, such as the Ethical Trading Initiative (ETI). Members of the ETI receive support in developing and implementing programs to protect workers in global supply chains, including a system for resolving violations.

The DOL’s International Labor Affairs Bureau (ILAB) has produced a web page detailing steps that companies can take to reduce forced labor in global supply chains.

The CBP has published guidelines on supply chain due diligence. They provide a broad outline of steps that businesses can take to combat forced labor and child labor in global supply chains as well as resources for developing and strengthening supply chain policies.

2.2.2 Trade standards

Many industry and trade associations have policies that their members must follow. For example:

• Responsible Business Alliance Code of Conduct (electronics industry). This code outlines standards for labor, health and safety, environmental protection, business ethics, and management systems for the electronics industry. Members are expected to adhere to these principles to ensure responsible supply chains.
• Better Cotton Initiative (BCI) Production Principles and Criteria (cotton industry). The BCI establishes global standards for more sustainable cotton production. It focuses on minimizing the environmental impact of farming, improving livelihoods, and promoting responsible land use.
• Bonsucro Production Standards (sugarcane industry). Bonsucro sets standards for the sustainable production and processing of sugarcane. The production standards address environmental, social, and economic aspects of the sugarcane supply chain, and are intended to encourage responsible practices from field to factory.

Step 3 – Assess and monitor risks

3.1. Identify origin of goods in the supply chain

To determine whether your business is engaging with or in danger of engaging with suppliers involved in forced labor, it is important to review the entire supply chain, including identifying the origin of all goods in the supply chain.

3.1.1 Sanctioned countries

As mentioned above, North Korea and the XUAR in China are under total or partial import bans because of forced labor concerns. Additionally, the 3TG minerals from the DRC or an adjoining country are subject to SEC reporting requirements.

As for other countries and products, the DOL publishes three reports with detailed research on countries and products at risk for child labor and forced labor, including:

• Findings on the Worst Forms of Child Labor;
• List of Goods Produced by Child Labor or Forced Labor; and
• List of Products Produced by Forced or Indentured Child Labor.

Further, the NGO Verité publishes a commodity atlas identifying specific commodities and their relationship to forced labor.

3.2 Assess suppliers for risk of slavery

It may be difficult to determine when individual suppliers pose a slavery risk. Businesses can obtain advice from customs experts, such as brokers, trade attorneys, or customs consultants, potentially including audits to evaluate supply chain risks.

Additionally, the CBP offers administrative rulings on prospective transactions. Also see 19 CFR part 177. Review of the CBP’s WROs and findings may also be useful in spotting previous violations by specific suppliers.

3.3 Map supply chain

Divide suppliers into first-tier suppliers and indirectly connected, downstream suppliers, and identify areas where business has higher leverage. Businesses generally know their immediate first-tier suppliers. But further down the supply chain, suppliers are not always visible. It is often difficult to trace the entire life cycle of goods down to all the individual components.

3.3.1 First-tier suppliers

The first step in mapping a supply chain is to engage first-tier suppliers. The cooperation of these suppliers and of those responsible for managing supply chain relationships is essential for a company’s effective policing of forced labor in supply chains.

3.3.2 Indirectly connected, downstream suppliers

A company can ask its first-tier suppliers to join in the mapping process down the chain with ‘cascading invitations’ for each component. Additionally, many industries share common suppliers. It may be efficient to share mapping efforts and costs with other companies in the same industry to create centralized, shared, and verified supplier data.

3.3.3 Identify areas where business has higher leverage

Mapping supply chains and governance structures (such as vertical or horizontal integration by contract or by market forces) will enable companies to identify areas where they have higher leverage and capacity to influence supplier labor practices. For instance, a company may have more leverage to impose conditions on a supplier before, rather than after, finalizing a supply agreement. Further, companies within the same industry may pool their leverage to impose conditions on common suppliers.

3.4 Consider whether the value of a transaction or the size of a business triggers reporting requirements

A transaction’s dollar value may trigger legal requirements. For instance, for federal contractors, foreign contracts worth less than $550,000 are exempt from the requirement for anti-trafficking compliance plans. See 48 CFR section 52.222-50(h)(1).

Additionally, there are significant exceptions to the requirement for federal supplier certification as to forced or indentured child labor. Exceptions include end products from:

• Israel, if the anticipated value of the transaction is at least $50,000;
• Mexico, at least $92,319; and
• Armenia, Aruba, Australia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Italy, Japan, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Montenegro, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Taiwan, Ukraine, or the United Kingdom, at least $183,000.

For more information see 48 CFR section 22.1503(b).

The company’s size may also determine its reporting obligations. As mentioned above, only SEC-listed companies have to comply with the Dodd-Frank reporting requirement on conflict minerals, 15 USC section 78m(p). Additionally, only companies with gross revenues of at least $100 million that do business in California have to comply with California’s transparency law, Cal Civ Code section 1714.43.

3.5 Identify whether adequate due diligence has been performed on the supplier

In the case of suppliers identified as high risk, workplace audits or assessments may be necessary. These may not be simple to conduct, as modern slavery is often deliberately hidden and may be difficult to detect. An assessment might include an initial inspection as part of due diligence, as well as ongoing monitoring. Where workers may be vulnerable to retaliation by their employer for speaking with auditors, it may be useful to interview workers offsite to minimize risks to them. Expert assessors, such as NGOs and trade unions, may be retained to identify forced labor risks and conduct individual workplace assessments.

3.6 Take steps to mitigate risks

Mitigating the risk to your organization from modern slavery is made difficult by the fact that the practice is usually hidden. The most effective risk mitigation method is to work towards complete transparency in your supply chain. An insistence on transparency will make potential problem areas apparent and direct your organization to further investigation. Gaining a reputation for insisting on transparency may also operate to deter those in your supply chain from being involved in modern slavery, or discourage those that are involved from any affiliation with the company.

Step 4 – Report and monitor compliance

As discussed above, a number of international, national, and local laws require companies to disclose their efforts to mitigate modern slavery in their supply chains. These may include periodic monitoring of supplier working conditions and access to a supplier’s grievance mechanisms.

4.1 Monitor compliance with standards

As part of compliance monitoring, suppliers should be required to provide regular reports on working conditions, as well as individual incident reporting. For suppliers at high risk of violation, periodic independent assessments of working conditions may be required. Additionally, digital worker reporting tools are under development to enable better data on violations.

4.2 Revise and update internal standards

If monitoring of suppliers reveals problems, you should consider whether your due diligence should have found the problem areas sooner, and if there are ways to improve your standards. Procedures and standards should not be regarded as being written in stone, but rather living documents subject to change and improvement.

Additional resources

Related Lexology Pro content

How-to guides:

How to draft a business continuity plan
How to develop a sustainable supply chain
How to assess modern slavery risk in supply chains

Checklist:

Supplier contracts and unforeseen events

Reliance on information posted:

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