Why addressing forced labor in supply chains is not only the right thing to do – but is also good for business.
13 May 2026
A series of policy shifts and legislative reversals in the U.S. have brought labor risk into sharper focus for businesses. Against a backdrop of tariffs, geopolitical uncertainty, climate impacts, and price volatility, forced labor and human rights risks are now a critical – and increasingly complex – dimension of supply chain management.
In March of 2026, Section 301 of the U.S. Trade Act was invoked to investigate imports that may be produced with forced labor. These investigations extend into 60 countries, including major manufacturing economies such as the E.U., Canada, China, Taiwan, Mexico, and Vietnam. If forced labor is found, punitive measures can include prohibition of importation of goods under the U.S. Trade representative argument that these goods create competition with U.S. producers.
Simultaneously, U.S. employers with reliance on short-term or seasonal labor are navigating the revival of the H2-A visa program, which includes new changes that will lower hourly wages paid to workers in the program in many, if not all, states. The H2-A program is already a hotspot for abuse and forced labor risks, with many workers relying on brokers and facing withheld pay and document confiscation. This pushes businesses – and their legal, human resources, and procurement teams – to navigate additional complexity when aiming to ensure prevention of forced labor or labor abuses across their supply chains.
Beyond the U.S. borders, there are also numerous forced labor regulations, including the emerging EU Forced Labor Regulation, which comes into effect December 14, 2027, as well as Modern Slavery Legislations in countries such as Australia and Canada, and the due diligence reporting frameworks required by CSDDD.
Modern slavery is defined by the United Nations as “situations of exploitation that a person cannot refuse or leave because of threats, violence, coercion, deception, and/or abuse of power”. It can take many forms, including human trafficking, forced labor, debt bondage/bonded labor, descent-based slavery, child slavery, forced or early marriage, and domestic servitude.
To comply with many of these regulations, in-scope companies must demonstrate that they have policies in place and are implementing due diligence processes in relation to modern slavery with a focus on forced labor, as well as on the steps they are taking to prevent and reduce the adverse human rights impacts associated with forced labor along their supply chain. However, statements must be backed by rigorous risk-based due diligence programs and internal checks and balances to ensure these programs are effective in identifying risks and prioritizing action in areas where adverse impacts are most likely to occur and to be severe.
Litigation across the E.U. and U.K. in the past months has highlighted this shift as well. Two large global companies have recently settled cases after workers in their supply chain facilities sued on account of forced labor and abuse. In one case, the court found that the company had failed to comply with the obligations of the France Duty of Vigilance Law, and it was the fault of the company for not identifying the risks the employees were facing. In the other, the claimants proved the company’s contractual oversight of factory conditions in Malaysia sufficed for jurisdiction, due partially to the company’s knowledge of the factory risk yet inaction towards the abuse. As reputational damage becomes precedent for true legal action, risks gone unresolved become more pressing.
Human rights risks have also been heightened in recent years as other external factors have increased the need for cost-competitiveness, often leading companies to cut corners on fair labor, reasonable pay, and effective and continuous due diligence. While procurement teams and supply chain managers have been preoccupied by geopolitical crises and rising prices, these current events only increase the likelihood of labor and human rights risks in supply chains, as rising fuel and food costs and increases in displaced persons contribute to forced, bonded, and child labor cases.
In the past, publishing a Supplier Code of Conduct and having internal governance policies that required passive or implicit agreement by suppliers was considered a sufficient foundation to ensure worker protections. In some instances, periodic audits and reactive engagement with certain sectors or geographies based on intrinsic risk or political signaling were also carried out.
However, the recent mixed signals across jurisdictions have not only caused confusion but now also pose direct litigation and compliance risks for companies that do not have a clear understanding of their labor protections and labor resourcing. More robust risk-based due diligence systems are needed to protect companies from unpredictable investigations, reputational risk, and financial risk posed by adverse human rights impacts, such as insufficient labor protections.
Despite this challenge, there is significant value in investing in effective due diligence processes and programs. The corporates leading their industries with human rights and environmental due diligence processes are those who treat addressing risk as a strategic and integrated collaboration exercise across functions of their business, rather than a tick box compliance approach.
These companies are benefiting from:
Anthesis supports companies at all stages of the risk-based due diligence process. We can help you start with a thorough, multi-angle risk assessment of your supply chain, prioritizing categories, products, and sourcing models with higher exposure to migrant labor, labor brokers, seasonal work, or opaque sub-tiers. In parallel, we can support full traceability of your supply chain beyond Tier 1 and Tier 2, mapping relationships and associated risks to better anticipate and respond to regulatory, compliance, reputational, and ethical pressures and sanctions.
Effective due diligence also requires meaningful stakeholder engagement. We can help you establish accessible grievance channels and incorporate worker feedback to surface issues earlier and test whether remediation is actually working. From there, we can help you triage where deeper due diligence is needed by combining geography, product, labor model, trade route, and supplier-specific risk signals. We reinforce this approach by training procurement teams so buyers understand how price pressure, short lead times, and unmanaged intermediaries can increase labor risk (and how more stable, consistent ordering, where feasible, can reduce it).
Finally, we can help you embed expectations into day-to-day governance: integrating these assurances into supplier onboarding, RFPs, and pre-bid risk assessments, and requiring clearer disclosure for higher-risk suppliers on sites, subcontractors, labor agencies, and worker-management practices before approval. We’ll also help you look beyond codes and audits (e.g., recruitment fees, wage deductions, document retention, restricted movement, excessive overtime, hidden subcontracting), define a clear internal escalation process (triggers, ownership, pauses, remediation/disengagement), and prioritize living wage assessment and supplier engagement to build positive work environments that prevent future risks.
Identifying, assessing, and managing human rights risks in supply chains.
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