Forced labor in Swiss chains: reality or myth? (cross-border guide)

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The United States accuses Switzerland of not doing enough against forced labor in its supply chains.

Context

In brief

  • Switzerland has been included in a list of 60 countries deemed to have failed to introduce or effectively enforce a ban on the import of goods produced with forced labour.
  • The US has imposed an additional duty of 12.5% on countries that do not have an import ban on products made using forced labour.
  • The Swiss government has rejected the accusations, saying that its approach combines regulation, mandatory risk assessments promoted by the private sector and international cooperation.

Key Facts

  • What: Switzerland has been included in a list of 60 countries deemed to have failed to introduce or effectively enforce a ban on the import of goods produced with forced labour.
  • When: June 2, 2023.
  • Where: Switzerland.
  • Who: United States.
  • Amount: Additional duty of 12.5%.

On March 12, 2023, the United States announced an investigation against Switzerland under Section 301 of the US Trade Act, which concerns unfair or discriminatory trade practices. The aim was to test whether Switzerland was doing enough to prevent the import of goods produced by forced labour. The International Labour Organization defines forced labour as "any work or service extorted from a person under threat of punishment and for which the person has not volunteered himself". Punishments may include violence, intimidation, or forms of coercion such as withholding wages or confiscating passports.

The results of the US survey were released on 2 June 2023 and Switzerland was included in a list of 60 countries deemed to have failed to introduce or effectively enforce a ban on the import of goods produced with forced labour. The US trade representative said that Switzerland and the other countries concerned would not effectively combat the phenomenon and expose American producers to unfair competition.

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Operational details

Practical implications for Swiss companies

Swiss companies, especially large ones, will face new challenges due to international pressures. Companies must ensure that their suppliers comply with human rights and international labor standards. This could lead to increased operational costs and the need to implement new policies and procedures to monitor supply chains.

Impact on Swiss consumers

Swiss consumers could see an increase in the prices of imported products due to the new tariffs imposed by the United States. This could affect the availability and cost of consumer goods, especially for those products that are heavily dependent on imports.

The future of Swiss supply chains

The future of Swiss supply chains will largely depend on the effectiveness of the measures taken to prevent forced labour. Companies, consumers and the Swiss government will need to work together to address this challenge and ensure that products imported into Switzerland are made under ethical and human rights conditions.

Conclusion

The current situation underscores the importance of effective regulation and international cooperation to combat forced labor in global supply chains. Switzerland must continue to work to improve its policies and procedures to ensure that its products are produced under ethical and human rights-respecting conditions.

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Key points

What to do for Swiss companies

Swiss companies must take immediate steps to ensure that their supply chains are free of forced labor. This includes conducting regular supplier audits, implementing clear human rights policies, and training staff on corporate social responsibility best practices.

What to do for Swiss consumers

Swiss consumers can play their part by supporting companies that demonstrate a commitment to ethical and sustainable practices. This can include researching ethical product certifications and choosing brands that are known for their responsible practices.

Useful tools

For more information and tools to monitor supply chains, consumers and companies can visit the Economiesuisse website and consult the OECD guidelines for companies.

Conclusion

The current situation calls for immediate action by all stakeholders to ensure that Swiss supply chains are free of forced labour. Only through shared cooperation and commitment can we meet this challenge and ensure a more ethical and sustainable future for all.

Source: swissinfo.ch

Frequently Asked Questions
What does it mean to be included in the list of 60 countries?
Being included in the list of 60 countries means that Switzerland is deemed to be in default in introducing or effectively enforcing a ban on the import of goods produced with forced labour.
What are the implications of the additional duty of 12.5%?
The additional duty of 12.5% could increase the costs of imported products, affecting both Swiss companies and consumers.
What is the Swiss Government doing to address this situation?
The Swiss Government is working on a draft law that will cover some thirty large companies and combines regulation, mandatory risk assessments promoted by the private sector and international cooperation.

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