The UK government's planned rules on forced labour in supply chains may include fines for businesses that fail to comply, according to a government briefing. The proposal would bring in a mandatory human rights due diligence regime for the largest companies in the UK.

Trade minister Lord Sarwar announced on 4 November that the government would legislate for the regime, covering services across the UK and goods in Great Britain. The government later confirmed in a briefing webinar that there is likely to be a complaints mechanism and that the regulator may have powers to impose financial penalties, according to Hannah Edmonds-Camara, a special counsel at law firm Covington.

What the regime would cover

The rules would apply to UK businesses with more than £350 million in global turnover, and non-UK businesses generating more than £350 million in UK turnover. Companies in scope would have to identify, assess and address risks of human rights abuses and labour exploitation in their operations and supply chains, in line with OECD and UN principles.

A new regulator would be able to investigate suspected forced labour goods and direct their withdrawal from the Great Britain market where due diligence duties were not met. The proposal follows a government review of responsible business conduct begun in June last year.

What is still unclear

Much remains undecided. No regulator has been named, no draft bill has been published and no timetable has been set. The government has not said how large any penalties might be, or exactly which enforcement powers the regulator would hold beyond investigating and withdrawing goods.

Business groups have welcomed a single regime but want detail on how the duty will work in practice, including how far up the supply chain companies must look.

Sources: Global Trade Review, Garden Court Chambers