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Advocating supply chain transparency

Many of the problems facing people in middle- and low-income countries result – either directly or indirectly – from the practices and policies of multinational corporations at the end of supply chains.

Together with trade unions and other civil society organisations, we at SOMO are calling for the promotion and protection of the rights of workers, communities, and individuals along all stages of corporate supply chains.

EU supply chains are riddled with human rights violations, land grabs, deforestation, pollution, and adverse biodiversity and climate impacts. This can be seen in the garment, electronics, food, and pharmaceutical supply chains. Many people in these sectors are working under inhumane and dangerous conditions, with little respect for either labour rights or environmental standards.

We are pushing for regulation, policies, and practices that ensure supply chain transparency, decent work and sustainability – including legally enforceable corporate accountability mechanisms, and a leading role for workers in monitoring and improving workplace conditions.

Highlighted Publications

Access to supply chain trade information with EU customs

Civil society organisations (CSOs), trade unions, journalists, and academics are crucial when it comes to uncovering injustices within global value chains. These ‘non-state actors’ can also significantly help to shape the laws that promote respect for human rights and the environment in EU supply chains.

Thanks to the advocacy and campaigning efforts of CSOs, international supply chains have become more transparent over time. Today, more companies are willing to share information about their supply chains – a trend that has seen substantial progress in recent years.

However, despite these positive developments, the extent of public disclosure from companies regarding their business relationships – such as suppliers and corporate clients, and specific transactions – like the volume and origin of commodities they source or sell – needs to improve. There is room for improvement when it comes to achieving full transparency across all supply chains.

In the USA, civil society organisations use petitions with US Customs and Border Protection to identify and block imports of certain products, such as palm oil, cocoa, cotton, and disposable gloves produced using forced labour. However, within the EU, the world’s largest trading bloc, Member States’ customs agencies deny access to non-state actors for company-specific information. They consider this confidential under Member State laws and practices.

Currently, only two EU-wide regulations(opens in new window) are in place to address sustainability issues in supply chains and to offer complaint mechanisms. Their focus is on legislating the efforts and processes of companies to address problematic issues in their business relations or sectors of operation.

Human rights due diligence across supply chains

While the systems safeguarding and promoting the interests of multinational corporations are sturdy, the mechanisms enabling individuals to assert and safeguard their rights against detrimental corporate influences often remain frail. Our objective is to guarantee that corporations can be held accountable and legally responsible for unfavorable outcomes throughout their entire value chain.

Transparency is a crucial aspect of these laws. Nonetheless, while companies are required to be forthcoming about their efforts and processes to combat or prevent malpractices in their operations, there is no specific requirement for public communication. This lack of public disclosure undermines the potential effectiveness of these new laws. Moreover, due to the scarcity of supply chain information, independent oversight and verification by CSOs face obstacles and frustration.

As a result, non-state actors are hindered from using the alert and complaint mechanisms built into most of these new laws.

We are calling for access to trade information with EU customs, which would facilitate stakeholder interventions with companies and authorities to help make companies’ value chains more respectful of human rights and the environment. This would contribute to a more efficient implementation of regulation in that area.

Supply chains European laws and regulations reforms

The Union Customs Code (UCC)(opens in new window) , known as Regulation (EU) No 952/2013, serves as the unified framework for customs rules and procedures within the EU. Its primary objective is to streamline the movement of goods across borders while safeguarding the financial, economic, safety, and security interests of the EU and its Member States.

At the EU level, there are no centralised customs authorities or databases. Instead, each Member State’s customs administration is responsible for implementing and enforcing the rules and procedures outlined in the UCC. These customs agencies play a vital role in levying taxes on goods that cross EU borders and preventing the illegal or unsafe trafficking of products such as drugs and weapons, thereby ensuring the integrity of the Common Market.

EU policymakers are considering expanding the traditional responsibilities of customs authorities to encompass tasks related to enforcing legislation on issues such as deforestation and human rights violations within supply chains. However, EU customs already encounter several challenges, including disparities in enforcement among Member States and a lack of capacity to handle the growing demands of e-commerce. In light of these obstacles, the European Commission (EC) is planning to reform the UCC.

In May 2023, a revised UCC was proposed, including establishing a new EU customs authority and an EU trade information hub. These institutions are intended to enhance coordination, information collection, and risk management through a more centralised approach.

Despite these proposals, the UCC’s potential to significantly contribute to fostering more just and sustainable EU supply chains through supply chain transparency still needs to be addressed in the current proposal. We are calling for changes in the UCC to address the central problem that trade information with customs is considered confidential and, therefore, non-state access is refused. The quality of supply chain information with customs needs to improve as a matter of urgency.

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