The Member States’ ambassadors to the European Union (Coreper) will be meeting on Friday 19 January to examine the third compromise text drawn up by the Belgian Presidency of the Council of the EU on the draft regulation banning products made using forced labour in the EU (see EUROPE 13021/17).
While the Spanish Presidency of the EU Council was slow to take the matter in hand, drawing criticism from MEPs (see EUROPE 13215/1), Belgium has now accelerated the work and this third compromise should, according to our sources, be approved by the EU27 representatives this Friday.
The text, which EUROPE has consulted, includes some fairly significant changes compared to the European Commission’s initial proposal, notably on its role in decision-making, the scope of application and the confidentiality granted to people reporting cases of forced labour.
On the other hand, the current compromise makes no mention of reparation for victims, and does not take into account forced labour imposed by a State. Similarly, the deadline for the Commission to reach a decision remains unchanged.
Greater role for the Commission and investigation deadlines
Several Member States called for a leading role for the Commission throughout the investigation process (see EUROPE 13309/2). This is now the case: Articles 14, 15, 16 and 17, which concern the preliminary investigation phase, the designation of competent authorities and the coordination of investigations, all provide for the Commission to play a leading role.
Article 14 specifies in particular that “in their assessment of the likelihood that economic operators have infringed Article 3 [on the prohibition of products derived from forced labour], the competent authorities may, at any time, request the Commission to conduct the preliminary phase of investigations”.
Both Member States and the Commission will have 60 days to complete the preliminary phase of the investigation and inform the targeted company. The new Article 19 details the cases in which Member States may carry out on-site inspections.
If the risk is located in a country outside the EU, they may “ask the government of the third country to carry out an inspection, to provide relevant information or to verify the evidence provided by the economic operators”. The final decision after investigation would rest solely with the Commission, as detailed in Article 20.
Penalties and post-investigation decisions
Article 20 also states that where it is clear that Article 3 has been infringed, the Commission must adopt a delegated implementing act within a maximum period of 6 months. This may involve banning the offending product, withdrawing it from the market, recycling it (rather than destroying it) or rendering it inoperable.
If the company concerned does not comply with the future European rules, Member States could put in place a financial penalty of up to 5% of total annual turnover.
SMEs are not excluded from the scope of the text, but the regulation has them taken into account in an appropriate way, depending on the size and resources of the economic operators and the extent of the forced labour.
Blind spot on forced labour imposed by a third country
While the text does mention “forced labour imposed by State authorities” in Article 2, the regulations make no other mention of this specific case, apart from the need to include it in the database which must be made available to the public and to economic operators.
For example, products made using the labour of Uyghurs in China would not be covered by the current regulations.
Absence of the notion of reparation
The compromise submitted by the Belgian Presidency does not mention any principle of reparation or compensation for proven victims of forced labour. Unlike the version voted by Parliament, which introduces a way of setting up a compensation mechanism (see EUROPE 13273/8).
If the text is validated by Coreper on Friday, interinstitutional negotiations are expected to begin at the end of January, given the tight schedule of the Belgian Presidency of the EU Council. (Original version in French by Isalia Stieffatre)