Legislación clave que impulsa el negocio responsable
Muchos gobiernos de todo el mundo están utilizando la legislación para impulsar prácticas empresariales responsables e impactos positivos en las condiciones de trabajo de las personas. Estas leyes nacionales requieren que las empresas gestionen sus impactos operativos en las personas y el medio ambiente, e informen sobre sus esfuerzos para hacerlo. Es importante que las empresas sepan qué leyes se aplican a ellas y cómo cumplirlas.
El enfoque en las prácticas comerciales responsables y las cadenas de suministro sostenibles continúa creciendo en todo el mundo. Los países están adoptando cada vez más nuevas leyes para apoyar esto y construir operaciones comerciales más responsables en las cadenas de suministro globales.
La legislación que una empresa debe cumplir puede variar según su tamaño, facturación, sector y ubicación de la oficina operativa.
Aquí, enumeramos las leyes clave de los países que las empresas deben conocer, para comprender qué legislación es relevante para ellas, cómo les afecta y qué deben hacer para cumplirla.
Póngase en contacto con nosotros si desea obtener más información sobre cómo Sedex puede ayudarlo a cumplir con la legislación que tiene como objetivo mejorar las operaciones comerciales responsables.
Legislation: Modern Slavery Act 2018
Who does it apply to?
All companies based in or operating in Australia with an annual revenue of more than AU$100 million.
What it means for businesses
Eligible companies must report annually on the risks of modern slavery in their operations and supply chains and the actions taken to address these risks.
Reports are submitted to the Ministry of Home Affairs and held in a public register – the Modern Slavery Statements Register.
Status: Effective from January 2019.
Legislation: Decree No. 540/2004 (the “lista suja”/“dirty list”)
Who does it apply to?
Any employer operating in Brazil, including individuals and businesses.
What it means for businesses
Decree No.540/2004 created a public “dirty list” of employers found guilty of exploiting workers under abusive and coercive conditions. The list is updated every six months.
Any worker located in Brazil, including non-Brazilian workers, can make a complaint about any employer operating in the country, including international businesses. People submit complaints about an employer’s working conditions to the Brazilian Government (specifically the “Ministério do Trabalho e Previdência”, or Labour Ministry) or a civil society organisation.
The Brazilian Government investigates the complaint and relevant workplace[s]. If the investigation finds that workers are subjected to slave-like conditions, the landowners can be prosecuted and the employer may be fined.
Employers are also put on the “dirty list”. They are blocked from accessing public financing, and face limited access to private financing. Employers are monitored for two years before their name can be removed from the list.
Status: Effective since 2004
Legislation: Conflict Minerals Regulation
Who does it apply to?
EU-based importers of tin, tantalum, tungsten, and their ores, and gold.
What it means for businesses
EU importers of tin, tantalum, and tungsten, and their ores and gold areas need to report on supply chain due diligence obligations.
Importers sourcing these minerals from conflict-affected and high-risk areas must provide extra information like which mine was used.
Due diligence is recognised as “an ongoing, proactive and reactive process through which economic operators [businesses] monitor and administer their purchases and sales with a view to ensuring that they do not contribute to conflict or the adverse impacts.”
Third-party auditing and public reporting are stated as actions companies can take.
Status: Effective from January 2021.
Legislation: Forced labour product ban
In September 2022 the European Commission proposed a law to ban products made with forced labour from the EU market. It won’t come into effect for at least two years, and there’s still a lot we don’t yet know, but it could be hugely significant for businesses – so we recommend starting to prepare for it.
Who will it apply to?
All products, sectors and businesses in the European Union (EU). The legislation would ban any products, including their components, made with forced labour from the EU market – even if the forced labour has taken place outside of the EU.
What it could mean for businesses
Where authorities in EU countries suspect that forced labour has been used to make a product or any of its parts, they would carry out an investigation. If they find that forced labour has been used, they can ban and seize the relevant items – causing disruption and financial loss to businesses. EU countries may also introduce fines or other penalties.
Status: In draft, expected to apply from 2025 or 2026. The European Commission’s proposal is now being reviewed by other EU governing bodies, and there will be a preparation period after the final version is signed into law.
Legislation: Non-Financial Reporting Directive
Who does it apply to?
Approximately 6,000 large companies and groups across the EU, including:
- Listed companies
- Banks
- Insurance companies
- Other companies designated by national authorities as public-interest entities.
What it means for businesses
Eligible companies must publish reports on the policies they implement in relation to:
- Environmental protection
- Social responsibility and treatment of employees
- Respect for human rights
- Anti-corruption and bribery
- Diversity on company boards (in terms of age, gender, educational and professional background).
Companies are given flexibility on how they disclose. They can use the UN Global Compact (UNGC) framework, OCED Guidelines, or the ISO 26000 framework.
Status: Effective from January 2018.
Legislation: Sustainable Finance Disclosure Regulation
Who does it apply to?
- Fund management companies
- Asset management companies
- Institutional investors
- Financial advisors
- Certain other regulated firms in the EU.
What it means for businesses
Eligible companies must disclose whether they consider negative impacts on the environment and social justice of their investment decisions and advice.
Companies must publish a statement on the due diligence policies and related actions concerning principal adverse impacts of investment decisions on sustainability factors.
Status: Effective from March 2021.
Legislation: Mandatory Human Rights and Environmental Due Diligence
Who does it apply to?
- EU companies with more than 500 employees that generate a turnover greater than EUR 150 million, or non-EU companies that generate a turnover greater than EUR 150 million in the Union each year
- EU companies with more than 250 employees that generate a turnover of more than EUR 40 million, and non-EU companies that generate a turnover between EUR 40 million–EUR 150 million in the Union in the last financial year, operating in high risk sectors such textiles and leather manufacturing, agriculture, forestry, fisheries, minerals and mining.
What it means for businesses
A draft legislative proposal outlines responsibilities for businesses regarding the social and environmental impact of their own operations, their subsidiaries’ operations, and their suppliers’ operations. It sets out companies’ responsibility to identify risks, prevent adverse impacts in their supply chains and operations, communicate progress, and provide remedy where appropriate.
Companies will be legally responsible for respecting workers’ rights, through tackling issues such as child or forced labour and discrimination. Companies of a certain size will also have to adopt a plan to ensure that their business strategy is compatible with limiting global warming to 1.5°C, in line with the Paris Agreement.
Status: Upcoming – the European Commission published their draft legislative proposal in February 2022. Next steps are for this draft to go to the European Parliament and EU Council for their approval. If and when adopted, Member States will have two years to translate the legislative directive into national laws.
Legislation: Corporate Duty of Vigilance Law
Who does it apply to?
Companies that are employing at least:
- 5,000 employees (at the end of two consecutive years)
- 10,000 employees within the company and its direct and indirect subsidiaries.
What it means for businesses
Companies must identify and prevent adverse human rights and environmental impacts resulting from their own activities and of their suppliers and subcontractors.
Companies are required to establish, publish and implement an annual, public vigilance plan. The plan must include measures to identify and prevent potential and actual human rights and environmental risks.
Interested parties can require judicial authorities to order a company to publish and implement a vigilance plan, or account for its absence.
Status: Effective from March 2017.
Legislation: CSR Directive Implementation Act
Who does it apply to?
Companies with any of the following criteria:
- More than 500 employees and an annual turnover above €40 million
- A balance sheet total of more than €20 million.
What it means for businesses
Eligible companies must disclose information on non-financial matters, with a minimum requirement to disclose information on environment, social and employee-related matters, on respect for human rights and on anti-corruption and bribery.
Status: Effective from April 2017.
Legislation: Supply Chain Due Diligence Act
Who does it apply to?
- 2023: Companies based in Germany, or German-registered branches of foreign companies, with more than 3,000 employees
- 2024: Companies based in Germany, or German-registered branches of foreign companies. with more than 1,000 employees.
What it means for businesses
Companies must conduct supply chain due diligence activities to make sure social and environmental standards are observed in their supply chain. They include:
- Risk analysis of business activities to assess adverse effects on human rights. Companies must monitor their own operations and their direct suppliers worldwide
- A duty to take measures if violations are discovered or potential impacts identified, to prevent adverse effects and to provide access to remedies
- A gradual responsibility applies to indirect suppliers beyond tier 1. A risk analysis is only required if an employee of an indirect supplier makes a complaint to the German company
- Companies must publish an annual report outlining the steps they have taken to identify and address risks, including those in specific areas such as forced labour and environmental degradation
- Fines for companies in cases of violations. These could be up to €800,000, or up to 2% of a company’s annual global turnover.
Status: Passed in June 2021; becomes effective from January 2023.
Legislation: Business Responsibility and Sustainability Reporting
Who does it apply to?
The top 1,000 listed companies in India (by market capitalisation).
What it means for businesses
The top 1,000 listed companies must report on certain business responsibility and sustainability indicators.
This framework incorporates existing requirements: the National Guidelines on Responsible Business Conduct (NGRBC) and previous Business Responsibility Reporting (BRR) requirements.
Status: Effective from April 2021.
Legislation: Legislative Decree no.254
Who does it apply to?
- Italian companies that trade on Italian or EU-regulated markets
- Banks
- Insurance companies with 500+ employees, a balance sheet of €20 million and a net turnover of €40 million.
What it means for businesses
Eligible companies must publish a non-financial statement that contains information on the impact of business activities on environmental and social matters, human rights, anti-corruption and bribery.
The statement must include identification of the principle risks and the products and services that are likely to give rise to adverse impacts in any of these areas.
Status: Effective from January 2017.
Legislation: Child Labour Due Diligence Act
Who does it apply to?
All companies that sell or supply goods or services to Dutch consumers, regardless of size or legal form.
What it means for businesses
All companies that sell or supply goods or services to Dutch end users are required to submit a statement declaring they conduct ‘due diligence’ related to child labour in their supply chains.
Due diligence involves investigating where there is suspicion that a product or service has been made with child labour and developing an action plan to address this.
There are criminal sanctions for companies that fail to produce a statement, carry out an investigation, or establish an action plan to address child labour.
Status: Effective from 2022, to allow companies time to investigate their supply chains.
Legislation: Transparency Act
Who does it apply to?
Companies registered in Norway, or foreign companies selling in Norway, that meet at least two of three criteria:
- At least 50 full-time employees (or equivalent annual man-hours)
- An annual turnover of at least NOK 70 million
- A balance sheet sum of at least NOK 35 million.
What it means for businesses
Companies must conduct human rights due diligence assessments on their operations and their entire supply chain, including business partners. They must take steps to prevent and limit human rights violations identified through these assessments, and must provide or cooperate with efforts to remedy any violations.
Companies must report on all of these activities and make this information available on their corporate websites. Companies are also legally obliged to respond to information requests from individuals about the human rights risks in their operations, and their related due diligence activities.
If a company does not comply with this law, they could face fines or injunctions.
Status: Passed in June 2021, becoming effective on 1 July 2022.
Legislation: Swiss Responsible Business Initiative (counter proposal)
Who does it apply to?
Publicly traded companies and regulated entities with 500+ employees and either a balance sheet sum of CHF 20 million or a turnover of CHF 40 million.
What it means for businesses
Eligible companies must prepare a report on non-financial matters, including environmental and social matters, respect for human rights, and anti-corruption. The report must extend to controlled entities worldwide.
The report must describe due diligence practices and processes applied in relation to these matters, the main risks associated with them, and the relevant measures taken.
The counter proposal includes specific supply chain-related due diligence duties in relation to conflict minerals and child labour. It includes criminal sanctions in the form of fines for non-compliance with the applicable annual reporting duties or for making false statements.
Status: Upcoming – a draft of the legislation is expected in 2021.
Legislation: Modern Slavery Act 2015
Who does it apply to?
Currently: Commercial organisations doing business in the UK and generating a turnover of £36 million or more.
Proposed updates to the legislation will also include requiring public bodies with a budget of £36 million or more to regularly report on the steps they have taken to prevent modern slavery in their supply chains.
What it means for businesses
Companies must issue an annual statement setting out the steps taken to address modern slavery in their supply chain.
Proposed new measures include:
- There are key topics that modern slavery statements must cover (e.g. risk assessment)
- Organisations with a budget of £36 million or more in all sectors must publish their modern slavery statements on a new digital government reporting service (to be released in 2021)
- Statements must include the date of Board approval and Director sign-off
- Group statements must identify every entity within the Group’s remit
- The introduction of financial penalties for organisations who fail to meet their obligations under the Act to publish annual modern slavery statements.
Status: Effective from October 2015, with proposed new measures applying soon (exact date to be confirmed).
Legislation: Plastic Packaging Tax
Who does it apply to?
Companies in the UK that are either importing in, or manufacturing, more than 10 tonnes of plastic packaging per year.
What it means for businesses
These companies must pay a tax on the plastic packaging they make or import. They must pay £200 per tonne of plastic containing less than 30% of recycled plastic.
Companies must also keep records to show where plastic packaging does contain at least 30% recycled plastic to claim exemptions from the tax.
Status: Effective from April 2022
Legislation: Transparency in Supply Chains Act 2010 (State of California)
Who does it apply to?
Retailers and manufacturers doing business in California with annual gross receipts (all revenue before costs) exceeding US $100 million.
What it means for businesses
Eligible retailers and manufacturers must publish annual reports detailing their efforts to eradicate human trafficking in their direct supply chains.
They must include the areas of verification, audits, certification, internal accountability, and training.
Status: Effective from January 2012.
Legislation: Section 307 of the Tariff Act 1930 (Federal)
Who does it apply to?
Any business in any country outside of the USA.
What it means for businesses
This Section prohibits the importing of merchandise mined, produced or manufactured, wholly or in part, in any foreign country by forced or indentured labour, including forced child labour.
The US Customs and Border Patrol can take action against any companies or products where there is reasonable evidence to suspect forced labour has been used. This can include blocking or seizing goods at customs, preventing them from being sold or distributed through the USA (a “withhold release order”).
Status: Effective from 1930, with an amendment in February 2016 to close a legal loophole.
Legislation: Uyghur Forced Labor Prevention Act
Who does it apply to?
Any company importing items into the USA from the Xinjiang region in China,
What it means for businesses
The Act aims to prevent any goods made with forced labor from entering the USA.
The Act presumes that any goods or merchandise “produced, or manufactured wholly or in part” in Xinjiang, China, were made with forced labor by Uyghurs or other persecuted groups. The law requires any company wanting to import goods from this region into the USA to provide “clear and convincing” evidence that items were made without forced labor.
The US government’s guidance lists evidence that importers can rely on, including supply chain mapping indicating sites where goods are produced; information on workers at the site, including wage and recruitment practices; and audits to identify and remediate forced labor.
Status: Effective from 21 June 2022
