|Under the proposal, a successful social compliance program must meet seven criteria according to CBP:
- Engage stakeholders and partners;
- Assess risks and impacts;
- Develop a code of conduct;
- Communicate and train across the supply chain;
- Monitor compliance;
- Remediate violations; and
- Disclosure, report performance.
All components must be met according to the Department of Labor guidance, because “a system without all components—for example, an auditing system that operates in isolation from communication and training, remediation and other measures—is very likely not to be sufficient to address challenging labor issues that can arise in global supply chains.”
Under the CTPAT’s new forced labor strategy, a company without a social compliance program will be forced to publicly disclose this information. (This appears to be in contrast to CBP’s policy of not disclosing a company’s participation in CTPAT.) Moreover, a forced labor violation would be grounds for removal from the CTPAT.
On the other hand, companies with validated social compliance programs will receive: prior notification from CBP of companies and commodities with a high risk of supply chain forced labor violations; prior notification of hold release orders and an opportunity to prepare exculpatory evidence, with expedited verification of the evidence provided; reduction in the post release inquiries related to forced labor supply chain due diligence; finally, participants will be excluded from the universe of imports considered high-risk unless specific actionable information is furnished against the importer.
It remains to be seen whether CTPAT will be able to get acceptance from the trade. The Commercial Operations Advisory Committee had recommended to the CBP that it allow companies “the option of opting in or opting out of the Forced Labor component of the future CTPAT Trade Compliance program.” The CTPAT has not yet indicated how it will audit or graduate and assist companies to ensure strict compliance.
The DOL further identified a social compliance system as part of a company’s broader approach to Corporate Social Responsibility. The CTPAT therefore seems to be requiring CSR as a specific element of continued membership.
While CBP has been encouraging importers to use the DOL guidance since the TFTEA changes, this proposal shows that CBP is increasing its focus on enforcement.
It also presents a template of factors of a successful program that CBP may use as a measuring stick going forward.