What Recent UK and EU Cases Mean for Corporate Responsibility and the EU Forced Labour Regulation
Global supply chains are entering a new phase in how corporate responsibility for human rights is defined and enforced. Over the past weeks, the Dyson ruling in the UK and the Yves Rocher decision in France have demonstrated the growing expectation that companies exercise oversight across their value chain. Importantly, both cases show that organisations may be held accountable in their home jurisdictions for human rights abuses occurring abroad.
To briefly recap the two cases: in the Dyson case, 24 migrant workers from Nepal and Bangladesh sued the company in 2022, alleging forced labour, threats, beatings, withheld passports, and excessively long working hours in unsanitary conditions at a Malaysian supplier factory. While Dyson denied liability and claimed it had been unaware of the abuses, the company ultimately agreed to a settlement without admitting fault. The true significance of the case lies in an earlier ruling by the UK Supreme Court, which determined that the lawsuit could proceed in an English court despite the alleged harms taking place in Malaysia.
Turning to the Yves Rocher case in France: between 2018 and 2019, more than 130 workers at the company’s Turkish subsidiary were dismissed after joining a labour union to protest poor working conditions, discrimination, and sexist and sexual violence. Following a complaint brought by several organisations, the Paris Judicial Court ruled that the Yves Rocher Group had failed to meet its obligations under the French Duty of Vigilance Law, which requires large companies to take appropriate measures to prevent human rights abuses within their global operations. The court found that Yves Rocher should have identified the risk of serious violations at its Turkish subsidiary and had wrongly excluded it from its vigilance plan. This was the first time a French company was held liable for human rights violations committed abroad by one of its subsidiaries.
Together, these cases mark an important moment in the evolution of corporate accountability: companies can now be brought to court for abuses occurring within their overseas supply chains. The message is clear: outsourcing production does not mean outsourcing responsibility. These cases also highlight the need for companies to strengthen their Human Rights Due Diligence (HRDD) processes and take responsibility for their global value chains and third-party workers. Even though many companies fall outside the scope of the CSDDD, and despite the weakening of the regulation compared to its initial intent, other laws and regulations still impose requirements on companies and create liability risks.
In addition, the EU Forced Labour Regulation (EU FLR) will enter into application on 14 December 2027. Although this date may seem distant, building a robust HRDD process takes time and resources. The regulation applies to all companies, regardless of size, that import products into or export products from the EU market, and it bans products from being sold in the EU if forced labour is found to have occurred at any stage of the value chain. While the EU FLR is product-based and therefore differs from the CSDDD, it is also grounded in a risk-based approach. Companies must be able to provide information on how they identify, assess, and address actual and potential adverse impacts related to forced labour in their operations and supply chains, if requested by competent authorities. The timeframe for providing this information is limited, meaning companies must act proactively and have their HRDD processes in place before any request for competent authorities is made.
How can companies act proactively and prepare for the EU FLR?
Work with the OECD Due Diligence Guidance’s six steps for responsible business conduct as the foundation for developing your HRDD process. Recommendations aligned with this approach include:
Strengthen relationships and trust with suppliers:
Building long-term, transparent relationships helps you map your value chain more accurately, improve collaboration, and identify risks earlier. Strong supplier engagement is also crucial for managing potential disruptions, including those driven by geopolitical changes.Conduct risk assessments and human rights impact assessments:
These assessments help you identify high-risk regions, industries, and suppliers. With this insight, you can more effectively prioritise resources where the most severe or likely adverse impacts are occurring.Establish a clear process for managing risks:
This applies to both actual and potential negative impacts. Ensure you have defined procedures, such as escalation routines, decision-making criteria, and engagement plans, to manage risks consistently and effectively.Document the actions you take:
Maintain consolidated documentation of how you identify, prevent, mitigate, address, and remedy negative impacts. This enables you to communicate your efforts quickly and transparently to internal and external stakeholders.
For companies with a global value chain, the key lesson is straightforward: it is essential to look beyond Tier 1 suppliers. Many of the most serious risks lie further upstream. Mapping, transparency, and a clear understanding of the full value chain are no longer optional; they are fundamental to corporate responsibility.
Contact Ethos’ Advisor, Melina Hägerö at melina.hagero@ethos.se, if you would like to discuss how this may affect your company and how to prepare for EU FLR.
Contact Melina Hägerö to know more!
Melina Hägerö
melina.hagero@ethos.se
About Ethos
Ethos is one of the Nordic region’s oldest and leading sustainability-focused consultancies, with over 20 experts covering environmental issues, human rights, and anti-corruption. We help medium to large companies and financial market actors address sustainability challenges—from strategic boardroom decisions to operational policy compliance on the factory floor. Ethos tailors each project to clients' needs, supporting compliance with CSRD, SFDR, EU Taxonomy, and CSDDD regulations while guiding their strategic sustainability journeys.