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Trade, supply chains and workers' rights

This briefing outlines concerns about human rights and environmental harm in global supply chains, and summarises the UK’s current legislative and policy framework.

It considers calls for reform, including proposals for mandatory corporate due diligence, in the context of developments in EU legislation. The briefing also reviews how workers’ rights are addressed in UK and EU trade agreements, including the Trade and Cooperation Agreement.

Concerns about abuses in companies’ supply chains

Concerns have grown in recent years about undesirable practices occurring in businesses’ supply chains. These include human rights and labour abuses and environmental damage. The treatment of Uyghur workers in the cotton industry in China has received widespread attention. There is also evidence of forced labour in other industries such as fishing, solar panels, processed tomatoes and critical minerals.

While international frameworks have been developed by the UN and the Organisation for Economic Cooperation and Development (OECD) and some countries have introduced legislation, civil society groups and others believe the current UK approach is inadequate.

Current UK legislation on supply chain transparency and accountability

UK legislation includes, for example, the Modern Slavery Act 2015, which requires certain companies to report on how they tackle modern slavery in their supply chains. This was regarded as world-leading when enacted but is now thought to lag behind other countries. The Procurement Act 2023, which came into force on 24 February 2025, enables public authorities to reject bids and terminate contracts with suppliers where there is evidence of environmental misconduct or labour misconduct, such as the use of forced labour anywhere in a supply chain. However, domestic policy on forced labour has been described as “piecemeal and ad hoc”.

UK law also requires certain companies to report on aspects of their supply chains and their environmental impact. For example, large companies must publish information on greenhouse gases emitted to produce energy that they purchase. They are also strongly encouraged to report on emissions that occur in their wider supply chain, although this is not mandatory. Large companies are also required to report on climate-related risks and opportunities, which may involve information on their supply chain, but ultimately this is discretionary.

The government is considering how to implement due diligence requirements to prevent illegal deforestation in UK supply chains.

Calls for reform

Parliamentary committees and others have called for reforms, including mandatory due diligence of supply chains for businesses above a certain size. Due diligence means taking reasonable, proactive steps to address abuses in supply chains through, for example, risk assessments or audits. There are some concerns, however, about the costs of complying with such mandatory requirements, especially for smaller firms, and the implications this may have for the government’s economic growth goals. Parliamentary committees have recommended that small and medium-sized enterprises (SMEs) be given fewer obligations than large companies.

Critics of the UK approach often highlight other countries’ evolving frameworks for responsible business conduct, supply chain due diligence or restrictions on imports of goods linked to forced labour. Examples include the EU’s Corporate Sustainability Due Diligence Directive, the Deforestation Regulation and the Forced Labour Regulation. However, in response to concerns about competitiveness, the EU is postponing or scaling down some of its new sustainability obligations.

The UK Government’s June 2025 Trade Strategy recognised concerns about the UK falling behind on regulating business conduct, and announced a review of responsible business conduct, focusing on global supply chains. The review will consider human rights, labour abuses, modern slavery and environmental harms.

Free trade agreements

Workers’ rights can be a contentious issue in trade negotiations.

The UK Government is currently negotiating a free trade agreement with the Gulf Cooperation Council (GCC, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates). Campaign groups have raised concerns about human rights in GCC countries and called for these rights to be explicitly protected in a trade agreement. The UK Government is aiming to reaffirm International Labour Organization (ILO) protections in the agreement with the GCC. It also said it raises any concerns with the GCC via ministerial and diplomatic channels.

The Parliamentary Partnership Assembly

This briefing has been prepared for a breakout session at the sixth meeting of the UK-EU Parliamentary Partnership Assembly (PPA), which is being held in the UK Parliament on 17 and 18 November 2025.  

The PPA was established under the UK-EU Trade and Cooperation Agreement and brings together members of the UK Parliament (MPs and peers) and Members of the European Parliament.