According to the International Labor Organisation, forced labor generates around $236bn in illegal profits each year. Behind those profits are workers who suffer because their rights are denied. As trade policies work to bring industries back to US soil, the result could be more decent, well-paying jobs, but it could also create cost pressures that fuel risks of abuse. Turning away from these realities leaves companies exposed: forced and child labor create uneven playing fields, heighten regulatory and reputational risk, and ultimately threaten the strength of American business.
Forced and child labor threaten the strength of American business.
Human Rights Due Diligence (HRDD) tools help companies identify and remedy problems before they damage reputation, revenue or competitiveness. Digital HRDD tools provide an efficient, scalable way for companies to implement HRDD in their supply chains.
The Stakes Are High for American Business
When American brands compete on the global stage, their competitiveness is bolstered as much by their reputation, as it is by the quality of their products. But trust can be fragile. The discovery of forced labor, whether in a factory down the road or at a supplier halfway around the world, will erode that trust and damage competitiveness.
Brands caught in labor scandals often face boycotts, PR crises, and lasting consumer distrust
Companies that fail to act are exposed to different kinds of risk:
- Reputational damage: Brands caught in labor scandals often face boycotts, PR crises, and lasting consumer distrust, and US brands are no exception. Whether the risk surfaces directly, at a supplier, subcontractor, or farm, public perception rarely makes such distinctions.
- Financial loss: Lawsuits, fines, import bans, and delayed or stopped shipments from regulatory non-compliance eat into margins and compromise investor confidence.
- Competitive disadvantage: While rivals in regions tied to forced labor, like Xinjiang, can undercut costs, peers in regulated markets like the EU show it’s possible to comply with high standards and stay competitive.
Avoiding nasty surprises means knowing your supply chain inside and out, right down to working conditions. Digital HRDD tools give you that knowledge.
American Business in the Spotlight
Forced labor isn’t just a problem overseas, it exists on American soil too. When the media exposes it before companies do, the fallout is swift and costly.
Bumble Bee Food’s reputation was tarnished when, in early 2025, four fishermen sued the company, alleging physical abuse, wage withholding, and forced labor aboard vessels supplying their tuna. The seafood industry is notoriously inscrutable as vessels are difficult to audit. Risk can rear its head anywhere a company can’t see.
Between 2022 and 2024, journalists and federal investigators uncovered underage labor at an Alabama auto parts facility tied to Hyundai. Despite attempts to distance itself, the automaker faced class-action lawsuits, profit forfeiture, federal complaints, and the CEO was forced to publicly apologise.
Temu faces an ongoing probe by the Department of Homeland Security
Even direct employee action can bring scandals into the light. Migrant H2-A workers have sued U.S. farms for forced overtime, unpaid wages, threats of deportation, and restricted movement.
When U.S. consumers are unwittingly implicated in forced labor scandals, reputations suffer. That’s what happened to Temu and Shein’s customers when the companies came under federal scrutiny. It was found that there was an “extremely high risk” that their supply chains, and by extension the products they sold to customers, were contaminated by forced labor.
The companies were publicly condemned by lawmakers, who drew attention to the “tilted playing field” that forced other brands to compete unfairly. Reuters have linked this pressure to a 40% drop in profit at Shein between 2023 and 2024. Meanwhile, Temu faces an ongoing federal probe by the Department of Homeland Security and growing backlash over both forced labor concerns The consequences of the scandal were tangible and costly for both companies.
American Standards Must Remain High…And Why Traditional Auditing Falls Short
U.S. brands are expected to lead by example. Consumers, investors, regulators, and the media hold them to high standards, and failure to meet them has tangible consequences:
- Losing ground to international competitors;
- Reduced access to investor capital;
- Exclusion from trade agreements and opportunities;
- Erosion of brand trust and identity.
Many companies still rely on traditional audits to safeguard their supply chains, but these methods have inherent flaws. They are periodic, site-limited, and often hampered by language barriers and power imbalances. They rarely detect abuses among irregular, isolated, or language-minority employee groups. Worse, they can push problems deeper into the shadows instead of exposing them.
Risk that can’t be seen, can’t be managed.
Let Digital HRDD Be Your Eyes and Ears
Digital HRDD tools provide the visibility traditional methods of auditing lack. They create continuous feedback loops between companies and employees, enabling early detection and resolution of issues before they escalate.
- Ulula’s tailored surveys allow workers to provide direct feedback that helps companies identify risk hot spots for precise interventions. This ensures even hidden or vulnerable groups can speak up and do their part to protect American brands.
- Grievance Mechanisms allow companies to detect and resolve forced labor issues before they become a problem. Ulula’s system is aligned with UNGP and OECD remedy standards, and ensures accessibility and anonymity. This anonymity is especially vital for migrant workers, who may fear retaliation or deportation, but it also protects any worker facing power imbalances or threats of reprisal.
- Real Time Feedback helps generate actionable insight from scattered worker input. Companies can take a proactive approach to risk before the damage is done. Ulula’s analytics platform makes this possible by turning continuous data streams into clear, evidence-backed guidance for decision makers.
- Data-Driven Evidence gives companies a consistent, credible record of their due diligence efforts. Keeping good records is essential for compliance with regulations like Canada’s S-211 bill and responding quickly to media, regulatory, or investor scrutiny.
- Ulula’s commitment to accessibility means no employee is left out. Workers can engage in the language and channel of their choice, anonymously and on their own terms.
Digital HRDD tools provide the visibility traditional methods of auditing lack
Enabling employees to safely speak up about issues will bring those issues into the light. It helps workers to help protect company reputations and insulate them from financial harm.
Digital HRDD offers a practical, effective way to do both. It provides the transparency needed to detect forced labor, the tools to address it, and the evidence to prove brand leadership in supply chain management. For companies that want to stay competitive, the path is clear: know your supply chain, eradicate forced labor and act before the damage is done. Help your employees to help you protect American commerce.