Six OEMs join AIAG in requiring additional forced labour due diligence from suppliers
For the first time, six leading carmakers with the Automotive Industry Action Group (AIAG) have come together in a joint letter to require suppliers to complete new forced labour due diligence.
Ford, GM, Honda, Nissan, Stellantis and Toyota signed the letter, asking selected suppliers to complete and submit a standardised AIAG Due Diligence Reporting Template (DDRT) by the end of this month, with more suppliers requested to submit the DDRT annually by mid-2026.
To prepare, suppliers will need to implement a forced labour compliance due diligence programme to meet compliance requirements and ensure company policies are informed by the AIAG’s guiding principles, as well as ensure contractual compliance with customers. The letter also suggested that suppliers conduct ongoing screenings through global risk analytics platform Kharon, or through a similar supply chain mapping database provider, for continuous supply chain monitoring and traceability. Any identified potential risks and mitigation actions must be promptly communicated to the suppliers’ customers.
Through the AIAG Forced Labor Due Diligence Program, suppliers will be able to access risk screening tools at lower, industry-negotiated rates, as well as training and resources to support suppliers at varying levels of due diligence maturity. The program helps to identify and mitigate risks of supply chain disruption and supports responsible sourcing, providing affordable access to technology solutions and an aligned reporting tool to provide findings to customers. It also allows for a consistent approach in communicating risks related to potential forced labour across all tiers of the supply chain, helping to reduce duplicated efforts, streamline responses and help customers address risks more efficiently.
While suppliers are initially expected to conduct risk screening on all their tier-1 suppliers, they can also include sub-tier suppliers if they have been confirmed in the OEM's supply chain.
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Keeping up with compliance and regulatory changes
The AIAG and the six OEMs have jointly developed the Forced Labor Due Diligence Progam, including the DDRT, to “attain the highest standards in business integrity and the social and environmental performance of the supply chain”.
Rapid changes in new and existing legislation are driving enhanced requirements for compliance in supply chain transparency and due diligence throughout the automotive industry and across the globe.
In North America, the US’s Uyghur Forced Labor Prevention Act (UFLPA) was signed into law in 2021 and enforced in 2022 to promote accountability for enforced labour. Since it came into effect, thousands of shipments of goods, including from the automotive sector, have been denied entry into the US. Similarly, Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act came into effect at the start of last year, requiring annual reporting on companies and their due diligence processes in relation to forced labour.
In Europe, the European Union (EU) introduced the Corporate Sustainability Due Diligence Directive (CSDDD) in 2024, establishing due diligence requirements for companies to identify risks of human rights issues, with phased implementation from July 2027. In the same year, the EU also brought in the Forced Labour Regulation (FLR), which bans products with forced labour from the EU market, beginning December 2027. Separately, Germany launched its own Supply Chain Due Diligence Act (LkSG) in 2023, but as of the start of this year it has been superseded by the EU legislation.
The AIAG’s new due diligence programme and its Automotive Industry Guiding Principles aim to collectively address the compliance and regulation requirements across North America and Europe, by providing best practice standards that are consistent with the United Nations’ Guiding Principles on Business and Human Rights, as well as other humanitarian group advocacy requirements.
Signatories of the letter
The letter was signed and backed by Liz Door, chief supply chain officer at Ford, Jeffrey Morrison, senior vice-president and global chief procurement officer at GM, Mike Lapham, vice-president of procurement at Honda America, Andrew Wareing, chief procurement officer and vice-president of purchasing at Nissan Americas, Gilles Testu, strategy, risk and value optimisation of purchasing supplier development at Stellantis, and Ryan Grimm, group vice-president, purchasing supplier, development at Toyota Motor North America.
The AIAG said other OEMs, suppliers, and industry alliances are welcome to endorse the program and become supporting members.
Tanya Hayes Bolden, vice-president of supply chain and corporate responsibility products and services at AIAG will be speaking at ALSC Global this month on a panel about OEM alignment and methodologies to tackle forced labour, announcing new reporting timelines crucial for ensuring supply chain integrity in the automotive sector. There's still time to register to attend here.
