H.R. 2310: China’s Odious and Brutally Atrocious Labor Trafficking Supply Chain Act

This bill, titled the "China’s Odious and Brutally Atrocious Labor Trafficking Supply Chain Act" or "COBALT Supply Chain Act," focuses on the importation of goods that contain cobalt refined in the People's Republic of China (PRC), particularly those sourced from the Democratic Republic of the Congo (DRC). The key components of the bill are as follows:

Purpose and Findings

The bill aims to address significant concerns regarding child labor and forced labor in the cobalt mining industry in the DRC, which is a major source of cobalt used in various electronics and electric vehicles. The DRC is noted to supply around 70% of the global cobalt production, and much of this production involves child labor and unsafe working conditions. Most cobalt mines are linked to companies from the PRC, which hold a substantial influence in this sector.

Statement of Policy

The bill establishes U.S. policy to:

• Prevent the importation of goods made with cobalt or containing cobalt sourced from the DRC by PRC companies.
• Lead global efforts to end child and forced labor practices.
• Recognize the implications of PRC's dominance in the DRC cobalt market as a national security concern.
• Coordinate with Canada and Mexico to implement the United States-Mexico-Canada Agreement regarding goods produced with forced labor.

Rebuttable Presumption of Forced Labor

The bill proposes a rebuttable presumption that goods made with cobalt refined in the PRC are produced with forced labor or child labor. U.S. Customs and Border Protection (CBP) is tasked with prohibiting the entry of such goods unless the importer can provide clear evidence proving that the goods do not contain PRC-refined cobalt.

Enforcement Strategy

The bill mandates the creation of an enforcement strategy to effectively prevent the importation of goods produced with forced labor. Within 120 days of the enactment, the Forced Labor Enforcement Task Force is required to report on:

• Identifying covered goods associated with cobalt refining.
• Tracing the origins of goods and improving supply chain transparency.
• Preventing goods denied entry from re-entering through third countries.

Certification for Federal Purchases

The bill requires the President to certify annually that all vehicles purchased by the federal government are free from parts made with child or forced labor, specifically pertaining to cobalt sourced from the DRC or PRC.

Definitions

The bill defines key terms such as:

• Covered goods: Goods that contain cobalt refined in the PRC.
• Child labor: Work that deprives children of their potential and dignity, as defined by the International Labour Organization.
• Forced labor: As defined by existing U.S. law pertaining to labor practices.

Duration and Reporting

The measures outlined in the bill are designed to cease eight years after enactment unless child and forced labor practices have been eliminated in the DRC's mining sector. Additionally, the Forced Labor Enforcement Task Force will provide ongoing updates to Congress regarding findings and enforcement efforts.

Relevant Companies

• TSLA - Tesla, Inc. is heavily reliant on cobalt for its electric vehicle battery production, making it susceptible to supply chain disruptions stemming from this legislation.
• BMW - As a major manufacturer of electric and hybrid vehicles, BMW's production processes depend on cobalt, which may be affected by the regulations imposed by this bill.
• NIO - This electric vehicle company sources materials for battery production globally, including cobalt; thus, it may face importation challenges if cobalt supplies are validated as sourced from the DRC.