Canada moves one step closer to supply chain legislation

by Josh Scheinert | Borden Ladner Gervais
Thursday, 21 February 2019 15:15 GMT

A Canadian flag flies in front of the Peace Tower on Parliament Hill in Ottawa, Ontario, Canada, March 22, 2017. REUTERS/Chris Wattie

Image Caption and Rights Information

* Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.

Canada is signaling its determination to enhance efforts to combat modern slavery and forced labour across the federal government

Josh Scheinert is a senior associate in the international trade and investment practice at Borden Ladner Gervais LLP in Toronto, and a co-head of the working group on business and human rights at the Ontario Bar Association.

Canada could become the next major economy to enact supply chain legislation. Currently, the country lacks a comprehensive policy response to modern slavery and forced labour, a point emphasized in an October 2018 report by the Canadian Parliament's House Standing Committee on Foreign Affairs and International Development entitled, "A Call to Action: Ending the Use of all Forms of Child Labour in Supply Chains".

Just months before that report was issued, the 2018 Global Slavery Index ranked Canada sixth globally for the value of imported goods at-risk of being produced by slave or forced labour.

The government response to the Standing Committee report, issued in a February 8 letter from International Development Minister Marie-Claude Bibeau, indicates Canada is seeking to change that. In her letter, Minister Bibeau announced the government is planning consultations to discuss enacting supply chain legislation aimed at combatting modern slavery and forced labour.

Changes to Canada’s procurement regime and import regulations aimed at stopping goods tied to modern slavery and forced labour from entering the country were also announced.

On the procurement side, a new apparel initiative requires apparel and textile suppliers to certify that they and their first-tier subcontractors respect eight fundamental human rights. Prohibitions on forced and child labour are included in these rights.

Other rights included in the "Ethical procurement certification" include: the right to free association, decent work hours (a maximum of 48 hours per week and 12 hours overtime), freedom from abuse and harassment, freedom from discrimination, occupational safety and health protections, and the right to receive fair wages.

Contracts are closed to suppliers who cannot certify respect for these basic rights.

Canada also agreed to prohibit the importation of goods produced through forced labour into the country, a prohibition already included in the yet-to-be enacted Canada-US-Mexico trade agreement. That import ban is not restricted to first-tier subcontractors, meaning businesses and importers must ensure this prohibition is respected throughout supply chains.

The move towards supply chain legislation comes as a surprise. There has been no suggestion this was on the government's legislative agenda. A private member's bill Modern Slavery Act introduced in December has not received government support. Until Minister Bibeau's letter, all indications were that the government was preoccupied with launching its new Canadian Ombudsperson for Responsible Enterprise (CORE), an office announced over a year ago but still not operational. The CORE is meant to investigate allegations of human rights abuses by Canadian companies abroad.

Still, the government's willingness to engage in consultations should be welcomed. Its statement that Canada is “studying the effectiveness of initiatives in other international jurisdictions” suggests a future Canadian bill could overcome shortcomings in other laws.

Challenges relating to scope of coverage and enforceability in the UK and Australian Modern Slavery Acts provide examples of challenges an effective Canadian Modern Slavery Act could address.

The UK Modern Slavery Act does not currently apply to the public sector or contain penalties for non-compliance. The UK Independent Review of the Modern Slavery Act recommended the government change this. The review also recommended the government clarify the scope of a company’s reporting requirement applies to its entire supply chain.

Australia’s Modern Slavery Act does apply to the Commonwealth, however, as with the UK law, it lacks enforcement provisions.

How Canada chooses to address these shortcomings will determine the effectiveness of any Canadian Modern Slavery Act. The private member’s bill introduced in December, Bill C-423, does not explicitly extend coverage to the public sector. It does, however, clarify that a company’s supply chain can include entities a company controls directly or indirectly. The bill also includes CAD $250,000 fines for failing to comply with the requirement to file reports or filing false or misleading reports.

Moving from consultations over a bill to passing one will be complicated by the fact that Canada’s next federal election is in October 2019.

Still, even if a bill is not immediately passed, Canada is signaling its determination to enhance efforts to combat modern slavery and forced labour across the federal government. This is a positive step forward.

Any views expressed in this article are those of the author and not of the Thomson Reuters Foundation or Borden Ladner Gervais LLP.