Canada takes steps to combat modern slavery by requiring company transparency
While many perceive slavery as a historical issue, it still exists in many parts of the world—in the forms of forced labour and forced marriage. According to the International Labour Organization’s Global Estimates of Modern Slavery: Forced Labour and Forced Marriage report, published September 12, 2022, 50 million people worldwide were victims of modern slavery in the year 2021. This includes 28 million people who were subjected to forced labour.
Just recently, the Canadian Ombudsperson for Responsible Enterprise (CORE) addressed allegations that the retailers Walmart, Hugo Boss, and Diesel exploit the forced labour of Uyghurs living in China’s Xinjiang region, whom the Chinese government has systemically subjected to a host of human rights violations. All three companies have denied the allegations. Still, CORE will move forward with conducting its independent investigations on each of the companies.
Such reports and investigations reveal that slavery continues to be a very real issue in the modern world. To address this issue in Canada, Bill S-211—the Fighting Against Forced Labour and Child Labour in Supply Chains Act—received royal assent on May 11, 2023, and will go into effect on January 1, 2024.
The act outlines new disclosure and reporting obligations. Applicable entities and government institutions must file a report to the Minister of Public Safety and Emergency Preparedness that delineates their activities and supply chains, identifies risk factors and protocols for forced or child labour in their supply chains, discloses initiatives to combat forced or child labour, and explores how the company evaluates its efficiency and efficacy in eliminating forced or child labour, among other requirements.
As explained by Public Safety Canada, entities required to file the report include “any corporation, trust, partnership or other unincorporated organization whose activities include producing, selling or distributing goods in Canada or elsewhere, importing goods into Canada, or controlling an entity engaged in these activities.” Likewise, it needs to be “listed on a stock exchange in Canada or have a place of business in Canada.” Additional requirements relating to assets, revenue, and employee headcount are evaluated using the entity’s consolidated financial statements.
For government institutions, organizations “producing, purchasing or distributing goods in Canada or elsewhere” must file the report.
This report must be filed annually before May 31. Failure to comply with the bill may result in a maximum fine of C$250,000. The reports will be publicly available, on both Public Safety Canada’s website and the entity or government institution’s website.
Alongside the newly introduced reporting requirements, the bill also amends the Customs Tariff, where importing products produced from child labour will also be banned, alongside the existing ban on forced labour products.
Effectively, Bill S-211 serves as a new consideration for the Environmental, Social, Governance (ESG) aspect of the corporate world—which encompasses a company’s efforts in relation to its environmental (sustainability) and social impact (community). According to an article published by Thomson Reuters—a reputable media corporation, industry groups have found the bill’s regulations and specifics unclear, and are pushing for a one-year extension before the first filing is due—on May 31, 2024. The degree of detail expected for the report is also unknown, sparking anxiety amongst reporting entities.
Speaking to Thomson Reuters, a spokesperson to the Minister of Public Safety and Emergency Preparedness revealed that there were no expectations to change the filing deadline, as of the article’s publishing date of August 11, 2023.
In alignment with the increasing global focus on environmental and labour exploitation, the importance of ESG reporting and strategy is rising. As bills akin to Bill S-211 are passed in the future, Canada will continue its venture into a redefined ESG landscape. Organizations throughout the country will need to ensure their compliance with the ever-changing regulations and reporting obligations.
