Canada’s Progress to Banning Forced Labour

Forced LabourOver the past few years—and primarily as a reaction to the Rana Plaza disaster of 2013 in which over 1,100 Bangladeshi garment workers died in a building collapse—governments across the world have introduced legislation to tackle forced labour in public and private supply chains: legal frameworks that go beyond trusting voluntary corporate social responsibility schemes.

In December 2018, Canada moved closer to joining these governments when Liberal MP John McKay tabled Bill C-423, also known as the Modern Slavery Act. The bill passed its first reading in the House of Commons, but needs to pass two more before receiving royal assent.

The proposed bill would apply to any company listed on a stock exchange in Canada, or any company doing business in Canada or holding assets in Canada with at least C$20 million in assets or C$40 million in revenue. Every year, these businesses would submit a report describing how they have addressed modern slavery in their supply chains. The report would include information on a company’s policies on forced labour and human trafficking, its at-risk activities, and the training it has provided for staff about these issues. A director or officer of the business would also have to attest that the report is truthful before submitting it. In addition, the reports would be published on companies’ websites, making it easier for Canadians to monitor their activities.

DiscoveryAccording to the bill, if a business fails to report or fails to abide by other orders, such as search warrants, it can be fined C$250,000. Lastly, the bill would amend Canada’s Customs Tariff to “exclude goods manufactured or produced wholly or in part by forced labour or child labour.” If passed, Canada’s Modern Slavery Act would enter into force in 2020.

Comparatively, this bill takes a stronger stance than the legislation in United Kingdom and Australia, which asks businesses to release yearly statements that explain their efforts to prevent forced labour in their supply chains. In these jurisdictions, a company can say, “we’ve done nothing to tackle this issue,” and face no consequences. In addition, there is little governmental oversight to verify that a company has indeed released a statement, so civil society and non-profits must scrutinize reports to confirm compliance. One positive aspect of this style of modern slavery legislation is that a company’s chair must sign off on the statement, holding her or him directly accountable for the company’s practices.

A stronger approach, however, is the French model. Businesses are asked to identify areas of their supply chains (and their subcontractors’) that are at risk of forced labour, safety issues, and environmental deterioration, and then come up with response plans. If they cannot prove they are actively addressing potential violations, businesses can be sued by civil society organizations or individuals. The Netherlands is following this example but focusing entirely on child labour.

GCCBill C-423 was tabled in response to a report published by the Standing Committee on Foreign Affairs and International Development in October 2018. The report details the committee’s study of child labour in supply chains, and makes seven recommendations to the Canadian government, including the need for legislative action at the federal level. While Bill C-423 addresses the need for a legal framework, and, through its employee training requirement, asks that Canadian businesses develop a better understanding of modern slavery (also among the committee’s recommendations), it doesn’t directly address the committee’s recommendation to tackle forced labour in Canada’s free trade agreements and international aid packages. The tabled bill also misses the call to rescript public procurement policies to better tackle modern slavery.

In Canada, procurement (and consequently companies’ supply chains) falls under both federal and provincial jurisdiction, making legal intervention a bit complex. Regardless, the tabled bill, the committee’s recommendations, and the examples provided by other countries give us, the fair trade movement in Canada, an opportunity to engage with our elected officials. While C-423 is private member’s bill, and its odds of passing are low, it still offers a platform to talk more about fair trade and how it combats modern slavery. By paying producers a fair price and a social premium, the fair trade system breaks local cycles of poverty, enabling kids to go to school, women to gain leadership skills, and workers to democratically determine how to use collective resources in the community. Fair trade does something much more powerful than increase transparency of supply chains: It works to improve the livelihoods of those at the beginning of supply chains by actively involving them in co-determining the process and shaping the outcomes. I encourage you to ask our government to make businesses more accountable, and take another step toward trade justice.

Author: Sarah Heim is national programs manager at the CFTN.

Originally published in Fair Trade Magazine - Winter/Spring 2019 Edition