Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act Goes Into Effect Soon

Canada Passes the Fighting Against Forced Labour and Child Labour in Supply Chains Act

On May 11, 2023, Canada passed the Fighting Against Forced Labour and Child Labour in Supply Chains Act (Bill S-211), which will take effect on January 1, 2024 (the “Act”).

Purpose of the Act

The purpose of this Act is to implement Canada’s international commitment to fighting forced and child labor through reporting obligations on government institutions and entities.

Reporting Obligations

The Act sets forth reporting obligations for government institutions and entities. Both must submit their first report to the Minister by May 31, 2024.

1. Government institutions producing, purchasing, or distributing goods in Canada or elsewhere
2. Entities producing goods in Canada or elsewhere or importing goods produced outside of Canada

Contents of the Report

The entity’s or government institution’s report must include the following information:

• Structure, activities, and supply chains
• Policies and due diligence processes in relation to forced and child labor
• Parts of activities and supply chains that carry a risk of forced or child labor and steps taken to assess and manage that risk
• Measures taken to remediate any forced or child labor
• Measures taken to remediate the loss of income resulting from measures to eliminate forced or child labor
• Training provided to employees on forced and child labor
• Assessment of effectiveness in ensuring forced and child labor are not used in activities and supply chains

Each entity and government institution must make its report available to the public by publishing it on their website. The Minister must also maintain an electronic registry containing a copy of every report, which will be made available to the public.

Additional Requirements for Entities Incorporated under the Canada Business Corporations Act

Entities incorporated under the Canada Business Corporations Act or any other Act of Parliament must provide the report or revised report to each shareholder, along with its annual financial statements. The report must be approved by the entity’s governing body.

Penalties for Non-Compliance

Failure to comply with the Act’s reporting, posting, or remedial requirements is punishable by a fine of up to $250,000. Knowingly providing false or misleading information is also an offense punishable by a fine of up to $250,000.

International Implementation of Similar Laws

Canada is not the only country implementing laws to safeguard human rights. The US and Germany have similar laws as well.

The US enacted the Uyghur Forced Labor Prevention Act, which prohibits the importation of goods produced in the Xinjiang Uyghur Autonomous Region of China. Unlike Canada’s Act, the US law does not require proactive reporting on supply chains.

Germany’s Act on Corporate Due Diligence Obligations in Supply Chains requires companies with at least 3,000 employees to observe human rights and environmental due diligence obligations. Companies with at least 1,000 employees will be required to comply starting January 1, 2024.

Definitions

1. Government institution: Any department or ministry of state of the Government of Canada, or any body or office listed in Schedule I of the Access to Information Act. It also includes parent Crown corporations and their wholly-owned subsidiaries.
2. Entity: A corporation, trust, partnership, or other unincorporated organization that meets certain financial criteria or is prescribed by regulations.

SDGs, Targets, and Indicators in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth
• SDG 12: Responsible Consumption and Production
• SDG 16: Peace, Justice, and Strong Institutions

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 8.7: Take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking, and secure the prohibition and elimination of the worst forms of child labor.
• SDG 12.6: Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.
• SDG 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Number of government institutions and entities reporting on their steps to prevent and reduce forced or child labor (Indicator for SDG 8.7)
• Number of entities publishing their reports on forced and child labor in a prominent place on their website (Indicator for SDG 12.6)
• Existence of an electronic registry containing copies of reports provided to the Minister (Indicator for SDG 16.3)

Table: SDGs, Targets, and Indicators

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Source: natlawreview.com

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