2023-12-26 05:01:37
In 2024, the new law once morest modern slavery must force Canadian companies to publicly declare what they are doing to counter forced labor and child labor. However, it does not require any concrete action and focuses above all on a vital need in commerce: protecting one’s reputation.
Concretely, the Law on Combating Forced and Child Labor in Supply Chains must apply from 1is January to businesses with 250 or more employees, at least $20 million in assets or $40 million in revenue. All companies listed on the stock exchange will also be subject by default, as will government institutions.
The organizations concerned will have to explain each year their efforts to combat forced labor and child labor. “The report must be presented to the minister no later than May 31 each year and must also be published on the company’s website,” explains Jean-Guillaume Shooner, partner at Stikeman Elliott and specialist in international trade. Federal corporations will also have to send the report to each shareholder, at the same time as the annual financial statements.
In the event of an infraction, the law also provides for the imposition of maximum fines of $250,000 on the companies themselves, but also potentially on their managers or directors.
No concrete measures to take
Federal law does not impose any “threshold” that might be used to determine whether a company’s efforts to combat forced and child labor are sufficient.
“There is no obligation to take specific measures on the supply chain,” says Paul Lalonde, partner at Dentons and specialist in international trade law. Companies will have an “obligation to say” what they do or do not do, period. “It’s completely legal to say: ‘I’m not doing anything to fight once morest child labor,’” illustrates Alexis Langerfeld, doctoral student at the Center for Economic Law Studies at Laval University.
As the document will be consultable by everyone, a company which makes such a declaration would nevertheless risk suffering the repercussions. And in principle, the Minister of Public Security might require certain information.
PHOTO MARTIN TREMBLAY, ARCHIVES LA PRESSE
Many foreign workers in the agricultural sector hired in Quebec are forced by the permit they have to work for a single employer.
The law might also give pause to companies that source from Canada. The issue of closed work permits, for example, is increasingly raising questions regarding the free will of agricultural workers in particular, who are forced to work for a single employer, under penalty of being kicked out of the country if they resign. “It’s certain that companies like Metro will ask themselves questions,” says Claudia Rebolledo, professor at HEC Montréal and specialist in supply chains.
Other laws go further
The new law once morest forced labor and child labor is in line with a trend in Western countries, which are adopting rules of the same type one following another. However, some governments go further.
Full professor at the Institute of Applied Ethics at Laval University, Ivan Tchotourian emphasizes that Germany does not let companies self-regulate. “We really ask the company to have a concrete plan,” he explains. We will define precise standards to be achieved, which Canada does not do. »
Consequences at customs
Canada had already added new border measures following the Canada–United States–Mexico Agreement, ratified in 2020 to replace the North American Free Trade Agreement (NAFTA). New rules include banning imports of goods produced using forced labor or discriminatory practices and adding child labor to the definition of forced labor.
Specialists note, however, that Ottawa has only used this ban once to seize merchandise, clothing imported from China, which it ultimately returned to its importer following its challenge. In comparison, the United States seized goods worth a total of nearly $1 billion just between June 2022 and April 2023, according to an article from Borden Ladner Gervais.
Hence the idea of the new federal law: since the government doesn’t wield much of a stick, it might as well force companies to make declarations regarding their supply chain.
Given that the Act does not require companies to take “proactive” steps to reduce or eliminate forced labor and child labor in their supply chains, the public nature of reporting will likely play an important role in encouraging businesses to take such measures in practice.
Jean-Guillaume Shooner, partner at Stikeman Elliott and international trade specialist
Ottawa already has a tool to shine the spotlight on companies that are not doing enough in this area. The Canadian Ombudsman for Corporate Responsibility is responsible for investigating complaints regarding human rights violations by domestic companies abroad.
The organization particularly looked into the cases of Levi Strauss, Walmart, Hugo Boss and Nike. He has just announced the opening of an investigation into Guess and possible links of the champion of faded jeans to the forced labor of Uyghurs in China.
The Nova Scotia fish company High Liner was also able to measure the reputational impact that the importation of goods resulting from modern slavery can have.
Last October, a journalistic investigation by the organization The Outlaw Project, published in the Globe and Maildemonstrated that seafood it imported came from a Chinese factory using Uyghur forced workers.
The government didn’t have to get involved for High Liner to quickly cut ties with the company.
Learn more
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- 25 millions
- Number of people victims of forced labor worldwide, including 16 million in companies in sectors such as domestic work, construction or agriculture, 5 million in sexual exploitation and 4 million in forced labor imposed by the authorities
Source: International Labor Organization
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