Canadian companies are already taking significant steps to identify and address forced and child labour risk in their supply chains. It will be important keep up this momentum as we approach the next year’s mandatory reporting cycle for modern slavery and forced and child labour in supply chains.
This is the main lesson of Public Safety Canada’s 2024 annual report to Parliament (Report to Parliament) on the Fighting Against Forced Labour and Child Labour in Supply Chains Act (the Modern Slavery Act).1 The Report to Parliament provides data on the 5,795 Modern Slavery Act reports received by Public Safety Canada during the first reporting period (which ended on May 31, 2024). This data offers a window into the existing practices of Canadian organizations across a wide range of industries.
In this article, we provide a few notable observations from the Report to Parliament that may assist your organization in establishing or enhancing its practices to reduce the risk of forced and child labour in its activities and supply chain.
Preventing and reducing the risk of modern slavery
Two of the most common questions BLG advised on while assisting in the preparation of reports under the Modern Slavery Act during the first reporting period were:
- how can our organization assess our effectiveness in preventing the use of forced labour and/or child labour in our activities and supply chains; and
- are our organization’s current policies and practices sufficient?
While Public Safety Canada does not evaluate whether an organization’s practices are sufficient to reduce the risk of modern slavery, the Report to Parliament helpfully summarizes the methods reporting entities are already using to prevent the use of forced labour and/or child labour in their activities and supply chains.
Nearly half of reporting entities (49.84 per cent) indicated that they conducted a regular review or audit of their policies and procedures related to preventing forced labour and/or child labour. This was the most common technique used by the private sector. A significant number of entities also reported:
- developing and implementing due diligence policies and processes for identifying, addressing, and prohibiting the use of forced labour and/or child labour in their organization’s activities and supply chain (45.04 per cent);
- monitoring suppliers (38.48 per cent); and
- developing and implementing anti-forced labour and/or anti-child labour standards, codes of conduct, or compliance checklists (36.96 per cent).
While these methods of preventing or reducing forced labour and/or child labour risks represent significant diligence practices, the Report to Parliament data suggests that these measures are already common in organizations across a diverse range of sectors (such as resource extraction, transportation, manufacturing, construction, and wholesale trade), at all stages of the supply chain.
It is to be expected that organizations will need to look at their due diligence and monitoring processes progressively. The fact that a range of sophisticated practices are already common across industries suggests that Canada has benefited from know-how acquired by organizations operating in other jurisdictions, and may be on an accelerated timeline. Though the Modern Slavery Act does not require that organizations take any particular steps to combat forced labour and/or child labour, as we approach the next reporting cycle, it will be important for organizations to carefully assess where their current practices stand in relation to the market, in order to properly target their resources.
Assessing effectiveness in preventing forced and/or child labour
Another common question we advise organizations on is how they might assess the effectiveness of their existing mechanisms to prevent the use of forced labour and/or child labour in their activities and supply chains. The Report to Parliament highlights some of the key performance indicators (KPIs) reporting entities are using to assess their effectiveness. These KPIs include monitoring:
- the number of cases of forced labour and/or child labour reported and solved;
- the number of their contracts with anti-forced labour and/or anti-child labour clauses;
- the number of their employees completing relevant training;
- the age and number of hours worked per employee; and
- the number of suppliers, vendors, and/or partners that have signed a relevant code of conduct.
If your organization is in the process of developing its mechanism to assess the effectiveness of its anti-forced labour / anti-child labour policies and practices, these KPIs may serve as a helpful starting point.
Public Safety Canada’s approach to enforcement
The Report to Parliament indicates that Public Safety Canada did not take any enforcement action or lay any charges against a person or entity for failing to comply with the Modern Slavery Act in the first year of reporting. Instead, Public Safety Canada prioritized raising industry awareness of reporting requirements to increase transparency regarding risk of forced and child labour, and promote meaningful action. However, there is no guarantee that this approach will continue into next year’s reporting cycle, particularly given the expectation that Public Safety must report to Parliament on its enforcement efforts. Public Safety Canada may increase its enforcement activities in the next reporting cycle.
Key takeaways
The reports for the next reporting period are due on or before May 31, 2025. Conclusions from the Report to Parliament may assist your organization in enhancing its due diligence and effectiveness assessment mechanisms, and aligning itself with the current market practices in Canada. In turn, aligning your organization with these practices may contribute to successfully meeting its reporting requirements, as well as ensure your organization is not perceived by the public as falling short of your competitors’ commitment to reducing the risk of modern slavery in their own activities and supply chains.
Contact us
For more information on modern slavery reporting requirements, the conclusions of Public Safety Canada’s annual report, or how to strategically implement adequate policies and practices, please reach out to any of the authors or key contacts below, or any lawyer from BLG’s International Trade and Investment or International Business & Human Rights groups.
1 The Report to Parliament was tabled in Parliament on Sept. 27, 2024, and remains subject to change until approved and published on the website of Public Safety Canada.
