Question Period Note: FORCED LABOUR (GLOBAL SUPPLY CHAINS)

What is the Labour Program of ESDC doing to combat forced labour in global supply chains?

• The Government of Canada is committed to respecting human rights and international labour standards and has a number of measures in place across government to address forced labour.

• In July 2020, Canada became the second country in the world after the US to ban the importation of goods produced by forced labour.

• The Government of Canada also includes comprehensive and enforceable labour provisions in free trade agreements, provides assistance to partner countries and has consulted with Canadians on measures to address forced labour in supply chains.

• Forced labour is a complex problem that requires a lot of work on the part of governments and industry to address. CBSA, ESDC and other relevant departments are continuing to work together on implementing the ban and looking at best practices around the world to address forced labour in supply chains.

• A mix of voluntary and legislative measures are being utilised internationally to address labour exploitation and/or human rights abuses in supply chains. These measures are typically based on the following key frameworks: the OECD Guidelines for Multinational Enterprises; the UN Guiding Principles on Business and Human Rights; and the ILO Declaration on Fundamental Principles and Rights at Work.

• While voluntary measures include codes of conduct, certification regimes and pledges, some governments have announced or implemented supply chain legislation (aimed at preventing the use of forced labour or exploitive practices in supply chains or proactively identifying goods, sectors or regions at risk of forced labour). Others have implemented or announced forced labour prohibitions (aimed at blocking goods from entering the country).

• Import prohibitions and supply chain legislation are distinct but complementary measures.

Canada’s Forced Labour Ban

• Under the Canada-United States-Mexico Agreement (CUSMA) Labour Chapter, the three partner countries included an obligation for each to prohibit the importation of goods produced in whole or in part by forced labour.

• The U.S. is the only country other than Canada with such a ban in place at present. The U.S. prohibition was introduced in the 1930s and the accompanying regime and related research and enforcement capacity has evolved significantly during this period. In contrast, Canada’s measures have been in place since July 2020.

• In January 2021, Global Affairs Canada (GAC) issued a business advisory cautioning Canadian companies of doing business with entities in Xinjiang, China that engage in human rights abuses. Canadian companies are expected to respect human rights, operate lawfully, and conduct their activities in a responsible manner. It is the responsibility of Canadian companies to conduct due diligence on their supply chains to ensure that they are not directly or indirectly sourcing products from entities implicated in forced labour (or other human rights violations).

• A number of GAC-led resources and mechanisms are available to assist companies in conducting their due diligence. Canadian companies can contact the National Contact Point (NCP), or the Canadian Ombudsperson for Responsible Enterprises (CORE), whose mandate includes advising Canadian companies on meeting high standards of responsible business conduct. The Trade Commissioner Service (TCS) can also provide information. In terms of non-governmental resources, companies can work with or reference third-party entities with specialization in supply chain risks, including: KnowTheChain, the Responsible Sourcing Tool, and the Responsible Business Alliance.

• In addition to working closely with the CBSA, ESDC-Labour collaborates with Global Affairs Canada as well as with Public Services and Procurement Canada, to share information on labour practices, responsible business conduct initiatives, and identification of potential high risk areas in supply chains.

Supply Chain Legislation
• As global awareness of human rights abuses in supply chains has increased, civil society organizations, unions and international organizations continue to call for governments to adopt measures that require companies to report on and address such violations in supply chains. In addition, there is significant attention to this issue within international fora, such as the United Nations, the Organization for Economic Co-operation and Development, the International Labour Organization, the G7 and the G20.

• In response, the Government conducted public consultations in spring 2019 with a range of stakeholders on possible measures to address labour exploitation in supply chains. While all stakeholders agreed that Canada should take further action to address this issue, there were differing views on how to do so, with civil society organizations and labour organizations strongly supporting comprehensive legislation, while some industry organizations and businesses suggested that Canada continue to study and learn from other countries to address the root cause of labour exploitation and consider non-legislative measures.

• Work remains ongoing to develop policy options to address exploitation in supply chains and ensure Canadian businesses that operate abroad are not contributing to human rights abuses.

Forced Labour Prohibition

• Under the Canada-United States-Mexico Agreement (CUSMA), one of the obligations of the Agreement is for each Party to prohibit the importation of goods that have been produced in whole or in part by forced or compulsory labour.

• Consequently, Canada amended the Customs Tariff and the Schedule to the Customs Tariff to include a prohibition on the importation of goods that are mined, manufactured or produced wholly or in part by forced labour. This amendment took effect upon entry into force of CUSMA on July 1, 2020.

• While the forced labour ban was implemented to fulfill a CUSMA obligation, it applies to all imports, regardless of origin.

• The Canada Border Services Agency (CBSA) is responsible for the administration and enforcement of the Customs Tariff. At CBSA’s request, EDSC-Labour provides support by conducting research and analysis on the risk of forced labour for specific complaints or allegations. The CBSA may use this information to identify and intercept shipments containing goods likelihood of suspected companies importing goods produced by forced labour.

• Establishing the likelihood that goods have been produced by forced labour requires significant research, analysis and supporting information. Research into allegations of forced labour in global multi-tiered supply chains is a complex and lengthy process, and requires that due diligence be applied at every step. Generally speaking, it can take six months or longer to conduct thorough analysis of a single complaint or allegation.

• CBSA, ESDC and other federal departments are working together to advance the overall effectiveness of the forced labour import prohibition in Canada, and assessing various models used in other jurisdictions to address labour exploitation.