On October 16, 2024, the Government of Canada announced the launch of consultations (the "Consultations") on its latest proposed measures to address modern slavery in Canadian supply chains. Most notably, the Government of Canada is contemplating a due diligence requirement for certain goods at higher risk of being made in whole or in part from forced labour.
The Consultations, which concluded in November, indicated that the Government of Canada was considering the following measures:
- forced labour informed by the International Labour Organization's forced labour indicators and definitions, and supplemented by other sources of information.
- Creation of a supply chain "minimum traceability" process in which importers of specified goods appearing on the above-cited public list would be required to provide documentation regarding the imported goods' supply chain journey.
- Changes to the cost-recovery model whereby the importer of goods deemed to be made by forced labour would be responsible for the payment of all costs associated with the detention, removal, abandonment and/or forfeiture of such goods, including any transport, storage, and/or disposal fees.
- Creation of a streamlined mechanism to settling disagreements between importers and the Government of Canada on decisions that prevented the entry into the market of specific goods.
- Strengthening of the legislative and regulatory authorities regarding information collection/sharing, enforcement and disposition within North America.
The Consultations also make clear that these proposals are in addition to existing measures that are in place, including the prohibition on importing goods mined, manufactured or produced, in whole or in part, with forced labour or child labour. The proposals would also be in addition to the reporting obligation found in the Fighting Against Forced Labour and Child Labour in Supply Chains Act, which would continue to apply broadly to businesses with a nexus to Canada.
The measures proposed in the Consultations align with the Government of Canada's promise to introduce additional legislation to tackle modern slavery in Canadian supply chains. However, there remains significant ambiguity in how these proposed measures could be implemented. For example, the Consultations do not discuss in detail the "minimum traceability" process that would be required of importers, and the breadth of this obligation. They also do not discuss in detail how the determination would be made whether a good is at risk of forced labour, and if there will be an opportunity for stakeholders to discuss the goods proposed to be included in the list prior to their publication.
The Consultations are another significant development for companies considering how to mitigate the risks of forced labour and child labour across their supply chains. Though the Consultations are now closed, we encourage businesses to continue engaging with the Government of Canada on these issues while simultaneously preparing for the possible rollout of the proposed measures.
For more information on the Consultations, please refer to our in-depth analysis here.
This article appeared in ESG and Sustainability: Key Trends in Canada
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