‘Supply chain legislation‘ requires companies to report on and/or take measures to prevent human rights violations – including modern slavery – at any stage in companies’ production of goods or services (the ‘supply chain’). Supply chain laws therefore regulate a company’s domestic activities and any activities that take place abroad, including through subsidiary companies or suppliers. There are two main categories of supply chain laws:
Transparency (Reporting) Laws
Transparency or ‘reporting obligation’ laws require companies to report on steps taken to prevent the risk of human rights violations at any stage in their production of goods.
Reporting alone does not ensure human rights violations are prevented. Companies comply with this type of law by reporting accurately – whether they have taken steps to prevent human rights violations or not.
Human Rights Due Diligence Laws
Human rights due diligence (HRDD) laws require companies to take reasonable steps to prevent human rights violations at any stage in their production of goods.
Companies must do more than report: These laws impose legal sanctions on companies that fail to take steps to avoid human rights violations.
The United Nations Office of the High Commissioner for Human Rights endorses HRDD.
Towards a Canadian Supply Chain Law: Transparency Legislation Bill S-216
Members of the APPG to End Modern Slavery have been instrumental in introducing supply chain legislation in Canada. Co-Chair Senator Julie Miville-Dechêne tabled the Modern Slavery Act (Bill S-216) in Senate in October 2020, previously introduced in February 2020 (as Bill S-211), and as a Private Members’ Bill by Co-Chair John McKay in 2018. Click here to see a brief from the APPG about Bill S-216.
Bill S-216, if passed, will:
- Require large companies to report annually on measures taken to prevent and reduce the risk that forced labour or child labour is used in their supply chains;
- Provide meaningful penalties and fines for failing to report or for falsely reporting;
- Prohibit the import of goods manufactured or produced, in whole or in part, by forced labour or child labour; and
- Create an inspection regime where inspectors would have the authority to examine a company’s premises and collect information.
The adoption of this legislation will begin to implement Canada’s international commitment to supply chains free of modern slavery and will encourage companies to ensure their supply chains are transparent if they wish to do business in Canada.
“By requiring companies to be more transparent, this bill will give tools to consumers who do not want to contribute to modern slavery. We must stop being complicit in violating the rights of millions of people condemned to forced labour.”
Senator Julie Miville-Dechêne, APPG Co-Chair
“The Modern Slavery Act is a welcome first step towards bringing transparency to Canadian companies’ global supply chains. The next step is for the government to mandate due diligence requirements and effective oversight so the goals of preventing and reducing forced labour and child labour can be realized.”
Nicole Barrett, Director, International Justice and Human Rights Clinic, Peter A. Allard School of Law, University of British Columbia.
“Modern day slavery and human trafficking exist in every country of the world including Canada. With over 25 million people around the world trapped in modern day slavery, we have a responsibility to tackle the slavery in our communities and in our supply chains.“
Arnold Viersen, M.P. for Peace River – Westlock, APPG Co-Chair
“Slavery has not been relegated to history, it is still a scourge in the 21st century and Canadians
unwittingly buy products made with slave labour. This bill will ensure that corporations examine their supply chains and certify that slaves had no part in the making of their products.”
Hon. John McKay, P.C., M.P. for Scarborough-Guildwood, APPG Co-Chair
Proposed Amendments from the International Justice and Human Rights Clinic: Full Human Rights Due Diligence Legislation
The International Justice and Human Rights Clinic (IJHRC) created and proposed the Transparency in Supply Chains Act (TSCA) in 2019, a model human rights due diligence law that calls on Canada to establish:
- A supply chain human rights reporting requirement (such as that in Bill S-216);
- A statutory duty of care requiring Canadian businesses take reasonable steps to avoid the use of forced labour, child labour, and human trafficking in their operations abroad (a due diligence requirement);
- Whistleblower mechanisms and protection to receive and investigate disclosures of forced labour and child labour; and
- An Ombudsperson for Transparency in Supply Chains.
Research for the TSCA consisted of desk research, legal analysis and dialogue with academics, legislators, researchers and activists with expertise in the field of business and human rights. Through this evidence-based approach to best practices in supply chain legislation, the IJHRC recommends six amendments to Bill S-216 to implement a human rights due diligence law in Canada.
International Justice & Human Rights Clinic, ‘In The Dark’, 2017
This publication led the International Justice and Human Rights Clinic at Allard Law to begin the drafting of the Transparency in Supply Chains Act, which they proposed in 2019.
Parliament of Canada, ‘Call to Action: Ending the Use of All Forms of Child Labour in Supply Chains’, Report of the Standing Committee on Foreign Affairs and International Development and the Subcommittee on International Human Rights, Parliament of Canada, 2018
Canadian Network on Corporate Accountability, ‘Policy Brief, European Union Commitment to Introduce Legally Binding Corporate Human Rights and Environmental Due Diligence: Implications for Canada’, 2020
Canadian Network on Corporate Accountability, Letter to Minister Monsef, 2019
This letter urged the Government, who committed to consult on Canadian supply chain legislation in 2019, to develop comprehensive mandatory human rights due diligence legislation.
Laws in Other Jurisdictions
How does Bill S-216 compare to supply chain laws in other countries? This SCORECARD by the IJHRC rates laws from around the world across six key features of an effective supply chain law. These features are:
- A reporting requirement
- A due diligence requirement
- An enforcement mechanism
- Remedies for victims
- Independent oversight
- Broad human rights scope (beyond modern slavery)
France’s Duty of Vigilance Law ranks the highest and is considered the current ‘gold standard’ in human rights due diligence laws that are in effect. Canada can learn from both its strengths and weaknesses to implement the most effective, cutting-edge legislation.
While Bill S-216 does not share the crucial due diligence requirement with the French law, it does have the unique feature of prohibiting goods made in whole or part by forced or child labour from being imported into Canada. This prohibition will be most effective if Bill S-216 is amended to have protections for whistleblowers and independent oversight of the law.