THE STANDING SENATE COMMITTEE ON HUMAN RIGHTS
EVIDENCE
OTTAWA, Monday, February 28, 2022
The Standing Senate Committee on Human Rights met with videoconference this day at 5:01 p.m. [ET] to give consideration to Bill S-211, An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff; and, in camera, to consider a draft agenda (future business).
Senator Salma Ataullahjan (Chair) in the chair.
[English]
The Chair: Honourable senators, I am Salma Ataullahjan, a senator from Toronto and chair of this committee. Today is the second meeting on Bill S-211, An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff.
I would like to introduce our first panel of witnesses. From the Global Fund to End Modern Slavery, we have Chris Crewther, Head of Strategic Partnerships, who is appearing from Australia, and from the Canadian Network on Corporate Accountability, we have Emily Dwyer, National Coordinator and Director of Policy.
I invite Mr. Crewther to make his opening remarks, and then we will ask Ms. Dwyer to give hers. Afterward, there will be questions from the senators.
Chris Crewther, Head of Strategic Partnerships, Global Fund to End Modern Slavery: First, thank you very much for the opportunity to attend this public hearing on Bill S-211 before the Standing Senate Committee on Human Rights. I acknowledge chair, Senator Salma Ataullahjan; deputy chair, Senator Wanda Thomas Bernard; committee members; and fellow panellist, Emily Dwyer.
For background, I’m Head of Strategic Partnerships with the Global Fund to End Modern Slavery. I’m based here in Australia, and I’m also on the Australian government’s Modern Slavery Expert Advisory Group. Formerly, I was an Australian member of Parliament, the chair of the Australian Parliament’s Foreign Affairs and Aid Sub-Committee and the chair of the Australian government’s Home Affairs and Legal Affairs Policy Committee. Through those roles, I instigated and led Australia’s modern slavery inquiry, resulting in the Hidden in Plain Sight report and recommendations, and Australia’s Modern Slavery Act 2018.
I’ve also been liaising with Senator Julie Miville‑Dechêne, MP John McKay, MP Marcus Powlowski and others since July last year, and more recently, I addressed Canada’s All Party Parliamentary Group to End Modern Slavery and Human Trafficking in December.
I congratulate you all on your efforts to bring about Canadian transparency in supply-chain legislation, including gaining government and opposition support recently as well as the recent ministerial mandate letters.
Firstly, on the Global Fund, we were launched as a multi-donor initiative in 2017, with initial funding from the U.S. and U.K., followed by Norway, Liechtenstein, philanthropists and the private sector. With this support, the Global Fund is mobilizing resources, designing innovative private and public partnerships, funding new tools and methods, and equipping partners to scale and replicate solutions that have demonstrated impacts to end modern slavery.
The Global Fund has granted US$45 million to more than 40 partners in nine countries, including, for example, Bangladesh, the Philippines, Brazil and Kenya.
We are also encouraging nations to put in more resources to better enforce existing legislation and implement further legislation against modern slavery. We strongly support Canada’s efforts to bring about this legislation. This is important, as over 40 million people live in modern slavery worldwide, deprived of their fundamental rights and freedoms. More than 70% are women and girls. One in four is a child.
Despite this, the number of people living in modern slavery is rising, not falling. COVID-19, corruption, authoritarianism and crises, such as that in Ukraine, will only exacerbate these issues.
While being mostly illegal, modern slavery persists almost everywhere. It persists because perpetrators make an estimated $150 billion annually from it.
Despite these terrible trends, there is hope. First, thanks to leaders like you, we can turn the tide. Second, nations must follow through on their commitments to eradicate forced labour from global and domestic supply chains and hold governments and corporations accountable. Third, modern slavery is deeply integrated with many of the deepest problems facing the planet, being strongly linked to environmental degradation; clean-energy supply chains; inequality, particularly for women and girls and excluded minorities; instability; unsafe migration; and corruption and criminal networks. There is no fair economic competition when some are using forced labour.
In Australia, I had the opportunity to launch an inquiry to do something about these crimes. In late 2016, I sought a referral for a parliamentary inquiry into establishing a modern slavery act in Australia. I often use the example that you don’t get from 0 to 100 metres in one step; in Australia, it was a step-by-step process, which is why I encourage you all. I went from not being sure I could get the inquiry approved and referred, to having it commence, then from not being sure the inquiry would lead to a bill, to possibly having a weak bill, to having a much stronger act than expected.
It’s been similar in Canada. Even over the last six months, you’ve gained support and momentum from both the government and opposition, as well as minor parties, independents, the media and the public.
Another saying is “don’t let the perfect get in the way of the good.” Had we insisted on the perfect, we likely wouldn’t have gotten a modern slavery act in Australia at all. While we didn’t get everything we wanted, in many ways, Australia’s act was much stronger than the U.K.’s original 2015 act. On the weaker side, our act requires entities above a AUS$100-million threshold, which is about C$91 million, to report annually on modern slavery. Compare that to the AUS$67 million in the U.K. and the AUS$50 million recommended in our report.
Australia also doesn’t have an independent anti-slavery commissioner, a modern slavery hotline or a national labour hire licensing like the U.K. does and as we recommended.
However, Australia’s act was stronger than the U.K.’s in many ways, including having voluntary reporting below the threshold, world-first government reporting, a legislated public register of modern slavery statements, prescribed reporting criteria, some compliance section 16A “name and shame” measures to list entities who don’t report or don’t report properly as well as the legislated three-year review. Of note, it requires principal governing body sign-off, which has brought modern slavery to the board’s attention nationally. It’s great that Canada’s updated Bill S-211 now incorporates this.
While the strength of Australia’s act has caught recent criticism and many statements are not yet up to scratch, thanks to Australia’s act, thousands of entities and people are now more aware, paying attention every year, actively looking into their operations and supply chains, taking action to stamp out and remediate modern slavery and identifying and reporting crimes. I also know that many reporting entities are taking a lot of action, even behind the scenes, beyond what they are putting in their public statements.
Australia’s act is also having a global impact, including in Canada, given that numerous multinational companies with operations in both Australia and Canada have to report in Australia on their global supply chains.
A Canadian act done well would up the bar internationally.
In terms of Canada’s act, I liaised with Senator Julie Miville‑Dechêne — hello, Julie; it’s great to see you here again — in July last year, and we spoke on quite a number of areas that could be improved with the bill at the time. It’s great to see a number of those recommended changes incorporated into Bill S-211 in the most recent updates and effectively replicated in Bill C-243, as brought to the House by government MP Marcus Powlowski, working closely with MP McKay.
I’ve made a number of suggested changes related to Bill S-211 but also to Bill C-243 in the written document that hopefully you’ve received. I’m happy to go through that more during the question-and-answer period, given our time frames.
Lastly, I’ll say that there was an option for Canada to match its legislative efforts by contributing further to global efforts, such as by joining the U.K., the U.S., Norway and others in the Global Fund. This would complement Canada’s legislative efforts and mandate letters that call on, say, the Minister of Labour to introduce legislation to eradicate forced labour from Canadian supply chains and ensure that Canadian businesses operating abroad do not contribute to the human rights abuses.
Thank you for the introduction. I look forward to the Q & A.
The Chair: Thank you, Mr. Crewther.
Emily Dwyer, National Coordinator and Director of Policy, Canadian Network on Corporate Accountability: Good evening, senators. Thank you very much for the invitation to be here this evening.
I am the policy director at the Canadian Network on Corporate Accountability, CNCA. We are a network of almost 40 member organizations from across the country, including development NGOs and grassroots environmental and faith-based groups and unions who collectively represent the voices of millions of Canadians.
Our members have long-standing relationships with women, Indigenous peoples and workers in every corner of the world. I work from the unceded and traditional territories of the Algonquin Anishinabeg people.
[Translation]
First of all, I would like to thank Senator Julie Miville‑Dechêne for bringing the important issue of human rights violations in supply chains to the attention of the Senate.
[English]
We agree that Canada should move quickly to address the widespread reports of human rights abuses in Canadian global supply chains, and we are grateful the Senate is taking the issue seriously. But in its current form, Bill S-211 would not prevent exploitation and abuses in Canadian global supply chains. Significant reforms are required.
To get widespread support of Canadian civil society, supply chain legislation should focus on preventing and remedying harm rather than reporting, it should apply to all human rights and it should apply to companies of all sizes.
I will briefly address each of these concerns.
First and most significantly, Bill S-211 does not require companies to stop using and profiting from child or forced labour. It does not require companies to take any steps to identify whether slave labour is in their supply chains. If companies do make use of child or forced labour, the bill doesn’t offer help to the victims at all.
The bill, as currently drafted, means a company could comply with the law by taking no steps, remaining willfully blind and continuing business as usual, apart from an annual report. The evidence from other countries confirms that reporting-only laws have not been effective in addressing corporate abuse.
For example, a five-year review of the U.K.’s Modern Slavery Registry “revealed no significant improvements in companies’ policies or practice.”
A second quote: “. . . failed to be an effective driver of corporate action to end forced labour.” And a third quote conclude that the “U.K. is now lagging behind its international neighbours.”
Similarly, the European Union’s 2020 study on supply chain due diligence concluded that reporting requirements produce “only a minor positive social impact.” Europe is moving away from reporting-only approaches to mandatory human rights due diligence laws and Canada should do the same.
Canadian supply chain legislation should at minimum require companies to prevent human rights violations and to undertake human rights due diligence processes and should include a statutory right for impacted people to access a remedy in Canadian courts through civil suits.
Secondly, Bill S-211 should not exclude other egregious and interrelated human rights abuses.
Canada does need to address child and forced labour, but human rights, as you all know, are interrelated, interdependent and indivisible. Modern slavery does not occur in isolation. To effectively prevent forced labour, you have to protect against other human rights violations, like the right to non-discrimination or to organize collectively.
Threats, killings, bodily harm, gang rape, unsafe and exploitative working conditions, failure to respect the rights of Indigenous peoples, these are all serious human rights abuses that are in Canadian supply chains for which there’s widespread evidence. Canadian companies should not be profiting from those abuses.
Finally, the United Nations Guiding Principles on Business and Human Rights make it clear that companies of all sizes from all sectors are required to respect human rights and undertake human rights due diligence. It is urgent that communities and workers harmed in Canadian supply chains be protected from abuse and have access to remedy in Canada. We hope that the process currently under way in the Senate will ultimately lead to such a result. Thank you very much for your time.
The Chair: Thank you very much for your presentations, and we will proceed with questions from the senators. As is our previous practice, I would like to remind each senator that you have five minutes for your question, and that includes the answer.
Senator Bernard: Thank you both for your testimony this evening. I appreciate you being here.
I’d like to hear a bit more from Ms. Dwyer with regard to your statements about this bill not going far enough and some of the limitations with regard to annual reporting and the lack of effectiveness around annual reporting as the core missive.
I’m wondering if you could tell us a bit more about your thoughts on that, and if there was going to be an amendment to strengthen this law, to address the gaps that you’ve identified, what might they be? Thank you.
Ms. Dwyer: Thank you very much for the question. Transparency is a key element and a key part of due diligence, and human rights due diligence is how companies fulfill their obligations to prevent human rights abuses, but alone, it’s not enough. That is the first part of the answer to your question.
Attached to that is also what is being asked of reporting. If you are seeing a report annually on if you have taken any steps and if you have identified any risks, as Bill S-211 does, what you’ll note is that there’s no obligation on companies to take any steps, which means a company could comply with the law by simply reporting every year: I took no steps to prevent modern slavery; I’m not aware of any risks of modern slavery in my supply chain, and they would comply with the law.
Our assessment is that it is time for Canada to require companies to prevent human rights violations and to undertake due diligence. It’s not actually a new requirement, but it would be new to have an enforcement around that.
Since 2009, Canada has been calling on companies and saying publicly that companies are expected to respect human rights in their operations around the world, and since 2011, when the UN Guiding Principles on Business and Human Rights were unanimously endorsed by all countries around the world — sorry, not all countries but by the UN, at that time in 2011 — the UN guiding principles put forth what were existing norms. In 2011, it was an existing international norm that corporations must respect human rights and undertake due diligence to identify, mitigate and remedy abuses throughout their supply chains. All that we are asking for Canada to do now is to give that expectation, that’s been long held, the effect of law. Please let me know if I haven’t sufficiently answered your question.
Senator Bernard: That’s fine. Thank you.
[Translation]
Senator Miville-Dechêne: My question is for Ms. Dwyer. You quoted the British report. You said that, five years after the implementation of the law, this report showed that the law was not effective. Yet, in that same report, I found a sentence that says instead that it is the lack of penalties in Britain’s transparency legislation that contributes to its lack of effectiveness.
As you know, in the legislation we are putting forward, Bill S-211, there are penalties. It is not just a bill to name and shame. It is a law with penalties, and in cases where a board of directors provides false or misleading information, there are also criminal penalties. It’s far from an empty shell, Ms. Dwyer, so I’d like to understand how you can compare the British law and the Canadian law, because the Canadian law has much more force. Sorry, I mean the Canadian bill.
Ms. Dwyer: Thank you very much, senator. I think there are several answers to your question. First of all, there’s no evidence that penalties would make a difference.
That’s one thing that has to be pointed out. The only evidence we have is that this type of reporting-based legislation has not been effective, has not really had an impact. The second part of my answer would be to understand what we are penalizing. Bill S-211 has no penalty for the use of forced labour other than import controls, which are already in existing legislation. When it come to fines, they’re for businesses that did or did not report. Penalties, in our view, should be linked to whether or not companies respect human rights and implement due diligence processes.
Senator Miville-Dechêne: Ms. Dwyer, it’s also about penalties if the information provided by companies is false and misleading. I apologize for repeating it. It’s in the legislation. As a supplementary, I’d like to ask Mr. Crewther a question. May I?
[English]
Mr. Crewther, would you say that the Canadian bill is the same or has no teeth as the Australian and British ones have? What would be your assessment of this bill? Admitting that, obviously, it doesn’t cover all human rights and that it doesn’t have a due diligence clause like the one Ms. Dwyer would like.
Mr. Crewther: Thank you, Senator Miville‑Dechêne.
Firstly, modern slavery acts and transparency and supply chain legislation more generally do complement other actions that also need to be taken against modern slavery, whether it’s forced import bans, resourcing for programs, whether that’s in your country or overseas, to tackle modern slavery.
But the transparency of having a public statement — I know in Australia — is making changes within companies. Investors, shareholders, employees, customers and others can see those statements, and they can follow up those companies. I know that even behind the scenes. My wife Grace also works in the modern slavery space, and she’s working with over 40 large companies who are reporting under Australia’s act. She sees a lot of the legal work going on behind the scenes to both remediate and eliminate modern slavery from operations and supply chains with those entities. It often goes beyond what is seen in statements.
I know with Australia’s act, it was stronger than the U.K.’s act. Originally the U.K. act didn’t have any prescribed reporting criteria. It has been improved now, but Australia’s act did. We don’t have penalties in Australia’s act, but we do have section 16A, which provides compliance measures. Section 16A, I believe, enables the minister to basically name and shame entities who either don’t report or don’t report properly. The government of Australia made a deliberate decision not to utilize section 16A enforcement measures in the first year of reporting. However, now that the second year of reporting just finished in December, I understand it is the government’s intention to utilize those compliance measures. I think that’s crucial this year. If those compliance measures are not utilized this year, the third-year statements will definitely drop off. So there is that concern.
I think Canada’s act is stronger in a number of ways than Australia’s act. I think you have extremely strong penalties. I would make a number of comments around those if you would like me to go through the recommended changes later on that I’d recommend to the bill. I would perhaps strengthen your bill further as well to have more around that naming and shaming component. Because you can have a $200,000 fine or a $10,000 fine, but if you’re an extremely large company earning over $1 billion a year, it’s not going to matter what the level of the penalty is. The fact is whether that penalty is private or public and known. It’s the naming and shaming component that’s more important for those companies.
It is stronger, but I think there are areas where the bill needs to be improved. I’m happy to go through those points if you’d like me to.
Senator Omidvar: Thank you, Ms. Dwyer and Mr. Crewther, for being with us today. We really appreciate it.
Mr. Crewther, thank you as well for your written submission to the committee and your exhaustive observations and recommendations to us in terms of this bill.
We heard last week or the week before from witnesses. What I’m struck by is the absence of any discussion around using the levers of multilateral organizations that we all belong to. I’m not just talking about the UN or the UNHCR.
Have you, Mr. Crewther, in your work on the Global Fund to End Modern Slavery, had any interactions with, let’s say, the World Trade Organization or the General Agreement on Tariffs and Trade, GATT, or even the World Bank to consider what levers they could release because of the spread and scope of their reach? This goes, of course, beyond the subject matter of this bill. But I’m just curious as to what the next steps would be and if you’ve had any thoughts on this.
Mr. Crewther: First, thank you for your question, Senator Omidvar. It’s very important for international organizations, as you mentioned, but also nations globally, to take much further action than they are currently taking against modern slavery. I haven’t directly spoken to those organizations that you’ve mentioned, but I’ve only been with the Global Fund since mid-December. I know that the CEO and others within the organization are working with and have spoken to such organizations in the past.
As mentioned, the Global Fund was originally established in 2017 with the aim to basically convene governments around the world, in particular, to provide the resources to implement evidence-based programs on the ground to end modern slavery. We have a situation where perpetrators make over US$150 billion annually in profits from modern slavery but less than one third of 1% of government investment internationally is made into actually tackling modern slavery. So there’s a lot more investment that is needed.
I know there are a number of programs already on the ground in Bangladesh or India or Philippines or Uganda or Kenya or elsewhere making a huge difference whether it is through the Global Fund or other organizations tackling modern slavery, but more resources are definitely required.
In the current situation, the U.S. and the U.K., Norway and Liechtenstein are contributing to the Global Fund, but it’s not a true global fund unless we get more nations contributing. In my view, Canada is a key country that could join the Global Fund and contribute going forward.
It’s one thing having funding, but that funding enables those programs on the ground to actually end modern slavery. If we’re not taking the issue seriously, much as with environmental and other issues, we’re not going to achieve results. The perpetrators will win, and they will continue to operate with impunity.
Senator Omidvar: Thank you so much, Mr. Crewther.
Mr. Crewther: Thank you.
Senator Boyer: I want to thank both of you for your presentations today. They have been very interesting.
Mr. Crewther, I want to talk about Indigenous women and girls. Senator Bernard had mentioned annual reports that detail the efforts that were taken by government and private entities to prevent mechanisms of forced labour and child labour.
I know that on your website there are many women and girls, particularly Indigenous women and girls, that find themselves in situations of sexual exploitation and sex trafficking. Because of the illicit nature of these industries, can you speak to the extent that the reporting scheme might help these particular Indigenous women and girls? How would shaming and naming be effective in this case, especially in light of the historically neglected issue of murdered and missing Indigenous women? Thank you.
Mr. Crewther: Thank you, Senator Boyer. That’s an excellent question, and I know it’s an issue that impacts nations globally in terms of Indigenous populations. I know there are issues in Canada, in Australia and globally.
Companies or entities often will just look at the tier one and the person that they are directly dealing with, but if you go further into supply chains, you get subcontractors and child labour. You get things like orphanage trafficking. Orphanage trafficking is something I’ve dealt with in the past. I think it’s estimated that over 80% of orphans around the world are not actually orphans. They have a parent or parents or kin or family, and human traffickers take advantage of the orphanage trafficking business model, if I can call it that, to attract donations, often from people who are trying to do the right thing or people who are willing to volunteer, and these children can be taken or coerced to leave their parents. They can go into a situation of child labour or sexual abuse. They can be trafficked to different locations. That is certainly an issue that I would like to see tackled more, and I’m sure the Global Fund, Canada and many other international organizations and countries would like to see that issue tackled further.
We need to implement, though, programs on the ground to help women and girls and to help Indigenous populations.
Hopefully you’ve all received my written statement, because I gave an example of a younger person in the Philippines with five children who was assisted by the Global Fund, and often these things are intergenerational. If you have a parent going through a situation of modern slavery or exploitation, their children often end up in the same situation as well, so you need to break that intergenerational disadvantage and actively intervene in a holistic manner.
I know that Australia’s act has recently been criticized, because I think those name and shame mechanisms have not been used, and I think from this year onwards, by using those mechanisms, it will help companies and entities to report properly, to report better and to take the issue seriously.
But with respect to actually looking into the supply chains, let’s say you’re importing forestry goods into Australia or Canada or elsewhere, 40% of deforestation internationally is linked with forced labour, which often includes child labour.
If you look at the renewable energy or clean energy supply chains issues, you have situations such as in the Democratic Republic of the Congo where over 35,000 children are in child labour mining cobalt, which is used in lithium ion batteries, which is used in the renewable energy sector, in electric cars, in your phones, in your computers and so on.
We need to look at issues like modern slavery and the environment not just from a domestic standpoint but also from an international standpoint.
I’m not sure if that answers your question properly, but by actually tackling this issue on a global basis, we can help Indigenous populations and we can help women and girls.
Another example on the environmental topic is balsa wood in Ecuador, which is being illegally logged, and it’s impacting Indigenous populations. That balsa wood is being used for wind turbines, so you’re helping one country in terms of producing renewable energy while deforesting another nation and impacting Indigenous populations linked with forced labour.
We need to look at those issues on a holistic global basis.
Senator Boyer: Thank you. I also want to mention about the trafficking corridors and how important it is to intervene right at that point. That’s where the supply chains are going, and that’s where the women and the girls are coming in and going out.
Mr. Crewther: Yes.
Senator Boyer: And that’s a critical point there as well, so thank you very much. I appreciate that.
Mr. Crewther: Yes, definitely.
Senator Hartling: It has been a very interesting presentation. First of all, Chris, good morning in Australia, I believe, and are you in Sydney?
Mr. Crewther: No, I’m in Melbourne.
Senator Hartling: Okay, so it’s still morning.
Mr. Crewther: First of March here. We’re now in autumn.
Senator Hartling: We have a son who lives in Australia, so I’m always cognizant of the time. At least we didn’t get you up in the middle of the night. Thank you for your presentation.
Emily, I was struck by what you were saying about the need to do something more on the human rights issues there. I know the bill covers fining and naming and shaming, but I see that your organization has been around for quite a long time. Do you see any movement in this area? Tell me a little bit more about the work and what you hope will happen.
If it doesn’t get in this bill, what else could we do? Can you talk more about that? I realize from working with women and girls for many years how these issues of abuse are so serious, and we need to find ways to work on these. I’ll give you the floor. Thank you.
Ms. Dwyer: Thank you so much for your question, senator. Part of the reason that I speak so passionately about this is, first of all, our network has been working on this issue in Canada since 2005. In 2005, there was an international human rights parliamentary subcommittee that made sweeping recommendations on Canada. It concluded that people are being harmed by Canadian companies and that it was urgent for Canada to act.
We’re now in 2021, and we still have not seen a proper movement.
It’s time for Canada to act, but it’s time for Canada to act in the most effective ways, because, we know in this movement, in the work of trying to advance corporate accountability legislation in Canada, it takes a long time for legislation to pass. And if a law passes now that is not effective, that’s not going to make a change, that will delay our efforts for years to come.
Part of the other reason that we talk so passionately about this is we work with people who are risking their lives every day. I have colleagues who have met with their union partners in Colombia who are facing death threats, others who work in Bangladesh and other garment-producing areas who have talked directly with people who are being harmed every day.
We produced model legislation that we published in May that would be much more ambitious and would follow along the best practices coming out of Europe. That legislation was endorsed by 150 organizations and unions from 32 countries of people who are directly impacted by Canadian companies. What they have told us, through our members and through these relationships, is that they are looking for legislation that will start to require Canadian companies to prevent harm from happening in the first place and allow them to access remedies, to access remedies in Canadian courts.
Part of the concern is that legislation that only asks for you to report but doesn’t ask for you to change behaviour will divert the attention of Canada, the Canadian government, the Canadian Senate, the Canadian House of Commons, in saying “we’ve done something, we can wait a while,” when the evidence is that it actually hasn’t been effective so far and isn’t responding to what people who are impacted are asking for.
We’d really encourage the Senate to look at the models in Europe that are moving beyond reporting — so the French law, the European Union just came out with a directive, the Netherlands, Norway and Germany have all established laws that require companies to undertake due diligence throughout their supply chains. I think we can all agree that it’s reasonable to ask companies to look into their supply chains and try to make sure they’re not profiting off of abuse of people and the planet. I think we can go further than an annual report that we hope will work.
I hope I’m not taking too much time, but I just wanted to make one quick point on the naming and shaming. Historically, our focus has been on the extractive sector because Canada is such a mining powerhouse, and naming and shaming really doesn’t work with that sector. It might work for concerted campaigns for some brands, but when it comes to extractives, naming and shaming isn’t really a solid and effective model. Transparency isn’t what’s needed. It’s not that we don’t know what harms are linked to Canadian companies, it’s not that we don’t know where mining is happening or its subsidiaries. It’s that there are not rules in place that are being enforced.
Thank you very much for the question and thank you for allowing me time to answer it so fully.
Senator Boyer: Thank you very much, Emily.
[Translation]
Senator Gerba: Bill S-211 focuses mainly on Canadian companies. The majority of businesses that could be involved in modern slavery operate internationally, sometimes in an unofficial way.
Ms. Dwyer, how can we ensure transparency in an unofficial context? How can we ensure accountability and legal employment for workers consistent with human dignity?
Ms. Dwyer: Thank you very much for your question, senator. In our view, there are several key elements.
There are recognized procedures regarding due diligence set out in UN and OECD guidelines. Part of due diligence is to identify the risks to mitigate them and report on them.
In our view, there are a few aspects that are truly important, such as including the obligation to consult with rights holders and having internal warning mechanisms so that companies can be notified when there are risks.
In our model bill, we say that civil society organizations should be able to publish comments on company reports to ensure that they are truthful. In addition, there should be access to the Canadian courts not only to pursue remedies, but also to ensure that companies comply with due diligence.
So we need to give Canadian courts a right of access, because it is part of that accountability.
Senator Gerba: So, in fact, part of the guarantee of the reliability of these reports lies with the companies themselves and the information they give us; we tell ourselves that this is reasonable.
For example, in African countries, young people work because they have no other choice; they have to go to work to help and feed their families. These young people work in mines and factories. How can we be certain that these children are or are not underage? The majority of the children involved are often undocumented, or in some cases, there are children whose birth certificates are forged. So, it is difficult to guarantee the reliability of the reports. I wonder if there is a mechanism that could be put in place to ensure that what companies are reporting is reliable.
Ms. Dwyer: I agree completely, senator, that it is very important to make sure that what appears in these reports is true.
In our view, it is important to have a Canadian commissioner who can review the reports. It’s really important to have a civil society official, not only in Canada but also in other countries. It is also necessary to have access to Canadian courts for consultation.
The commissioner could have compelling investigative authority to ask companies to publish reports and turn over information to examine a specific situation.
Senator Gerba: Thank you.
Senator Miville-Dechêne: Ms. Dwyer, I share your ideals; the abolition of forced labour and child labour is a very laudable goal. However, I am pragmatic, and the objective of this bill is to achieve a consensus.
I would like to ask you a question, because there is a contradiction in what you are saying. You say that the French model is a very good due-diligence model. However, you know as well as I do that in France, only 800 companies with more than 5,000 employees are subject to the bill. I agree that the bill that I am proposing is less strict, but it applies to many more businesses. In fact, it applies to all businesses with more than 250 employees, but particularly those with sales revenues exceeding $40 million. I would like to hear your thoughts on these thresholds.
Furthermore, you mentioned that you wanted the Canadian legislation to require all companies to submit reporting, regardless of their revenues. However, we know quite well that it is no simple thing to conduct investigations and obtain these reports within the supply chain. In addition, requiring a business with five employees to do so is quite difficult. On the other hand, you say that you like the French legislation, which, on the contrary, applies only to very large businesses. So which is it?
Ms. Dwyer: Thank you very much for your question, senator.
We are seeking to create a legislative framework that will address human rights violations. It’s not about choosing legislation from somewhere else in the world and making a carbon copy of it here in Canada. I think that the Canadian economy needs to be closely examined. In Canada, a large number of small- and medium‑sized enterprises work in high-risk situations.
The bill needs to apply to more than just large businesses. We agree on that point. I also believe, senator, that we share the same ideals. For our network, it is very important that the objective of the Canadian legislation be the prevention of human rights violations. However, we have seen that legislation based solely on reports is not effective.
For example, in our model bill, which we are recommending to the Government of Canada, we note that small businesses could be exempt from the obligation to submit reports, because it is more difficult for a small business to publish a report annually. However, because the act sets out an obligation to prevent human rights violations and show proof of due diligence, it would apply to businesses of all sizes. This means that even a small business directly tied to human rights violations might have to be held accountable, even if it isn’t subject to reporting. The emphasis should be placed on the mechanisms that need to be put in place to ensure that harms are prevented and eliminated in Canadian supply chains, not just on the reporting.
Senator Miville-Dechêne: Allow me to interrupt you for a moment. You are repeating that transparency legislation is ineffective. However, contrary to what already exists, my bill sets out very strict penalties for when a company provides misleading information.
I want to come back to the information being requested in this report. You are saying once again that there is no obligation for information. Certainly, we judge on the basis of the report, but we are asking each company —
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The Chair: Senator, I’m sorry to interrupt you. Senator Omidvar has a question.
Senator Miville-Dechêne: I’m sorry. I will stop. I have so many questions. I’m sorry.
Senator Omidvar: I’ll keep my question brief. It’s only fair that you get a turn for your questions, Madam Chair. My question is for Mr. Crewther.
Mr. Crewther, in your brief to us, you make an observation that this bill limits the entities that will be covered, and you make a comment about large churches, charities and funds being excluded.
I’m not naive. We’re not naive. We know that even in a basket of roses, there are some bad apples, but could you not lend some colour to this observation? Could you give us a brief explanation about where your thinking comes from?
Mr. Crewther: Yes. In my written comments, which hopefully you’ve all received, I noted that the current definition does limit to some extent the entities that, in my view, should be covered.
I do note there that clause 23 gives you the ability to make regulations to expand that entity range, which is good. In my view, if you are an entity that, say, has above $40 million in revenue — as one of the points in your Bill S-211 mentions — and whether it be you’re a large church, like the Catholic church, or you’re a large international charity, for example, Oxfam and others, you should be included within the reporting requirements, because within your own supply chains and within your own operations, you will be potentially dealing directly with modern slavery issues.
One example is forced marriage in the context of, say, the Catholic church, which is a larger entity. If a person is paying a fee to get married, you’re bringing that directly under the operations and supply chain of that church, and if it’s a forced marriage situation, then that church should be reporting on that situation.
In my view, the definition on entities, which is currently a bit limited, should be expanded. I also mention that the bill should be expanded beyond forced labour and child labour to include, for example, human trafficking, forced labour and other forms of modern slavery, which aligns better with both the Australian act and the U.K. act.
At the same time, as I mentioned during my opening comments, don’t let the perfect get in the way of the good. Yes, aim for the perfect, but in politics, it’s often about the art of compromise. Having been a politician myself in the past, I know that we wouldn’t have gotten a modern slavery act at all had we continued to insist and push on getting everything exactly right.
I do know that the Australian act is changing behaviour. It’s drawing attention to modern slavery every single year at the top of each organization. Within the prescribed criteria in Australia, and within your prescribed criteria as well, it mentions due diligence as part of that but not quite full due diligence, as mentioned by Emily. However, you do have a chance for a legislative review, and hopefully that can be done in three years instead of five years.
Senator Omidvar: Thank you so much.
Mr. Crewther: Thank you.
The Chair: I have a question, Mr. Crewther. In the report examining the merits of adopting the Modern Slavery Act 2018 in Australia, the Australian Foreign Affairs Committee, which was chaired by you, recommended the establishment of an independent anti-slavery commissioner, amongst other things, to monitor and investigate compliance of government agencies with modern slavery legislation and to undertake legislative reviews of the proposed modern slavery act every three years.
The independent anti-slavery commissioner was ultimately not included in the act. Why wasn’t it included? Could you briefly tell us the advantages of having an independent commissioner?
Mr. Crewther: Yes, I led Australia’s modern slavery delegation to the United Kingdom. When meeting with parliamentarians over there, there were actually parliamentarians from across the world meeting on modern slavery in the U.K. at the time. The independent anti-slavery commissioner in the U.K. — it was Kevin Hyland then — was doing a terrific job. It’s one of the things we strongly recommended should be implemented in Australia. Unfortunately, and this goes to the idea “don’t let the perfect get in the way of the good,” it was a sticking point in the party room, and it was a sticking point in terms of getting the bill through or not at the time.
A number of parliamentarians in Australia compared that to some of the powers under a human rights commissioner or other similar commissioners in Australia. There’s been contention around those sorts of issues in the past, whereas I thought it was a different role to those sorts of roles, but we effectively and unfortunately had to drop it from the bill.
Hopefully, with the legislative review, which is happening this year and which would need to be completed by the start of next year, a commissioner will be recommended to be implemented and can improve Australia’s bill, because I think an independent anti-slavery commissioner is there to continually draw attention to modern slavery, to monitor the situation, to keep companies and governments accountable.
It needs to be a legislated, truly independent position that can’t be abolished by the government. Because if the commissioner is appointed and is being critical of the government, they could have their resources withdrawn or the position could be abolished altogether. If it’s a truly independent position, it needs to have legislated resources and a legislated role that gives them the power and authority to say what they think, even if it is against the government of the day. I think that’s quite important. That was a fear in Australia, that the commissioner would be a person who would be quite critical of the government. It was part of the reason, I think, it wasn’t adopted, but I would strongly recommend that you do adopt it.
The Chair: Thank you.
Ms. Dwyer, you have indicated quite strongly that in its present form this bill will not prevent abuse. What is the one thing we could add that would make this bill better? I know there are many things you would like to see, but what is the one thing that we could add?
Ms. Dwyer: Thank you very much for the question, chair. It’s very hard to articulate in one piece. I would say a reformulation from focusing on reporting to focusing on preventing and remedying abuse. Victims of abuse should have some recourse in the legislation to be able to hold companies accountable if they’re harming them. This legislation doesn’t do that.
If you’ll permit me a very short point, only because I don’t want to leave without mentioning a critique of the Australian Modern Slavery Act that I don’t think has been mentioned.
Just this month, civil society and law schools in Australia published a report. I can send a link and some of the findings from that, but very quickly, it concluded that only 27% of companies appear to be taking some form of effective action to address modern slavery risks. I just wanted to make sure that’s included in your record also.
Thank you very much for the time, and if I can be of any assistance or answer further questions, I’m happy to do that afterwards.
The Chair: Thank you for bringing that to our attention. If there’s anything else that you would like the committee to look at, you can always do a written submission. You do have that option.
The hour has gone by. In fact, we’ve gone over by a few minutes. I would like to thank the two witnesses. Chris, it was nice to see you.
Emily, thank you very much for taking the time.
Honourable senators, we are continuing our review of Bill S-211, An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff.
I would like to introduce our next witnesses. From the Shareholder Association for Research & Education, we have Mr. Kevin Thomas, Chief Executive Officer, and from World Vision Canada, we have Michael Messenger, President and Chief Executive Officer and Matthew Musgrave, Policy Advisor.
I invite Mr. Thomas to make his presentation. After that, it will be Mr. Messenger’s turn.
Kevin Thomas, Chief Executive Officer, Shareholder Association for Research & Education: Thank you very much, chair, for inviting me to present today. I sat through the last witnesses, and there were fantastic questions.
As you said, I’m the CEO of the Shareholder Association for Research & Education, known as SHARE. SHARE represents the Canadian network of institutional investor clients, with more than $90 billion in assets and management. We coordinate investor advocacy on environmental, social and governance concerns alongside most of the major financial and pension institutions in our country.
This means that each year, on behalf of our clients, we engage in dialogue with boards and management at over 120 Canadian and international companies on behalf of their shareholders, in which case, we would be asking boards or management to take action on a range of material issues for us, which would include human rights impacts, or climate transition strategies, for that matter, or good governance questions.
In the past couple of years, SHARE has also been hosting a working group of leading Canadian companies that have taken steps to develop human rights due diligence in their supply chains. That group has been trying to promote best practices amongst industries and help inform the dialogue happening here on legislative actions in this arena.
I say that just to say that our recommendations today are grounded in this direct experience as institutional investors and as shareholders that work directly with the companies that would be affected by this law.
As institutional investors, we do have a fiduciary duty to manage risk. Part of that is ensuring that the entities in which we invest have sound policies, consistent oversight, effective management to address their own human rights impacts, but we’re here really because we can’t do this all on our own. I liked the comments earlier that there’s a bit of an ecosystem and other actors that play a role. For investors, it’s this lack of coordinated standards across the market, and, in particular, the disconnect between Canada’s laws and those of other jurisdictions that have already acted on this issue, that adds to the confusion we have to deal with.
There are other jurisdictions. We have looked at the U.K. and Australia, but also including France, the Netherlands, Germany, and soon the whole EU, that are adopting this kind of legislation. It will be important for us to get as consistent and comparable standards as possible for both Canadian and global investors.
We’re joined by a group of global institutional investors with more than $2.3 trillion in assets, and we’re urging the Government of Canada to enact a law that would require companies to identify, address, prevent and mitigate adverse human rights impacts in their global operations.
We need these common rules. That helps us manage our own risk as investors. That said, I don’t think we should be satisfied with just any law, and I think your previous witnesses spoke to that. I agree that the perfect should not be the enemy of the good, but we should try to get as close as we can to making sure that this is going to be of value to Canadian and international institutions that invest in our Canadian companies. I don’t think that Bill S-211, as it currently stands, will do the trick.
There are three main reasons for that. First, the scope of rights. It has been discussed here already. It is overly narrow to focus just on forced and child labour. That’s partly from experience with the companies that themselves don’t just focus on forced and child labour when they institute due diligence systems. Although these are egregious human rights violations, they’re not the only material human rights issues for companies and investors.
Prior to joining SHARE, I was involved in developing the Bangladesh Accord, which was enacted after the horrible Rana Plaza factory collapse in 2013 that killed more than 1,200 workers and injured thousands more. Those risks to workers were real, but they are not the kinds of things which would be covered in something like Bill S-211 but could be.
Second, Bill S-211 doesn’t actually create a human rights due diligence expectation for business. As an investor, I’m a big fan of transparency and reporting. We rely on that good reporting. But while a company would be required to report on its policies here, there is, as I think Ms. Dwyer mentioned, still that possibility that a company could fulfill their reporting obligation by just saying, “We don’t have these processes,” or more worrisome, by providing extremely vague and unsubstantial disclosures.
This is one of the things that is most important to us, because from our experience, there are companies that answer queries on human rights by pointing to vague public statements or boilerplate that don’t really provide enough information for investors to assess the quality of the company’s approach to managing human rights risk. We don’t accept that as investors, and neither should you.
I would also say that due diligence laws should require, first, that companies identify these human risks throughout their global supply chains and then talk about what they report publicly on these risks and the actions taken to remove or mitigate them. We go with the due diligence first and then get to the question of reporting.
Lastly, I do want to speak to the question of accountability and fines associated with it. I think this question of accountability is complex. Companies have a lot of different kinds of relationships with global operations and supply chains. It’s different, say, in the mining sector than the retail or banking sectors, for that matter. Some of these are indirect, especially at the lower tiers of the supply chain or with small companies here that source through a series of brokers. However, I do think that Bill S-211’s accountability regime, which fines companies for reporting failures, should be restructured to better incentivize action.
I think Ms. Dwyer is quite right that companies need to be held legally accountable for adverse human rights impacts in the supply chain. I think that’s critical, but at the same time, legislation has to allow that a company has established a robust human rights due diligence system has that as a defence, which was done in other countries’ legislation, because the objective of the legislation has to be to help companies identify and fix abuses, not to incentivize companies to cut and run if they catch a whiff of a problem because they’re afraid of legal repercussions. We want them to stay and fix the human rights issues which have resulted in their supply chain.
Where I go with this, ultimately, is that I think government-sponsored legislation accompanied by a process that actually involves the investors, the companies and civil society in designing an effective and enforceable regime is actually preferable at this stage. This isn’t to slight the fantastic work being done by Senator Miville‑Dechêne in bringing these concerns forward. In fact, we’ve done this together also with the Global Fund to End Modern Slavery internationally to advocate for these things. I can’t thank her enough for the tireless efforts to defend human rights. This is fantastic that we’re even here discussing this today thanks to her efforts.
In the recent mandate letter issued to the Minister of Labour, Seamus O’Regan, the Prime Minister also asked him to develop legislation on this question. As senators, I’d see a path forward to work with Minister O’Regan and relevant government departments to address the critical issues you set forth already in Bill S-211 and maybe address its gaps through government‑sponsored legislation, which may also get us to a point where we have a different calculation about what’s politically possible and get closer to that perfect if not all the way there.
Thank you. I look forward to responding to your questions.
The Chair: Thank you, Mr. Thomas.
Mr. Messenger, you have the floor and you have five minutes to make your presentation, to be followed by questions from the senators.
Michael Messenger, President and Chief Executive Officer, World Vision Canada: Hello, honourable senators. I’m joined today by my colleague, Matthew Musgrave, our Policy Advisor who can provide technical advice on this topic. Before I begin, I do, like the previous witness, want to acknowledge Senator Miville‑Dechêne’s amazing work championing this important issue.
World Vision is committed to promoting children’s rights and well-being. We partner with communities for long-term development and provide emergency relief, but our testimony is anchored on this child focus. We got involved in advocacy to fight child labour because we had direct experience with this issue in 25 of the nearly 100 countries in which we operate. Again and again we saw how the impacts of the worst forms of child labour, work that we sometimes refer to as the 3-D jobs: those that are dirty, dangerous or degrading, were preventing the girls and boys we were working with from living up to their full potential. Children were unable to go to school; their health and well-being were affected or put at risk; they were exploited. When children can’t learn and grow, it makes the future of their families, communities and entire countries far more uncertain. At its core, child labour robs children of their rights.
When we started to raise awareness of this issue, we knew we needed to tackle its causes and impacts on the ground. To eliminate this issue will require a holistic approach to providing economic opportunities and fighting poverty in all its forms. But we also sought a made-in-Canada approach that would have a positive impact on the issue, and we saw legislation in other places that focused on addressing the risk of modern slavery, human rights or child and forced labour. We knew that Canadian consumers could not be confident that children were not exploited in the production of ordinary goods. That’s why we’ve made supply chain legislation one of our advocacy priorities.
The issue is even more critical today. In 2020 the International Labour Organization reported that the number of girls and boys in child labour increased for the first time in 20 years, especially those in the worst forms of child labour. They warned that an additional 8.9 million children are at risk by the end of 2022.
At World Vision we’ve looked at Canadian import data. We found that over $43 billion in goods at risk of being produced using child or forced labour were imported into Canada in 2020, accounting for nearly 8% of total imports, and this number is growing.
Child labour and forced labour are Canadian problems. Now more than ever, with pressures on supply chains increasing, companies need to be proactive and vigilant. They need strong policies, practices and due diligence in place, and they need to communicate to government and the public to maintain trust. Many companies, as we’ve already heard, have taken it upon themselves to do the right thing, yet most are disclosing little, if any, meaningful information.
At World Vision, beyond the obvious risks to girls and boys, we believe that the risks with child and forced labour pose to global supply chains themselves are so urgent that the bar for corporate social responsibility needs to be raised, much like it has been by many of our major international trading partners. We know, including in the minister’s mandate letter, that this is on the political radar, but we need to move from awareness to action.
So what do we do? We’ve already heard that if we think about what’s been done internationally, there are really two approaches. The specific supply chain transparency legislation, similar to Bill S-211, and then broader mandatory human rights due diligence legislation.
Our position at World Vision is that we have endorsed a consensus framework with other civil society organizations that has identified that broader due diligence legislation would be a global best practice. Keeping up with these international standards will be critical. But our point is that we urgently need a starting point. We don’t believe it’s either/or. Supply chain legislation can begin paving our constructive path towards tackling this issue. Therefore, we do support the approach that we see in Bill S-211.
There are areas where the bill could be strengthened. First, parts of it in clause 11, for example, could be expanded so that companies need to disclose not only the steps they’re taking to manage risk and remediate child labour but also to specify reasonable suspicions or credible reports of forced or child labour or other abuses. Second, we’d like to see companies report not only on their own operations abroad but on the codes of conduct they ask their suppliers and contractors to uphold. Third, the proposed penalties may not be sufficient to deter non-compliance, especially by large companies.
Honourable senators, there’s no single bill that can eliminate human rights violations from our supply chains. But this bill provides a critical opportunity to explore these complicated human rights issues, and your deliberations will inform the federal government as it continues to navigate its policy options and fulfill its commitments.
This is a final word. This is from my seat in this organization. I encourage you to remember that behind these policy discussions and statistics are real children, real communities who face incredibly challenging contexts, children like 12-year-old Sami, who I met in 2017 on a trip to Bangladesh, who worked for hours each day in a machine shop operating a razor-sharp cutting tool bigger than him; or Koli, a 13-year-old girl in Dhaka who spends most days on the floor in a small room stitching tiny sequins on the pockets of jeans and who told me, though, she wanted to be a teacher. Sami and Koli had received support from our programs, but what we can do may now be limited. But we can act to prevent other children from facing the abuse, danger and limitations caused by the worst forms of child labour. We should use every tool in our tool box to promote human rights, and supply chain legislation like this bill is a critical one.
Thank you for the opportunity to provide some input, and we look forward to your questions.
The Chair: Thank you to both witnesses for your testimony. I will proceed with questions through the deputy chair. Senator Bernard, you have the floor.
Senator Bernard: Thank you to the witnesses for your testimony this evening. It’s been quite informative.
I would like to start with a question that gets your perspectives on the issue of poverty, which is often the root cause of child labour. Is this legislation a tool to help us get to those root causes such as poverty and other types of things that are going on in families that may lead to child labour? If not, are there things that could be added to strengthen the bill?
The Chair: Senator Bernard, is that question directed at both witnesses or one witness?
Senator Bernard: Either.
The Chair: We’ll hear from both witnesses. I’ll give you two minutes to answer that question.
Mr. Thomas: If we are looking at a bill that expands to look at other rights at work — for example, the ILO’s core conventions — that does help to address this question of poverty. I’ve often said in going through some of these factories, and I’ve visited many of them myself, we’ve seen the parents of these kids working in conditions or at low wages, which affects the children of those parents. It’s not a surprise that some of these same problems with child labour occur in the same supply chains in which the parents are also exploited.
I think there’s an opportunity, if we expand the definition of rights included under the bill to be the UN’s convention on human rights and the ILO’s core conventions, to see an expanded effect on child labour, not just as a question of limiting it when you find it in a factory, say, but also trying to address some of those root causes.
Mr. Messenger: Thank you, senator, for the question. Our approach has been that in fact, yes, poverty is a critical cause and also an impact of child labour. This is why we need a holistic response overall, and this bill is just one tool in a broader tool kit. We do need to address why, in our situation, children are going to work. Is it to support their family or find economic livelihood? What are the injustices, causes or challenges that the families or communities are facing that is causing it in the first place?
Then we think about the impacts on the ground, but then we think about this kind of legislation. We can then think about the incentives that are placed through the supply chain, reaching all the way through to situations like I described in a back room in Dhaka, which is a subset of a larger manufacturing facility. If Canadians are asking questions, companies are taking due diligence steps and there’s transparency and understanding about what the impacts will be, then it’s something we’re conscious of and we can address. This is not a comprehensive response. We need a holistic response. We need organizations like ours or the Canadian government or other multilateral organizations to set standards and provide support. However, this is a critical tool in responding.
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Senator Miville-Dechêne: I would like to thank both witnesses who have joined us today to present very different visions. My question is for Mr. Michael Messenger.
You said that, for the moment, moving forward with Bill S-211 is a good idea and that a bill on transparency is a good idea. In your opinion, what are the positive aspects of such a bill? Is it the issue of visibility? If businesses do nothing and publish absolutely ridiculous reports, that would be called out. Is that important, in your view? Would that allow businesses to start this conversation? Is it also a matter of competition between businesses, which would perhaps want to publish good reports so that they are looked upon favourably in newspaper articles? How do you see this Canadian transparency legislation improving the lives of children over the longer term?
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Mr. Messenger: Thank you, senator. When we think about the differences between supply chain transparency legislation and some of the mandatory human rights due diligence legislation, the differences are, I suppose, in three areas.
One is in terms of scope — what’s included. As the other witness has made clear, is it just child and forced labour or is it broader human rights? The ideal legislation would certainly have a broader scope that would include the full range of potential adverse human rights impacts. As was pointed out, child or forced labour is not always the most material or salient human rights issue for all supply chains. But it’s a start. So scope is the first piece we could consider.
The second is around obligation. That is to say that it’s not just the production of a report but whether there is a positive obligation for due diligence that could be strengthened in this. We don’t want a situation where a company just gives a bland report that says nothing and ticks the box. That doesn’t help. It needs to have enough teeth to actually enable us to get a sense that companies are taking this seriously and also taking action, what they’re doing to address the problematic issues and that there’s a clear expectation that they act.
The third area is around liability. What happens if they don’t comply? There are some modest penalties in the bill for non‑compliance. We know that there are provisions for civil liabilities that would be a more effective way to ensure companies take their responsibility to ensure human rights seriously. However, that’s a broader conversation. The question is to what extent do we extend that?
Our view is that this is a good starting point to address and discuss the questions of scope, obligation and liability in the current bill and in the potential models out there that could strengthen it. I don’t know if my colleague Mr. Musgrave could correct me.
Senator Miville-Dechêne: If I can pursue with Mr. Thomas. I’d like to know why you would not see this bill as a first step. How does it prevent the government from going further if it wants? This is an incremental legislation. I’ve always said it. There’s nothing in Canada right now — nothing that tells anything to companies about that. So the idea post-pandemic, after companies have been shaken, is to do something incremental — a first step. How would that be detrimental?
Mr. Thomas: Without speaking to the way that the Senate bill might interact with the government bill, I do see an opportunity in the mandate letter that says we, as a government, want to see action on this, and perhaps there’s some way of reconciling those two. You can speak to the political process much better than I can. I’ve expressed the kinds of concerns I have around the bill. They could be addressed in Senate legislation, but I don’t know whether, as a calculation of what might get passed, you might see some opportunity in working with the government and the house on this. So I’ll leave that question more to yourselves.
I do think you’re right to point out that this is going to be an iterative process. Even if you do the best legislation from the government, it’s still going to be something we learn from as we go. One of the things that I take from the Australian legislation, which learned from the U.K. legislation, was they advanced upon what was done there and then improved upon it. We’ve got the opportunity — and I think you’ve done that in your bill — to learn from them.
Senator Miville-Dechêne: Exactly.
The Chair: Thank you, Mr. Thomas.
I would like to give Mr. Musgrave a chance to respond to this, also.
Matthew Musgrave, Policy Advisor, World Vision Canada: Thank you, senator and committee members. It’s wonderful to be here.
In terms of answering the question, we’re talking a lot about themes of incremental progress and what a starting point is. I think that’s how we can frame this conversation. It’s not necessarily where we need to move to; we’re seeing the precedent in France and now with the European Union developments last week, and we are moving toward mandatory human rights due-diligence legislation.
So the question really is this: How do we start? We can only start when we first really understand our supply chains, and a lot of companies, unfortunately, don’t have that understanding right away. We need to have a path where all companies can begin the process of really understanding what their global supply chains look like. A lot of companies don’t have that understanding, and what risks are there and present.
Once we have that understanding, we can continue to gradually increase the floor of corporate social responsibility in this country to increase our expectations over time.
But we have to be cautious. If we move the levers too quickly, we might leave certain companies behind and, actually, in the long run, miss an opportunity to really bring everybody along on this really important journey that we need to take in this country.
I hope that comment makes sense and adds some value to your deliberations.
Senator Miville-Dechêne: Thank you very much.
Senator Omidvar: Before I ask my question, I should say how nice it is to see Matthew Musgrave as a witness, because he used to work for my office a couple of years ago. He sat at my side as he is now sitting next to Mr. Messenger. It is really nice to see the Senate provide opportunities for career growth, so congratulations, Matthew.
My question is to either Matthew or Mr. Messenger. It’s a difficult question to ask, but I’m going to try.
I’m imagining that when this law is passed, certain opportunities or certain contexts for work for children will be obviously restricted. Then I think about unintended consequences. I think about what will happen to those children. You’re with World Vision, so you can inform us about this. I think about this: If they have no other recourse, they will be forced into pimping, prostitution, possibly drug trafficking, criminal activities and even organ selling.
So yes, this bill is not the end — it is a beginning — but can you tell us whether you have actually seen this at play in the countries where you are working?
Mr. Messenger: Thank you, senator. Perhaps I’ll start and then Mr. Musgrave can join. We’re also delighted to have Matthew on our team, so thank you for sharing him with us.
It is a difficult question. It’s good to understand, though. It’s important to start with what we mean in this particular case by “child labour.” The bill’s definition is grounded in our domestic definition of “child labour,” and sometimes, you could see that the phrase “mentally, physically, socially or morally dangerous” is ambiguous, but it really mirrors International Labour Organization language, which is necessary given Canada’s connection to conventions.
The reason I’m giving that is that we’re trying to say what kind of child labour we’re talking about. This is not somebody helping out on a family farm. It’s not somebody helping at a small business. It really connects child labour to what is referred to as the worst forms of child labour. I mentioned that earlier. At World Vision, for the purposes of our public engagement, we talk about the three Ds: work that is dirty, dangerous or degrading. It could include sexual exploitation. It could include children who are at deep risk of their own well-being and a lack of education.
So we’re not talking about children completing light work. I think it’s important to balance that.
Now having said that, there is, of course, the risk that if an economic opportunity were immediately taken away, then there would potentially be an impact on the family. We see that even right now. I’m thinking about situations in Afghanistan right now where we see the rate of girls being sold into marriage increasing with the humanitarian crisis in place, despite laws against it.
But that really requires us, then, to take a holistic approach, as I said before, to look at what we are doing, not only to focus on the incentives that are built into a bill like this one, but also on the ground to assist.
In our work with World Vision — and I’ll use Bangladesh as a good example, where I was — World Vision is working alongside children who are supporting their families, even in some of these dangerous environments, providing them with extra schooling and programs. We actually were able to negotiate with some of their employers to have kids participate, because we recognize that just taking away this livelihood was actually going to hinder and hurt the families rather than help them.
In the long term, we hope that this will become so ingrained that this will, first, be unnecessary from an economic perspective, and second, it will continue to be morally repugnant for children to be exploited in this way. In the meantime, however, we do need to address the current needs. We certainly don’t want to go in and do worse harm, but our view is that, with a holistic and gradual approach — these incentives take time to interact — and in addressing issues like poverty, human rights and injustice in Canada and around the world, that we will be able to mitigate those concerns you’ve identified.
Senator Omidvar: Thank you. That’s a most encouraging answer.
Chair, do I have time for a quick question to Mr. Thomas?
The Chair: Could we do second round? I have a list.
If I can ask the witnesses to be a little bit brief in their answers so that everyone can get their questions in.
Senator Boyer: Thank you to the three witnesses for sharing your information with us today.
I am picking up on Senator Omidvar’s question and Mr. Messenger mentioning the holistic approach. I do like this approach, and I like it because it’s a several-prong approach. But I’m curious about the means of prevention and protection that you’ve noticed or advocated for in policy changes of other countries and the ways those changes have curbed the reliance on child labour in certain industries.
Can you elaborate on the impacts and with specific examples of how child labourers break free from exploitation after the funding ceases? And how can we ensure, via policy or other ways, that those vulnerable children are not simply pushed into another situation of coerced labour or other bad things? Thanks.
Mr. Messenger: I will pass this over to Mr. Musgrave. Certainly, we can talk about other areas of injustices or human rights work where convention will set the stage, and then we act accordingly, but Matt, why don’t you respond.
Mr. Musgrave: Certainly. Thank you, senator, for the question.
Reflecting on your question, the one concept that really requires some conversation and reflection from all senators on this committee is really the concept of remediation. When companies identify there is a risk within its supply chains through this legislation, what do they do with that information? Oftentimes, to the conversation, it’s not appropriate to simply turn off the valve, remove that supplier or that subcontractor and move on, but there’s actually a responsibility to act. What does that responsibility truly look like from a company’s perspective?
So often, you see companies that find a risk and will actually take children out of that scenario, invest in their education and put them closer toward a path where they have a legitimate form of work that is not dirty, dangerous or degrading. But that can only happen when companies have the awareness first to act.
Our hope is that this bill starts a meaningful conversation — not a conversation that proverbially doesn’t go anywhere — but a real conversation with government, companies and the stakeholders, like ourselves, about what that responsibility truly looks like and what the opportunities are to invest in the real, proper remediation that prevents children from re-entering cycles of extreme poverty and child labour.
We actually have a very important opportunity to be able to reverse a lot of these cycles of poverty through this legislation. It’s all about how we grasp onto these concepts like remediation and move forward.
I hope that that answers your question.
Senator Boyer: Thank you. It’s definitely a holistic approach, so thank you very much.
Senator Hartling: I want to thank the witnesses for being here, all three of you. It’s a lot of information. I want to thank the sponsor, because what we’re doing here is like peeling an onion. As soon as one layer is uncovered, we’re finding more and more information, and that’s very interesting and exciting.
I want to direct my question to Mr. Thomas. I like what you said about Canada and how there’s a disconnect with other jurisdictions. What I’m getting from that is that we need a global approach, but you also said the law needs to add value. Here’s where I’m going to ask for your advice. If you could recommend some things for us to do to make this law better or to look at other jurisdictions, what would work best so that we can do the best we can? I know it’s a beginning, but I think we’ve got a shot at this, so what could we do to make sure this law really starts affecting people in many different ways?
Mr. Thomas: Thank you, Senator Hartling. Trying to narrow down exactly where you add value to a law like this over and above other jurisdictions is part of the process. First of all, we should try to align as much as possible with other jurisdictions, and this comes from working with businesses that are being required to report in different ways in different places. We don’t want to see too much of that, unless it’s something that is clearly being added to make the law more effective. You don’t want to add a reporting requirement that just adds paperwork but doesn’t actually add effects on the ground. That’s my first caution around that.
The direction of travel that I’ve seen in other jurisdictions, particularly ones which are important trading partners like the EU, is this question of overall human rights due diligence, not just forced and child labour, as well as a positive requirement for due diligence. As Mr. Musgrave just said, I think there’s a need for education on how to do this well, but I also think there’s already been a vast amount of awareness in these global supply chains of what needs to be done. We’re not starting from ground zero.
Speaking on behalf of global investors and the work in this area, we’ve been engaging with companies for years around these same questions. The conversations are there. What’s missing for us has been the standardization we can point to say that this is the expectation. It’s not something we’re just coming up with on our own or that the next investor that comes in is going to have a different point of view. This is where we’re going and this is what is expected, and if we don’t see reporting and due diligence to the depth required here, we know that’s going to be a material risk for you as a company and therefore for us as investors.
Senator Hartling: I really appreciate that, and I really appreciate your expertise and experience. Thank you very much.
Mr. Thomas: Thank you.
[Translation]
Senator Gerba: Thank you to all of the witnesses for joining us today. My question will be very brief, because Senator Bernard and others have asked the same one. It deals with poverty.
I’ll turn to Mr. Messenger, whose organization does a lot of work in Africa, so he knows the context of poverty, particularly in African countries and all those where this legislation will apply.
How do we ensure that children who are very impoverished and don’t even have the means to go to school can stay home without going to school, without working, when they are doing so mainly to help their families? They don’t have a choice. How do we help lift these families out of poverty, without exposing their children or the families themselves to exploitation? What solutions could help improve Bill S-211 in that respect?
[English]
Mr. Messenger: Thank you, senator. My brief answer would be that poverty is often an injustice that leads to a lack of choice by families who are affected. That includes children and perhaps an opportunity, or a lack of opportunity, for them to live up to their full potential. Any broad response to issues of poverty and injustice need to address all of those opportunities, and as I said before, it needs to be a holistic response.
Of course, this bill is not going to solve the issues that you’ve raised and that we see every day, but it is one tool that we have to address one particular concern around ensuring that children don’t have their future curtailed by being subject to the worst forms of child labour. Will it take time? Is it a silver bullet? No, it’s not, but it’s one tool in the tool box to address this particular heinous human rights issue.
Senator Gerba: But can we add something to the law so that it may help?
Mr. Messenger: The one thing in the law that could help is to move just beyond reporting to actually requiring action. When companies need to say what actions they are taking when they discover what they’ve found, when they are acting on reasonable suspicions or reports of child or forced labour in the supply chains, for them to actually take action and have responsibility to report that — not just that they are considering — is one way, as Mr. Musgrave was talking about, in terms of responding.
Senator Gerba: Okay, thank you.
Senator Omidvar: Mr. Thomas, you mentioned the Rana Plaza disaster. I actually went to the Rana Plaza site a couple of months after the disaster. I came back and in this committee we did a study on the rights of the garment workers. We had recommendations. We called in some of the companies whose labels I saw floating in the water because the monsoon rains had come. I met some of the parents who were there whose children’s bodies weren’t found, and, from my understanding, would never be found because the monsoons in Bangladesh can be brutal.
The issue that came up was that Canadian companies can contract with certain companies who will have all the regulations in place, but then those companies will contract with subcontractors. I don’t know what has changed since that report. I know that initially there was a hue and cry that we need to protect the rights of these workers — mostly they were young women. They pay them less because they feel they are less skilled. Have you seen any change in the supply chains since that disaster?
Mr. Thomas: Thank you, and thank you for that direct observation from Bangladesh. Yes, the one thing which changed, and I think it reflects on the value of this human rights due diligence approach, is that following that disaster there was an agreement signed between hundreds of global garment companies with the unions in Bangladesh and globally to create an inspection program for buildings, a fire and building safety inspection program, which includes workers and training and access to remedy. And the most important part of that was it had a legal remedy within the host countries through binding arbitration procedures if the companies do not live up to their obligations in Bangladesh. That’s now been expanded. Just last summer, we negotiated with companies to expand it internationally. It’s going to other jurisdictions where it can be played out again.
The important part of that in terms of this legislation is that when I worked with the workers in Bangladesh to develop that inspection provision and accountability mechanism, we had that draft in place one year before Rana Plaza collapsed. We negotiated with some global brands which were not willing to institute that practice because they felt they didn’t need to. So the reason I keep coming back to this idea of being compelled to conduct this due diligence and having some legal remedy from it is because this solution was in place before 1200 workers died. It was available to those companies, and they didn’t sign it. They signed it afterwards, but they could have signed it to prevent that in the first place. I think this legislation is exactly the thing we need to do — to get this kind of legislation in place because the voluntary approach is no longer working, and there’s evidence to show that this approach can.
Senator Omidvar: Mr. Thomas, you’ve spoken about the corporations and the investors, but you haven’t spoken about shareholders. Do you think that this legislation, when it is passed — and I’m certainly rooting that it will be passed — will give shareholders a platform for activism on the issue of modern slavery in the supply chain? Perhaps you could riff off whatever experiences you have in shareholder activism on environmental and sustainable goals.
Mr. Thomas: Thank you very much, senator, and it’s the area we work in, definitely. In fact, one of the first shareholder proposals in Canada was in 2000 from our organization at Hudson’s Bay Company on due diligence in Lesotho, particularly, around some of their factories there.
There is a great deal of activism around this. It’s hampered by two things. One is the question being addressed by the current draft of legislation: disclosure. We need comparable and reliable information which can be checked against fraud, as Senator Miville‑Dechêne spoke about, and gives us something we can work with.
I’m worried about leaving this to shareholders on their own in that it’s up to us to police the companies we invest in entirely. I think we can do more in terms of requiring due diligence. It’s somewhat as in the way that consumers should be able to expect that the clothes that they buy are made in good conditions rather than having to look for a label that says it. I think it’s a reasonable expectation of a company that they are meeting human rights obligations when they source globally.
It should be the same for investors as well. But it is an ecosystem, and we’ll play our part as long as we have that standard-setting and rule-making done by governments.
Senator Omidvar: Thank you.
Senator Bernard: Mr. Thomas, this bill has very specific inclusion criteria targeting large- and medium-sized businesses. Can you tell us what your thoughts are with regard to the benefits and/or drawbacks of including smaller businesses?
Mr. Thomas: Thank you. Great question, because I did wonder about the threshold. In the consultations we’ve had with companies, mostly that threshold in the bill seems pretty good. They might quibble about it here and there, but they don’t feel that it’s onerous in terms of reaching too deep down into companies that are too small to institute these measures. It’s important to understand how companies interact with supply chains as well because the smaller ones tend to use brokers. They buy from distributors and have little ability to impact what happens down the supply chain.
Getting at these higher tier ones, 40 million as a threshold may be low for some; it may be high for others. I think we have to pay attention to that, maybe through surveys with the companies in the Canadian market, but I’m fairly confident that we’re getting close to it here. I would worry about going any lower than that.
One last thing: The EU directive speaks to threshold by number of employees and by revenue, but also to target a few high-risk sectors where it identified specific risks to a particular sector that might want to be identified and where they might go a bit lower down the threshold for those sectors. That’s a reasonable approach as well. I don’t have an answer on which sectors you should work with, just to say that there are different approaches to take.
Senator Bernard: Thank you.
The Chair: Mr. Thomas, Mr. Messenger and Mr. Musgrave, thank you for your assistance this evening and for appearing before us. Your assistance with this study is much appreciated.
Senators, our next meeting will be on Monday, March 21, 2022.
Are there any objections that we now proceed in camera to discuss future business? Seeing none, we will now go in camera.
(The committee continued in camera.)