Fighting Against Forced Labour and Child Labour in Supply Chains Bill

Second Reading--Debate

December 8, 2021

Hon. Julie Miville-Dechêne

Moved second reading 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.

She said: Honourable senators, I rise today at second reading of Bill S-211, the Fighting Against Forced Labour and Child Labour in Supply Chains Act. This is the third time I have introduced this bill. Let’s hope the third time is the charm. Although the essence of the bill is the same, much has changed in recent months, making it more relevant than ever for Canada to enact legislation to end modern slavery.

There are four things I want to discuss. First is the pandemic and, more specifically, the pressure it put on public and private supply chains. The pandemic opened our eyes to some personal, social and economic realities. It highlighted the limits of our system and its inequities, and it reminded us just how connected we are to the rest of the world, which we rely on for so many goods and services we consume every day, from our phones and our clothing to a large number of our food products.

Forced labour and child labour are among the problems that have been exacerbated by the pandemic. For example, we know that the Government of Canada awarded $220 million in contracts for disposable gloves to a subsidiary of the Malaysian company Supermax. Former Supermax workers said that they did back-breaking work for 12 hours a day, 7 days a week, and were not even permitted to take washroom breaks when needed. They were also never able to pay off their debts.

Despite the fact that these allegations of forced labour came to light as early as January 2021, Canada continued to receive deliveries until October. Canada waited for our American neighbours to ban the entry of Supermax products into the U.S. before taking action.

Let’s not forget that the United States can ban merchandise if “the information available reasonably but not conclusively indicates” production by forced labour, while Canada can intervene only if a much higher standard is met. That standard requires “legally sufficient and defensible evidence” of production by forced labour. Given that it is extremely difficult to document in detail forced labour practices abroad, Canada’s decision in this regard means that in practice we very rarely intervene. That is unfortunate.

According to UNICEF, the number of children involved in child labour worldwide had been shrinking for years, but it has now started to rise again. In 2020, 160 million children were involved in child labour, an increase of more than 8 million in four years. That could climb by an additional 9 million by the end of 2022. It is estimated that there were 25 million victims of forced labour in 2016 compared to 21 million in 2012.

Although the pandemic may have aggravated the problem in an exceptional way, we should recognize that the issue of forced labour has always existed. It is a complex phenomenon fuelled by poverty, discrimination and inequality. There are many ways to make a person fall into the trap of forced labour: endless debt repayment, confiscation of identity documents, threats to report to immigration authorities, intimidation, violence and so on. Several cases are sadly well known: children exploited in certain mines in Africa; fishermen and migrants imprisoned on fishing boats in Asia; foreign workers in Dubai. Consumers in rich countries also participate in this system — most often unintentionally — by always seeking the cheapest products possible. But low prices can come at a human cost that is too high.

These cases are not exceptional. Forced labour and child labour have long permeated our everyday consumption. Generally, it is not the Canadian companies that are directly involved, but rather their subcontractors as well as their suppliers of raw materials and agricultural products. Therein lies the main risk: supply chains.

It is exceedingly difficult for consumers to know which products have been produced by children or by adults working under duress. Not all fair trade certifications are created equal and industry self-regulation has obvious limitations. It was estimated that $34 billion worth of goods imported into Canada could have been manufactured, in whole or in part, through forced labour or child labour. One thousand two hundred companies imported at least one of these high-risk goods into Canada.

In recent months and years, non-governmental organizations and media reports have shone the spotlight on this uncomfortable reality. A recent World Vision survey revealed that nearly $4 billion worth of agricultural products imported into Canada could be the product of forced labour or child labour, particularly from Mexico. That’s about 10% of all Canadian food imports and the equivalent of $264 per Canadian household. This is also a 63% increase in imports of risky products in a decade. Among the worst foods: coffee, fish, cane sugar, tomatoes and cocoa. Common products for many of us.

Just a few weeks ago, we learned that Canadian authorities had, for the first time, seized a shipment of clothes from China. Even more recently, there have been reports of child labour in Congo’s cobalt mines where some of the materials needed to make electric cars are sourced, which are most often sold in wealthy countries in Europe and North America.

Even if most cases of forced labour are identified abroad, we should not assume that this reality does not exist here. The Global Slavery Index estimates that 17,000 people are believed to be living in conditions of modern slavery in Canada. Our temporary agricultural workers are particularly at risk. Over the years, there have also been other cases of illegal practices in Canada. For example, in 2019, 43 workers of Mexican origin were released by Ontario police. These men had been trafficked to Canada to work as maintenance workers in hotels.

The practices of forced labour and child labour are violations unworthy of our humanity and the principles that we put forward. We cannot fight them only with virtuous speeches. We must act.

With that in mind, I would like to take a closer look at the plight of the Uighur Muslim minority in China’s Xinjiang region. The plight of the Uighurs is probably the most obvious example these days of the methods used by an autocratic regime to subdue an entire people.

For years now, there have been more and more allegations of forced labour in re-education camps and in tomato and cotton fields. Several credible sources have reported this, which is why the House of Commons even described the situation as “genocide.”

A recent CBC investigation revealed that many of the processed tomato products we consume in Canada originate from the Xinjiang region and can be found on our grocery store shelves under labels such as Del Monte, Nestlé, Unilever and La Doria.

Should we ban all products from Xinjiang province, as my colleague Senator Housakos is proposing? We’ll have that debate, but in the meantime, I would like to emphasize that our two bills are not in conflict. My bill, Bill S-211, amends the Customs Tariff to prohibit the importation of goods manufactured or produced by either forced labour or child labour. Senator Housakos, in turn, is proposing to systematically ban all imports from Xinjiang.

The good news is that there is no time like the present to finally start taking action. A few months ago, Canada’s Minister of International Trade signed a G7 joint statement committing herself and her counterparts to take action on modern slavery.

From the beginning, I have been grateful to have the support of the All-Party Parliamentary Group to End Modern Slavery, which is made up of members from the House and the Senate of all political stripes. More recently, during the last election campaign, both the Liberal Party and the Conservative Party committed to fighting forced labour.

On page 67 of their platform, the Liberals promised to do the following, and I quote:

Introduce legislation to eradicate forced labour from Canadian supply chains and ensure Canadian businesses that operate abroad are not contributing to human rights abuses.

In their platform, the Conservatives committed to dramatically revise supply chain legislation to meaningfully enforce Canada’s commitment not to import products made with slave labour.

In that respect, the political parties are in tune with public opinion. If a 2015 World Vision survey is to be believed, a staggering 87% of Canadians want the government to require companies to assess the risk of child labour in their supply chains.

According to a 2013 survey, 89% of Canadians are actually ready to pay more — up to 23% more, on average — for products free of child labour.

Lastly, according to the Schulich School of Business, even in the business world, three quarters of respondents believe that a supply chain transparency law could help drive change and benefit their company.

Canada has relied on self-regulation and corporations’ social responsibility for too long. Companies don’t always have the means or the economic incentive to take significant action, so it is high time our actions mirrored our words.

What does Bill S-211 propose? As was the case with previous versions, this is first and foremost a tool for transparency. Bill S-211 would require federal institutions and large companies that do business in Canada to produce an annual report detailing the measures taken to prevent or mitigate the risk of forced labour or child labour in their supply chains. The important thing is that these reports will have to be made public. The legislation sets out fines of up to $250,000 for offenders, for those who make false or misleading statements.

I want to state from the outset that the obligation is to issue a report, not to end forced labour in a single stroke. The bill is a step in the right direction, but it does not claim to eradicate human rights violations committed during the production of the goods we consume. Several systemic causes maintain modern slavery. Still, this is a start, and as our American friends say, sunlight can be the best disinfectant.

We have had the chance over the past few months to make a few significant improvements to the bill. I will mention four key ones today.

We broadened the scope of the bill to include federal institutions, namely the departments and more than one hundred public institutions that purchase or distribute goods in Canada or elsewhere.

There are two main reasons for this important change. First, as we saw with orders of medical supplies during the pandemic, the federal government also runs the risk of importing goods made with forced labour. Second, as a major economic actor, the federal government has a certain duty to be consistent and to set an example. It seems that the least the government can do is apply to its own machinery the standards it wants to apply to the private sector.

With respect to private businesses, the new version of the bill has not changed the compliance criteria, which are identical to those of the Extractive Sector Transparency Measures Act. The law would therefore apply primarily to businesses that have at least $20 million in assets, that have generated at least $40 million in revenue, or that have at least 250 employees. The bill is aimed primarily at large businesses. It is a pragmatic choice, at least initially.

As a third improvement, we have sought to harmonize contents of the reports with comparable international legislation, and we have also aligned the certification standard with the one applicable to financial statements.

So we changed the content of the report to add explicit references to supply chains, an explicit reference to the due diligence processes put in place by companies and an assessment of the effectiveness of the company’s efforts.

Bill S-211 also changes the standards for improving and certifying the report under the new section 11. Reports on the risk of forced labour must be approved by the company’s governing body; in the case of business corporations, this is the case of the board of directors. We have harmonized this rule with those provided for in the Canada Business Corporations Act for the approval of the company’s financial statements.

These changes not only allow for a single standard for corporate reporting but it is in line with the contemporary trend to require an equivalent degree of corporate approval for financial and non-financial disclosures.

Finally, Bill S-211 proposes an amended definition of child labour which, in my opinion, better corresponds to the ideals and aspirations of Canada, while also being more realistic and representative of the international reality. The new definition incorporates the definition of child labour of the International Labour Organization, that is to say, labour or services that are provided or offered to be provided by children under circumstances that are:

. . . mentally, physically, socially or morally dangerous . . . or

interferes with their schooling by: depriving them of the opportunity to attend school; obliging them to leave school prematurely; or requiring them to attempt to combine school attendance with excessively long and heavy work.

Compared to the predecessor bill, these definitions avoid the application of Canada’s standards abroad. It also defines child labour more broadly than simply referring to the worst form.

Here are a few international examples, if I have time to talk about them. Canada is lagging behind, so it is even more important that we take action to end modern slavery.

Six years ago, the United Kingdom passed the Modern Slavery Act, transparency legislation that targets companies with at least $60 million Canadian in business revenue. An independent review recommended that the act be amended to add sanctions and that the companies’ reports be included in the annual reports provided to shareholders. These two recommendations are included in our Bill S-211.

In 2017, France passed its corporate duty of vigilance law. This strict legislation requires companies to prevent serious violations of human rights and fundamental freedoms. However, the French law applies only to major corporations with more than 5,000 employees in France or 10,000 employees worldwide.

Australia followed the example of the United Kingdom and made improvements to its legislation, for example, by making it applicable to public organizations and by creating a public centralized registry.

In 2019, the Netherlands passed a very worthwhile bill. It is very innovative in that it applies not only to companies that have facilities in the Netherlands but also to those that only do business online.

Germany, the last country, passed its own due diligence legislation with respect to supply chains six months ago.

How does Bill S-211 compare to these international examples?

Subject to your comments and observations, esteemed colleagues, I believe that the bill we are debating is reasonable, pragmatic and measured. It is modelled mainly after the legislation of Britain and Australia — which have regimes similar to the Canadian system — but also proposes some improvements.

As is the case with any type of legislation, some would like us to go further, in particular by following certain European examples, while others would like us to include more businesses by lowering the threshold for application of the legislation. Still others, in contrast, would like to limit the scope of the bill.

In the end, I sought to find a compromise that would lead to a certain consensus by reminding myself that politics is the art of the possible. My hope is that this legislation will be a first step in the right direction for Canada, and that we will be able to improve it over the years and as the global situation evolves.

The Hon. the Speaker [ - ]

Excuse me, Senator Miville-Dechêne, but I have to interrupt you.

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