Moved second reading of Bill S-211, An Act to enact the Modern Slavery Act and to amend the Customs Tariff.

She said: Honourable senators, I rise at second reading to explain the relevance of Bill S-211, An Act to enact the Modern Slavery Act and to amend the Customs Tariff.

Bill S-211 is a tool for transparency to fight against forced labour and child labour. It is a bill that will help Canada to more strictly adhere to the letter of its international commitments. It is clear that we have fallen behind many other countries in our efforts to hold our companies accountable for wrongs they commit outside Canada.

This bill is a step in the right direction. Of course, it does not claim to eradicate human rights violations in our companies’ supply chains, a problem that is exacerbated by systemic causes such as poverty, insecurity and gender inequality

It is estimated that at least 40 million men, women and children around the world are victims of modern slavery, a term that is not explicitly defined by international law but that encompasses a whole series of practices, including sex and other trafficking and forced marriage, in which a person is exploited or forced to work through violence, threats, coercion, abuse of power or fraud.

Of these, 16 million human beings, both adults and children, are trafficked for forced labour in the private sector, according to International Labour Organization estimates. Here is how the ILO defines the term forced labour:

. . . all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily.

Ways to trap people into forced labour include debt bondage, withholding identity documents, threats to report labourers to immigration authorities, and violence or threats of violence. Cases of shameless child exploitation have made the headlines: Thailand’s shrimp industry, Côte d’Ivoire’s cocoa fields and the Democratic Republic of Congo’s cobalt mines. Cobalt is used in the production of lithium batteries, such as the ones in our cell phones.

But it wasn’t until 2013 that many Canadians finally started paying attention. That was when 1,100 adults and children died in the collapse of the Rana Plaza building in Bangladesh, which housed five textile workshops. This tragedy shed light on the darker side of outsourcing by major Western fashion brands in a globalized economy: Zara; Walmart; Benetton; The Children’s Place; and here at home, Loblaws’ Joe Fresh brand. It explains why many of the clothes sold here are so cheap.

Of course, while Canadian companies are less likely to be directly involved in human rights abuses, the foreign manufactures they do business with, the suppliers of raw materials and agricultural products elsewhere in the world, are at risk.

Beyond the headlines in our day-to-day lives, as consumers we don’t know which products were made by children or by people working under some form of threat. Not all fair-trade product certifications are equal, and some can be confusing to consumers.

It is estimated that $34 billion worth of goods imported into Canada are at risk of having involved forced or child labour. That’s significant. World Vision Canada estimates that 1,200 companies doing business in Canada have imported one or more of these high-risk products, in all sectors and at all stages of the supply chain.

For too long in Canada, we have counted on self-regulation alone, relying on the social responsibility of businesses to investigate their suppliers. The debate over this laissez-faire attitude culminated in the House of Commons in October 2018 with a highly-publicized report entitled A Call to Action: Ending the Use of all Forms of Child Labour in Supply Chains.

This report recommends that the Government of Canada develop, and I quote:

 . . . legislative and policy initiatives that motivate businesses to eliminate the use of any form of child labour in their global supply chains, and that empower consumers and investors to engage meaningfully on this important issue.

Building on that consensus, in 2018, my colleague, MP John McKay, introduced the first private member’s bill on modern slavery in the other place. It died on the Order Paper, but reflection on it continued and expanded, particularly within the All-Party Parliamentary Group to End Modern Slavery and Human Trafficking. My colleague, Senator Dan Christmas, contributed a great deal, as did the other co-chair of the group, Conservative MP Arnold Viersen.

The introduction of Bill S-211 in the Senate is the result of all that work and stems from a desire to make a difference that transcends party lines. This is about our humanity. It is my privilege and my responsibility to champion that desire for change and to convince you that this bill is the way to go. That was my brief overview, and I’ll touch on those points again, but let’s get into the substance of the bill now.

Broadly speaking, Bill S-211 would require corporations doing business in Canada to report on the measures taken to prevent or reduce the use of forced labour or child labour at any step in the production of their goods. This is supply chain transparency legislation.

Who does it target? Any company listed on a stock exchange or that operates in Canada and meets two of the following three criteria: has at least $20 million in assets; has generated at least $40 million in revenue; or employs at least 250 employees. Clearly, the bill targets big corporations with the means to produce these reports, not SMEs and little local shops for which it would be too great a burden. This is a pragmatic approach. I should also note that these are companies that import goods into Canada, or produce or sell here, so not just companies such as supermarkets that do business directly with consumers.

What is more — and this is critical — the legislation targets companies that have direct or indirect control over other entities involved in the chain, in other words, the parent company, which is responsible for the activities of its subsidiaries.

The obligation enshrined in the legislation is the following: publish, in a prominent place on its website, an annual report filed with the Minister of Public Safety on the measures taken to prevent or reduce the risk of forced labour at any step in the production of goods, whether in Canada or elsewhere, or at the time of their importation to Canada. Production of goods means the manufacture, growing, extraction or processing.

This report should include information on the goods, policies on forced labour, measures taken to assess the risk, and training provided to employees on this issue. These aspects will be further detailed in the regulations that will accompany the legislation.

The Minister of Public Safety and Emergency Preparedness will have to report to Parliament once a year on what companies are doing. I want to be clear that this bill is not a simply lip service. It contains real checks and balances. For example, a director or officer of the company must attest that the information in the report is true, accurate and complete. Senior officials at the company are held accountable. In addition, the minister’s designated authority may enter a company’s premises to investigate. This includes examining computer systems if there is reasonable grounds to believe that the systems contains objects or documents covered by the legislation. The bill even allows this person to enter a home with a warrant.

The bill provides for offences and punishment for those who fail to comply with the obligation to file a report and make it public or who make a false or misleading declaration. It is important to note that officers and directors are a party to the offence and if found guilty of an offence punishable on summary conviction are liable to a fine of not more than $250,000. This penalty, which may seem modest, was modelled after the one set out in the Extractive Sector Transparency Measures Act to address corruption. However — and I am highlighting this notable limit on the scope of the act — there is only an obligation to file a report that is true, accurate and complete and there is no obligation to endeavour to reduce or diminish the use of forced labour by subcontractors. That is a major difference and the reason why I am stating that this bill is a first step.

In my view, the last aspect of particular significance is that Bill S-11 amends the Customs Tariff to prohibit entry into Canada of goods manufactured or produced, in whole or in part, by the use of forced or child labour. This provision is already in effect at the border to stop the entry of goods manufactured in whole or in part by prisoners.

This last prohibition is considered one of the most effective solutions for urging commercial actors to respect workers’ rights. According to a survey conducted by UQAM’s Centre d’études sur l’intégration et la mondialisation, 96% of respondents feel that this prohibition is necessary.

Believe it or not, the importation of goods manufactured using forced labour has been prohibited since 1930 in the United States, where the associated investigative powers rest with the border services. The results have been modest, but very real: There have been 33 seizures of goods, specifically condoms, gloves, auto parts and leather from China, as well as clothing from Mexico. In short, our American neighbours are way ahead of us on this matter.

Bill S-211 on modern slavery is innovative in some regards, but it is also inspired by transparency laws that have been passed around the world. The pioneer in this area was California in 2010, but that first piece of legislation focused too little on companies and, more importantly, it required only one report in a company’s existence and imposed no penalties on offenders.

The result is that 20% of the companies in question did not submit reports and the one-third of companies that did submit a report did not follow the instructions. Two lawsuits brought by individuals against Costco and Nestlé were dismissed because the law was too vague.

In 2015, Great Britain passed its own law on modern slavery. It was broader and was an improvement over the Californian model. This law includes an obligation to report annually with general guidelines regarding the information that can be but is not required to be included in these reports. Under the law, a report may even indicate that the company did not do anything at all to combat forced labour. There is therefore a lot of flexibility to plan for changes over time, according to the authorities.

There again, the law does not provide for any penalty, but an injunction may be sought against those who break the law. In 2017, 57% of companies listed on the stock exchange did comply with the law. The most recent research indicates that a rather small group of British business leaders took action, but there has still not been any large-scale changes. There are examples of good and bad reports. Last year, in the face of criticism, the authorities decided to audit 17,000 companies in the hopes of increasing transparency.

An independent report recommended strengthening the British law and adding penalties.

The most recent example is the Australian law adopted in 2018. It is the first transparency law that imposes obligations not only on corporations, but also on the federal government and its agencies. There are mandatory reporting criteria. The Australian law is innovative in one respect: The state must publish the list of companies that fail to submit a report, and there is a central register that is very useful for identifying and outing offenders.

Here again, there are no penalties for non-compliance. It is too early to assess the impact of the Australian law.

All these transparency laws are based on the name and shame concept. Corporate offenders can be shamed by human rights advocacy groups. Consumers have a little more information they can use to make responsible consumer choices. The underlying assumption is that transparency will increase accountability.

Now that we’ve looked at what California, Great Britain and Australia have on the books, we can see that Bill S-211 goes even further because it sets out penalties for non-compliance.

What impact do these laws have on transparency?

Adopting these laws has certainly contributed to a broader conversation about modern slavery among businesspeople, investors, unions, and the general public. Many businesses are still turning a blind eye, but there is a growing awareness no doubt because investors, particularly millennials, are increasingly making this an investment criterion.

Many companies know that their reputation is at stake and that finding slaves in their supply chain may result in a drop in sales and profits.

Some CEOs even believe that transparency legislation reduces unfair competition from those who cut corners on human rights. There are a few champions who have paved the way: the Canadian athletic clothing company Lululemon, but also Adidas, Gap and H&M, according to a KnowTheChain ranking.

Even small players are applauding Bill S-211: the president and owner of Équifruit — a Quebec company that imports fair trade fruit to Canada — told me that she hopes this bill can give her more access to supermarket chains because they will have to ask their usual large-scale suppliers more questions about the presence of modern slavery in their supply chain.

All this is happening in a context where investigative reporting is condemning the use of forced labour. Consumer awareness campaigns are growing. I am thinking in particular of palm oil. In Indonesia, palm oil plantations use child labour in conditions that are considered to be dangerous and difficult by Amnesty International.

A survey of 26 major Canadian businesses and 37 managers sheds light on the concerns of the business world: 89% of businesses have difficulty drawing attention within their organizations to the issue of modern slavery; 75% believe that legislation on supply chain transparency could drive change and benefit their own organizations. Only 29% of businesses carefully examine the first level of their supply change when modern slavery is often present in the second or third level, and often even further away geographically, thus further out of sight.

Here is one last very worrisome statistic. According to a British survey of 71 major companies, including 25 international brands and retailers, more than three-quarters of businesses surveyed believe that there is a good chance that there is forced labour in their supply chain.

Why did we feel compelled to introduce such a bill? The reason is that surprisingly Canada has not yet set out in its legislation and national measures the very numerous commitments it has made on the international scene. Therefore, I will repeat that we lag very far behind.

CUSMA, the latest Canada-United States-Mexico free trade agreement that will soon be submitted to the Senate, also has strong language on forced labour:

The Parties recognize the goal of eliminating all forms of forced or compulsory labor, including forced or compulsory child labor. Accordingly, each Party shall prohibit, through measures it considers appropriate, the importation of goods into its territory from other sources produced in whole or in part by forced or compulsory labor . . . ..

Perhaps even more striking is that Canada has ratified all eight core conventions of the International Labour Organization, including those on the worst forms of child labour and the abolition of forced labour. Why, then, is the use of forced labour not explicitly prohibited in the Criminal Code and in the Canada Labour Code?

From May to June 2019, the Government of Canada held consultations on labour exploitation and supply chains. As well, in its response to the 2018 parliamentary report on this issue, the government agreed with the broad thrust of the recommendations and said it was studying the effectiveness of legislative initiative elsewhere:

The Government recognizes that bringing about improvements to working conditions in global supply chains is a complex and multi-faceted challenge, and must involve the participation of provinces and territories, industry and civil society, as well as a number of Government of Canada departments.

The government is indeed open and sensitive to these issues, but we are still thinking at the highest level about how best to act here, with businesses. This is the aim of Bill S-211, as it could perhaps help speed up the process.

This issue is particularly difficult because we live in a federation. Pursuant to section 91 of the Constitution Act, 1867, the federal government is responsible for regulating trade and commerce, but section 92 states that the provinces have the power to adopt laws regarding property and civil rights in the province. The obligation for large businesses to be accountable in Bill S-211 would clearly have implications for provincial jurisdictions. Some, but not all, legal experts who were consulted believe that jurisprudence allows for the bill to move forward and were reasonably confident that the bill was not patently unconstitutional. They referred to the 2018 Supreme Court reference on securities, which establishes five indicia for assessing a federal law’s validity.

In conclusion, organizations that advocate for human rights cannot agree on Bill S-211 or any other legislation on supply chain transparency. A number of advocates are calling for a stricter law modelled on legislation in the Netherlands and France. These laws require companies to do due diligence to ensure that their supply chain is reasonably free of forced and child labour. Offenders are subject to civil liability.

In discussions leading up to the introduction of the bill, there was a lot of talk about what the role of the new Canadian Ombudsperson for Responsible Enterprise might be. Unfortunately, a private bill like Bill S-211 cannot contain provisions for the spending of funds. The new ombudsperson’s mandate would have to be expanded to include responsibility for Bill S-211, which would make for added expense. That is why the bill is silent on the subject.

The debate on Bill S-211 is just beginning. I therefore invite my colleagues to participate. The committee’s study will enable senators to decide whether the bill needs improvement. I am open to discussing it with a view to building political consensus on the bill in the Senate.

It is high time we took action. Canada cannot just pay lip service to defending human rights. The reality of world trade is that goods produced under modern slavery conditions cross borders into wealthier countries like Canada. The crime is committed elsewhere, but the product of the crime is sold right here.

I find it encouraging that consumers want to know. According to a 2017 survey by World Vision, 91% of Canadians believe the government should require Canadian companies to publicly report on what they are doing to eliminate child labour from their supply chains. Society can no longer turn a blind eye to this problem.

Thank you.

First of all, I would like to apologize to you for the ringing of my phone earlier. Now you know why I don’t use Twitter and have no idea what a website is.

Senator, I would like to ask you about the idea of Canadian companies refusing to hire overseas child labour. I think it would be great if it worked. I’m not sure how well it would work, because child labour is rampant in places like India, Pakistan, Indonesia and parts of Africa. Thousands and thousands of mothers and fathers rely upon their children working. There is a great deal of illiteracy. I’m not sure we can eradicate child labour, and I’m not sure the families or parents of these children would want us to.

How do you propose this law will make an impact on all that is going on in these countries, where we have no jurisdiction?

You are right, senator, in saying that this is a complex issue. That is why I said, at the beginning of this speech, that I was not claiming to be able to eradicate forced labour or child labour with this bill. That being said, what we are talking about here is forced labour. You are right in saying that there are over 150 million children who are working, but not all of them are engaged in forced labour. Just because a child is under the age of 18 does not mean he or she falls into that category. There are different cultures and ages. Of course, our hope would be that all children could go to school until they are 18 years old, but that is not how things work in many countries. The child labour we are talking about here pertains to 16 million people. We are talking about the worst forms of work for children, work that is dangerous, work that prevents them from going to school when that is where they should be. However, you no doubt saw, as I did, the reports on the dangers of working in cobalt mines. There is not necessarily an equivalent in all cases. I am not claiming that we can solve all of the problems, but the idea is that, with some transparency, we can force companies to monitor what is happening in their supply chain. That in and of itself is a good thing, even within some companies, and it may trigger greater awareness. I am not an idealist. Of course, some companies will do better than others. The idea is to get things started. Right now, companies are just regulating themselves, so only companies that believe they have to monitor their supply chain to protect their reputation do so. This is a step in the right direction. I am not claiming to revolutionize the way things are done, but transparency, in some cases and some companies, may have a relatively modest impact, but an impact nonetheless. Thank you.

Will the senator take a question? Thank you for your efforts in this area. I welcome it.

I wonder if, in your research, you also looked at the prevalence of forced labour in our country, because it exists as well.

Absolutely; you’re right.

It is a matter of importance. Indeed, in Canada, when we talk about modern slavery, we are talking mostly about trafficking, sex trafficking. There is also forced labour, but to a lesser extent than in the rest of the world where we generally see more forced labour in businesses and in the private sector than sex trafficking. The ratio is about 60-40 around the world. In Canada, it’s the opposite. Yes, there is forced labour in Canada, among domestic workers notably, who are often immigrants, and there is also forced labour in the agriculture sector whenever a work permit is involved. We know that in Canada those who have temporary work permits are more often victims of forced labour than others. You’re right, this exists. Are we focused specifically on this issue in this bill? I believe that when we talk about supply chain, we are talking about a supply chain that may be national or international. Of course, forced labour in Canada is covered by the bill. However, I was emphasizing the supply chain abroad because based on everything I have read and the conversations I’ve had, I believe it is harder to uncover the truth at a company that has one or two subcontractors and is located on the other side of the world. We were saying that we need to not only look within manufacturing, but also examine the services that are part of it. For example, for transportation services, do the company bosses use children to get to the manufacturing? If so, that may indeed be forced labour. It is hard to know or to get any figures. There are many figures around, but on the issue of forced labour in Canada, we have very few figures that we can rely on to determine the scope of the problem. Thank you, senator, for mentioning that. I may have focused too much on forced labour outside Canada during my speech and not enough on what is happening within our borders. Thank you.

Thank you, senator, for that response. I know there are many instances of forced labour where passports are taken away, and you’re right; it’s primarily within the precarious community of either temporary foreign workers or agricultural workers.

I wonder what your response would be to an observation that people in glass houses should not throw stones. I take Senator Richards’ comments and question into consideration. Absolutely, the kind of supply chain you have described is of serious concern, but we have problems in our own country.

I wonder if, at committee, you would be open to extending the scope of your bill to include supply chains in Canada.

Thank you for your question. The bill doesn’t say “supply chains outside of Canada.” The bill covers supply chains in general.

In my speech I emphasized the problems around the world. However, each instance of forced labour or child labour is covered, wherever it occurs. I will obviously check another time, because I’m in doubt, but I’m pretty sure that we cover forced labour around the world.

You’re right about the fact that we cannot be complacent about our own reality, but I also did choose to put the emphasis on the fact that we have signed quite a few international agreements about those questions on forced labour in Canada or elsewhere. We have signed many agreements, and in terms of having those agreements translated in law in Canada, not much has happened. One of the things that could be said for that is we don’t have a definition of forced labour in the Criminal Code. We talk about human trafficking, but forced labour in Canada, as such, is not in the Criminal Code. One of the reasons I’m told is that for years we have only taken into account human trafficking for sexual purposes and we underestimate forced labour in North America.

That is an excellent question, senator. I will refer to what is happening in the United States. The denunciation of what could be included in a batch of goods is practically the only way to go about it. The United States, however, also has a list of products that are more likely to come from forced labour. Customs officials have been given investigative powers to enforce the law.

Bill S-211 amends the law, stipulating that no goods manufactured using forced labour can enter the country. However, once again, for reasons you are familiar with, private bills cannot create new structures or involve any expenditures. The mechanism itself is not described in the bill. Basically, denunciation is the most commonly used means for customs officers to be able to inspect goods. Even in the United States, which has had legislation similar to this bill on the books since 1930, there have been about 30 major seizures. You’re therefore right to say that it’s an illusion to think we’ll be able to stop everything at the border. I would say this is another way to send a message and make it clear that our border is closed to goods manufactured using forced labour.

There is existing legislation stating that goods manufactured by prisoners are not allowed in Canada. I will certainly follow up on your question by looking into whether we have managed to make any meaningful seizures under those provisions.

Your question is absolutely relevant. That is not the only law that is difficult to enforce.