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Understanding the Canadian Modern Slavery Act and Its Implications
Canada has officially entered the global effort to combat modern slavery in supply chains with the introduction of the Fighting Against Forced Labour and Child Labour in Supply Chains Act. This legislation mandates that companies operating in Canada disclose their actions to eliminate modern slavery from their supply chains, aligning with existing initiatives in the U.K., Australia, and the U.S. Modern slavery encompasses forced labour, including child labour and human trafficking, underlining the necessity for responsible sourcing practices and proactive measures to address these critical issues.
What Does the Canadian Modern Slavery Act Entail?
Under the Canadian modern slavery act, entities involved in producing, selling, or distributing goods in Canada, as well as those importing goods into the country, are required to submit an annual report outlining their efforts to prevent forced labour in their supply chains. An entity is defined as a company listed on the Canadian stock exchange, operating in Canada, or having assets in the country. To meet the criteria, a company not listed in Canada must also fulfil financial thresholds such as having at least $20 million in assets, generating $40 million in revenue, or employing 250 people over the past two years.
Companies are mandated to report on various aspects, including their business structure, supply chains, policies on forced labour and child labour, risk assessment and management strategies, remediation measures, employee training programs, and assessment of effectiveness in combatting forced labour. Once reports are finalised, they must receive approval from the relevant governing bodies and be submitted to Public Safety Canada.
Comparing the Canadian Act to Global Regulations
The Canadian modern slavery act aligns with similar legislation in the U.K., Australia, and the U.S., focusing on transparency, due diligence, and remediation processes regarding forced labour and human rights abuses in supply chains. Companies in these countries must conduct supplier due diligence, implement robust policies, and publicly disclose their efforts to address modern slavery issues in their supply chains. The thresholds for companies subject to modern slavery laws vary across jurisdictions, but the overarching goal remains the same — to eradicate modern slavery from global supply chains.
Best Practices for Compliance
To navigate the evolving regulatory landscape effectively, companies must develop comprehensive compliance programs encompassing all levels of their organisations. This may include implementing training programs, incorporating modern slavery clauses into supplier agreements, and establishing zero-tolerance policies for forced labour. By proactively addressing modern slavery risks and aligning their practices with the most stringent aspects of the laws, companies can adapt to current and future requirements seamlessly.
The Canadian modern slavery act represents a significant step toward fostering ethical and responsible business practices, emphasising the importance of transparency, accountability, and human rights considerations in global supply chains. By embracing the principles of the act and aligning with global best practices, companies can contribute to the collective effort to combat modern slavery and create a more ethical and sustainable business environment worldwide.
