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| Pix Credit: Marble Relief (2 Pair of Collared Slaves led by helmeted men perhaps to fight like the animals below; Izmir (Smyrna) c AD 200 (University of Oxford Collection |
Sometimes the most intriguing legal developments in the liberal democratic camp come from its most active flanks. Canada has increasingly taken the lead in working through the core issues that tend to attach to the project of transforming the understanding of economic activity, its structural elements, and its inter-relationship with the political economy in a liberal democratic space that is still grounded on the core premise of individual autonomy and private choice protected by the state within an evolving set of core normative principles that the state is also bound to defend.
Like France, and Germany, and soon the E.U., it is now contributing another variation to the national efforts to enact "supply chain." Like Australia and the U.K., it has centered its efforts on forced and child labor. The model however, can be expanded to suit capacity and political will. In a sense, one might think about this effort as a second generation disclosure-nudging legislation--the purpose of which is to harness the power of market behaviors bound to the normative objectives of compliance based regulatory measures.
Three key implications are worth considering. The first touches on the role of "modern slavery" as a wedge regulatory strategy to naturalize what can then become a broader HRDD system. The second touches on the challenges of the HRDD form and its implications both for the regulatory environment and the reshaping of the nature and purpose of economic activity within liberal democratic states. The third touches on the nature of risk and reporting built into these sorts of statutory schemes.
1. Modern Slavery. The object of this measure, at least at its core is what is now labelled "modern slavery." The term is both useful and highly problematic--though the legislation aimed at reducing its incidence is to be welcomed in the strongest possible terms. The term is meant to broaden the definition of traditional chattel slavery--which in its last iteration ending with the 19th century, was deeply embedded in the social and economic structures of the largest European states and their offshoots. Now it includes a number of terms: (1) Sex Trafficking; (2) Child Sex Trafficking; (3) Forced Labor; (4) Bonded Labor or Debt Bondage; (5) Domestic Servitude; (6) Forced Child Labor; and (7) Unlawful Recruitment and Use of Child Soldiers (see here). Global society has moved well beyond race based slavery ideology (at least as practiced among the European powers) and systems of bondage compatible with the cultural sensibilities of the rest of the globe (no society is entirely free of the indulgence in extreme exploitation of humans, they vary merely in the cultural mechanics used to justify and operationalize local systems). At the same time, it avoids an engagement with the core issue of exploitation of labor or of social relations of which modern slavery is the tip of an iceberg. It is not that societies want to avoid exploitation of humans, it is merely that social sensibilities in the current era and stage of global development requires elites to move the line between permissible and impermissible exploitation. It is certainly too much to ask Canada to be an outlier in this context. And even this small step is forward movement. Maybe.
2. There are two operative provisions surrounded by definitions, carve outs, and the usual bureaucratic structure building and risk shifting (where the real guts of what is actually happening takes place). The first is §11:
Every entity must, on or before May 31 of each year, report to the Minister on the steps the entity has taken during its previous financial year to prevent and reduce the risk that forced labour or child labour is used at any step of the production of goods in Canada or elsewhere by the entity or of goods imported into Canada by the entity.The other is §13:(1) An entity must, on providing the Minister with a report under section 11 or a revised report under section 12, make the report available to the public, including by publishing it in a prominent place on its website.Simple enough. ore or less. The object is far less straightforward.
First it extends, through the device of effectively mandatory human rights due diligence, a sanctions based regime through private enter`rises and SOEs) covered by the Act. Entities are required to carry forward the policy of Canada (again, a good policy), as the operational arm of the administrative apparatus, which now effectively kicks back and performed a n auditing and supervisory role at the behest of a Parliament which sketches the scope of the administrative responsibilities of enterprises. It is in this sense a marvelous example of the governmentalization of the enterprise (and more generally the private sector) within the new regimes of objectives based compliance.
Second, that compliance and disclose based regime also imports the sensibilities of government into the risk calculus of business. That may be a good or a bad thing. But it is a "thing" that is never discussed. Where, for example in developing states and Marxist-Leninist states, the principal object is development, risk taking may be more important in ways that shift the disclosure and the calculus away from prevention to remedy (see here). But it is in the nature of risk in economic activity, juxtaposed against pricing (or avoiding) cost (in certain respects) that remains the largest black hole of the debates (such as tyhey are) about the role of risk and value in economic activity and its relation to individual and collective human rights (including sustainability, development, and stability rights).
Third, the result in this case hardens a variation of what has proven to be the greatest innovation of the UN Guiding Principles for Business and Human Rights--the development of the concept and practice of human rights due diligence. Human rights due diligence has proven to be a versatile mechanism for quality control, as well as for accountability and pricing. Though it is used here only with respect to prevent of a small slice of human rights wrongs, its potential extends well beyond the regulatory limits. One: the mechanism can be used to identify the points of economic activity the costs of which can be identified and priced. In this century it might appear that free riding for public goods ought to be a thing of the past (water, air, etc.) and the technique makes it possible to identify and embed in pricing structures. But of course human rights advocates believe that human rights are priceless (unless of course they call for compensation in which case value is easy enough to construct). Yet form a regulatory and remedial perspective the use is tragic in the sense that it remains effectively unexplored. Two: HRDD provides a basis for intergovernmental work--here Canada misses an opportunity to extract from these reports a mapping of the scope and form of capacity building in host states that might better serve the state duty to protect human rights--not through enterprises but in state to state relations. Three: these reports can better align with Canada's enhanced sanctions based human rights and sustainability regimes. Coordination, alas, is as aspiration in Canada as it is elsewhere.
3. The good intentions are implied rather than stated.The core of the report must touch on a number of matters, the approach to which will be dependent on the creative ability of enterprises to interpret these in specific ways and a willingness to risk pushing the interpretive envelope. Section 11(3) maps the contents:
(3) The report must also include the following information in respect of each entity subject to the report:
(a) its structure, activities and supply chains; (b) its policies and its due diligence processes in relation to forced labour and child labour; (c) the parts of its business and supply chains that carry a risk of forced labour or child labour being used and the steps it has taken to assess and manage that risk; (d) any measures taken to remediate any forced labour or child labour; (e) any measures taken to remediate the loss of income to the most vulnerable families that results from any measure taken to eliminate the use of forced labour or child labour in its activities and supply chains; (f) the training provided to employees on forced labour and child labour; and (g) how the entity assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains.The hope, of course, is based on the core premise of HRDD--that market pressure will force reporting forms to "do the right thing."It is for the state to point out what that "right thing" is and to induce its consuming populations, it financial instrumentalities and other stakeholders to then "apply" that in their markets based dealings with the reporting entity. Fair enough. Yet, it is also possible for an enterprise--say a state owned enterprise form a home state that does not share Canada's values--to comply but suggest that their entire response regime in limited to strict compliance with local law. Worse, from the implied objectives of the Act, would be the taking of a position that indeed , their remediation consists only in compensating people whose rights have been breached but doing nothing to change local conditions--which it leaves to the host state to deal with in its sovereign representative capacity.
Now what? These and smilar quesiotns will continue to enliven these efforts as they lumber from good intentions and pragmatic first steps toward something that they hope is transformative--but transformative in an inclusive way. The text of the Act follows.
SUMMARY
This enactment enacts the Fighting Against Forced Labour and Child Labour in Supply Chains Act, which imposes an obligation on certain government institutions and private-sector entities to report on the measures taken to prevent and reduce the risk that forced labour or child labour is used by them or in their supply chains. The Act provides for an inspection regime applicable to entities and gives the Minister the power to require an entity to provide certain information.
This enactment also amends the Customs Tariff to allow for a prohibition on the importation of goods manufactured or produced, in whole or in part, by forced labour or child labour as those terms are defined in the Fighting Against Forced Labour and Child Labour in Supply Chains Act.
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Available on the Senate of Canada website at the following address:
www.sencanada.ca/en |
TABLE OF PROVISIONS
Preamble
Fighting Against Forced Labour and Child Labour in Supply Chains Act
Definitions
Purpose
Binding on Her Majesty
Government institutions
Annual report
Revised report
Accessibility of report
Entities
Control
Annual report
Revised report
Accessibility of report
Designation
Entry into a place
Warrant to enter dwelling-house
Obstruction
Minister’s power
Offence
Liability of directors, officers, etc.
Offence by employee or agent or mandatary
Electronic registry
Regulations
Annual report
Review by committee
Amendments
January 1
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1st Session, 44th Parliament, 70-71 Elizabeth II, 2021-2022 |
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SENATE OF CANADA |
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BILL S-211 |
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An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff |
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Preamble
Whereas forced labour and child labour are forms of modern slavery;
Whereas Canada, as a party to the eight fundamental conventions of the International Labour Organization on fundamental labour rights — including the Forced Labour Convention, 1930, adopted in Geneva on June 28, 1930; the Abolition of Forced Labour Convention, 1957, adopted in Geneva on June 25, 1957; and the Worst Forms of Child Labour Convention, 1999, adopted at Geneva on June 17, 1999 — is determined to contribute to the fight against modern slavery;
And whereas Parliament considers that it is essential to contribute to fighting modern slavery, including by imposing reporting obligations on government institutions involved in producing, purchasing or distributing goods in Canada or elsewhere and on entities involved in manufacturing, producing, growing, extracting or processing goods in Canada or elsewhere or in importing goods manufactured, produced, grown, extracted or processed outside Canada;
Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Short Title
Short title
1 This Act may be cited as the Fighting Against Forced Labour and Child Labour in Supply Chains Act.
Interpretation
Definitions
2 The following definitions apply in this Act.
child labour means labour or services provided or offered to be provided by persons under the age of 18 years and that
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(a) are provided or offered to be provided in Canada under circumstances that are contrary to the laws applicable in Canada;
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(b) are provided or offered to be provided under circumstances that are mentally, physically, socially or morally dangerous to them;
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(c) interfere 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; or
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(d) constitute the worst forms of child labour as defined in article 3 of the Worst Forms of Child Labour Convention, 1999, adopted at Geneva on June 17, 1999. (travail des enfants)
entity means a corporation or a trust, partnership or other unincorporated organization that
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(a) is listed on a stock exchange in Canada;
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(b) has a place of business in Canada, does business in Canada or has assets in Canada and that, based on its consolidated financial statements, meets at least two of the following conditions for at least one of its two most recent financial years:
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(i) it has at least $20 million in assets,
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(ii) it has generated at least $40 million in revenue, and
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(iii) it employs an average of at least 250 employees; or
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(c) is prescribed by regulations. (entité)
forced labour means labour or service provided or offered to be provided by a person under circumstances that
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(a) could reasonably be expected to cause the person to believe their safety or the safety of a person known to them would be threatened if they failed to provide or offer to provide the labour or service; or
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(b) constitute forced or compulsory labour as defined in article 2 of the Forced Labour Convention, 1930, adopted in Geneva on June 28, 1930. (travail forcé)
governing body means the body or group of members of the entity with primary responsibility for the governance of the entity. (corps dirigeant)
government institution has the same meaning as in section 3 of the Access to Information Act. (institution fédérale)
head has the same meaning as in section 3 of the Access to Information Act. (responsable d’institution fédérale)
Minister means the Minister of Public Safety and Emergency Preparedness. (ministre)
production of goods includes the manufacturing, growing, extracting and processing of goods. (production de marchandises)
Purpose of Act
Purpose
3 The purpose of this Act is to implement Canada’s international commitment to contribute to the fight against forced labour and child labour through the imposition of reporting obligations on
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(a) government institutions producing, purchasing or distributing goods in Canada or elsewhere; and
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(b) entities producing goods in Canada or elsewhere or in importing goods produced outside Canada.
Her Majesty
Binding on Her Majesty
4 This Act is binding on Her Majesty in right of Canada or a province.
PART 1 Reporting Obligation — Government Institution
Application
Government institutions
5 This Part applies to any government institution producing, purchasing or distributing goods in Canada or elsewhere.
Annual Report
Annual report
6 (1) The head of every government institution must, on or before May 31 of each year, report to the Minister on the steps the government institution has taken during its previous financial year to prevent and reduce the risk that forced labour or child labour is used at any step of the production of goods produced, purchased or distributed by the government institution.
Supplementary information
(2) The report must also include the following information in respect of the government institution:
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(a) its structure, activities and supply chains;
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(b) its policies and due diligence processes in relation to forced labour and child labour;
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(c) the parts of its activities and supply chains that carry a risk of forced labour or child labour being used and the steps it has taken to assess and manage that risk;
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(d) any measures taken to remediate any forced labour or child labour;
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(e) any measures taken to remediate the loss of income to the most vulnerable families that results from any measure taken to eliminate the use of forced labour or child labour in its activities and supply chains;
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(f) the training provided to employees on forced labour and child labour; and
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(g) how the government institution assesses its effectiveness in ensuring that forced labour and child labour are not being used in its activities and supply chains.
Form and manner
(3) The Minister may specify, in writing, the form and manner in which a report is to be provided. The requirements must be made available to the public in the manner that the Minister considers appropriate.
Revised report
7 (1) The head of a government institution may provide the Minister with a revised version of the report provided under section 6.
Content of revised report
(2) The revised version of the report must, in addition to the information required under subsection 6(2), indicate the date of the revision and include a description of the changes made to the original report.
Accessibility of report
8 The head of every government institution must, on providing the Minister with a report under section 6 or a revised report under section 7, make the report available to the public, including by publishing it in a prominent place on the government institution’s website.
PART 2 Reporting Obligation — Entities
Application
Entities
9 This Part applies to any entity
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(a) producing, selling or distributing goods in Canada or elsewhere;
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(b) importing into Canada goods produced outside Canada; or
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(c) controlling an entity engaged in any activity described in paragraph (a) or (b).
Control
10 (1) For the purposes of this Part and subject to the regulations, an entity is controlled by another entity if it is directly or indirectly controlled by that other entity in any manner.
Deemed control
(2) An entity that controls another entity is deemed to control any entity that is controlled or deemed to be controlled by the other entity.
Annual Report
Annual report
11 (1) Every entity must, on or before May 31 of each year, report to the Minister on the steps the entity has taken during its previous financial year to prevent and reduce the risk that forced labour or child labour is used at any step of the production of goods in Canada or elsewhere by the entity or of goods imported into Canada by the entity.
Single or joint report
(2) An entity may comply with subsection (1) either
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(a) by providing a report in respect of the entity; or
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(b) by being party to a joint report in respect of more than one entity.
Supplementary information
(3) The report must also include the following information in respect of each entity subject to the report:
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(a) its structure, activities and supply chains;
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(b) its policies and its due diligence processes in relation to forced labour and child labour;
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(c) the parts of its business and supply chains that carry a risk of forced labour or child labour being used and the steps it has taken to assess and manage that risk;
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(d) any measures taken to remediate any forced labour or child labour;
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(e) any measures taken to remediate the loss of income to the most vulnerable families that results from any measure taken to eliminate the use of forced labour or child labour in its activities and supply chains;
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(f) the training provided to employees on forced labour and child labour; and
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(g) how the entity assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains.
Approval of report
(4) The report must be approved,
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(a) in the case of a report in respect of a single entity, by its governing body; or
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(b) in the case of a joint report, either
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(i) by the governing body of each entity included in the report, or
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(ii) by the governing body of the entity, if any, that controls each entity included in the report.
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Attestation of the report
(5) The approval of the report must be evidenced by
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(a) a statement that sets out whether it was approved pursuant to paragraph (4)(a) or subparagraph (4)(b)(i) or (ii); and
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(b) the signature of one or more members of the governing body of each entity that approved the report.
Form and manner
(6) The Minister may specify, in writing, the form and manner in which a report is to be provided. The requirements must be made available to the public in the manner that the Minister considers appropriate.
Revised report
12 (1) An entity may provide the Minister with a revised version of the report provided under section 11.
Content of revised report
(2) The revised version of the report must, in addition to the information required under subsection 11(3), indicate the date of the revision and include a description of the changes made to the original report.
Approval and attestation
(3) Subsections 11(4) and (5) apply in respect of a revised report.
Accessibility of report
13 (1) An entity must, on providing the Minister with a report under section 11 or a revised report under section 12, make the report available to the public, including by publishing it in a prominent place on its website.
Federal corporations
(2) Any entity that is incorporated under the Canada Business Corporations Act or any other Act of Parliament must provide the report or revised report to each shareholder, along with its annual financial statements.
Administration and Enforcement
Designation
14 The Minister may designate persons or classes of persons for the purposes of the administration and enforcement of this Part.
Designated Person’s Powers
Entry into a place
15 (1) A designated person may, for the purpose of verifying compliance with this Part, enter any place where they have reasonable grounds to believe there is anything to which this Part applies or any document relating to the administration of this Part.
Powers on entry
(2) The designated person may, for the purpose referred to in subsection (1),
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(a) examine anything in the place, including any document;
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(b) use any means of communication in the place, or cause it to be used;
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(c) use any computer system in the place — or cause it to be used — to examine data contained in or available to it, or reproduce the data — or cause it to be reproduced — in the form of a printout or other intelligible output and remove any printout or output for examination or copying;
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(d) prepare a document based on the data, or cause one to be prepared;
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(e) use any copying equipment in the place, or cause it to be used;
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(f) take photographs or make recordings or sketches of anything in the place;
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(g) direct any person to put any equipment in the place into operation or to cease operating it;
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(h) prohibit or limit access to all or part of the place or to anything in the place; and
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(i) remove anything from the place for the purpose of examination.
Persons accompanying designated person
(3) The designated person may be accompanied by any person whom the designated person believes is necessary to help them exercise their powers or perform their duties or functions under this section.
Assistance
(4) The owner or person in charge of the place and every person in the place must give all assistance that is reasonably required to enable the designated person to exercise their powers or perform their duties or functions under this section and is to provide any documents, information or access to any data that is reasonably required for that purpose.
Warrant to enter dwelling-house
16 (1) If the place referred to in subsection 11(1) is a dwelling-house, the designated person may enter it without the occupant’s consent only under the authority of a warrant issued under subsection (2).
Authority to issue warrant
(2) On ex parte application, a justice of the peace may issue a warrant authorizing the designated person to enter a dwelling-house, subject to any conditions specified in the warrant, if the justice is satisfied by information on oath that
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(a) the dwelling-house is a place referred to in subsection 15(1);
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(b) entry to the dwelling-house is necessary for a purpose related to verifying compliance with this Part; and
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(c) entry was refused by the occupant or there are reasonable grounds to believe that entry will be refused by or that consent to entry cannot be obtained from the occupant.
Obstruction
17 A person must not obstruct or hinder a designated person who is exercising powers or performing duties or functions under this Part.
Order — Corrective Measures
Minister’s power
18 If, on the basis of information obtained under section 15, the Minister is of the opinion that an entity is not in compliance with section 11 or 13, the Minister may, by order, require the entity to take any measures that the Minister considers to be necessary to ensure compliance with those provisions.
Offences and Punishment
Offence
19 (1) Every person or entity that fails to comply with section 11 or 13, subsection 15(4) or an order made under section 18, or that contravenes section 17, is guilty of an offence punishable on summary conviction and liable to a fine of not more than $250,000.
False or misleading statement or information
(2) Every person or entity that knowingly makes any false or misleading statement or knowingly provides false or misleading information to the Minister or a person designated under section 14 is guilty of an offence punishable on summary conviction and liable to a fine of not more than $250,000.
Liability of directors, officers, etc.
20 If a person or an entity commits an offence under this Part, any director, officer or agent or mandatary of the person or entity who directed, authorized, assented to, acquiesced in or participated in its commission is a party to and guilty of the offence and liable on conviction to the punishment provided for the offence, whether or not the person or entity has been prosecuted or convicted.
Offence by employee or agent or mandatary
21 In a prosecution for an offence under subsection 19(1), it is sufficient proof of the offence to establish that it was committed by an employee or agent or mandatary of the accused, whether or not the employee or agent or mandatary is identified or has been prosecuted for the offence, unless the accused establishes that they exercised due diligence to prevent its commission.
PART 3 General
Registry
Electronic registry
22 (1) The Minister must maintain an electronic registry containing a copy of every report or revised report provided to the Minister under section 6, 7, 11 or 12.
Accessibility of registry
(2) The registry must be made available to the public on the Department of Public Safety and Emergency Preparedness website.
Regulations
Regulations
23 The Governor in Council may make regulations for carrying out the purposes and provisions of this Act, including regulations
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(a) prescribing other entities for the purpose of the definition entity;
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(b) respecting the circumstances in which an entity is controlled by another entity; and
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(c) prescribing anything that may, by this Act, be prescribed.
Report to Parliament
Annual report
24 (1) The Minister must cause to be tabled in each House of Parliament, on or before September 30 of each year or, if a House is not then sitting, on any of the next 30 days on which that House is sitting, a report containing
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(a) a general summary of the activities of government institutions and entities that provided a report under this Act for their previous financial year that carry a risk of forced labour or child labour being used;
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(b) the steps that government institutions and entities have taken to assess and manage that risk;
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(c) if applicable, measures taken by government institutions and entities to remediate any forced labour or child labour;
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(d) a copy of any order made pursuant to section 18; and
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(e) the particulars of any charge laid against a person or entity under section 19.
Publication
(2) The Minister must publish the report in a prominent place on the Department of Public Safety and Emergency Preparedness website within 30 days after it is tabled in both Houses of Parliament.
Review of the Act
Review by committee
25 (1) At the start of the fifth year after the day on which this section comes into force, a comprehensive review of this Act must be undertaken by the committee of the Senate, of the House of Commons or of both Houses of Parliament that may be designated or established for that purpose.
Report to Parliament
(2) The committee referred to in subsection (1) must, within one year after the review is undertaken under that subsection, submit a report to the House or Houses of Parliament of which it is a committee, including a statement setting out any changes to the Act that the committee recommends.
PART 4 Customs Tariff
1997, c. 36
26 Subparagraph 132(1)(m)(i.1) of the Customs Tariff is replaced by the following:
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(i.1) amending that tariff item to exclude goods that are mined, manufactured or produced wholly or in part by forced labour or child labour as those terms are defined in section 2 of the Fighting Against Forced Labour and Child Labour in Supply Chains Act, from that tariff item, or prescribing the conditions under which such goods may be excluded from that tariff item,
27 The reference to “Goods mined, manufactured or produced wholly or in part by forced labour” set out in the Description of Goods of tariff item No. 9897.00.00 in the List of Tariff Provisions set out in the schedule to the Act is replaced by the following:
Goods mined, manufactured or produced wholly or in part by forced labour or child labour as those terms are defined in section 2 of the Fighting Against Forced Labour and Child Labour in Supply Chains Act;
PART 5 Coming into Force
January 1
28 This Act comes into force on January 1 of the year following the year in which it receives royal assent.
First Session, Forty-fourth Parliament, 70-71 Elizabeth II, 2021-2022 |
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SENATE OF CANADA |
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An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff
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AS PASSED
BY THE SENATE
April 28, 2022
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