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The enactment of Canadian Bill S-211, titled "Fighting Against Forced Labour and Child Labour in Supply Chains Act," marks a significant development in Canadian legislation aimed at combating modern slavery within supply chains. This new law, which is scheduled to take effect on January 1, 2024, introduces mandatory reporting requirements for a broad range of businesses, including those engaged in the production, sale, or distribution of goods both within and outside of Canada, as well as importers of goods produced abroad.
Who is Impacted by Canadian Bill S-211?
The Act targets a wide spectrum of business entities including:
- Federal government institutions and departments.
- Crown corporations and their subsidiaries.
- Private sector companies that either:
- Engage in the production, sale, or distribution of goods in Canada or abroad.
- Import goods produced outside of Canada.
- Oversee any entity involved in the above activities.
To fall under the Act's jurisdiction, private entities must be listed on the Canadian stock exchange or have significant operations in Canada and meet at least two of the following criteria:
- Generate at least C$40 million in revenue.
- Employ an average of at least 250 employees over one of its two most recent financial years.
Reporting Requirements Under Canadian Bill S-211
Entities affected by this legislation must submit an annual report to the Minister by May 31 each year, detailing efforts made to minimize the risks of forced and child labor in their supply chains during the previous fiscal year. These reports must cover:
- The organization’s structure, activities, and supply chain details.
- Policies and due diligence processes implemented to address forced and child labor.
- High-risk areas within the business and supply chain, including the measures taken to assess and manage these risks.
- Actions taken to remediate forced or child labor and efforts to mitigate impact on vulnerable groups.
- Training provided to employees regarding these issues.
- An evaluation of the effectiveness of the actions taken against forced and child labor.
Organizations have the option to submit these reports individually or jointly for multiple entities under their control.
Enforcement and Penalties
Non-compliance with the provisions of Canadian Bill S-211, such as failure to prepare or publish a report, obstructing investigations, or failing to comply with corrective orders, is considered an offense. Additionally, knowingly providing false or misleading information or making false statements in the reports are also punishable offenses. Corporate officers and directors may be held personally liable for such violations. Convictions under these offenses may result in fines up to C$250,000.
Customs Tariff Amendments
In conjunction with the reporting requirements, Canadian Bill S-211 also amends the Customs Tariff to prohibit the importation of goods that have been mined, manufactured, or produced wholly or in part through forced or child labor. This expansion is part of a broader initiative to align Canadian trade practices with international human rights standards.
Conclusion
As the implementation date approaches, it is crucial for affected organizations to begin preparing for compliance with Canadian Bill S-211. This involves conducting thorough audits of their supply chains, developing comprehensive due diligence processes, and ensuring that all reporting requirements are met. The implications of this Act are significant, as it not only seeks to protect vulnerable populations but also aims to foster transparency and accountability in global trade practices. For businesses, the time to act is now, to ensure that their operations and supply chains are free from forced and child labor well ahead of the 2024 deadline.