Prepare Your Organization for the Fighting Against Forced and Child Labour in Supply Chains Act in Canada

You may have heard that Canada is taking the next step into addressing forced labour and child labour in their supply chain. Earlier this year, we wrote about what you need to know with regards to the Fighting Against Forced and Child Labour in Supply Chains Act (the Act), including its context, who it affects, and the reporting requirements. Read on to learn about the Act’s updates, and to ensure your organization is prepared for the Act and it’s reporting requirements.

On May 11^th, 2023, the Fighting Against Forced and Child Labour in Supply Chains Act was passed, requiring government institutions and certain private sector organizations to report on measures taken to prevent and reduce the risks of forced and child labour in their supply chains. The Act comes into effect on January 1^st, 2024, and the first annual report is to be due on May 31^st, 2024. Reports are thereafter due yearly on or before May 31^st.

After the Act was passed, more specifications were presented about the activities an entity needs to be involved in for the Act to apply. These are:

1. Production (manufacturing, growing, extracting, or processing), including mining, selling, or distributing goods in Canada or elsewhere;
2. Importing into Canada goods produced outside Canada; or
3. Control of an entity engaged in any activity described in (1) or (2).

Whether your company meets the reporting requirements or not, it is good practice to learn about your supply chain and minimize risks associated with forced and child labour in your procurement activities and operations. The following steps can improve your company’s ethical supply chain due diligence .

1. Make an organization wide commitment.

Highlight your organization’s commitment to tackling modern-day slavery: reiterate your understanding of the risks associated with modern slavery and ways to prevent it. Embed these commitments within your sustainability/ESG goals, and ensure they exist as actionable obligations within in your Human Rights Policy and/or Sustainable Procurement Policy.

2. Review and update existing policies, procedures, and systems.

When preparing for compliance, review your current management tools to ensure they align with the Act’s requirements. Organizations might find gaps in policy, assessment, management integration, as well as monitoring and reporting.

3. Develop a comprehensive compliance plan.

To address the gaps identified in (2), develop a comprehensive compliance roadmap including tasks and deadlines to:

1. Map your supply chain,
2. Conduct risk assessments and human rights impact assessments,
3. Develop corporate human rights policies, and
4. Implement a Supplier Code of Conduct that reflects the new legislation’s requirements, along with existing ILO International Labour Standards.

4. Train employees and management.

Provide internal training on human rights and modern slavery. Include information about the Act, its requirements, and the importance of ethical supply chain management. This will help staff and leadership understand their role and responsibilities to effectively implement management tools to ensure compliance. If there are capacity limits within the organization, consider seeking external support to provide staff with this training.

5. Engage with suppliers and partners.

The Act requires companies to ensure their suppliers are aligned with the updated definitions of forced labour and child labour. Engage with suppliers to establish clear expectations, open communication channels, and effective compliance. To successfully engage with suppliers:

1. Develop a list of high impact procurement opportunities (HIPOs) and determine how engaging with certain suppliers could impact change in high spend categories, and/or
2. Provide support and collaboration opportunities to smaller suppliers, prompting them to adhere by making positive changes in their supply chains.

6. Establish a common data management platform.

An effective data platform informs what and how to collect, and who is responsible. Ideally find/create a template that can be populated on an ongoing basis. Monitor and improve the data and collection system continuously. To gather data, you might choose to:

1. Issue a Self-Assessment questionnaire (SAQs) or request audit information from suppliers who may have high or medium risk of modern slavery, and other Code violations, and/or
2. Use a risk assessment and management supply chain software like Ecovadis, Assent Compliance, Supplyshift, or Avetta.

7. Implement effective feedback and grievance mechanisms.

These mechanisms are crucial for affected individuals to raise concerns and seek redress. This supports risk mitigation by supporting prompt, fair, and transparent handling of grievances, including providing appropriate remediation when necessary. Companies should ensure these mechanisms are aligned with the United Nations Guiding Principles Effectiveness Criteria.

8. Track your progress using KPIs and metrics.

Determine KPIs and metrics to help you track progress. This helps to determine success along the way and to make data driven decisions in the future. Metrics should be embedded into your organization’s Sustainability or ESG Policy. An organization should be assessing and addressing human rights risks and undertaking due diligence throughout all operations of their business to address modern slavery.

How Reeve can Help

Reeve has helped hundreds of organizations drive their corporate sustainability goals through procurement. We can help you undertake enterprise-wide risk assessments, consider your internal processes and supply chains, and begin collecting data to comply with the new reporting obligations. To ensure your compliance, Reeve can:

• Advise and assist your entity to produce a Modern Slavery Statement,
• Undertake an enterprise-wide risk assessment and identify modern slavery risks,
• Review policies and procedures,
• Revise procurement terms and conditions to cover the new obligations,
• Assist in developing or revising Supplier Codes of Conducts and policies to address modern slaver – such as human rights policies,
• Train employees on risks and compliance related to modern slavery,
• Set up systems and procedures to monitor risks in operation and supply chain, including grievance mechanisms, and
• Develop a monitoring system to assess the effectiveness of your systems.

If you need assistance to ensure your organization is compliant and ready to submit your first report for the Act, please reach out to info@reeveconsulting.com.