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On 20 December, the Canadian government published the online questionnaire and guidance for reporting under the Fighting Against Forced Labour and Child Labour in Supply Chains Act. Companies will be required to submit their first report to the Canadian government by 31 May 2024 and complete an accompanying 28 question, multiple-choice questionnaire.

  • On 20 December, the Canadian government (Public Safety Canada) published the mandatory online questionnaire and guidance for companies on the Fighting Against Forced Labour and Child Labour in Supply Chains Act. The Act entered into force in January 2023 and requires businesses to report annually on their forced labour and child labour supply chain due diligence.
  • To comply with the Act, companies are required to (i) complete an online questionnaire of 28 questions and (ii) submit a report in-line with the mandatory reporting criteria under the Act. Companies will be required to submit their first report to Public Safety Canada, the government agency responsible for monitoring compliance with the Act, by 31 May 2024.

Online questionnaire

  • Companies are required to complete a 28-question online questionnaire, available on Public Safety Canada’s website. The questionnaire includes 13 questions related to a company’s business and 15 questions related to the company’s child labour and forced labour supply chain due diligence policies, programmes and activities.
  • Most questions are multiple-choice with an option to provide additional information in a 1500-character text box. Additional information and supplementary content such as charts and graphs need to be included within the annual report, where relevant.
  • The questionnaire covers
    • Steps taken in the previous financial year to prevent and reduce the risk of forced labour or child labour
    • Policies and due diligence processes
    • Identified forced labour or child labour risks
    • Measures to remediate any forced labour or child labour
    • Methods, policies and procedures in place to assess the effectiveness of a company’s due diligence.
  • The following is an example question from the online questionnaire for illustrative purposes. EXAMPLE QUESTION: Has the entity taken any measures to remediate any forced labour or child labour in its activities and supply chains?
    • Yes, we have taken remediation measures and will continue to identify and address any gaps in our response.
    • Yes, we have taken some remediation measures, but there are gaps in our response that still need to be addressed.
    • No, we have not taken any remediation measures.
    • Not applicable, we have not identified any forced labour or child labour in our activities and supply chains.
  • If yes, which remediation measures has the entity taken? Select all that apply.
    • Actions to support victims of forced labour or child labour and/or their families, such as workforce reintegration and psychosocial support
    • Compensation for victims of forced labour or child labour and/or their families
    • Actions to prevent forced labour or child labour and associated harms from reoccurring
    • Grievance mechanisms
    • Formal apologies
    • Other, please specify.

Annual report on forced labour and child labour supply chain due diligence

  • In addition to the questionnaire, companies are required to submit an annual report to the Minister of Public Safety by 31 May each year and the Act sets mandatory reporting criteria. Public Safety Canada’s guidance provides some – although very limited – guidance on how companies should report on each of these mandatory disclosures.
  • Parent companies are required to disclose the activities and policies of their subsidiaries / controlled entities.
  • Neither the Act nor the Guidance prescribe a set level of detail for the report. Companies are expected to use their discretion based on their size and risk profile, and should defer to international standards, such as the OECD Due Diligence Guidance for Responsible Business Conduct, to ensure that they are reporting in-line with due diligence principles. The report should also focus on actions taken during the previous financial reporting year, but the guidance recognises that some actions may span multiple years.
  • Reports must be no longer than 10 pages in length, or 20 pages for reports provided in both French and English, and signed by a member of the board. The guidance clarifies that the online questionnaire may be used as a report template or guide for developing the report, but it is not necessary.
  • Companies are required to report on
    • The steps they have taken during the 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.
    • Their structure, activities and supply chains. Activities include all pursuits undertaken by the entity in relation to the production, sale, distribution or importation of goods by the company. The guidance clarifies that reporting must include identifying to the greatest extent possible the source countries or regions of origin of each of the goods and services used at each stage of the supply chain. Companies should also aim to provide a complete overview of their structure, activities and supply chains, even if they do not consider them high-risk for child or forced labour . The guidance also provides a list of example disclosures on a company’s business structure (e.g. legal structure, organsiational structure, number of employees, partner organisations, controlled entities).
    • Their policies and due diligence processes in relation to forced labour and child labour.
    • The parts of their business and supply chains that carry a risk of forced labour or child labour being used and the steps taken to assess and manage that risk. The guidance states that companies should explain how they have identified risks (i.e., mapping supply chains, conducting a risk assessment, etc.) and how they have dealt with the risks identified. Companies may do this for each risk identified, or choose to provide a general description of how they assess and manage risks.
    • Any measures taken to remediate any forced labour or child labour, including the loss of income to vulnerable families when child labour is found. The guidance clarifies that if companies have assessed that their activities and supply chains do not carry a risk of forced labour or child labour being used, and the question of remediation is considered not applicable, then stating this in their report would be sufficient to address this requirement. Alternatively, entities may indicate that no measures have been taken to remediate forced labour or child labour in their activities and supply chains, if that is the case.
    • The training provided to employees on forced labour and child labour. The Guidance provides a list of example disclosures on training.
    • How they assess their effectiveness in ensuring that forced labour and child labour are not being used in their business and supply chains. The guidance clarifies that this must include the policies, processes and other actions the company has implemented to measure and track its success in preventing and reducing risks of forced labour and child labour in their activities and supply chains.
  • Companies must make a copy of the report available on their website and a copy of the report must be provided to Public Safety Canada by the 31 May of each year. Public Safety Canada will keep an online registry of company reports which will be publicly available through an searchable online catalogue.
  • The Government of Canada will continue to strengthen the reporting guidance and expects that the reporting process and questionnaire to evolve in the coming years.

About the Act

  • The Fighting Against Forced Labour and Child Labour in Supply Chains Act applies to companies that are listed on a Canadian stock exchange, that reside in, do business in or have assets in Canada that meet two of three of the threshold criteria (at least $20 million in assets, at least $40 million in revenue, or at least 250 employees).
  • The Act includes fines of up to $250,000 per offence as well as personal liability for directors and officers. The Minister of Public Safety and Emergency Preparedness will be responsible for establishing the enforcement and inspection regime.
  • For more information, see the RBC Existing Policy and Legislation Briefing (November 2023).
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