Canada's forced labour laws have potential, but supply chains hard to police, expert says

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While Canada's forced labour laws have the potential to be effective, those laws aren't being enforced, says Ottawa lawyer William Pellerin.

Canada is currently reexamining how it combats forced labour abroad in the wake of a new U.S. law that will come into effect on June 21, aimed at curbing the flow of products into the country that originate from forced labour in other countries. 

This is in part because of detailed evidence of human rights abuses against ethnic Uyghurs in China's Muslim region of Xinjiang, which produces a fifth of the world's cotton production, and is a hub of tomato paste and solar-panel production.

In 2020, Canada brought in a law that makes the import of goods with connections to forced labour illegal. But according to The Globe and Mail, only one suspected shipment has been barred from entering the country, and that shipment was eventually released. 

Though Seamus O'Regan, Canada's Minister of Labour, couldn't explain why there hasn't been any enforcement, he agrees that now is the time to act. 

There is a private member's bill that has passed in the Senate that puts the onus on companies globally to show what they're doing to stop forced labour in their supply chains.

"We right now are taking this to committee to figure out how we can strengthen it," O'Regan told The Current guest host Nahlah Ayed.

"We've been on the sidelines trying to pick up best practice, but now is the time to act."

William Pellerin is a lawyer in Ottawa who focuses on Canadian laws surrounding forced labour imports. Here is part of his conversation with Ayed. 

How effective do you think Canada's current law is at keeping out goods that are made by forced labour? 

I think the law has the potential. The law that we currently have on the books has the potential to be effective. It's a hard one to enforce. And that's why, as you mentioned, there has been very little enforcement activity, if any at all. 

But I think it's about building the evidence in the background and empowering the Canada Border Services Agency to actually make those enforcement actions. 

Can we drill down on the details of that? Why is it hard to actually implement? Why is it hard to enforce? 

Well, for one thing, the law as it stands right now, the goods are not going to be stamped or marked in any way, of course, and that goes without saying, as being a product of forced labour.

So when the Canada Border Services Agency has the goods or you import the goods and your B3 customs form is going to label it as a T-shirt, as a hammer, as a barbecue. It's not going to label that good as a product of forced labour. 

And so the question then becomes, what information does the Canada Border Services Agency have to halt those goods, to detain them or otherwise? And so they're relying on third parties. 

And one of those third parties is ESDC, Employment Services and Development Canada and Social Development Canada. So they're relying on reports from, from ESDC or tips from the public, and that's not always forthcoming or the best possible evidence. 

So what could actually change if this new private member's bill that we mentioned actually comes into law? How could that change things? 

I think the private member's bill creates an obligation on Canadian companies, medium and large companies, to produce annual reports and make those reports public. 

So basically what it says is you have to tell us everything that you're doing to address forced labour in your supply chains, and you have to detail your supply chains. And everyone will be able to look up these reports on the company's websites. 

I think that will shed a lot of light and empower consumers, and through the media, to look at what companies are doing and pick the ones that they want to purchase from. 

It's not a diligent standard, and what I mean by that is the new bill does not tell companies how they must act or what they must do specifically. It simply says, tell us what it is that you are doing. 

Is that a flaw in your eyes? 

I think it's one approach. I don't know if it's a flaw. I think the private member's bill is done that way…. Ultimately, I think imposing a diligent standard can be a one-size-fits-all approach that may not necessarily work. So I think that this bill is kind of the first step in the chain. 

What do you think the impact will be of this new U.S. law, on the goods that are arriving in Canada? Could we see a diversion of certain kinds of goods here? 

So the U.S. approach is very different than the Canadian one. It's really kind of, run fast and break things. And there's some benefit to that. And some folks think that that's the right approach in the circumstances. 

The problem, of course, is the thing that you might break is global supply chains. And we've already had tons and tons of enforcement actions that have resulted in the supply chains disintegrating a little bit in the United States on this specific issue because the United States has been taking actions, numerous actions, something like 1,300 enforcement actions even before this bill has come into place. 

So things are about to get much more difficult at the border. Not to say that it isn't already. 

When you look at the border, how confident are you that the Canada Border Services is actually equipped to investigate and catch goods that may be running afoul of the law? 

I think that's why Canada has been taking a cautious approach … really being on the sidelines and learning from global lessons from which countries have done what and then figuring out what has worked. 

And I think Canada is now stepping off the sidelines and ready to take action with them. 

What are the holes that need to be plugged at the moment? What do you want to see the Canadian government do to combat forced labour goods coming into this country? 

I think that ultimately, no one wants forced labour in their supply chain. No one is OK with this. I speak with companies regularly who are trying to figure this out.

I think that the pressure is definitely on the companies to do their diligence, to understand their supply chain, to track, to get, as much as they can, in with their suppliers and in their contracts and perform risk audits as much as possible. 

Written by Philip Drost. Produced by Joana Draghici and Camilla Bains. Q&A edited for length and clarity.