As part of its fight against forced and child labor, the Canadian government will soon require certain businesses to make mandatory reports about the steps they have taken to prevent and reduce that practice in their supply chains, according to a report from law firm Squire, Patton, Boggs.
The new policy is described in the “Fighting Against Forced Labour and Child Labour in Supply Chains Act,” which is set to take effect on January 1 and require affected companies to make their first report by May 31. The act affects both Canadian government institutions producing, purchasing, or distributing goods in Canada or elsewhere; and also entities producing goods in Canada or elsewhere or importing goods produced outside of Canada.
In short, affected groups will have to report on their efforts during the previous financial year to avoid child labor in any step of production (for corporations) or in any step of the production of goods produced, purchased, or distributed (for government institutions). Failure to make those reports, or making false statements in them, can be punished by fines of $250,000 each.
According to Squire, Patton, Boggs, the U.S. and Germany have similar laws as well. The U.S. has enacted the Uyghur Forced Labor Prevention Act, which went into effect on June 21, 2022, to address human rights issues that may impact goods imported into the U.S. And Germany’s Act on Corporate Due Diligence Obligations in Supply Chains act took effect on January 1, 2023. That rule requires obliges companies to observe human rights and environmental due diligence obligations, the law firm said.
