Combating supply chain slavery

From the February 2024 print edition

Canada kicked off the New Year by affirming its commitment to eradicating modern slavery and enhancing social sustainability.

On January 1, the sweeping new supply chain law, “Fighting Against Forced Labour and Child Labour in Supply Chains Act,” took effect. This legislation requires brands, retailers, and importers to scrutinize and prevent forced labour and child labour within its global supplier networks, mandating that domestic and international businesses with $40 million in gross worldwide revenues, $20 million in assets, or an average of 250 employees or more must conduct comprehensive due diligence in their supply chains.

Rejean Provost is the Team Lead, ESG Strategy for TradeBeyond.

The law requires these companies to report their actions annually to combat modern slavery. Reports must detail policies, risk assessments, and remedial actions taken. A vital aspect of this legislation is its emphasis on transparency, necessitating the publication of these reports on a publicly accessible website. The inaugural reporting deadline is May 31, 2024. This date is critical, as non-compliance could result in fines up to $250,000.

Uniquely, Bill S-211 imposes personal liability on business leaders for any company offenses they directed or authorized, heightening the law’s enforcement potential.

By some measures, the new bill may be the most sweeping supply chain due diligence law in North America, even more than the US’s Uyghur Forced Labor Prevention Act (UFLPA). Where the UFLPA specifically targets goods produced in China’s Xinjiang region, Bill S-211 focuses on supply chain due diligence obligations for businesses operating in Canada, irrespective of the origin of goods. While Canada’s Bill S-211 and the UFLPA address overlapping concerns, they differ in requirements and scope, highlighting the growing complexity of global compliance for multinational corporations and underscoring the necessity of digitalizing supply chain operations.

Visibility
Complying with Bill S-211 will pose challenges, especially for brands and retailers that must navigate complex global supply chains of hundreds of suppliers. That requires coordination, accountability, and visibility, but thankfully it’s made much more manageable by a multi-enterprise platform, also known by Gartner as a multi-enterprise collaboration network. These cloud-based platforms support collaboration between businesses, their suppliers, and their third-party partners, introducing visibility into a supplier base, from vendors to factories to raw material providers.

To comply with the law, supply chain managers will need to establish systems and processes to identify and address any instances of modern slavery or forced labour within their supply chains. This involves enhanced supplier vetting, auditing, and monitoring mechanisms to ensure compliance and ethical practices – all of which can be simplified through the supplier relationship management (SRM) tools of a multi-enterprise platform.

These platforms create a window into an enterprise’s supplier base, enabling the traceability and transparency that Bill S-211 requires. Through their supply chain mapping functionalities, businesses are granted a fuller understanding of their social and environmental footprint, including where all transformations of raw materials occurred, how much carbon they’re emitting, and whether their downstream suppliers abide by ethical labour practices. End-to-end platforms like this let businesses document the chain of custody of every material they use in every product they make, so they can prove that no forced labour was involved.

Multi-enterprise platforms also foster collaboration with industry associations and non-governmental organizations (NGOs) that can prove invaluable in navigating supply chain management complexities in light of Bill S-211. TradeBeyond’s multi-enterprise platform integrates with sustainability databases from business associations and non-profits like amfori and Worldwide Responsible Accredited Production (WRAP), which monitor and certify the social sustainability of thousands of factories and suppliers. To further enhance their capabilities in ensuring compliance with Bill S-211, TradeBeyond acquired Pivot88. This brings Pivot88’s AI-powered traceability tools into TradeBeyond’s suite of solutions, offering a more robust means to trace and monitor their supply chains.

Multi-enterprise platforms create other efficiencies, for instance by saving retailers and brands time through automating the onboarding process for vendors and factories and ensuring new suppliers have read and consented to the company’s terms. From the earliest stages, there’s transparency about your ESG standards and expectations.

Safeguards
This SaaS platform enforces a company’s social and environmental standards by preventing merchandisers from booking orders with non-compliant suppliers and preventing shipping departments from booking shipments with these vendors. Bill S-211 will be a tough adjustment for many businesses, but it’s a necessary one. By leveraging multi-enterprise platforms, businesses can not only comply with the new legislation but also enhance consumer trust and contribute to
a more ethical global supply chain. This proactive approach ensures the long-term resilience and competitiveness of businesses, aligning them with evolving global standards for ethical supply chains.