From the August 2023 print edition
After more than four years of debate, Canada has passed its most significant supply chain law in a generation. Bill S-211, officially known as the “Fighting Against Forced Labour and Child Labour in Supply Chains Act,” addresses the scourge of human rights violations in global supply chains.
Effective January 1, 2024, the law places the responsibility on brands, retailers, and importers to identify and prevent forced labour and child labour in their supplier networks.
After complaints that Canada had for too long turned a blind eye to forced labour in supply chains, Bill S-211 represents significant progress, aligning Canada with a growing global trend of legislation aimed at eradicating modern slavery and promoting social sustainability. By some measures, it may be the most sweeping supply chain due diligence law in North America, even moreso than the US’s Uyghur Forced Labor Prevention Act (UFLPA). Where the UFLPA targets goods made in China’s Xinjiang region, Bill S-211 focuses on due diligence obligations for businesses operating in Canada, irrespective of the goods’ origin.
The law applies to both domestic and international businesses that meet at least two of these three thresholds: CD$40 million in gross worldwide revenues; $20 million in assets; or an average of 250 employees or more. Regardless of their industry, companies that meet these criteria must produce annual reports outlining their due diligence measures to identify and mitigate the risk of modern slavery in their supply chains. These reports must include information about a company’s policies, procedures, risk assessments, and remedial actions taken to address any identified issues. To ensure transparency, these reports must be published on a publicly accessible website.
The law’s first reporting deadline is May 31, 2024, a date that’s sure to receive attention in boardrooms because of the law’s unique enforcement structure. Businesses that don’t comply will be subject to fines of up to $250,000, and unlike other global supply chain due diligence laws, Bill S-211 holds business leaders personally liable for any company offenses they directed, authorized, or in any way participated in.
Meeting requirements
Complying with the law will pose considerable challenges, especially for brands and retailers that must navigate complex global supply chains of hundreds of suppliers. That requires coordination, accountability, and visibility. Thankfully, it’s made much more manageable by a multi-enterprise platform, sometimes also known as a multi-enterprise collaboration network. These cloud-based platforms support collaboration between businesses, their suppliers, and their third-party partners, introducing complete visibility into a company’s supplier base, from vendors to factories to raw material providers.
To comply with the law, supply chain managers will need to establish robust 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 entire supplier base, enabling the traceability that Bill S-211 requires. Through supply chain mapping, businesses are granted a fuller understanding of their social and environmental footprint, including where their yarns and fabrics come from, how much carbon they’re emitting, and whether their downstream suppliers are vetted and accredited. An end-to-end platform like this allows businesses to 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 also prove valuable in navigating the complexities of supply chain management in light of Bill S-211. TradeBeyond’s multi-enterprise platform can even integrate 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 factories and suppliers.
By making critical certification details from these partners available in real time, these integrations eliminate the need for supply chain managers and compliance teams to log in to multiple systems. They create other efficiencies, like saving retailers and brands time through automating the onboarding of vendors and factories and ensuring that all new suppliers have read and consented to the company’s terms. This way, from the earliest stages of working with a supplier, there’s transparency about your ESG standards and expectations.
This software 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 them.
Bill S-211 will be a tough but necessary adjustment for many. By implementing responsible sourcing practices with a multi-enterprise platform, businesses can protect their reputation, strengthen consumer trust, and contribute to a sustainable global supply chain, while fostering the resilience needed to remain competitive.