Canadian industries are pushing back against the country’s planned January launch of the Modern Slavery Act, intended to fight forced labour and child labour in supply chains. Mining and apparel trade groups say the government has failed to spell out the details of the law’s requirements.
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The act, which passed in May, seeks to push corporations to provide greater transparency about their supply chains in order to avoid abetting what critics say amounts to modern slavery.
However, lobby groups, including mining companies and apparel manufacturers, are warning that a perceived lack of clarity about the rules could lead to unwanted penalties and prevent critical goods from entering Canada.
Under the new law, companies found to be in violation face penalties of up to $250,000, reflecting an increasing emphasis by global investors on ethical and social governance issues (ESG).
A spokesperson for Canada’s newly appointed public safety minister said the ministry “has been working expeditiously” to implement the law by January, and that the companies must do their first reporting on or before May 31, 2024.
In May, Canada’s corporate ethics watchdog initiated an investigation of Nike and Dynasty Gold Corp. on allegations that the companies benefited from forced labour from the Xinjiang province in China in their supply chains.
“The real anxiety right now is about getting guidance from the Canadian government about what are their expectations [related to the bill] and what’s going to be sufficient in terms of how detailed or high level things are,” said Sabrina Bandali, an international trade and investment partner at Toronto law firm Bennett Jones.
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