Subcommittee on International Human Rights Committee on Nov. 23rd, 2017

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you to both of you for being here.

My first question will go to Mr. Evans.

Mr. Evans, what do you think about the threshold, thoughts on a particular number when it comes to legislation and what would be required? In the United Kingdom, as you well know, the U.K. legislation mandates that, in terms of annual turnover, a business would have to have, in the equivalent of Canadian dollars, $61 million as far as annual turnover is concerned to be affected by the legislation. In Australia, what the committee is looking at now is roughly in that same range.

There have been concerns raised by the business sector in Australia. I'll read a quotation:

The executive director of the Australian Retailers Association, Russell Zimmerman, says: “Special care must be taken regarding over-regulation and impact on businesses with small turnover who do not have the resources to deal with what are very complex issues.”

How do you feel about a threshold being put in place, and where should that threshold be if that happens?

[Christopher Evans]

It is a contested space. My personal view is that it doesn't really matter where you start, the reality of the supply chain accountability is that you cascade down the supply chain so that the reporting is by the people at the top, but it requires accountability down the supply chain.

The government in Australia is currently recommending $100 million Australian. To be frank, I think the Parliament will come at a figure lower than that when the legislation is finalized. There won't be any science to it either way. The $100 million was a figure the government found relating to some tax provisions. It's not illogical, but it's not science, either. A lot of NGOs are arguing for $30 million to $40 million, or $50 million thresholds. Obviously each Parliament will decide what they think is appropriate.

I think in terms of the quote, it's fair to say that the Business Council of Australia represents the people impacted by the proposal in Australia, not the Australian Retailers Association, which perhaps represents smaller organizations. The Business Council of Australia is supporting the legislation.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much. I don't mean to cut you off, but I'm subject to time constraints.

Mr. Smith, may I ask you a question about what we heard at the outset of the answer from Mr. Evans' supply chain investigation? Can you go into that again? It seems to me that it would be tremendously complex to really understand all the touchpoints in a supply chain. How do you carry out such a process? It seems incredibly complicated to investigate the entire supply chain to ensure that modern slavery isn't being carried out.

I think, for example, of fair trade, which is a welcomed initiative as far as international trade goes, but we know that all too often, perhaps in most cases, what is marketed as fair trade has not been developed in a fair way at all, that there is exploitation well in the process, early on in the process, in the middle of the process, and towards the end of the process. You see how it would be difficult to understand, from my perspective and, I think, the perspective of others as well, about the supply chain and the challenges of monitoring it.

[Benjamin Smith]

Yes, absolutely, it is complex, certainly. Supply chains are getting longer, and they're getting more complex.

Thinking of particular subsectors, just to give you an example, cocoa has been one that's received a lot of attention for forced labour and child labour, and the cocoa industry has been at it, with efforts to eliminate child labour in their supply chain, for 15 to 20 years, and they're still at it. This is after many tens of millions of dollars going into it.

The challenge is really that the supply chain in west Africa is comprised of 1.5 million small holding farmers in cocoa, so you can imagine the challenge of monitoring that sort of supply chain. What the companies have done in terms of certification, and you referenced the fair trade model, there are real limits to it just because of the sheer geographic scope and scale of these supply chains.

What we have found works best is really to work with governments, with communities themselves, to empower people to look after their own interests and their own children. That means working with co-operatives, working with trade unions, so that you can have more of a continual monitoring happening because snapshot social audits can tell you what's happening today, but they don't tell you about yesterday or tomorrow.

I think companies are learning some difficult lessons about the limits of the tools they typically use and have in the toolbox, and are coming up with more creative approaches. We work quite closely with cocoa, with tobacco, with garments to try to have a more effective approach that can reach down deep into these supply chains.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Mr. Chair, with any remaining time, I have a feeling that my colleague, Mr. Tabbara, who I think is third in the list, might not have an opportunity to ask his questions....

[The Chair, Liberal, Michael Levitt]

There is time for a short question.

[Marwan Tabbara, Liberal, Kitchener South—Hespeler, ON]

I'll just ask a very quick question.

What specifically caused the dramatic decline in child labour since the ILO began monitoring?

[Benjamin Smith]

We have just come out with an analysis of that, which points to some key policy levers that have contributed.

In Latin America we've seen a sharp decline. The reason is that it has put in place very strong social protection mechanisms that are targeted at child labour, so things like cash transfers for poor families to send their children to school and keep them out of work, and poverty elimination efforts. I think it's also quite tied to demographic trends. The general progress on reaching universal education and poverty reduction is quite linked to the declines we have seen in child labour.

I would note that in these past four years there has been a plateau. The decline is much slower. That's a cause for concern and we're looking into why. What has happened in the past four years that has caused that?

[Marwan Tabbara, Liberal, Kitchener South—Hespeler, ON]

Why is there a plateau? Why is there a decline?

[The Chair, Liberal, Michael Levitt]

In 30 seconds or less, please.

[Benjamin Smith]

I think demographic trends have a lot to do with it. We've seen in Africa particularly that it's moving in the wrong direction. It may be that we've reached the low-hanging fruit, in a sense, and now we're dealing with child labour that is really entrenched and rooted in systemic poverty. But I don't want to say too much because our analysts are looking into that and we'll be able to say something with a lot more confidence in the coming months and into next year.

[The Chair, Liberal, Michael Levitt]

Thank you very much.

Sorry to be a stickler on time, but I wanted to make sure that we had a full question for MP Hardcastle, and it is now MP Hardcastle's turn.

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Thank you very much, Mr. Chair.

In the interests of time, because we do have a hard stop with this committee with the time slot that we're in right before question period—just so you guys understand that—what I think I'll do, which has been my habit with witnesses in the past, is give you one quick question and let the two of you share the time on it.

I was extremely intrigued by the comment that was made by Mr. Evans in answering my colleague's question with regard to legislation and how we move forward. Mr. Smith, maybe you heard Mr. Evans say this as well. He said that we're anticipating some legislation like the U.K.'s, but only more effective. I take that as a learning opportunity for us on this committee.

Maybe you could share with us what you think would be some effective ways for us to be approaching this journey towards legislation.

[Christopher Evans]

There is wide recognition of a few weaknesses in the U.K. act, as with any legislation after some experience, and there's some talk of amendment bills coming in. There are issues around the reporting repository, that there should have been one established that's easily accessible, and that's not the case, so you can't find all the reports at one place.

There's concern there wasn't enough mandatory content requirement, so that some of the reporting is superficial and others do a very good job of it. It's quite patchy, if you read the reporting. There's a range of issues such as that.

The point I stress to people is that it has changed the conversation. There is a supermarket firm now in the U.K. employing former victims in the U.K., running a jobs program for them. It has had a conversation in the society that has made people more aware, and the act has been a real catalyst for that. In Australia, the inquiry has also been a catalyst.

What we do know is that it sure is a complex question and solutions are hard, but it's a very worthwhile thing to undertake. As I said already, your own mining industry has a voluntary protocol. They are trying. They are giving advice. If you look at companies such as Coca-Cola or Unilever, they're quite sophisticated in their approaches to these supply chain issues.

Yes, the U.K. act can be improved upon. I think you'll find the Australian parliamentary report will be quite extensive in going through those things. There have been submissions from U.K. parties about that. They'll be a good source of information about the critique of the U.K. legislation, but there is ongoing debate in the U.K. as well.

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Mr. Smith, you have a few minutes.

[Benjamin Smith]

The ILO hasn't come up with a policy one way or the other, in favour or against such legislation, so I wouldn't be able to give an institutional perspective.

Just in our experience, transparency is critical. I would agree with Mr. Evans that the conversation has really evolved in important ways in recent years, coinciding with some of the laws that we've seen.

In terms of industry collaboration, it seems to me quite important that there be as few barriers as possible to sharing of information about supply chains, so that companies can reward the good actors. These are pre-competitive issues when it comes to child labour and forced labour in supply chains.

Of course, there are antitrust concerns, but at times those are overblown. There is more scope for sharing amongst companies about what's happening in their supply chains and how they're structured and who they work with.

The ILO hosts what's called the Child Labour Platform. This is a group of companies that come together under the Chatham House Rule of safe space for an exchange of information and experience on tackling child labour in supply chains—big companies such as Coca-Cola and Primark, from a variety of sectors such as mining firms. It's really in the interest of accelerating progress so that companies can learn from each other. A sector such as cocoa, which has been at it for quite some time, can provide its perspective so that mining firms and telecoms can benefit from that experience.

[The Chair, Liberal, Michael Levitt]

Thank you very much.

We have about a minute and a half left. There's a question I want to follow up on and maybe you can submit it. One of the members just put it forth.

Slavery and hazardous conditions are easier to determine, but how do you determine exploitation? For example, if there are no opportunities for the parents but a child of, say, age 13 in Bangladesh can make $60 a week, which is almost the median income, how do you measure exploitation related to the wage and the responsibilities they might have? Maybe it's something that we can get you to provide some written input on, if there's an answer to that, or is it something that there's a response back for?

[Benjamin Smith]

Is this directed to me?

[The Chair, Liberal, Michael Levitt]

Sorry. Yes, it was.

[Benjamin Smith]

Exploitation isn't a term that's defined in ILO conventions, so it's a slippery one. I would be happy to follow up with a more fully fleshed response to that.

[The Chair, Liberal, Michael Levitt]

Thank you very much.

Thank you to both of our—

[David Sweet, Conservative, Flamborough—Glanbrook, ON]

Mr. Evans, since reporting directly would expose some company that would have those employees, how do we deal with that?

[The Chair, Liberal, Michael Levitt]

Mr. Evans, if you have any thoughts on that and care to submit them, we'll absolutely take those with gratitude as well.

Thank you to both our witnesses. You have given us a lot to think about as a first session on this topic. We really appreciate your participation, both here and by video conference.

The meeting is adjourned.