Subcommittee on International Human Rights Committee on Dec. 5th, 2017

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

Thank you.

[Peter Talibart]

I would go back to the point I made about influence, sir. I'm not a constitutional lawyer. You guys have access to constitutional expertise that would be far more effective than mine. The reality is that it has to start somewhere. The way legal systems evolve is that you introduce a concept and the legal system evolves it in a way that's consistent with the way that system operates, so I'm a lead systems architect. When I look at this problem, I don't look at the barriers provided by the Constitution.

My analysis is frankly pretty straightforward: does Canada want to fight this crime? Does Canada want to make a statement? If it does, there are a number of ways within the constraints of federal jurisdiction that we can do it. We can look at our customs laws. We can look at our tax laws. We can look at the Human Rights Act. As long as those are amended in a manner consistent with the way they operate in the constitutional framework, you don't really have a constitutional issue.

To your point, you have a more difficult problem with a brand new law, because you are going to have the provinces saying, “Hang on, you're going a little too far here.” Maybe there would be a constitutional challenge, but let's think about the issue we are dealing with here: child labour and human trafficking. Is it really going to be in anyone's interest to mount a constitutional challenge to that? Maybe. We can't discount it. If you amend a federal law to orient the system against human trafficking, isn't that going to influence the provinces?

Rather than focusing on what we can't do, let's focus on what we can do. We're stuck with a constitutional divide, but if the federal government sets an example within the constraints of its powers, that's going to have an impact on the provinces.

We are having this discussion because the Modern Slavery Act has had that effect on Canada. I told the U.K. Parliament that this was exactly what would happen, and it has. The way legal systems develop, they're like people. They're jealous. They're greedy. They look at each other. They want the money—

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

I don't mean to cut you off, but I have limited time. Thank you very much. You've answered the question very well.

The issue of scope has come up in the various meetings we've had. My concern is the focus on child labour, and just in listening to the questioning that's been happening over the past few meetings, I think Mr. Anderson holds this concern as well, as do other colleagues. I wonder if that is the most effective way to go.

If you make modern slavery and forced labour the emphasis on the model of the approaches of the U.K., Australia, and California, you would still be able to capture the most egregious violations of children's rights and their labour protections, correct? It almost goes without saying, does it not? If modern slavery and forced labour are the emphasis, that would include children, not just adults. That's the approach of the U.K., Australia, and California.

[Peter Talibart]

Yes, and we're in violent agreement, I feel, but the reality is, that which you would do to secure the system against child labour you would also be doing to secure the system against forced labour. The arbitrary date of the 18th birthday doesn't change the background facts.

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

I have one last question here. It relates to penalties and remedies for non-compliance.

In California, in the U.K., and in what's been proposed in Australia, those models do not provide for fines, sanctions, or civil liability for non-compliance. The Dutch law provides for financial penalties and possible imprisonment. The French law provides for potential fines and civil liability. What do you think is the best approach to take?

[The Vice-Chair, Conservative, David Sweet]

Go ahead, Ms. Berman, very briefly, please.

[Cindy Berman]

We would argue that the French law is the most far-reaching. We support it because it tackles human rights due diligence. We do believe the UN guiding principles on business and human rights are an internationally agreed framework around which companies need a level playing field and clear rules of the game to manage the risks of forced labour and child labour.

A due diligence law that requires companies to conduct human rights due diligence, ensure remedy where rights are violated, address some of those risks, and prevent the problem is the most effective way to go—

[The Vice-Chair, Conservative, David Sweet]

Thanks, Ms. Berman. That's all the time we have.

Ms. Hardcastle.

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

Thank you, Mr. Chair.

I want to thank all the witnesses for the work they're doing to get our heads around the fact that we have to do something about modern slavery and other human rights abuses, including child slavery. I'll leave it for all of you to talk about why it is to our advantage to customize a law now, to have a made-in-Canada approach, instead of waiting and just following in the metaphorical jet stream, as I think was mentioned. What opportunities are we losing out on and what should we be doing?

I'd like to hear from Ms. Berman, Mr. Trachuk, and Mr. Talibart on this. I'll use up all my time for these comments, so all of you will have a couple of minutes. Thank you.

[Cindy Berman]

I think there is a lot of recognition that a proliferation of legislation that is confusing is a risk where companies that operate in multiple jurisdictions need very clear rules of the game. Responsible businesses do need a level playing field, and they need to know that what they are required to do in one jurisdiction is applicable in another.

Having said that, I do think that the Canadians have always been extremely proud of leading on human rights issues. I mentioned the focus on gender. I think there is an opportunity to build on the legislation that has been put in place elsewhere to make sure that it is consistent, coherent, and far-reaching in tackling a level playing field for all companies operating everywhere.

[Peter Talibart]

Every minute that Canada does nothing proliferates an existing risk to the life savings of Canadian pensioners, many of whom have their life savings invested in public companies that don't know they should be doing something to address this issue. The effect on the market cap of a company when a catastrophic human rights event occurs in its supply chain is profound. It's a risk to value.

Our Canadian companies don't want to be supporting this, but they don't know what to do, so give them some guidance. Canadian companies have to make these disclosures anyway. That's benefiting the other countries that have passed these laws. Investors and consumers outside Canada have a better idea of the human rights risk profile of Canadian companies than Canadian consumers and investors do. It makes no sense. We actually don't have any time. We don't. We're behind on this.

[Mark Trachuk, Partner, Osler, Hoskin & Harcourt LLP, As an Individual]

I'll make a couple of really brief comments.

I think this is really an issue of corporate social responsibility. It's something that is talked about; these issues are talked about in the boardrooms of companies across Canada. I think that if we don't create some regime that's consistent with the highest standards of the world, we'll be seen as slipping behind in terms of the maturity and sophistication of our corporate law and the way our companies are run.

I think there's another issue that hasn't been addressed, although maybe in prior sessions it has. We are one of the leading economies in the world in the extractive sector, not just in mining in Canada, but in mining all around the world. Canadian companies are doing it, and we're the best in the world at it. It's rife with human rights abuses like this. We're starting to see class actions being brought in Canada against Canadian directors by former slaves of companies that have been operating in parts of the world where this kind of behaviour goes on.

I think that if we don't get out in front of this, we may find from a competition perspective and an economic and competitive perspective that we'll start to slip behind. It's very important, and it's something that most of our large companies are already complying with, frankly, because they are global in scope.

[Peter Talibart]

Is there still time?

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

Yes.

[Peter Talibart]

The United States has a law, which they haven't used very frequently, that allows their customs to seize goods at the border that are possibly made with forced or slave labour. The European Union is also very concerned about human rights and links it with market access. Canadian companies that aren't doing anything about this risk that market access.

If the United States starts to enforce this law more—several of my partners are ex-federal prosecutors in the U.S. who feel that this is going to happen—those laws can be weaponized as part of a trade dispute. A fantastic way to deny Canadian companies access to that market is to say, “We're not going to allow you to provide those goods into the United States unless we have some sort of guarantee that you don't have a bloody supply chain.”

There are all kinds of risks out there. It would take a small tweak of American law to do that. In the American system, as I put in my paper, there is systemic pressure already, despite the current regulatory regime. I think we'll regret it if we don't deal with it now.

[The Vice-Chair, Conservative, David Sweet]

Ms. Berman, did you have a brief comment?

[Cindy Berman]

I just wanted to say that the Ethical Trading Initiative, in partnership with the British Retail Consortium.... Actually, our companies pushed very hard for the clause on transparency in supply chains. Last week, we were in Geneva for the UN Forum on Business and Human Rights. There were a number of very large French companies arguing how much they welcomed the French due diligence law, and there are other companies also saying that they actually need a level playing field.

To the comments that have been made, responsible business needs government to regulate in order for it to not be undercut by unscrupulous competitors. We know that there's a race to the bottom. In terms of labour standards, there is just-in-time instant production, and the prices of goods are getting lower and lower. Without government intervention to set a regulatory framework, it is extremely difficult for business to self-regulate.

[The Vice-Chair, Conservative, David Sweet]

Thank you very much.

Mr. Tabbara.

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

Thank you very much.

Ms. Berman, you mentioned something in your testimony that was very interesting. I want to highlight it a bit more.

We've been focusing a lot on child labour and forced labour, but we haven't really focused on the family unit. You mentioned that adults are paid so little that they're unable to provide for their children the basic necessities and education, etc. That's where you see a lot children being forced into these industries because of the circumstances that they're growing up in.

I've heard, too, and was reading previously, that often some organizations have cash transfer programs for the females in the family. Whether it's the mother, an older sister, or an aunt in the family, there are cash transfers, and that helps to really prioritize the family into getting these essential needs for their families so their children aren't forced into these programs.

Maybe you could elaborate on that a bit more and on whether you've heard of examples like this.

[Cindy Berman]

Yes, there have been some very successful experiments in cash transfers. Invariably, I think, the evaluations I've seen of it point to significant success and value for the families who are benefiting, but there are some risks that these are not long-term sustainable: that governments need to put in place social protection systems that enable people to access health care if there's a crisis, or to access education benefits or other benefits where they are vulnerable, and governments also need to demand that living wages or at least minimum wages be paid to adults and that appropriate regulatory frameworks are put in place.

I do think that cash transfers—both unconditional and conditional—in a number of jurisdictions have seen a decline in the incidence of child labour. We've just seen in Brazil that the Bolsa Familia, which has now been abolished, sadly, had a massive impact on reducing the incidence of child labour, but that was a fairly wide-ranging set of social protection mechanisms instituted by the government for extremely vulnerable poor families, and I would argue that those ultimately are the most sustainable.

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

Thank you.

My second question is for Mark Trachuk.

After legislation was passed in the U.K., did smaller companies follow the example of larger companies that complied with this legislation?

[Mark Trachuk]

Regarding the compliance, I think that's more of a question for Pete.

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

Peter, you talked about examples in the United States and the U.K., and you said that Australia is ahead of us. Can you tell us a little bit about the U.K. and some of the legislation they've passed and its results?

[Peter Talibart]

Do you mean in relation to the Modern Slavery Act?

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

Yes, that they've passed legislation.