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

[Peter Talibart]

This is a new thing, and companies are starting to comply. They are starting to put the statements up, led by the biggest companies, which take this issue very seriously. It is starting to focus directors' attention on the issue of slavery in their supply chains. I don't know how else to answer the question.

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

When the legislation was passed, a lot of the larger supply chains were following certain regulations. I'm asking whether the smaller supply chains were following those to reduce some of their....

Ms. Berman, you're nodding your head, so maybe I'll let you—

[The Vice-Chair, Conservative, David Sweet]

We don't have enough time for anything but a very brief answer, Ms. Berman.

[Cindy Berman]

Very briefly, we've followed this very closely. We don't think.... The larger companies are taking this more seriously and they are addressing this, but the smaller companies are lagging behind. Some of them are B2B businesses and don't have reputations to defend, so they are less likely to be on the front foot on this agenda, but we see some progress being made.

[The Vice-Chair, Conservative, David Sweet]

Thank you very much, Ms. Berman.

Mr. Anderson.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I'm going to follow up on the question that Mr. Tabbara just asked. I'm wondering about information. We're talking about following right through the supply chain, I guess to the lowest levels, but how do we get confirmation of information in places where there's no rule of law and the institutions and the enforcement structures are weak? Can both of you talk to that a bit?

[Cindy Berman]

What we're seeing is companies starting to put into their modern slavery statements that they are mapping their supply chains and understanding risks progressively down the supply chain. Obviously the risks are far greater where there are, as you say, failures in government legislation or application of the law and labour monitoring systems.

We've been arguing very strongly that human rights due diligence needs to include engagement with local stakeholders, local businesses and industry, trade unions, and civil society organizations from the south, from sourcing countries. They have to be part of the solution. This can't just work top down. The more we can engage with and empower local actors to take this issue seriously, the more likely we are to see long-term change.

[Peter Talibart]

I would agree with that. Companies are starting for the first time, really, to map their supply chains, to audit their major suppliers, and to investigate their suppliers—sometimes unannounced. They're changing their suite of contractual documents to oblige suppliers to comply with human rights. Some of them are creating hotlines that are actually available to employees of the suppliers to report violations.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I have another question. Doesn't that actually then give the advantage to the larger companies? To me, it seems to encourage corporate consolidation. Bigger companies have the capacity to do this kind of thing and small and medium-sized companies generally do not. Doesn't that just encourage more consolidation of business? I guess maybe you haven't seen that yet, but I would be interested to see if that's the impact.

[Peter Talibart]

That's why the legislation being passed tends to have financial thresholds, below which they don't apply.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I understand that.

[Peter Talibart]

I think the idea is that there's going to be a kind of an iterative process. The big companies are going to be the pathfinders and develop corporate best practices as their slavery statements get published—

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Their corporate practices are not usually beneficial to those who are smaller than they are. Is there any assurance here that this is going to take place?

[Mark Trachuk]

One of the great subtle advantages of the U.K. Modern Slavery Act is that there's no bright line that you have to meet; you just have to tell people what you're doing. You can only do what your capacity allows you to do, so you're just reporting what you can do.

In theory, you could report that you're not doing anything, although we think that both the capital markets and the consumers won't see that as being very positive. You're not expected to be able to perform in the same way that a large company may be able to.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

That would be different from France's law. Okay.

[Peter Talibart]

It has a financial piece.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Yes.

[Cindy Berman]

Could I make one suggestion?

[The Vice-Chair, Conservative, David Sweet]

It will have to be the final one. Thank you.

[Cindy Berman]

One of the things we've been arguing is that government public procurement requirements might reach some of the smaller companies and suppliers.

Baroness Young has tabled a private member's bill in the House of Lords and the Commons to ask governments to ensure that their modern slavery legislation extends to public bodies too. We believe that public procurement contracts often address some of the smaller companies and those that aren't well-known brands and retailers like the big multinationals, and this would go a long way both to address governments, in order for them to model good practice in their own procurement practices, and also to address some of the companies that are smaller in the supply chain.

[The Vice-Chair, Conservative, David Sweet]

Thank you very much to the witnesses. It's after two o'clock now, which is our usual adjournment time.

On behalf of the committee, I want to say thank you very much to the witnesses for the good work you're doing. We appreciate your knowledge in helping us to craft a report for the Government of Canada, and we really appreciate your being on the vanguard and making sure that you're doing the best you can to encourage people to craft legislation to protect children, as well as those who find themselves enslaved. On behalf of the committee, thank you very much.

Colleagues, we're adjourned.