Subcommittee on International Human Rights Committee on Dec. 12th, 2017

[The Chair, Liberal, Michael Levitt]

Good afternoon, everyone.

We will get going because we have a number of guests here today. It's great to see such a crowd drawn to what might be our final session of the season.

Also, to members, we're going to take 10 minutes at the end for some committee business.

With that, we'll continue our study on child labour and modern slavery. We have witnesses today from the Department of Employment and Social Development: Rakesh Patry, director general, labour program; and Michelle Sinclair, senior policy analyst in the labour program.

Then from the Department of Foreign Affairs, Trade and Development, we have Claude Beauséjour, director, education and preventing violence and harmful practices division; Chris Moran, director general, trade portfolio strategy and coordination; and Mandy Sheldrake, deputy director, international crime.

With that, can we have the folks from Employment and Social Development Canada begin?

Mr. Patry, will you give the remarks?

[Rakesh Patry, Director General, Labour Program, Department of Employment and Social Development]

I will.

[The Chair, Liberal, Michael Levitt]

Wonderful. We'll have you start off.

Thank you.

[Rakesh Patry]

Thank you very much, Chair.

Good afternoon, everyone. Thank you for the opportunity to address the subcommittee about Canada's efforts to eliminate the use of child labour.

I'm going to provide an overview of the labour program's international efforts and in so doing I may touch briefly on the work of other departments. We work very closely with our colleagues, particularly from Global Affairs Canada who are here with us today, and in other departments as well to ensure a coherent response to child labour, particularly hazardous child labour or forced labour within supply chains.

Those who have already appeared before this subcommittee have discussed related challenges at length, and we have found their observations to be extremely useful. We look forward to the conclusions of this study and the forthcoming recommendations.

To begin with, as you're aware, the government has developed a progressive trade agenda that seeks to ensure that economic growth is inclusive. To this end, Canada negotiates comprehensive and enforceable labour obligations in all our free trade agreements, including the effective enforcement of domestic labour laws that provide protection for fundamental labour rights and principles, such as the effective abolition of child labour and the elimination of forced labour.

When Canada negotiates and enters into these free trade agreements it seeks to ensure the existence of a level playing field and avoid a race to the bottom in labour standards between trading partners.

To date, we have successfully negotiated some of the most comprehensive labour provisions in trade agreements in the world, and we are endeavouring to do so in ongoing trade negotiations. For example, Canada has recently launched negotiations toward deepening its trade partnership with the Pacific Alliance, which compromises Chile, Colombia, Mexico, and Peru, and as you're well aware we're negotiating the modernization of the NAFTA labour provisions with the United States and Mexico.

With current and pending agreements as well as ongoing negotiations, once concluded, these agreements could cover more than a third of the world's population.

We continue to promote co-operation with trading partners, including through focused capacity-building projects addressing the issues of child and forced labour. Over the years, Canada has provided funding to the ILO, the UN's International Labour Organization, to undertake projects, including for example, a project promoting gender rights and tackling child labour in the garment and footwear sector in Vietnam, and a pilot project for the elimination of child labour among refugees and host communities in Jordan.

The role of social partners and civil society organizations in combatting human trafficking, forced labour, and child labour is invaluable, and we thank these groups for sharing their knowledge, skills, and expertise. They are key partners to us, particularly for their research analysis and awareness-raising efforts.

Despite the strides we have made to ensure a multi-faceted, comprehensive approach to eliminate child labour, particularly hazardous child labour or forced labour, certain challenges remain with respect to supply chains in particular.

Combatting child labour or forced labour within supply chains requires the engagement of a number of Government of Canada departments. Our goals are to improve respect for internationally recognized labour standards and human rights, promote the voluntary endorsement by Canadian businesses of internationally recognized corporate social responsibility standards, and protect Canadian workers and businesses from unfair competition. We also want Canadian consumers to have the information they require to constructively engage with companies.

Earlier this year, our department spearheaded the creation of an interdepartmental working group to study the issue of transparency or due diligence throughout global supply chains. We work closely in this endeavour with our colleagues from Global Affairs Canada; Public Services and Procurement Canada; Public Safety; Justice; Innovation, Science and Economic Development Canada; and Natural Resources Canada.

Challenges remain in understanding the complexity of supply chains and the respective roles of different stakeholders in enhancing transparency. Our working group has examined legislative developments to explore how such measures could build on Canada's current approaches.

Different governments have adopted various approaches such as mandatory transparency legislation and bans on the importation of goods made with forced and child labour.

As you all well know, mandatory legislation such as the California Transparency in Supply Chains Act and the U.K.'s Modern Slavery Act seek to increase transparency around supply chain issues and engage consumers, investors, and advocates in encouraging companies to take action when necessary.

These are important outcomes. However, one challenge raised by civil society in this context is that companies can comply with the strict letter by merely reporting, even when they've taken no steps to address modern slavery in their operations and supply chains.

We've also kept ourselves abreast of more recent measures that are more specific in focus such as the Netherlands' forthcoming child labour due diligence law, or more comprehensive like France's corporate duty of vigilance law. As you have heard from other witnesses, these models differ from the California, U.K., and proposed Australian models in that they mandate due diligence, in addition to reporting.

Where the Californian, U.K., and proposed Australian models do not provide for fines, sanctions, or civil liability for non-compliance, the Dutch and French laws do provide for the respective possibilities of penalties or imprisonment, fines or civil liability.

As these measures are relatively new or have not yet come into force, the effectiveness of the various reporting models is not entirely clear. We are aware of arguments in favour of consistency of international reporting obligations, so officials are consulting with governments, civil society representatives, and other stakeholders to research the various possibilities. Moreover, we continue to study other mechanisms to complement the existing array of measures, including voluntary codes of conduct, to address forced labour in supply chains.

For example, Canada is making strides to eradicate human trafficking from the production of goods and provision of services purchased by the government. Public Services and Procurement Canada published a request for information on November 27 of this year seeking input from the apparel industry to develop guidelines and a collective approach for the ethical procurement of apparel. As part of the proposal, suppliers selling apparel to the government will self-certify that they and their direct Canadian and foreign suppliers comply with local laws and international standards on labour and human rights, including freedom from child labour, forced labour, and human trafficking.

In addition, Public Services and Procurement Canada plans to expand its code of conduct for procurement to include similar provisions to ensure that the Government of Canada's procurement supply chains are free from human trafficking and labour exploitation. Canada already prohibits the importation of commercial goods made with prison labour. Similar prohibitions exist in the U.S., which also prohibit the importation of goods made from forced labour and/or indentured labour.

This type of approach may also increase transparency and awareness. It could motivate companies to be more proactive on these issues and to commit to taking concrete action. This could also create an opportunity for collaboration among government, companies, civil society, and consumers in enhancing transparency in supply chains.

The ILO is also conducting research to help fill the knowledge gaps on statistics. We look forward to the results of that research as well as the results of this study, as they will undoubtedly shed light on the existing risks that are throughout Canadian supply chains and advance the discussion towards the identification of the best model for Canada.

We're committed to continuing engagement to determine the best combination of measures to address these issues in a manner appropriate to the Canadian context and supportive of international initiatives in this area. We will continue to collaborate with other Canadian jurisdictions, social partners, UN agencies, civil society, international governments, and others to combat child labour, particularly hazardous child labour or forced labour within supply chains.

Thank you again for your time this afternoon.

[The Chair, Liberal, Michael Levitt]

Thank you very much.

Before we move to Ms. Moran, I also want to acknowledge the presence of Robert McDougall, who is the executive director of the south Asia division for Global Affairs Canada.

With that, Ms. Moran, please go ahead.

[Chris Moran, Director General, Trade Portfolio Strategy and Coordination, Department of Foreign Affairs, Trade and Development]

Thank you, Mr. Chair, for the opportunity to speak today with the subcommittee on the work of Global Affairs Canada to address the issue of forced and child labour in global supply chains.

My remarks today will outline our department's approach on corporate social responsibility, or SCR, writ large, and provide a summary of our international assistance programs and multilateral engagement efforts. My fellow colleagues present today can answer specific questions on certain of these details.

These hearings have provided an opportunity for us to outline the Government of Canada's strong commitment to responsible business conduct, ethical public procurement, and the application of the International Labour Organization's fundamental principles and rights at work.

Canada recognizes that the participation in global supply chains is a key determinant of success for Canadian business in many industries, and thus is an important potential source of sustainable economic growth and job creation. However, it’s also clear that poor working conditions exist within some global supply chains, including the use of child and forced labour.

As a key interlocutor with business through the trade commissioner service, we see a specific opportunity to address these issues through Canada's corporate social responsibility strategy. Recognized worldwide as a strong stance on responsible business operations abroad, the strategy articulates Canada's expectations for our extractive sector operations abroad—although the principles could be applied to other sectors—and specifically, engagement to promote internationally recognized guidelines, foster networks to convene key stakeholders on CSR issues, strengthen the environment for responsible business and anti-corruption measures, and provide effective and easily accessible dispute resolution mechanisms.

Promotion is underpinned by a government expectation that all Canadian corporate activities abroad respect human rights and all applicable laws to operate transparently and in consultation with host governments and local communities, and to work in a socially and environmentally responsible manner. By encouraging companies to adopt guidelines outlined in the CSR strategy, there is further expectation that companies will take voluntary measures that may be more stringent than the laws of countries in which they operate, specifically on children's rights and child labour impacts. This includes the expectation that companies align their internal policies and operations with internationally recognized CSR standards such as the OECD guidelines for multinational enterprises, the UN guiding principles on business and human rights, and the UN's children's rights and business principles.

Among other things, these standards encourage companies to respect all human and labour rights enshrined in the international bill of rights and the ILO fundamental conventions and to perform early-stage due diligence impact assessments of their operations on human rights and labour conditions of the workers and the communities affected. These standards apply to Canadian businesses wherever they operate, and companies are expected to be aware of the practices inherent in their supply chains, with both their suppliers and subcontractors.

We do not consider that a business's commitment to respect human rights and eliminate child labour in their supply chains is limited to a checklist to tick off or to a supplier code of conduct. Companies have an incredible opportunity to use the leverage of their business relationships to engage with their suppliers, raise awareness, provide training, and improve their suppliers' operations, as well as to gain a better understanding of their own business model.

With respect to our work to foster networks and strengthen the overall environment for responsible business conduct, we have been active in supporting the OECD to develop and disseminate a series of supply-chain due diligence guidance materials for the financial, mineral, garment, and footwear sectors to provide each respective industry with tools for the practical application of the OECD recommendations. This includes specific guidance dedicated to addressing and preventing child labour.

Canada's engagement on CSR with extractive industries is proving successful, as the industry itself is stepping up its voluntary business practices. For instance, the Mining Association of Canada has recently incorporated into its sustainability framework measures to prevent the use of child and forced labour in the mining supply chain, in line with relevant ILO conventions. This framework, known as “Towards Sustainable Mining”, is unique in the world and has established itself as a best-in-class CSR standard for the mining industry. It is mandatory for all MAC members.

While we rely on these best practices to prevent problems, we know that allegations arise, and Minister Champagne has been clear that we want to know about them. Canada offers two dispute resolution mechanisms. The CSR counsellor for the extractive sector facilitates early intervention and advice to avoid impacts before they escalate, and Canada's national contact point for the OECD guidelines for multinational enterprises provides a multi-sectoral, accessible platform for dialogue and resolution between parties seeking solutions that may include changed or improved practices, compensation, and apology.

Please allow me to broaden the lens beyond the CSR strategy at Global Affairs Canada.

It's recognized that, except for a few entities, most Canadian retailing companies in the food and garment industries—two of the most at-risk sectors for forced and child labour—import their goods from foreign suppliers established in developing countries. These companies and their suppliers largely fall outside the mandate of the Global Affairs' trade commissioner service to promote Canadian exports and to attract inward investment to Canada. As indicated by my colleague from ESDC, our multilateral engagement and trade co-operation are also contributing to efforts to eliminate child labour in supply chains, and efforts are deployed through our international development assistance programs as well.

Global Affairs is currently supporting a number of international assistance projects working towards the elimination of child labour. These projects are focusing on applying best practices and helping governments, donors, private sector, and civil society actors to understand the root causes of exploitative child labour and to help eliminate the abhorrent practice.

Most significantly, Canada has invested billions of dollars in support of development projects and humanitarian assistance to refugees, which, while not officially labelled as child labour initiatives, have contributed to countering some of the conditions that create an enabling environment for economic exploitation. These projects have supported millions of women, men, and children, by providing decent work and livelihood opportunities, food security, better access to finance, education, vocational training, and health care, all of which contribute to keep children, in particular girls, out of and far away from child labour.

Moving forward under the feminist international assistance policy, Global Affairs Canada will place a greater focus on ending all forms of violence, especially gender-based violence against girls and boys. This includes preventing and protecting children from the worst forms of child labour as well as countering human trafficking, a criminal activity that fuels forced and child labour.

Canada was among the first countries to ratify the UN Protocol to Prevent, Suppress and Punish Trafficking in Persons Especially Women and Children. In addition to our domestic efforts, we continue to provide assistance to international partners, working with the UN Office on Drugs and Crime and other organizations, including the International Organization for Migration and INTERPOL, to provide technical assistance and capacity building to enable countries to successfully address the crime of trafficking a person.

Addressing child labour in global supply chains is, however, a complex endeavour that goes much beyond promoting CSR standards for Canadian enterprises operating abroad, advocating for policy changes in foreign capitals, or providing development assistance. Our international efforts need to be complemented by domestic interventions with and led by companies, civil society organizations, consumers, and investors, along with governments at all levels. With our colleagues in the interdepartmental group on supply chains, we are following with great interest the development of supply chain transparency and due diligence legislation in several foreign jurisdictions to better understand how such measures could complement our current approach to eliminate child labour.

Thank you very much for the opportunity to speak today.

[The Chair, Liberal, Michael Levitt]

Thank you very much.

We'll go right into our first round of questions.

We will begin with MP Anderson.

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

Thank you, Mr. Chair.

I want to thank our guests for being with us today.

I would like to follow up on something you mentioned at the end, Ms. Moran. You're talking about following with interest what's happening in other countries. We've had many witnesses here who suggested that we need to move ahead with some legislation in Canada.

I don't know who would be best to answer this, but have you received any direction to examine this in terms of putting legislation together to deal with this issue? We've had hearings here on trafficking, on CSR, and now on child labour, and this has come up numerous times.

Do you have direction from the government to begin to move forward on this?

[Rakesh Patry]

Yes, we have been asked to look at various options for legislation and we are working with partners across government in looking at what those options would be, as both Ms. Moran and I explained, I think, in our remarks.

We do know—and as you've heard from witnesses—there are a number of models out there. We are studying what the different countries' models are. We have listened to civil society. Many of the witnesses who have come and spoken to your committee over the past few weeks have also spoken with us about what their interests are. We are gathering all of that information and examining what the various models and options could potentially be.

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

Does anything stand out for you then? We have a number of options right from completely voluntary through to some serious compliance requirements. What do you think would work best for Canada? What are you seeing that would be the strengths of some of the different proposals?

[Rakesh Patry]

I think it would be premature for me to say what would work best for Canada. I would say that there are pros and cons to each of the models, as you have heard. The range runs from the California model, and the U.K. model is also quite similar, with the voluntary reporting mechanism. Then you have that middle ground where the French and the Dutch are looking at something that is voluntary reporting but it does have a bit of teeth attached to it as well. Then you run all the way down the gamut to the U.S. with a ban of importation on goods made with child labour and forced labour, which can be a difficult thing to enforce but certainly there are merits to an option like that as well.

We certainly recognize that there are pros and cons with all of them. We do want to hear from corporations and civil society around what they see as the merits of this as well.

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

I just want to follow up. Maybe I should have been listening a little bit more closely when you were speaking, but you talked about some compliance requirements for the textile industry, and then talked about procurement provisions for the government for supply chain accountability. Have they already been put in place?

Can you just explain a bit more about what's required at this point?

[Rakesh Patry]

Sure.

Our colleagues from Public Services and Procurement Canada, who are responsible for government procurement, as you know, are in the process of putting this into place, so I can't expand a great deal beyond the surface knowledge that I have of it.

What that basically amounts to is that on November 27—

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

I'm sure they were encouraged by our study, right?

[Rakesh Patry]

I'm sure.

Basically they asked for input from the apparel industry within Canada to develop guidelines looking at ethical procurement of apparel when the government is procuring apparel. Suppliers who sell to the government need to go through this process of self-certifying to ensure that both they, as well as their Canadian suppliers and their foreign suppliers, are complying with all local laws.

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

Is there already a legislative structure in place that you can require compliance? Do you know?

[Rakesh Patry]

No, I don't believe so. I don't know with certainty, but I don't believe so.

Are you talking about compliance by the private sector?

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

Yes.

[Rakesh Patry]

No, a legislative structure—

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

So you're just talking about voluntary.

I want to come to this. We've had some suggestion that companies might be responsible enough to be able to do this on their own, and others have said that's not going to happen. I'm just wondering. Do you have any opinion on that? Can we expect that the companies will do the right thing without legislation?

I think some of us would love to see that happen without the government and taxpayers having to get involved in this. From your experience, is that realistic or is it, again, a thing where the government is going to have to say, “Look, we need to put some legislation in place. We don't believe you'll comply otherwise.”

[Rakesh Patry]

I think the U.K. model is precisely that, the idea of voluntary reporting.

But the challenge is that I think it's a little premature to see how effective the U.K. model is going to prove to be. California has had similar legislation in place for a number of years and I think there is a sense that companies have been reporting under the California legislation, but it's certainly not been a comprehensive approach to it. It's a bit of a mixed bag around how the reporting has taken place.

Canadian companies that are active in the U.K. and in California do fall under those regulations as well, so they do have to report as well.

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

I want to shift direction a little bit here. We've had a commitment from MPs in this Parliament and in the last parliaments in terms of forced labour in the textile industry in southeast Asia. Can you just expand a little bit on where we are with keeping accountability for that?

We had a fire a few years ago where a number of people were killed and it got quite a bit of attention here in Canada. Where have we moved on that issue?

[Rakesh Patry]

The incident you are referring to, I believe, would probably be the Rana Plaza collapse in Bangladesh, where there were some Canadian companies that were involved in manufacturing there. Following that collapse, in fact just last year, Canada joined with the U.S., the European Union, and the International Labour Organization in what has been termed a sustainability compact. The idea of this is that we're working with the Bangladeshi government, with textile manufacturers in Bangladesh, as well as labour unions to ensure there is an improvement in safety standards across the country in all factories. There has been significant progress in improving labour standards and the inspection of factories there.

There still remain challenges that need to be undertaken, particularly around freedom of association. We have concerns that workers need to have that option available to them, and there is still additional work that needs to be done on that front. Even on labour inspections there is additional work that needs to be done, but we have been working very closely with stakeholders, as well as with the government in Bangladesh, in improving the standards.

I think that since the Rana Plaza collapse there has been a significant improvement in safety, but there is still a great deal of work that needs to be done.

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

Have you been involved at all, then, in the fishing and seafood industry as well? That's come up numerous times here. Have you done any work that's parallel to what's happening in the textile industry on seafood?

[Rakesh Patry]

No, we haven't. We know that the European Union has been quite heavily engaged in the Thai fishing industry in particular in addressing issues around child labour there. We have not been directly involved in that, though.