Amid Public Safety Canada’s publication of its first annual
report on Canada’s Supply Chains ActTorys counsel Steven Slavens spoke with Forward Law Review to discuss the
findings of the report and reflect on how this mandatory reporting
presents opportunities for Canadian companies, particularly when it
comes to entering the EU market.
The Supply Chains Act (formally the Fighting
Against Forced Labour and Child Labour in Supply Chains Act)
was implemented on January 1, 2024 and requires all government
organizations and large companies in Canada to “report on
their efforts to identify and mitigate the risk of forced or child
labour in their supply chains.”
“I think it’s interesting to see that when it comes to
identifying risks of forced labour and child labour in their supply
chains, government institutions were trailing behind the business
community by a significant margin,” Steven told Forward
Law Review.
The report showed that more than 38% of businesses had reported
on their supply chain activities and over 39% had started the
reporting process, compared to only 17% of government institutions
that had reported their activities. It also showed that more than
44% of government institutions had not yet begun the process.
“I would expect that both government institutions and
private sector entities will improve on those numbers next
year,” Steven said.
Layered on top of Canada’s Supply Chains Act is the
EU Corporate Sustainability Due Diligence Directive, which was
enacted in July 2024 and adds even more mandatory human rights due
diligence and reporting regulations for companies. Preparing for
this reporting will help both Canadian and U.S. companies when it
comes to selling into the EU, Steven said.
“A lot of the knowledge in these organizations was spread
among different stakeholders—legal, compliance, HR,
procurement, audit—and there had never been such an acute
need to put all of those stakeholders in conversation with each
other.”
Steven also noted that while the EU legislation is broader in
scope, “setting up the internal communication channels and the
processes required for ensuring accuracy of their reports will go a
long way toward preparing Canadian and U.S. organizations for EU
reporting.”
Thorough reporting could even be a marketing opportunity for
some companies, Steven added. “For responsible organizations,
there’s a marketing opportunity to be had and potential
differentiator in the marketplace. Investors that take these issues
seriously will look for companies who take these issues seriously.
These reports are marketing tools as well as compliance
artifacts.”
