Earlier this week, we hosted an information session with Shift Critical International, an executive sustainability advisory firm based in Calgary. The firm’s co-founders, Craig Stenhouse and Frank McShane went into detail about the specifics of the new Modern Slavery Act and the necessary steps companies will need to take to meet their legal disclosure and staff training obligations.
As a recap, in 2023 the Federal Government introduced the Modern Slavery Act (The Fighting Against Forced Labour and Child Labour in Supply Chains Act). This Act is part of the Government’s broader initiative to combat forced labour and child labour in global supply chains. The Act has since come into effect on January 1, 2024.
This law applies to any corporation, trust, partnership, or other unincorporated organization if it:
- Is listed on a Canadian stock exchange; or
- Has a place of business in Canada, does business in Canada or has assets in
Canada, and meets two of the following three criteria for at least one of its two
most recent financial years:
-$20 million or more in assets;
-$40 million or more in revenue; or
-250 or more employees
- If either of the above two conditions is met, the entity engages in any of the
-produces, sells or distributes goods in Canada or elsewhere;
-imports goods into Canada; or
-controls an entity engaged in these activities.
Below are some key resources and takeaways to help Enserva members position their organizations accordingly:
- Full text of the Act is available here.
- Shift Critical’s primer on the Act.
- Information on Shift Critical International’s online and individual staff training option.
Answers to Common Questions
Q: How can a company get started with a supplier risk assessment process and create a report on its measures to effectively mitigate risks?
To effectively mitigate risk, you can follow these four steps:
- Understand your supply chain: The first step involves compiling baseline information about your suppliers, such as their location, industry, products, and other relevant details. This information can help you understand the real costs and actual service levels associated with each supplier. It’s also important to identify the most critical suppliers to your business, as these are the ones that should be prioritized for risk assessment.
- Evaluate Risk: The next step is to evaluate the risk associated with each supplier. This involves assessing whether suppliers have a governance system in place to manage risk and to identify gaps and areas for improvement.
- Consider Mitigations: In this step, you need to assess whether suppliers have systems in place to act upon instances of child labour and forced labour. This involves engaging suppliers in awareness-raising, training, and capacity building to prevent, identify, and address child labour, including understanding the root causes. Companies should also train and monitor supplier subcontractors and recruitment agencies.
- Report: The final step is to report on measures to identify and evaluate modern slavery risks in the supply chain. This involves creating a clear and comprehensive report detailing the results of your risk assessment and the steps taken to mitigate identified risks. The report should include a description of the supplier risk assessment process, the objectives of the assessment, the criteria for assessing supplier risk, the steps in the assessment process, and the resources needed for the process. It should also recognize efforts undertaken to train staff on Canada’s Modern Slavery Act.
Remember, supplier risk management is an ongoing process that requires regular reviews and updates to ensure that risks are effectively managed and mitigated.
Q: How can a company best support and engage staff to reduce modern slavery risk in supply chains, and the risk of non-compliance with Canada’s Modern Slavery Act?
Engaging staff to reduce modern slavery risk accross your supply chain and ensuring compliance with Canada’s Modern Slavery Act involves a multi-faceted approach. Here are some key strategies:
- Staff Training: Implement modern slavery training for all staff, particularly those in procurement and other areas that directly interact with the supply chain. This training should explain and reinforce the organization’s code of conduct and principles and teach staff how to spot and report signs of modern slavery.
- Risk Identification and Assessment: Provide the necessary support to staff in conducting thorough evaluations of both direct and indirect suppliers for potential risks. This process includes the development of strategies to address any risks identified, the implementation of suitable remediation actions, and the initiation of measures to mitigate future risks.
- Transparency and Reporting: Increase the level of transparency and understanding of supply chain risks beyond tier 1 suppliers. Develop clear modern slavery risk management strategies and action plans. Under the Canadian Modern Slavery Act, companies are required to file an annual report describing the modern slavery risks within the organization, as well as the risk mitigation measures implemented to address them.
It is crucial to start implementing these strategies as soon as possible to ensure compliance and reduce the risk of modern slavery in your supply chain.
Thank you to Shift Critical International for putting together an insightful and informative presentation for our members!