Canadian HR Reporter

CANADIAN HR REPORTER MAY 2019 6 NEWS Reporting requirements 'lacking' around modern slavery: Report Greater monitoring and enforcement needed around employer compliance BY SARAH DOBSON M ODE RN SL AV E RY has emerged as a pressing issue over the past few years, with reports of forced labour and human traffi ck- ing making headlines. In response, several govern- ments around the world have made an eff ort to better address the issue through reporting re- quirements, with positive out- comes, such as increased aware- ness and employers allocating more resources. Company reporting has also strengthened the ability of ex- ternal stakeholders to provide guidance and measure their per- formance on these issues year over year, according to the report Full Disclosure: Towards Better Modern Slavery Reporting, by the International Corporate Ac- countability Roundtable (ICAR) and Focus on Labour Exploitation (FLEX). However, these steps are not adequately preventing forced labour in global supply chains, found the report. "Compliance with these laws has been inconsistent and… the breadth and quality of informa- tion companies disclose is insuf- fi cient and does not refl ect seri- ous eff ort to tackle the problem," it said. "Reporting remains primarily a tick-the-box exercise." e report recommends ways governments can improve mod- ern slavery laws and regulatory options, while companies im- prove reporting practices. Background The most recent push to pass modern slavery reporting re- quirements started in 2010 with the California Transparency in Supply Chains Act. is was fol- lowed by the 2015 United King- dom Modern Slavery Act and the 2018 Australian Modern Slavery Act. In Canada, in October 2018, the Subcommittee on International Human Rights of the House of Commons Standing Committee on Foreign Aff airs and Interna- tional Development released the report A Call to Action: Ending the Use of All Forms of Child Labour in Supply Chains. It recommended "more con- certed action, in the form of leg- islative and policy initiatives that motivate businesses to end the use of child labour." In response, in February, the federal government indicated it would "begin a process in 2019 to consult on possible supply chain legislation," said MP Marie- Claude Bibeau. At the same time, Bill C-423, An Act respecting the fi ght against certain forms of modern slavery through the imposition of certain measures and amending the Cus- toms Tariff was introduced. About 90 per cent of Canadian businesses would want to comply with this kind of legislation "as long as the mechanism is something that is easily accessible, and the in- formation generated can be useful," said MP John McKay, who intro- duced the private member's bill. "You're always going to be deal- ing with the 10 per cent who, for a variety of reasons, don't want to, primarily because their entire busi- ness model is built upon some di- rect or indirect use of slave labour." But shareholder groups keen to invest in companies want to know about the ethics of the sup- ply chain, he said. "If, in fact, that takes hold in the checklist of things you look into when buying shares in a company, then that will do far more than any legislation." ere's also growing investor interest in the risks associated with modern slavery, said Carole Gilbert, an associate at Norton Rose Fulbright in Montreal. "Companies are getting more and more pressure in the form of things like shareholder proposals pushing for disclosure on CSR (corporate social responsibility) issues, including disclosure on how modern slavery risks are be- ing managed." More recently, the All-Party Parliamentary Group (APPG) to End Modern Slavery and Human Traffi cking announced the com- pletion of the Transparency in Supply Chains Act to be tabled in the Senate. It outlines four mecha- nisms to improve compliance in- cluding: a reporting requirement on qualifying entities; and mech- anisms to receive and investigate disclosures of forced labour and child labour from whistleblowers. "It would include not only an- nual reporting obligations, but also it proposes to impose a stat- utory duty of care on businesses meeting a certain annual turnover threshold, which would be a fi rst in this space," she said. " ere's a lot on the radar in Canada right now… And for com- panies, there's litigation liability at stake. And there's also reputa- tional and competitive risk. So, companies have every incentive to get on top of their supply chain." Results thus far Despite the apparent progress, companies' compliance with modern slavery reporting laws has been inadequate. e report- ing requirements have failed to bring meaningful improvements for workers, found the ICAR/ FLEX report, which is based on 28 interviews and in-person ex- pert consultations in London and Washington, D.C., which in- cluded input from 15 companies, 38 civil society organizations and trade unions, and 12 government and four investor groups. In addition, employers have failed to investigate and address how business practices and oper- ating models create the conditions for such abuses. And the informa- tion provided by companies lacks the breadth and quality needed to refl ect eff ective human rights due diligence processes, it said. " ere's not enough informa- tion for civil society investors and consumers to be able to get a clear picture of what is happening in companies' supply chains and to be able to understand exactly what companies are doing, and mainly if they are if they are doing enough," said Marion Cadier, legal and policy co-ordinator at ICAR in New York. Employers need to have a broader understanding of the risks, not just for the company, but the people and communities aff ected by business operations, she said. " ere's sort of a misperception that modern slavery mainly arises out of criminal activities. But we feel that it's important to know that modern slavery arises basi- cally on the continuum of labour rights violations, which tend to lead to forced labour." e monitoring and enforce- ment of governments are also too weak to lead to eff ective corporate responses to modern slavery risks, said the report. As a result, Full Disclosure makes several recom- mendations, such as penalties for non-compliance with reporting requirements; risk-based com- pany reporting that includes in- formation on corporate policies and processes in place to respond to risks of forced labour, as well as the outcomes and results of such measures; and mandatory human rights due diligence legislation. It's all about more teeth, said Cadier. "Mandatory human rights due diligence-type of legislation will emphasize the fact that compa- nies have to take action, rather than having to report only, so we think that this might be more ef- fective," she said. Implications for HR All of this is part and parcel of the CSR umbrella, which keeps on getting bigger, said Sharon Singh, an associate at Bennett Jones in Vancouver. And CSR shouldn't be a de- partment that's separate from other departments. It's about HR, procurement, communities and managers, for example, she said. "Each individual or each de- partment has one role to play in the governance of ensuring that modern slavery is addressed. So… ensuring that, for instance, HR is not just (involved in) the hiring of individuals, but they are also in- volved in addressing the policies that are in place, sometimes for your contracts or workforce... you have your speak-out policies, you have other policies. So HR plays a role in that for sure." HR is responsible for the em- ployee training aspects, said Singh. "(That means) the internal communications aspect of it, the training aspect of it, oversee- ing any programs that would go into your corporate governance programs." is is predominantly a CSR and legal issue, and it's defi nitely an HR issue from an implementa- tion perspective, said Gilbert. " e legal team would have the role of putting into place an eff ec- tive system and collaborate with HR. But it would be really up to the HR people in various jurisdic- tions to work together to ensure that the risk management system is actually eff ective." at would also include train- ing and communication around any kind of whistleblowing policy, along with the grievance mecha- nisms, she said. Looking at the composition of the workforce is also important, said Cadier, as some populations are more at risk of being exploit- ed, such as migrant workers and women. A 2017 report from the International Labour Organiza- tion, for example, found women and girls are disproportionately aff ected by modern slavery, ac- counting for almost 29 million or 71 per cent of the overall total of 41 million. "It's important for businesses to have a gender-sensitive approach to both preventing and addressing these issues." THE POWER OF PERSISTENCE: MEDICAL MALPRACTICE LITIGATION No matter how challenging, complex or costly the case may be, we will not stop in our pursuit of justice. 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