Worldwide: Preparing For New Canadian Forced And Child Labor Reporting – A Detailed Look At The Online Questionnaire

The first annual reports under Canada's new Fighting Against Forced Labour and Child Labour in Supply Chains Act generally are due on May 31, 2024. On December 20, 2023, Public Safety Canada published the online questionnaire that reporting entities will need to complete when they submit reports under the Act.

The questionnaire includes detailed, substantive questions that will need to be answered by reporting entities. In this post, we describe the questions and related response options in the questionnaire.

For a further discussion of the Act's requirements, see our earlier Alert. In addition, see our post discussing the Public Safety Canada guidance also published on December 20, 2023. In addition to providing a detailed summary of the Guidance, that post includes takeaways for U.S.-based and other multinationals managing to multiple modern slavery reporting requirements.

Questionnaire overview

In addition to preparing a report under the Act, reporting entities will need to complete an online questionnaire. The questionnaire includes both open and closed-ended questions that address each of the requirements under the Act, as further described in this post.

Some of the open-ended questions are optional, as noted in this post. The optional questions allow reporting entities to elaborate on their responses to the mandatory questions and provide additional information if desired. The optional open-ended questions have a 1500-character limit. The Guidance under the Act indicates that entities are strongly encouraged to fill out the optional questions. The Guidance notes that by providing this information, entities can demonstrate leadership and responsibility and provide the level of transparency that partners, investors and members of the public are looking for.

Reporting entities will be required to submit their annual report under the Act via the questionnaire. The questionnaire will prompt them to upload into the questionnaire a PDF of their attested report.

Identifying and general information

The questionnaire calls for the following identifying and general information:

• Legal name of the reporting entity.
• Start and end dates of the financial reporting year.
• If the report is a revised version of a report already submitted for the reporting year, the date the original report was submitted and a description of the changes made to the original report, including by listing the questions or sections that were revised (1500 character limit).
• Business number(s), if applicable.
• Whether the report Is a joint report and, if so, the legal name of each entity covered by the report and the business number(s) of each entity covered by the report, if applicable.
• Whether the reporting entity also is subject to reporting requirements under supply chain legislation in another jurisdiction. If so, pull-down options include the Australia, California and UK modern slavery statutes and an "other" box which requires a response to be inserted if that box is checked.
• Scoping questions that tie to the specific jurisdictional requirements under the Act (i.e., the requirements for being an entity and a reporting entity).
• The reporting entity's sector or industry of operation. There are 20 options plus an "other" choice. More than one option can be selected.
• The country in which the reporting entity is headquartered or principally located. There is a drop-down menu to select from.
• The reporting entity's organizational structure.
• The reporting entity's activities, as described below. For the first three activity categories, there are dropdowns to differentiate between activities in and outside of Canada.
  • Producing goods (including manufacturing, extracting, growing and processing).
  • Selling goods.
  • Distributing goods.
  • Importing goods produced outside of Canada.
  • Controlling an entity engaged in one of the foregoing.
• A mandatory open-ended response for additional information on the organization's structure, activities and supply chains (1500 character limit).

Due diligence questions

The annual report is required to discuss the steps the reporting entity has taken during its previous financial year to prevent and reduce the risk that forced or child labor is used at any step of the production of goods in Canada or elsewhere by the entity or of goods imported into Canada by the entity.

More specifically, the report also must include the following information in respect of each entity subject to the report:

• Its structure, activities and supply chains.
• Its policies and due diligence processes in relation to forced and child labor.
• The parts of its business and supply chains that carry a risk of forced or child labor being used and the steps it has taken to assess and manage that risk.
• Any measures taken to remediate any forced or child labor.
• Any measures taken to remediate the loss of income to the most vulnerable families that results from any measure taken to eliminate the use of forced or child labor in its activities and supply chains.
• The training provided to employees on forced and child labor.
• How the entity assesses its effectiveness in ensuring that forced and child labor are not being used in its business and supply chains.

The online questionnaire includes questions intended to elicit information on the due diligence by reporting entities, as described below.

Steps taken to assess and manage forced and child labor risks generally

• The steps the reporting entity took in the previous financial year to prevent and reduce the risk that forced or child labor is used at any step of the production of goods in Canada or elsewhere by the entity or of goods imported into Canada by the entity. Reporting entities are asked to select all of the following that apply:
  • Mapping activities.
  • Mapping supply chains.
  • Conducting an internal assessment of forced and/or child labor risks in the entity's activities and supply chains.
  • Conducting an external assessment of forced and/or child labor risks in the entity's activities and supply chains.
  • Developing and implementing an action plan for addressing forced and/or child labor.
  • Gathering information on worker recruitment and maintaining internal controls to ensure that workers are recruited voluntarily.
  • Addressing practices in the organization's activities and supply chains that increase the risk of forced and/or child labor.
  • Developing and implementing due diligence policies and processes for identifying, addressing and prohibiting the use of forced and/or child labor in the organization's activities and supply chains.
  • Carrying out a prioritization exercise to focus due diligence efforts on the most severe risks of forced and child labor.
  • Requiring suppliers to have in place policies and procedures for identifying and prohibiting the use of forced and/or child labor in their activities and supply chains.
  • Developing and implementing child protection policies and processes.
  • Developing and implementing anti-forced and/or -child labor contractual clauses.
  • Developing and implementing anti-forced and/or -child labor standards, codes of conduct and/or compliance checklists.
  • Auditing suppliers.
  • Monitoring suppliers.
  • Enacting measures to provide for or cooperate in remediation of forced and/or child labor.
  • Developing and implementing grievance mechanisms.
  • Developing and implementing training and awareness materials on forced and/or child labor.
  • Developing and implementing procedures to track performance in addressing forced and/or child labor.
  • Engaging with supply chain partners on the issue of addressing forced and/or child labor.
  • Engaging with civil society groups, experts and other stakeholders on the issue of addressing forced and/or child labor.
  • Engaging directly with workers and families potentially affected by forced and/or child labor to assess and address risks.
  • Responsive information is not available for the reporting period.
  • Other (open-ended response required).
  • As an optional response, organizations can provide additional information describing the steps taken, if applicable (1500 character limit).

Policies and due diligence processes

• Whether the organization currently has policies and due diligence processes in place related to forced and/or child labor. If so, the questionnaire asks the reporting entity to indicate which of the following elements of the due diligence process it has implemented in relation to forced and/or child labor:
  • Embedding responsible business conduct into policies and management systems.
  • Identifying and assessing adverse impacts in operations, supply chains and business relationships.
  • Ceasing, preventing or mitigating adverse impacts.
  • Tracking implementation and results.
  • Communicating how impacts are addressed.
  • Providing for or cooperating in remediation where appropriate.
  • As an optional response, additional information may be provided on the organization's policies and due diligence processes in relation to forced and child labor, if applicable (1500 character limit).

Identified forced and child labor risks

• Whether the organization has identified parts of its activities and supply chains that carry a risk of forced or child labor being used. If so, there are three response options to choose from:
  • The organization has identified risks to the best of its knowledge and will continue to strive to identify emerging risks.
  • It has started the process of identifying risk, but there are still gaps in its assessments.
  • It has not started the process of identifying risks.
• If either of the first two responses above is selected, the reporting entity is asked to indicate whether it has identified forced or child labor risks relating to any of the following aspects of its activities and supply chains:
  • Its sector or industry.
  • The types of products it produces, sells, distributes or imports.
  • The locations of its activities, operations or factories.
  • The type of products it sources.
  • The raw materials or commodities used in its supply chains.
  • Tier one suppliers.
  • Tier two suppliers.
  • Tier three suppliers.
  • Suppliers further down the supply chain than tier three.
  • The use of outsourced, contracted or subcontracted labor.
  • The use of migrant labor.
  • The use of forced labor.
  • The use of child labor.
  • None of the above.
  • Other (open-ended response required).
• Whether the organization identified forced or child labor risks in its activities and supply chains related to 20 specified sectors and industries. There also is the option to check "none" or "other" (in the latter case, with explanation). There also is a box to voluntarily provide additional information on the parts of the organization's activities and supply chains that carry a risk of forced or child labor being used, and the steps that the organization has taken to assess and manage that risk, if applicable (1500 character limit).

Remediation measures generally

• Whether the organization has taken any measures to remediate any forced or child labor in its activities and supply chains. There are four response options:
  • It has taken remediation measures and will continue to identify and address any gaps in its response.
  • It has taken some remediation measures, but there are gaps in its response that still need to be addressed.
  • It has not taken any remediation measures.
  • Not applicable since it has not identified any forced or child labor in its activities and supply chains.
• If an affirmative answer is provided to the prior question, the reporting entity is asked to indicate which of the remediation measures below it has taken. There also is a box to voluntarily provide additional information on any measures the organization has taken to remediate any forced or child labor, if applicable (1500 character limit).
  • Actions to support victims of forced or child labor and/or their families, such as workforce reintegration and psychosocial support.
  • Compensation for victims of forced or child labor and/or their families.
  • Actions to prevent forced or child labor and associated harms from reoccurring.
  • Grievance mechanisms.
  • Formal apologies.
  • Other (open-ended response required).

Measures to remediate the loss of income to the most vulnerable families

• Whether the organization has taken any measures to remediate the loss of income to the most vulnerable families that results from any measure taken to eliminate the use of forced or child labor in its activities and supply chains. There are four answer options, as indicated below. There also is a box to voluntarily provide additional information on any measures the organization has taken to remediate the loss of income to the most vulnerable families that results from any measure taken to eliminate the use of forced or child labor in its activities and supply chains, if applicable (1500 character limit).
  • It has taken substantial remediation measures and will continue to identify and address any gaps in its response.
  • It has taken some remediation measures, but there are gaps in its response that still need to be addressed.
  • It has not taken any remediation measures.
  • Not applicable, since it has not identified any loss of income to vulnerable families resulting from measures taken to eliminate the use of forced or child labor in its activities and supply chains.

Training

• Whether the organization currently provide training to employees on forced and/or child labor. If so, the reporting entity is required to indicate whether the training is mandatory, as indicated below. There also is a box to voluntarily provide additional information on the training the organization provides to employees on forced and child labor, if applicable (1500 character limit).
  • Mandatory for all employees.
  • Mandatory for employees making contracting or purchasing decisions.
  • Mandatory for some employees.
  • Training is voluntary.

Measuring effectiveness

• Whether the organization currently has policies and procedures in place to assess its effectiveness in ensuring that forced and child labor are not being used in its activities and supply chains. If answered in the affirmative, the questionnaire asks for information on the method(s) used to assess effectiveness, as described below. There also is a box to voluntarily provide additional information on how the organization assesses its effectiveness in ensuring that forced and child labor are not being used in its activities and supply chains, if applicable (1500 character limit).
  • Setting up a regular review or audit of its policies and procedures related to forced and child labor.
  • Tracking relevant performance indicators, such as levels of employee awareness, numbers of cases reported and solved through grievance mechanisms and the number of contracts with anti-forced and -child labor clauses.
  • Partnering with an external organization to conduct an independent review or audit of its actions.
  • Working with suppliers to measure the effectiveness of their actions to address forced and child labor, including by tracking relevant performance indicators.
  • Other (open-ended response required).

Attestation

The questionnaire requires an attestation for it to be submitted. The person submitting the questionnaire on behalf of the reporting entity is required to attest that they have reviewed the information contained in the report for the entity and that, based on their knowledge, and having exercised reasonable diligence, the information in the report is true, accurate and complete in all material respects for the purposes of the Act, for the listed reporting year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.