What Canada’s new forced labour reporting law means for mining companies

By Sharon G.K. Singh, Sabrina A. Bandali, and Jessica B. Horwitz

taken to assess and manage that risk;

> any measures taken to remediate any forced labour or child labour;

> 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 labour or child labour in its activities and supply chains;

> the training provided to employees on forced labour and child labour; and

> how the entity assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains.

The annual report must be approved by the reporting entity’s governing body.

In addition to the disclosure requirements, the bill creates personal liability for directors and officers, among others, who direct, authorize, assent to, acquiesce in, or participate in an offence under the proposed act. Failure to comply with the requirements under the new legislation can lead to a summary conviction with fines up to $250,000.

Since 40% of the world’s public mining companies are listed on TSX and TSXV, many mining companies will meet the definition of “entity.” In turn, a subset of these mining entities satisfies the test to publicly report. As many mining companies operate in multiple jurisdictions across the globe, some companies may already disclose similar information according to the laws of the relevant countries, including the laws of Australia.

What mining companies can do now

Although there are no prescribed guidelines on the type of measures a mining company must take to combat modern slavery, any public reporting will need to withstand public, investor, and lender scrutiny. This includes demonstrating year-on-year improvement and effectiveness of any measures that are implemented.

Mining companies should review their supply chain due diligence and monitoring practices now, familiarize themselves with best practices, understand the differences between Canadian and other jurisdictions’ legislation combating modern slavery, and implement appropriate systems, processes, and practical strategies to prevent and mitigate the risk of forced labour and child labour in their supply chains. CMJ

By Trang Tran-Valade and Kwestan Salimi