With the May 31 deadline for filing a report less than a month away, Canada's Fighting Against Forced Labour and Child Labour in Supply Chains Act ("S-211") is now a "front burner" item for many Canadian businesses.
Reporting responsibilities
S-211 requires in-scope businesses and organizations that are required to report under this law ("Reporting Entity") to prepare and file with the federal Minister of Public Safety, a report ("S-211 Report") on or before May 31 of each calendar year.
The S-211 Report must set out the steps the Reporting Entity has taken during its previous financial year to prevent and to reduce the risk that forced labour or child labour is used at any step in the production of goods in Canada or elsewhere by the Reporting Entity, or at any step in the production of goods imported into Canada by the Reporting Entity. Seven other mandatory disclosure items must also be included.
In addition, the S-211 Report must also include the following information in respect of the Reporting Entity and any Entities that it controls:
- Its structure, activities and supply chains.
- Its policies and its due diligence processes in relation to forced labour and child labour.
- The parts of its business and supply chains that carry a risk of forced labour or child labour being used and the steps it has 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.
- How the Reporting Entity assesses its effectiveness in ensuring that forced labour and child labour are not being used in its business and supply chains.
Guidance
Public Safety Canada has published information and guidance for entities (a defined term in S-211) including guidance on which entities are required to report and guidance on preparing a S-211 Report.
According to the guidance, reporting requirements are for entities producing goods in Canada or elsewhere or importing goods produced outside Canada. Reporting requirements are also for entities controlling other entities engaged in these activities.
Joint reports
A Reporting Entity may submit a joint report covering its own operations and supply chains and those of its subsidiaries and other controlled Entities in the same corporate group.
Board approval and attestation
In the case of a single Entity S-211 Report, the governing body (e.g. board of directors) of the Reporting Entity must approve the S-211 Report. In the case of a joint S-211 Report, the S-211 Report must be approved by the board of directors of each entity included in the S-211 Report or by the board of directors of the entity, if any, that controls each entity included in the S-211 Report.
Every S-211 Report must include a signed attestation from a member of the governing body/ board of directors of each Reporting Entity that approved the S-211 Report attesting that, having exercised reasonable diligence, the information in the S-211 Report is true, accurate and complete in all material respects.
Mandatory questionnaire
Public Safety Canada introduced a mandatory questionnaire that must be completed as part of the process to upload and file an S-211 Report. The questionnaire is comprised of questions regarding the identification of the Reporting Entity, and additional multiple choice questions to collect information focused on the disclosure requirements under S-211.
Public availability of S-211 Reports
A Reporting Entity must post its S-211 Report in a prominent place on its website. If the Reporting Entity was incorporated under Canadian federal legislation, it must also provide the S-211 Report to each of its shareholders along with its annual financial statements.
Public Safety Canada will make available all S-211 Reports in a searchable online publicly accessible registry.
Penalties and personal liability of officers and directors
S-211 provides for a number of compliance-related offences with fines up to $250,000. Directors and officers who direct, authorize, assent to, acquiesce in or participate in the commission of an offence under S-211 may also be personally liable.
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