Eradicate forced labour risk in your supply chain

Up until now, reporting on forced and child labour in Canada was optional. But given the scale of the global issue, reporting requirements are becoming mandatory.

With the introduction of the Forced Labour in Supply Chains Act in 2024, businesses in Canada must now demonstrate compliance through clear data and documented evidence.

For many organizations, this means taking a closer look at how risks are identified and managed across their supply chains.

How the Forced Labour in Supply Chains Act affects businesses 

The new legislation will affect a significant number of organizations operating in Canada.

Businesses will be required to submit annual reports describing how they identify and address forced labour and child labour risks within their supply chains.

This includes outlining the steps they take to assess potential risks and the actions they take to mitigate them when they are identified.

Organizations must also demonstrate that they are actively monitoring their supply chains and taking reasonable steps to reduce risk. Ignoring these obligations is not an option.

If organizations fail to comply or provide up-to-date information about their efforts, they risk financial penalties and reputational damage that can be difficult to recover from.

Penalties under the legislation can reach $250,000 and, in some cases, organizations may face further legal consequences if compliance obligations are not met. 

New expectations for supply chain transparency 

The new Act introduces stronger expectations for transparency across supply chains.

Organizations must demonstrate that they are actively identifying risks related to forced labour and child labour, and that they have processes in place to manage those risks.

This means collecting reliable data, documenting due diligence activities and ensuring that contractors and suppliers meet required standards.

For many organizations, this represents a significant shift toward more structured supply chain oversight. 

Why early preparation matters 

With the first reporting deadline approaching, organizations benefit from starting preparation early.

The first reports are due by May 31, 2024, which means companies need time to gather information, assess supply chain risks and document their compliance activities.

Preparing early helps organizations avoid last-minute gaps and ensures they have reliable data ready when reporting deadlines arrive.

It also gives organizations the opportunity to strengthen their internal processes and improve visibility across their supply chains. 

Practical steps to reduce forced labour risk 

Organizations can begin strengthening their compliance approach by taking practical steps across their supply chains.

Responsible contractor sourcing plays an important role in identifying and preventing potential risks.

Some actions organizations can take include:

• Conducting spot checks and audits on new contractors

• Avoiding unreasonable contract demands that could encourage unsafe practices

• Supporting fair and sustainable trade practices

These measures help organizations strengthen oversight and demonstrate a proactive approach to supply chain responsibility. 

Working with partners to strengthen compliance 

Managing supply chain compliance can be complex, especially for organizations working with large contractor networks.

Many organizations work with contractor management specialists to support compliance monitoring and reporting requirements.

Solutions within the Veriforce ecosystem of products help organizations collect compliance data, support contractor qualification processes and improve visibility across supply chain networks.

Taking a structured approach to contractor qualification and compliance helps organizations manage risks while supporting ethical and responsible supply chain practices.