Breaking down Canada’s new Modern Slavery Act: Compliance tips for miners

It’s finally here; Canada’s Modern Slavery Act officially came into effect on Jan. 1. With long-awaited additional guidance on reporting obligations only released at the end of 2023 and mandatory reports due by May 31, many first-time reporting companies are scurrying to figure out how to ready themselves. Last year, we wrote about the act’s implications for miners. Now that it’s time for action, let’s dive into the practical details of how to align.  Failure to file will attract substantial penalties and risks individual liability even in the absence of company prosecution or conviction. So if you’re a mining leader, scan these actions, compiled to help you to comply with the act and better manage your company’s modern slavery risks.

1. Keep it concise

Keep it short, yet comprehensive. Per current guidance, your report must “not exceed 10 pages in length” (or 20 for a report in both official languages), but needs to cover a lot of ground. It’s a public-facing document to help your stakeholders understand company performance, so use plain, clear language and explain unfamiliar terms to make the report accessible.

2. Focus on your previous fiscal year

While all reports are due by May 31, they must reference the activities undertaken during your company’s previous fiscal year (which may or may not be the calendar year). Focus on actions taken during that year, including specific progress on initiatives that may span multiple years or lack a concrete start and end point.

3. Align multi-jurisdictional disclosures

A relief for many companies, the Canadian government recognizes that plenty of businesses operating internationally already report under supply chain legislation in multiple jurisdictions. In particular, cross-jurisdictional reporting under U.K. and Australian Modern Slavery regimes is possible (just don’t forget your distinct submissions to additional jurisdictions). While it may still mean producing multiple documents, you can create a streamlined reporting process if you’re already reporting in those jurisdictions.

4. Cover local impact, globally

The act has a broad scope, applying to companies that do business in Canada and have significant global assets, revenue, or workforces, regardless of whether their direct operations are in Canada. Reporting companies must examine both direct and indirect suppliers, extending beyond Canada’s borders. Seek legal counsel to assess if your company qualifies as a “reporting entity.”

5. Prepare for mandatory components

In addition to basic company information and legal structure, the report must include a description of the structure of your supply chain, including assessed forced labour risks related to both direct and indirect suppliers, and specific actions taken to evaluate and manage them, and to ensure accountability and effectiveness. Such actions could include compliance checks, audits, supplier agreements, or employee training. If instances of forced labour were discovered, disclose these cases and any remediation or corrective actions taken.

6. Report transparently and honestly

Companies are expected to provide honest responses that transparently describe concrete actions taken to address risks of forced labour and child labour, rather than vague motherhood statements such as those often historically used in voluntary sustainability reporting. State your company’s performance as it is and, if needed, take action to do better. The act does not require entities to disclose commercially sensitive information that would expose them to legal risk or compromise the privacy of any persons.

7. Attest and post prominently

Your final report must include a signed attestation from the appropriate governing body or bodies of your company who have the legal authority to bind the organization. Your company must post the report in a prominent place on your website. If you’re incorporated under the Canada Business Corporations Act or any other Act of Parliament, you’ll also need to provide the report to each shareholder, along with your annual financial statements. This may mean your report needs to be ready before May 31, so plan accordingly!

8. Submit additional materials

The late 2023 guidance surprised many companies with unexpected detailed requirements. The act isn’t just about producing and filing a report; it’s a full-on digital engagement. Aside from the report, your company must complete an online questionnaire that goes hand-in-hand with the report. Consisting of a series of both mandatory and optional questions, it provides entities an opportunity to provide additional clarifications on actions taken. Once you submit, it goes live in an online catalogue for the world to see – transparency in action! And a prompt to do better, for those whose approach isn’t leading practice quite yet.

The actions above will help you to prepare for your company’s inaugural report under the Modern Slavery Act. But remember, the reporting under the act is not a one-time task. For many companies, the act represents the launch of an ongoing internal process of monitoring and improving your supply chain management systems and practices. The reports are simply a vehicle to publicly share your performance and progress in annual disclosures. As you embark on this journey, remember, it’s not just about ticking boxes to achieve compliance. It’s about better managing risk; company and leadership risks and risks to people in your company’s value chains.

Even in Canada, human rights group Walk Free Foundation estimates that 69,000 people are being exploited for labour on any given day. As concern grows over both environmental and social risks in our complex global geopolitical landscape, companies in Canada and worldwide should anticipate stricter oversight of their supply chains. With more due diligence and disclosure laws likely to emerge globally in the years ahead, companies would be wise to take proactive measures now to prepare for compliance and embrace the opportunity to reduce the risk of causing or contributing to forced labour.

Need help with your Modern Slavery reporting? Check out our original article, the government’s public resources online, or reach out to a specialized, experienced and trusted advisory firm for support.

Elizabeth Freele and Rachel Dekker are the co-founders and managing partners of mining sustainability think tank and ESG consultancy Sympact. Sympact supports companies in ensuring their social performance and disclosures meet growing expectations through advisory services, training, and thought leadership products.