Canadian businesses must be cognizant of and comply with the restrictions on the importation into the U.S. of goods made with forced labour. U.S. federal law 19 U.S.C. 1307 prohibits the importation of merchandise produced, wholly or in part, by convict labour, forced labour, and/or indentured labour, including forced or indentured child labour. These goods are subject to exclusion and/or seizure by CBP at the U.S. border, and may lead to criminal investigation of the importers.
The Canadian government also recently reminded Canadian businesses that it expects Canadian companies doing business outside of Canada to respect human rights, operate lawfully, conduct their activities in a responsible manner and adopt voluntary best practices and internationally respected guidelines such as the U.N. Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises – including provisions on the elimination of forced labour in their supply chains. Both the OECD Guidelines and the U.N. Guiding Principles contain detailed recommendations on how businesses should carry out supply chain due diligence.
Given the duties of Canadian boards of directors regarding oversight of risk management, boards need to ensure that steps are being taken to adequately assess, manage and address forced labour supply chain risks, import/export risks, reputational risks, class action risks and stakeholder risks.
This was excerpted from a 27 January 2021 article by Stephen A. Pike, Partner - Toronto, Gowling WLG.