On January 1, 2024, the Fighting Against Forced Labour and Child Labour in Supply Chains Act came into force.
The act orders any government institution producing, purchasing, or distributing goods and services in Canada or elsewhere must, on or before May 31 of each year, submit a report to the Minister of Public Safety. The report must detail the steps the government institution has taken during its previous financial year to prevent and reduce the risk that forced labour or child labour is used at any step of the production of goods produced, purchased or distributed by the government institution.
The act’s reporting obligations also apply to entities producing goods in Canada or elsewhere or importing goods produced outside Canada.
The report below is for the Communications Security Establishment Canada (CSE) fiscal year 2023 to 2024 (April 1, 2023 to March 31, 2024).
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Structure, activities and supply chains
CSE procures goods and services from inside and outside of Canada.
CSE has integrated Public Services Procurement Canada’s (PSPC) updated General Conditions for goods and services contracts and PSPC’s Code of Conduct for Procurement in our purchasing activities.
To prevent and reduce the risk of forced labour or child labour in our procurements, CSE used the following list of PSPC’s purchasing tools:
- Standing Offers (SO)
- Supply Arrangements (SA)
- Anti-forced labour contract clauses
PSPC supports government institutions in their daily operations by acting as the central purchasing agent for the Government of Canada. CSE undertakes activities under its own procurement authority, independently of the previously mentioned PSPC tools.
During the previous fiscal year 2023 to 2024, CSE purchased goods and services under the department’s own procurement authority.
Steps to prevent and reduce risks of forced labour and child labour
In 2023 to 2024, approximately 6.5% of the annual value of purchases by CSE were made using PSPC tools such as SOs and SAs. 48.5% was purchased with PSPC through other channels, mostly for specialized IT equipment.
Since November 2023, all PSPC SOs and SAs for goods and services that have been issued, amended, or refreshed include anti-forced labour clauses. All CSE contracts for goods and services resulting from the use of these tools include clauses relating to forced labour which set out, among other things, human rights and labour rights requirements. These clauses can be found in the Policy Notification-150U1: Anti-forced labour requirements.
During the previous fiscal year 2022 to 2023, CSE purchased approximately 35% of annual value through Shared Services Canada (SSC) for IT equipment under available SSC methods of supply (non-specialized equipment, COTS, etc.). The same year, approximately 10% of our annual value was purchased under CSE’s procurement authority.
In November 2021, PSPC implemented anti-forced labour clauses in all goods and services contracts to ensure that it can terminate contracts where there is credible information that the goods and services have been produced in whole or in part by forced labour or human trafficking.
Policies and due diligence processes
Effective April 1, 2023, amendments to the Treasury Board Directive on the Management of Procurement require contracting authorities from all departments listed in Schedules I, I.1 and II of the Financial Administration Act (with the exception of the Canada Revenue Agency) and commissions established in accordance with the Inquiries Act and designated as a department for the purposes of the Financial Administration Act to incorporate the Code of Conduct for Procurement (the code) into their procurements.
Following the amendments, CSE has integrated the code into our procurements, with a view to safeguarding federal procurement supply chains from forced labour and child labour. Contracts that CSE has awarded included the code through the General Conditions for goods.
The code requires that vendors, providing goods and services to the Government of Canada and their sub-contractors, comply with all applicable laws and regulations. In addition, the code requires vendors and their sub-contractors to comply with Canada’s prohibition on the importation of goods produced, in whole or in part, by forced or compulsory labour. This includes forced or compulsory child labour and applies to all goods, regardless of their country of origin.
The prohibition on the importation of goods produced wholly or in part by forced labour came into force under the Customs Tariff on July 1, 2020. This amendment implemented a commitment in the Labour Chapter of the Canada-United States-Mexico Agreement and applies to all imports, regardless of origin.
Forced labour and child labour risks
In May 2021, a risk analysis of PSPC’s supply chains was completed by Rights Lab (University of Nottingham, UK), to determine which goods and services were at the highest risk of exposure:
- to human trafficking
- to forced labour
- to child labour
The report created strategies for PSPC to use public spending power to raise awareness about forced labour in supply chains.
CSE is familiar with information in the risk assessment provided by PSPC and are monitoring related follow-up action. This includes the development of a Policy on Ethical Procurement.
Training
CSE is aware that PSPC is currently developing awareness-raising guidance materials for suppliers, including risk mitigation strategies. The guidance materials will be targeted towards high-risk sectors. CSE is monitoring the development of the guidance materials and will use them once their published.
Assessing effectiveness
Currently, CSE does not have policies and procedures in place to assess the effectiveness of ensuring forced labour and child labour are not being used in its activities and supply chains in its in-house procurement.
CSE uses PSPC for 47% of goods and 14% for services.
CSE uses SSC for 30% of goods and 1% for services of their purchases. CSE is monitoring related follow-action, including the development of a Policy on Ethical Procurement.