Since 2020, the Government of Canada has taken several steps to eradicate and reduce forced and child labour in Canadian supply chains. To date, key elements impacting Canadian businesses include a trade prohibition on goods made wholly or in part by forced or child labour and, more recently, the introduction of modern slavery reporting obligations. These steps reflect a significant global proliferation of regulations relating to modern slavery throughout Western countries over the past decade.

More recently, several countries have adopted human rights due diligence legislation. Notable examples are France's Corporate Duty of Vigilance Law and Germany's Supply Chain Due Diligence Act. The most recent development is the European Union's Corporate Sustainability Due Diligence Directive (CSDDD), which came into force on July 25, 2024. The CSDDD offers a comprehensive approach to human rights and environmental due diligence, mandating that large EU and non-EU companies conduct due diligence across their operations, subsidiaries and supply chains. The obligations under the CSDDD, which will be gradually implemented between 2027 and 2029, aim to ensure responsible business conduct through rigorous administrative supervision and civil liability.

Canada is in the process of considering similar legislation. In Budget 2023, Canada announced its "intention to introduce legislation by 2024 to eradicate forced labour from Canadian supply chains to strengthen the import ban on goods produced using forced labour." This commitment was reaffirmed in Budget 2024.

Consultations on due diligence legislation are currently underway within the government. By understanding the frameworks and requirements in France, Germany and the EU's CSDDD, Canadian businesses can gain valuable insights into what future due diligence obligations may look like in the country.

Understanding human rights due diligence legislation: Key aspects in France, Germany and the EU

Human rights due diligence involves businesses taking proactive steps to identify, prevent, mitigate and address their impacts on human rights, ensuring they do not contribute to abuses such as forced labour and child labour. Generally, diligence legislation is directly applicable to entities that meet the relevant legislation in an applicable jurisdiction. However, it also "trickles down" throughout the economy through contracts. Entities selling into jurisdictions with diligence legislation may also be indirectly impacted by such legislation. It is increasingly common for procuring entities to include human rights diligence controls and requirements within their procurement processes.

Below, we outline the key elements of due diligence legislation in France, Germany and the EU.

Conclusion

Examining the human rights due diligence legislation in France, Germany and the EU can give Canadian businesses valuable insights into what future due diligence obligations may look like in Canada to the extent it is adopted. Further, Canadian companies selling into the EU, France and Germany should be aware of these developments as certifications, attestations or company policies may be requested as a matter of evolving procurement practices.

For more information on this topic, please contact Sean Stephenson.

The author would like to thank summer student Nikki Bhatia for her contributions to this insight.