Human rights due diligence and the risk of child labour in the global operations and supply chains of Canadian garment companies

Webinar report

Recordings of this webinar are available here in: English, French, Spanish

On February 13, 2023, the Office of the Canadian Ombudsperson for Responsible Enterprise (CORE) hosted a webinar as a virtual side event during the 9th OECD Forum on Due Diligence in the Garment and Footwear Sector. The webinar was an opportunity to discuss the results of the CORE's study on 'Respect for child rights and the risk of child labour in the global operations and supply chains of Canadian garment companies', and the extent to which Canadian garment companies identify and address the risk of child labour throughout their global supply chains. The discussion also focused on supply chain transparency legislation, remediation, and the importance of human rights impact assessments (HRIAs). Moderated by the Ombudsperson, Sheri Meyerhoffer, the webinar featured four panelists:

• Danielle Bennett, Business and Human Rights Analyst, CORE
• Cathrine Bloch Veiberg, Responsible Value Chains Programme Manager, the Danish Institute for Human Rights
• Malin Liljert, Director, the Center for Child Rights and Business
• Kelly Drennan, Executive Director, Fashion Takes Action

The following is a summary of key points discussed during the webinar.

CORE study findings

The CORE's study involved anonymous and confidential interviews with ten Canadian garment companies about the risk of child labour in their operations and supply chains and what steps they were taking to address these risks. The main results from the study reveal:

• Limited understanding of responsible business conduct key concepts
• Traceability remains a challenge
• Limited understanding of human rights due diligence (HRDD)
• Limited awareness of child labor risks and impacts
• Few confirmed cases of child labour, which is likely due to limited supply chain transparency
• Heavy reliance on compliance and monitoring tools to identify and address child labour
• Tendency towards zero-tolerance approaches to child labour remediation

CORE study recommendations

The recommendations put forth in the study are as follows:

• Enhance supply chain transparency measures
• Implement mandatory human rights and environmental due diligence (mHREDD)
• Include reporting requirements that go beyond garment production, or tier 1 of a company's supply chain within the RBC standard announced in Canada's RBC Strategy
• Expand approaches to child labour remediation
• Strengthen Canadian garment company knowledge and understanding of responsible business conduct key concepts

Supply chain transparency

Panelists discussed the issue of supply chain transparency and the increasing introduction of supply chain transparency legislation in various jurisdictions, including Canada.

• While supply chain transparency is on the radar of many Canadian garment companies, some are not taking action due to limited resources and lack of knowledge.
• The bigger the brand, the more difficult it is to maintain supply chain visibility. Owning some of its supply chain allows brands to maintain greater visibility.
• Traceability is the only way to increase transparency.
• Companies should be preparing themselves for the arrival of supply chain transparency legislation by trying to have a better understanding of where their suppliers are located and the risks which exist within their supply chains.
• Challenges to increasing supply chain transparency include not questioning suppliers, not tracing beyond the first tier, and not identifying and engaging with relevant initiatives.
• Due to the definition of 'entity', many Canadian garment companies are excluded from the ambit of Bill S-211.
• Even if companies do not fall directly or indirectly under the proposed legislation, experience from the European context has shown that this type of legislation creates a change in mindset more generally within the market around human rights and HRDD. Companies are becoming more transparent as they experience a shift in the market in terms of due diligence expectations.

Social audits vs. human rights impact assessments

Panelists discussed the pros and cons of using social audits vs. human rights impact assessments (HRIAs):

• Companies are expected to respect human rights which means identifying, assessing and addressing actual and potential human rights risks and impacts. Both social audits and HRIAs are employed by companies to identify and assess impacts. 
• Social audits have many shortcomings. Some of the challenges identified include a short timeline, lack of human rights expertise among auditors, and adherence to local law and company codes as opposed to international human rights.
• HRIAs cannot fully replace audits, but they are a different tool which can be used by companies who want to better understand the human rights challenges associated with specific countries, activities, and issues. They require buy-in from the supplier and the company itself, and resourcing in terms of implementation and follow-up.
• Human rights or child rights impact assessments provide a much more comprehensive view than an audit. Where audits provide a "snapshot in time", HRIAs assess the risks for child labour across various time periods and provide much more in-depth information about risk factors.
• Companies often choose to conduct audits over HRIAs as audits are easier and companies are often more familiar with them. HRIAs require a bigger investment of both time and money and require a deeper level of expertise. In order to increase uptake, HRIAs can be combined with existing environmental assessments to form an integrated approach.
• There needs to be a shift from a compliance culture to a reflective ("knowing and showing") culture. It is not just about being able to tick the box, but important for garment companies to be able to say 'we've done the assessment, we did identify challenges around child labour and this is what we're doing about it'.
• There is a need for companies to take ownership of the HRIA process, get external expertise where needed and consider how they will use the results.

Remediation

• A good child labour remediation process starts even before a child labour case is identified. Remediation procedures and guideline should be in place so that when a case is identified, it can be dealt with immediately.
• Zero-tolerance approaches to child labour are not effective. If a company stops collaborating with a supplier when a case of child labour has been detected, the risk remains. It is important to work with suppliers and create strong relationships. Zero-tolerance approaches may lead to more sub-contracting as suppliers attempt to hide the problem.
• A collective impact approach is a positive alternative to a zero-tolerance approach. Companies must look inwards and see how they can contribute to collective action.

Next steps

• Fashion Takes Action and the CORE are partnering to hold a series of educational webinars this year for the Canadian garment industry.
• The CORE is exploring a phase two to follow-up on the garment study findings. Interested companies are encouraged to contact the CORE.

Resources

• CORE Study on Respect for Child Rights and the Risk of Child Labour in the Global Operations and Supply Chains of Canadian Garment Companies, February 2023
• Sustainable Fashion Toolkit, Fashion Takes Action
• Human Rights Impact Assessment Guidance and Toolbox, The Danish Institute for Human Rights
• The Centre's Child Rights in Business (CRIB) Working Group, The Centre for Child Rights and Business