44th Parl. 1st Sess.
November 21, 2022
- 04:03:28 p.m.
- Watch
- Read Aloud
Thank you, Mr. Chair, and thank you for inviting me to present today.
I am the CEO of the Shareholder Association for Research and Education, which is also known as SHARE.
We regularly coordinate investor advocacy on environmental, social and governance issues alongside most of the major pension and asset management institutions in our country and also with international coalitions of investors with trillions of dollars in assets under management.
We represent a group of direct institutional investor clients of SHARE, on whose behalf we engage in regular dialogue with boards and management at over 120 Canadian and international companies in which—
103 words
All Tags
- Hear!
- Rabble!
- add
- star_border
- share
- 04:05:04 p.m.
- Watch
- Read Aloud
I just tried that.
Is it any better?
8 words
- Hear!
- Rabble!
- add
- star_border
- share
- 04:05:24 p.m.
- Watch
- Read Aloud
4 words
- Hear!
- Rabble!
- add
- star_border
- share
- 04:25:47 p.m.
- Watch
- Read Aloud
4 words
- Hear!
- Rabble!
- add
- star_border
- share
- 04:25:48 p.m.
- Watch
- Read Aloud
Great.
Before I speak to the contents of the current bill, maybe I can provide a brief example to demonstrate the challenge that Ms. McPherson just mentioned of only requiring modern slavery reporting versus requiring an obligation to perform human rights due diligence.
Last year, on behalf of its shareholders, we began engaging a Canadian-headquartered multinational renewable energy company after it was reliably identified as having supply chain links to forced labour in the Xinjiang region of China. Actually, shipments of its product were even reportedly detained by U.S. customs officials, as we were just talking about, on suspicion of these links. We had a clear case of very material risk to the company and its investors.
Despite those credible allegations, the company said, “There's no forced labour in our supply chain. We don't believe there's forced labour in our industry.” In fact, the company, and many of the investors we reached out to, said this company has a modern slavery statement. It's right there on its website, and it says everything is fine. They have zero tolerance for forced labour anywhere in their supply chain.
But this statement didn't include any detailed information that would help the investors know whether the company is taking meaningful and effective action to implement these commitments. There's no indication of how they identify human rights impacts, which stakeholders are consulted, how many instances were investigated and acted on and what corrective actions the company has taken.
In fact, our review, when we looked closer, found that the company didn't have any system for investigating or addressing human rights impacts in the Xinjiang region, and for good reason: Investigators can't even get into that region to check allegations of human rights abuses. When we continued to try to push the company on this and develop a due diligence system, they said, “Just trust us.”
I tell you that story because it's indicative of the primary challenges we have as pension plans, banks, and asset management firms here in Canada when we're trying to meet our fiduciary duties, to assess risk. We can't properly assess it without this kind of—
373 words
All Tags
- Hear!
- Rabble!
- add
- star_border
- share
- 04:28:31 p.m.
- Watch
- Read Aloud
I appreciate that, Mr. Chair. Thank you.
7 words
- Hear!
- Rabble!
- add
- star_border
- share
- 04:31:26 p.m.
- Watch
- Read Aloud
The thresholds are important, because we want to make sure that companies have the capacity to institute due diligence systems. There's no point in asking your corner store to develop that kind of thing just because it's incorporated under the CBCA, so I think those thresholds are appropriate.
We've consulted with a lot of businesses in the retail sector, particularly around the thresholds, and we found that they're more or less in the right place. We're not really concerned about that as a problem in the legislation.
We are concerned that there's a requirement that there be a due diligence system, and that's the part that we haven't seen in the legislation. So far, there is a reporting requirement, but the answer could simply be no. The key here is making sure that there's a positive obligation to due diligence.
149 words
All Tags
- Hear!
- Rabble!
- add
- star_border
- share
- 04:38:37 p.m.
- Watch
- Read Aloud
Thanks.
One that I think we should speak about is the question of scope. Right now, it's narrowly focused on child labour and forced labour, and I appreciate what the other witnesses have brought forward on this question. Those are, obviously, egregious human rights abuses. However, as we speak to, perhaps, what Mr. Dumas has been speaking about—what happens with children—one of the solutions to address child labour is also to make sure that the human rights and workplace rights of the parents are respected.
Every company we deal with on human rights due diligence doesn't stop doing due diligence just for child labour or forced labour. We believe the scope should be human rights, as defined under the UN Universal Declaration of Human Rights and under the ILO Declaration on Fundamental Principles and Rights at Work. That will capture the whole essence of what's happening in these supply chains and, I submit, will actually help us address the question of whether there are adverse affects for children when their parents are not receiving their rights at work as well.
I would definitely expand it that way: make it a mandatory requirement that there is a due diligence system and expand the number of reporting requirements to include things like grievance systems, which are, again, well established in OECD guidance on this and in the United Nations Guiding Principles on Business and Human Rights.
That's where I would go, short and simple.
250 words
All Tags
- Hear!
- Rabble!
- add
- star_border
- share
- menumenu
- notificationsnotifications
- home
- mailmail
- searchsearch
