Risk analysis of human trafficking, forced labour, and child labour in Public Services and Procurement Canada’s procurement supply chains : Executive summary

May 2021

This project analyzed the exposure of the Public Services and Procurement Canada (PSPC) goods supply chain to potential risks of human trafficking, forced labour, and child labour.

The risk analysis modelled the relative risk of each Goods and Service Identification Number (GSIN) code to determine which were at the highest risk of exposure to human trafficking, forced labour, and child labour. PSPC’s contract history from April 2017 to September 2020 was included in the analysis. As a result of these analyses, the 3 largest vendors by spend value from each of 13 high-risk GSIN codes, as well as the 20 highest value vendors, were identified for detailed policy analysis. The policy analysis investigated these vendors’ publicly available policies and procedures to mitigate risks. This analysis found that 5 vendors out of 48 had suitable policies in place to mitigate human trafficking, forced labour, and child labour risks, 3 had ineffective policies, 2 had no policies but acknowledged the risks elsewhere, and 38 did not acknowledge human trafficking, forced labour, and child labour risks in their supply chains.

These results, and the investigations made into the procurement process with the help of PSPC employees have led to the following recommendations:

A government procurement policy should be developed detailing Canada’s commitment to, and leadership in the prevention and remediation of human rights abuses in government supply chains. The policy should have clear ownership and a defined method of communication and dissemination.

The policy should be expanded into a due diligence strategy. Suppliers should be informed that PSPC highly prioritizes the prevention of labour exploitation, and the new strategy should be communicated to them. Pre-qualification requirements at the bidding stage should commit suppliers to engaging with the policy, and to providing their own policies and procedures to mitigate associated human rights risks. Contracts should be awarded to suppliers with appropriate policies and who have demonstrated sufficient understanding of supply chain risks related to human rights violations.

The data management system should be streamlined to allow vendors to share human rights due diligence information with procurement officers and across GSIN codes. More information should be provided by the vendors, including product country of origin, the geographical distribution of their supply chain, and information to utilize the importance of PSPC contracts to their business.

Information and appropriate training should be provided by PSPC to vendors as part of the contractual relationship, which should also obligate vendors to uphold the updated Code of Conduct for Procurement. Capacity should also be built within PSPC to investigate high-risk supply chains and to address allegations of human trafficking, forced labour, and child labour in its supply chains.

Lack of transparency and engagement should lead to ineligibility as a PSPC vendor and contract termination where a contract is already in place.

It should be reinforced that termination will only be used in cases where vendors fail to meaningfully engage on a human rights violation, so as not to lose leverage for improvement.

The effectiveness of this strategy should be periodically reviewed and updated by the owners of the policy using internally developed key performance indicators.

PSPC should require that its vendors engage in remediation for human rights violations in their supply chains.

PSPC should collaborate with partners both internally to ensure that the policy is understood, disseminated, and acted upon, and externally to promote ethical procurement and to combat human trafficking, forced labour, and child labour.

Progress on the implementation of the new policy should be reported on transparently, detailing learning points and challenges encountered.

Contact us to request a full version of the risk analysis report.

Email: spac.paachatsethiques-apethicalprocurement.pspc@tpsgc-pwgsc.gc.ca