Thank you very much, Mr. Chair and the honourable members of this committee, for your invitation.
I am joining you today from the traditional, ancestral and unceded territory of the Algonquin Anishinabe people.
The Canadian ombudsperson for responsible enterprise, or the CORE, as my office is referred to, has a mandate to promote respect for human rights and responsible business conduct by Canadian garment, mining, and oil and gas companies operating abroad. My office also provides a complaint mechanism for those who believe their human rights are negatively impacted by those companies.
My remarks today will cover the following: first, the CORE's assessment of forced labour and other human rights abuses in China; second, the expectation of companies and investors operating in high-risk contexts like China; and third, recommendations for government action related to Canadian public pension fund investment in China.
First, with respect to the CORE's assessment of forced labour in China, at present it is not possible to conduct in-country investigations into Uyghur forced labour. However, reports published by the Office of the United Nations High Commissioner for Human Rights and Global Affairs Canada, among others, are resolute. They indicate that Uyghur and other Muslim ethnic minorities are subjected to serious human rights abuses in the Xinjiang area. This includes forced labour, repressive surveillance, mass arbitrary detention, sexual violence, torture and other ill treatment.
In light of this, the Canadian government requires the importers to sign an integrity declaration on doing business with Xinjiang entities prior to receiving services and support from the trade commissioner service.
To summarize this point, there is no question that China is a high-risk context for forced labour, particularly in the Xinjiang region.
Second, with respect to companies and investors operating in high-risk contexts such as China, Canada's strategy on responsible business conduct abroad is quite clear. Our government expects Canadian companies, including investors, to respect Canadian standards for human rights and environmental protection when they operate overseas.
We also expect them to operate in a manner that is consistent with the United Nations “Guiding Principles on Business and Human Rights”. When operating in high-risk contexts like China, companies and investors are expected to carry out enhanced due diligence in line with the UN guiding principles. Investors should assess whether investee companies are connected with adverse human rights impacts and use their leverage to encourage appropriate action. If companies are unable to prevent or mitigate identified harms, then investors should take steps to end business relationships responsibly.
Third and finally, regarding Canadian public pension fund investments in companies in China, the CORE, in line with the UN working group on business and human rights' guidance for investors, recommends that the Canadian government do three things: first, put in place guidance for investors on respecting human rights throughout investment activities, which includes public pension funds; second, integrate respect for human rights into the mandate, operations and investment activities of institutions involved in issuing and managing government pension funds; third, introduce mandatory human rights and environmental due diligence legislation, requiring companies to take steps to identify, prevent, address and remedy all human rights abuses, including forced labour. This would support investors' efforts to assess and address human rights risks in investment portfolios.
In closing, I would like to provide two updates on the CORE's work.
First, my office is currently handling 13 complaints regarding the use of Uyghur forced labour in the supply chains of Canadian companies. Of these complaints, 11 focus on the garment sector and two focus on the mining sector. We will start publishing initial assessment reports in July and look forward to working with all parties to find solutions. However, I would like to point out that while some companies are engaging in our complaints process, others have opted not to participate.
Second, the CORE published a study in February that assessed Canadian garment company approaches to addressing the risk of child labour in their global supply chains. The study revealed that of the 10 Canadian companies that participated anonymously, all have suppliers based in China. Few, however, have robust measures in place to identify and remediate human rights risks, like child labour and forced labour, in their overseas supply chains. Also, while the study profiled 10 companies, we suspect that others likely face similar challenges.
I wish to conclude by thanking you for providing me with the opportunity to share the CORE's perspective. I welcome your questions and reflections.