Canada announces new measures to address human rights abuses in Xinjiang, China

The Canadian government falls short of its international legal obligations and fails to acknowledge an ongoing genocide. The recent announcement by the Canadian government to address the oppression of the Uyghur community in Xinjiang offers little in terms of immediate meaningful impact on companies operating in Xinjiang. We address why companies operating in the region should still be concerned.

 Gary Caroline

 Gary Caroline is an international lawyer and the President of The Ofelas Group Inc. Follow him on Twitter: @Gary_Caroline

On January 12, 2021, then Minister of Foreign Affairs François-Philippe Champagne and Minister of Small Business, Export Promotion, and International Trade Mary Ng announced certain measures in response to the oppression of the Uyghur community in the Xinjiang Uyghur Autonomous Region.

The Global Affairs news release described Canada’s position as follows:

Canada is gravely concerned with evidence and reports of human rights violations in the People’s Republic of China involving members of the Uyghur ethnic minority and other minorities within the Xinjiang Uyghur Autonomous Region (Xinjiang), including repressive surveillance, mass arbitrary detention, torture and mistreatment, forced labour and mass transfers of forced labourers from Xinjiang to provinces across China. These activities strongly run counter to China’s international human rights obligations.

In coordination with the United Kingdom and other international partners, Canada is adopting a comprehensive approach to defending the rights of Uyghurs and other ethnic minorities, including by advancing measures to address the risk of goods produced from forced labour from any country from entering Canadian and global supply chains and to protect Canadian businesses from becoming unknowingly complicit.

 The news release states that Canada would be taking several steps in this respect.

• The Prohibition of imports of goods produced wholly or in part by forced labour;

• A Xinjiang Integrity Declaration for Canadian companies;

• A Business Advisory on Xinjiang-related entities;

• Enhanced advice to Canadian businesses;

• Export controls;

• Increasing awareness for Responsible Business Conduct linked to Xinjiang; and

• A Study on forced labour and supply chain risks.

 In reality, there is nothing either new or meaningful in the actions described.

This weak response by the Canadian Government is in sharp contrast with the strong stand taken by the United States including multifaceted legislation[1], sanctions and the US State Department declaration[2] that the Chinese Government’s conduct in respect of the Uyghurs constitute a genocide and crimes against humanity.

As a signatory to the Protocol of 2014 to the Forced Labour Convention, 1930 Canada is required to “sanction the perpetrators of forced or compulsory labour” which China is and Canada has not.

The prohibition of imports of goods produced wholly or in part by forced labour

The Government’s own Backgrounder states that the impetus for this welcome step in the fight against forced labour was the obligation contained in the revised NAFTA Agreement (CUSMA) requiring the three Parties to codify the prohibition through domestic legislation. The measure was not in response to the situation in Xinjiang.

Effective July 1st, 2020, the Customs Tariff Act and the Schedule to the Customs Tariff were amended to include a prohibition on the importation of goods from any country that are produced wholly or in part by forced labour. This legislation provides a basis for enforcement against goods produced by forced labour originating in or transferred from Xinjiang. This amendment enshrines in legislation the labour obligations that Canada signed on to as part of CUSMA, which apply to imports from all countries. (1)

One might ask why Canada says that it moved to adopt these albeit tepid measures to ensure compliance with CUSMA when it was already obligated by the international conventions it has signed to make forced or compulsory labour punishable in Canadian law and to “adequately and strictly” enforce it. (2)

A Xinjiang Integrity Declaration for Canadian companies

This “measure” relies on companies to self-report. The penalty for failing to report is toothless – the withdrawal of trade advocacy by the Canadian Government. This is the same milquetoast approach and structure as used with the Government’s Canadian Ombudsperson for Responsible Enterprise.

Canadian companies that are 1) sourcing directly or indirectly from Xinjiang or from entities relying on Uyghur labour, 2) established in Xinjiang, or 3) seeking to engage in the Xinjiang market, will be required to sign a declaration when engaging with the Trade Commissioner Service, beyond receiving a briefing about the risks of doing business in this market. The declaration acknowledges that the company: is aware of the human rights situation in Xinjiang; abides by all relevant Canadian and International laws, respects human rights, and seeks to meet or exceed OECD Guidelines for Multinational Enterprises and the UN Guiding Principles for Business and Human Rights.

Companies are required to affirm that they are not knowingly sourcing products or services from a supplier implicated in forced labour or other human rights violations and committing to conduct due diligence on their suppliers in China to ensure there are no such linkages.

Not collaborating in good faith could result in the withdrawal of trade advocacy support and future Export Development Canada financial support.

A Business Advisory on Xinjiang-related entities

Issuing “business advisories” which caution companies sourcing products in Xinjiang is advisable but hardly a “measure” in the fight against forced labour.

Global Affairs Canada issued a business advisory to caution Canadian businesses about the risks of supply chain exposure to entities that engage in human rights abuses, including forced labour in Xinjiang and involving Uyghur ethnic minorities, with a view to helping Canadian firms to understand the legal and reputational risks posed to companies whose supply chains rely on doing business with entities possibly implicated in forced labour. While these risks are not limited to Xinjiang or China, the Canadian Government considers that risks are higher in Xinjiang given conclusive evidence of human rights violations. 

Enhanced advice to Canadian businesses

 The same can be said for this – repetitive – point.

The Trade Commissioner Service is working with partners and private sector stakeholders to assist clients by providing enhanced advice on due diligence and risk mitigation related to supply chains and forced labour. Since July 2020 new guidelines have been shared across the Trade Commissioner Service network regarding the specific risks that Canadian firms operating in and doing business with China should carefully consider. 

Export controls

It is welcome that Canada will deny export permits to Canadian companies supplying technology to China’s surveillance state for use in Xinjiang. But Canada should adopt a more aggressive stancer by giving immediate consideration to employing Magnitsky and other sanctions on the leadership of Chinese or other companies deploying such technology throughout Xinjiang[3]. Given the notorious use of this technology, there should be no hesitation on Canada’s part in punishing foreign and domestic participants in what Canadas’s Parliament has declared to be a genocide.

In accordance with the Export and Import Permits Act, Canada will deny export permits if determined that there is a substantial risk that the export would result in a serious violation of human rights or international human rights law, including serious acts of gender-based violence. Particular scrutiny will apply to exports of advanced Canadian technology and services that could be misused or diverted towards government surveillance, repression, arbitrary detention or forced labour, in light of the evolving situation in the Xinjiang Uyghur Autonomous region.

Increasing awareness for Responsible Business Conduct linked to Xinjiang 

This is good but again, tough penalties must be employed against any company violating clear prohibitions. Canada has neither the clear legal prohibitions nor stiff penalties for companies sourcing, importing or manufacturing product made by forced or compulsory labour.

Global Affairs Canada will convene discussions with businesses and nongovernmental organizations to raise awareness about the risks of doing business in Xinjiang, with a specific focus on ensuring the integrity of their supply-chain so they operate in accordance to relevant laws and ethical standards. 

A Study on forced labour and supply chain risks

It is astounding that Canada (Global Affairs) lacks the internal capacity to analyze “areas of exposure to forced labour involving Uyghurs”. Further, it would help Uyghurs much more if Canada contributed to the body of legal measures punishing the architects of forced labour in Xinjiang.

Global Affairs Canada is seeking a comprehensive third-party analysis of areas of exposure to forced labour involving Uyghurs. This analysis is intended to contribute to the body of knowledge on these issues, with a view to providing Canadian companies with further advice on the risks of doing business in the region, supporting deliberations and decision-making and helping Canadian organizations to act against human rights violations.

The Risk to Companies Operating in Xinjiang

Sourcing, selling or operating in Xinjiang may be appealing to some companies which prize stability more than their responsibility to act ethically in conducting their affairs. Xinjiang is a “secure business environment” only until the light of human rights shines on what the Xi Jinping regime is doing to the Uyghur people.

The risks associated with ignoring what is going on there are great.

-       Penalties for ignoring legislation prohibiting doing business in Xinjiang;

-       class actions by Uyghurs and others working in the company’s supply chain; and,

-       shareholders and consumers challenging your decision to do business there.

Gone are the days when companies could operate where they wanted, in the manner of their choosing without bearing the consequences of their reckless behaviour.

Conclusion

While Canada’s hesitancy in confronting the many challenges posed by the Xi Jinping government may be somewhat understandable in responding to the incarceration of the two Michaels, there shouldn’t be any quandary for the government when determining how it will respond to a genocide in the making. A nation’s moral principles must guide its response. Silence or tepid measures will accomplish nothing more than providing the basis for saying “we’re doing something”.

Canada knows that China’s goal is to eliminate the Uyghurs as a distinct people. For a government that believes in human rights for all, what it has or hasn’t done in respect of the Uyghurs is on both counts - unacceptable.

As noted below (Endnote 2), as a signatory to the Protocol of 2014 to the Forced Labour Convention, 1930 Canada is legally obliged to “take effective measures to prevent and eliminate” the use of forced labour. The Chinese authorities are using forced labour in Xinjiang as an important instrument in their campaign to destroy the Uyghurs as a distinct people.

There is no better, more urgent time than now for countries like Canada to enact comprehensive legislation against forced labour. It would have the immediate effect of communicating our solidarity with the Uyghurs of China and signal Canada’s recognition of the gross human rights violations being perpetrated by the Xi Jinping regime.

Based on legislation enacted by other countries such as Australia[4] and the United Kingdom[5], a Modern Slavery Act would demonstrate Canada’s resolve by imposing strict reporting requirements on all companies working in or importing product from China. The failure to report should result in stiff penalties aimed at ensuring compliance and not simply the loss of trade advice from the Canadian Government.

The universal fight against forced or compulsory labour through potent measures aimed at combatting it, must be complemented by national initiatives to mount global pressure on the Chinese authorities to end their oppression of the Uyghurs and other Turkic peoples in Xinjiang.

The United States’ Uyghur Human Rights Policy Act of 2020 provides an important precedent that Canada and other countries should follow – in particular, the imposition of sanctions against the Chinese officials primarily responsible for its actions as well as any company directly or indirectly engaged in the oppression of the Uyghur people.

Finally and urgently, the Canadian Government on its own or in conjunction with others must adopt strong measures aimed at convincing the Chinese Government to end the genocide of the Uyghur and other Turkic people and punish any company doing business in or with Xinjiang. Where the origin of the product is unclear, Canada should simply ban the product from being imported.

Canada’s Parliament has spoken. The measures we suggest are among those that the Canadian Government should adopt as a first step in what will likely be a long campaign to end the destruction of the Uyghurs Let Canada live up to the clarion call of the very first Article of the Genocide Convention[6].

The Contracting Parties confirm that genocide, whether committed in time of peace or in time of war, is a crime under international law which they undertake to prevent and to punish.

 Endnotes 

1.   See Customs Notices No. 20-23.

 1.     On November 30, 2018, Canada, Mexico and the United States signed the Canada-United States-Mexico Agreement (CUSMA). Article 23.6 of the CUSMA establishes an obligation for each Party to prohibit the importation of goods that have been produced in whole or in part by forced or compulsory labour.

2.     Paragraphs 201(i.1) and 204(8) of the Canada-United States-Mexico Implementation Act (the Act) amend the Customs Tariff and the Schedule to the Customs Tariff to include a prohibition on the importation of goods that are mined, manufactured or produced wholly or in part by forced labour. The amendments made under the Act come into force in Canada on July 1, 2020.

3.     As of July 1, 2020, goods that are mined, manufactured or produced wholly or in part by forced labour are prohibited from entering Canada pursuant to tariff item No. 9897.00.00 of the Customs Tariff.

4.     Goods that are mined, manufactured or produced wholly or in part by forced labour are exempted from the provisions of tariff item No. 9897.00.00 when imported solely for personal use and are not for sale or for any business or occupational use.

5.    Importers of goods classified under tariff item No. 9897.00.00 may appeal the classification as prohibited, re-export the goods or abandon the goods.

2.   See Convention on Forced Labour, 1930, Article 25. Canada is signatory to three international instruments concerning forced or compulsory labour. They are:

 i.       Convention on Forced Labour, 1930 - ratified by Canada in 2011;

ii.      Abolition of Forced Labour Convention, 1957 – ratified in 1959;

          iii.   PO 029 - Protocol of 2014 to the Forced Labour Convention, 1930 – ratified on June 17, 2019. The timing of Canada’s ratification would indicate that the move was made in light of the CUSMA coming into force on July 1, 2019.

The Protocol is arguably the strongest call to action among the three. In its Article 1 we find the following. 

…each Member shall take effective measures to prevent and eliminate [forced or compulsory labour]…to provide its victims protection and access to appropriate and effective remedies, such as compensation, and to sanction the perpetrators of forced or compulsory labour.

Footnotes

[1] Uyghur Human Rights Policy Act of 2020, enacted June 17, 2020.

[2] Issued January 17, 2021.

[3] Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law), Canada; Special Economic Measures Act, Canada.

[4] Modern Slavery Act 2018.

[5] Modern Slavery Act, 2015.

[6] Convention on the Prevention and Punishment of the Crime of Genocide.