In Canada’s federal procurement landscape, opportunities for growth and expansion abound, but beneath the surface lie serious challenges that all businesses must consider—among them, the prevalence of human trafficking and forced labour in the supply chain. For companies seeking to secure government contracts, it’s critical to adopt a procurement strategy that not only supports growth but also stands up to rigorous ethical standards. At Niipaawi, we help companies navigate this complex environment by developing strategies that align with their growth goals while upholding strong commitments to human rights and social responsibility. By working with clients to identify and mitigate risks related to forced labour and trafficking in their procurement practices, we empower businesses to pursue federal opportunities with integrity and accountability, ensuring a safer, fairer supply chain for everyone involved.

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Human trafficking, forced labour, and child labour remain significant global issues that permeate supply chains worldwide. Vulnerable groups, particularly Indigenous communities in Canada, often face heightened risks of exploitation. Recognizing this, the Government of Canada has introduced comprehensive guidelines to help businesses ensure ethical procurement practices, eradicate these abuses, and foster a fairer and more transparent procurement system.

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This article is centered around a report from Public Services and Procurement Canada (PSPC) and Rights lab, in which many of the findings and analyses within this blog article are informed by.

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Who is Vulnerable to Exploitation?

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The risk of exploitation is especially high for groups facing socioeconomic marginalization, political instability, or other systemic inequities. According to the PSPC report, In Canada, Indigenous peoples, as well as individuals fleeing economic hardships, are among those most susceptible to exploitative labour conditions. Indigenous communities, in particular, have been historically marginalized, making them vulnerable to forced labour and trafficking within supply chains.

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Understanding Exploitative Working Conditions

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Exploitative labour practices can include a range of severe conditions, such as:

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• Excessive Working Hours: Workers may be forced to work long hours with minimal breaks, often without adequate pay.
• Hazardous Working Environments: Safety standards are ignored, putting workers’ health at risk.
• Lack of Freedom and Mobility: In some cases, workers are restricted in movement or have their identification documents withheld to prevent them from leaving.
• Physical and Psychological Abuse: Threats, violence, and intimidation are often used to maintain control over workers, creating a climate of fear

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These conditions undermine basic human rights and contribute to a cycle of oppression and exploitation.

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Internal and External Risks to Businesses
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Ethical procurement goes beyond simply signing agreements with suppliers; it requires an ongoing assessment of potential risks, both within and outside the organization:

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• Internal Risks: Businesses may have limited oversight of their suppliers or fail to monitor working conditions adequately. Poor internal controls or inadequate training can allow exploitative practices to go undetected. A lack of due diligence processes may also create gaps in assessing suppliers' practices.
• External Risks: The complexity of global supply chains can obscure unethical practices within third-party vendors or subcontractors. Limited visibility into supplier networks, particularly those involving international suppliers with different standards and practices, makes it difficult for businesses to ensure compliance across their entire chain

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Government Partnerships and the Role of Rights Lab

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The Government of Canada has partnered with research initiatives like Rights Lab to strengthen its understanding and combat these issues effectively. Rights Lab, a research group specializing in modern slavery, provides data and analysis to guide ethical procurement practices. Through this partnership, the government gains access to research that informs policy decisions and improves the accountability of businesses operating within Canadian procurement.

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Key Guidance and Expectations for Ethical Procurement

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The Government of Canada’s guidance for ethical procurement provides a framework to help businesses identify and eliminate forced labour and child labour within their operations. This guidance is grounded in international and domestic standards, including:

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1. United Nations Guiding Principles on Business and Human Rights (UNGPs): These principles emphasize the dual responsibility of governments and businesses in protecting human rights across all business activities.
2. Palermo Protocol: This international treaty defines human trafficking and outlines the state’s responsibilities to prevent it and prosecute offenders. It directly informs Canada’s procurement policies to ensure compliance and respect for human rights.
3. Sustainable Development Goals (SDGs): Canada’s commitment to the SDGs includes goals related to promoting justice, peace, and prosperity for all—goals that directly relate to ethical procurement.
4. National Strategy to Combat Human Trafficking (2019-2024): This strategy enhances support for victims, raises public awareness, and equips law enforcement to combat trafficking. For procurement, it emphasizes the role businesses must play in aligning with anti-trafficking efforts.
5. Fighting Against Forced Labour and Child Labour in Supply Chains Act: Effective January 2024, this act requires businesses of a certain size to report annually on their efforts to mitigate forced and child labour within their supply chains

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Implications for Indigenous Communities and Procurement Practices

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For Canadian businesses engaged in federal contracts, these standards elevate the level of accountability required. Suppliers must comply with human rights laws, conduct due diligence, and implement transparent practices to ensure that forced and child labour are absent from their supply chains. This is particularly significant for Indigenous communities, who face unique vulnerabilities due to historical and systemic marginalization. By enforcing these guidelines, Canada’s ethical procurement initiative seeks to protect Indigenous rights and promote fair treatment within supply chains.

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Moving Forward with Ethical Procurement Practices

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At Niipaawi, we recognize the importance of ethical practices within procurement and supply chains, especially as they relate to Indigenous communities. These guidelines are about more than compliance—they are an opportunity to foster respectful and fair relationships with Indigenous communities in Canada. Ethical procurement, rooted in transparency and accountability, empowers businesses to contribute to a fairer economy that benefits all Canadians.

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Conclusion

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As we advance in our commitment to reconciliation and Indigenous economic empowerment, it is crucial for businesses to understand and adhere to these ethical procurement guidelines. By integrating these measures, businesses don’t just comply with regulations; they build a future grounded in justice and respect, creating a supply chain that values every individual and supports a more equitable Canada.

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To view the Government’s official guidance, you can learn more at: https://www.canada.ca/en/public-services-procurement/services/acquisitions/ethical-procurement/awareness-guidance/overview.html

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