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Allegations the companies benefited from the use of Uyghur forced labour in China
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The federal government agency responsible for monitoring alleged human rights abuses in Canadian companies’ operations abroad is now investigating Walmart Canada Corp., Hugo Boss Canada Inc. and Diesel Canada Inc.
The Canadian Ombudsperson for Responsible Enterprise (CORE) said none of the three companies provided a satisfactory response about allegations they benefited from the use of Uyghur forced labour in their supply chains and operations in China, so ombudsperson Sherri Meyerhoffer decided investigations were required.
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CORE has launched investigations against six companies since July 11, including Nike Canada Corp., Ralph Lauren’s Canadian unit and Dynasty Gold Corp., a junior gold miner, all based on complaints made last year by a coalition of 28 civil society organizations.
“These three companies and the other ones who haven’t participated (with CORE) have lost an opportunity,” Meyerhoffer said. “They don’t acknowledge their obligation to be transparent on what they have done or are doing to identify, assess and address the risk of human rights abuses.”
According to the complaints, clothing products sold by the three companies now under investigation are linked to factories in China that use Uyghur forced labour. All three companies denied the allegations.
As part of CORE’s process, it communicates and attempts to meet with company officials once a complaint is filed. It then decides whether to investigate the allegations based on those meetings and creates an initial assessment report.
Walmart was the only one to attend an initial assessment meeting with CORE, but it declined to participate in the dispute resolution process.
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“While Walmart Canada generally denied the allegations in the complaint, it did not provide a specific response,” the CORE report said. “There is a conflict in the available information that warrants a limited investigation.”
In response to CORE’s allegations, Walmart Canada said it responded and participated in CORE’s process and provided information about its supply chain procedures and controls in place.
“Through this process, we also confirmed that none of the entities in the complaint are in our active disclosed supply chain,” a Walmart spokesperson said in a statement.
CORE said the other two companies didn’t attend a meeting, but did communicate the steps they have taken to prevent worker abuse in their supply chains.
Diesel Canada provided two brief initial responses to the complaint, CORE said, but did not participate in the initial assessment meeting and did not provide any comments about the draft initial assessment report.
“Diesel Canada’s non-participation in the CORE’s process raises questions relating to the degree of transparency in Diesel Canada’s human rights due diligence practices, including its approach to responding to allegations of potential abuses of international human rights,” the report said.
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Diesel Canada has not yet responded to a request for comment.
CORE said Hugo Boss’s response “does not appear to consider fully the complex nature of the garment supply chain.”
Hugo Boss said CORE’s decision to investigate it was “incorrect” and the allegations against them “do not take into account” the information it provided to CORE. It added that it does not “tolerate forced or compulsory labour or any form of modern slavery.”
The agency, however, said Hugo Boss initially didn’t want to meet with CORE officials, but it changed its stance on May 30 after it received the draft assessment report and wanted to have an initial assessment meeting. CORE, however, refused as it had to stick to its timeline.
This is a “theme” in a number of reports, Meyerhoffer said.
“At the very last minute when they know it’s about to be published, now they want to sit down with us and see what they can do,” she said. “And we are saying, ‘Wow, we have already gone through a number of months and we need to move on with this.’”
Meyerhoffer said CORE would much prefer to advise companies directly rather than in the public arena. But the lack of company participation “forces” the investigations into the public.
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The ombudsperson said companies need to look at CORE as an opportunity as opposed to a “threat,” adding that there’s a lack of understanding on how engagement with the CORE can benefit companies.
As an example, she said a complaint against one undisclosed company was withdrawn by the complainant after it extensively engaged and, presumably, provided a satisfactory response. CORE will not mention the name of the company, as a result.
“They all deny the allegations and they tell us in this report that they have got great policies and whatever, but there has been a complaint they need to respond specifically, and I think it’s to their benefit,” Meyerhoffer said.
“It’s not about whether something has or has not happened. The purpose is to resolve a dispute, a human rights allegation. A company that engaged (with CORE) could provide information that shows that it was not part of the supply chain or that it was, and it disengaged.”
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CORE doesn’t have the authority to summon witnesses, nor will it take legal actions against the companies. But Meyerhoffer hopes the public reports will compel companies to engage and be more transparent.
• Email: nkarim@postmedia.com
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