The hidden human costs behind everyday products

Transparency is easy to promise but not always provided.  

Despite growing pressure for companies to observe ethical business practices, many continue to disclose little information about their products. Questions about who made the products, and under what conditions, go unanswered while companies continue to profit.  

Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (Bill S-211) took effect in January 2024, with the goal of increasing corporate accountability and helping eliminate forced and child labour from global supply chains. By requiring companies to publicly report on the risks of forced labour in their operations and the measures they have taken to address them, the legislation promised greater transparency for consumers, investors and policymakers. 

PhD candidate Sima Fallah-Tafti’s research examines the ineffectiveness of this Bill due to the shortcomings of corporate reporting and the limited accountability required under the Act. 

According to Fallah-Tafti, there is inconsistency between organizations’ reporting: while some companies provide extensive explanations of processes and risk assessments, others submit only brief summaries. 

Larger companies such as Nike, Fallah-Tafti found, often produce more detailed reports, compared to smaller, less visible companies, which sometimes release reports lacking in detail and numbers. This raises questions about whether current reporting standards are enough to ensure meaningful transparency and accountability.  

The onus is not on the consumer 

How often do we see a label that notes a product was made in China, sourced from Ethiopia or a product of the USA? 

The S-211 Act applies to companies operating in Canada and those importing goods into the country, bringing many international organizations under its scope. As a result, the legislation affects many companies that Canadians interact with and support every day. 

While consumers are increasingly encouraged to make ethical purchasing decisions, they can only do so when they have access to reliable information about how products are made and who is making them. Labelling a product “ethically sourced” is no longer enough. It is becoming increasingly difficult for governments to track origins in a global supply chain. For the average consumer, it is nearly impossible. 

Fallah-Tafti argues that the burden to figure out which companies are adhering to ethical standards does not fall on consumers, who lack the resources and access to investigate corporate supply chains. Instead, companies are in the best position to provide meaningful information behind their practices. 

What can be done if companies continue to fall short? 

Speaking the language 

Fallah-Tafti highlights the unfortunate truth that for practices to change for the better, businesses need incentives. 

While the Act does allow fines for failing to file or for false statements, it sets no penalty for reports that disclose little.

“Once there is a meaningful penalty, companies that are not disclosing right now would disclose, and the ones who are disclosing minimally will disclose more information, more detail, and answer more questions,” she added.

As Canada continues its efforts to address forced and child labour in global supply chains, transparency remains a critical first step. Transparency is only meaningful when the information provided is detailed, accessible and reliable.