China’s Public Procurement Law lists a number of requirements that must be fulfilled by all suppliers whose goods or services the government is seeking to purchase. Article 22 of the law states that the enterprise must have a good business reputation, a good history of paying social security funds, and no “significant illegal record in business activities” in recent years.
There is no requirement for officials to conduct due diligence to ensure that projects are free of forced labour. Officials do not appear to be given any training on how to identify assets that are likely to contain slavery in their supply chains. Procurement training is provided but it is unclear if the curriculum includes modern slavery
Who needs to report?
Entities will need to report under the Act if they are an entity or carry on business in that country with a minimum annual consolidated revenue of $100 million.
What does reporting entail?
Reporting obligations relate to the risk of modern slavery in the operations and supply chain of a reporting entity (and its owned and controlled entities), as well as the steps it has taken to respond to the risks identified.
Unlike other jurisdictions, the reporting criteria in Canada are mandatory. Reporting entities must have a reasonable basis for any opinions expressed in their Modern Slavery statement, so it is important that reporting entities take the time to assess their risk. The reporting criteria can be found here.
What should entities do?
It is crucial that reporting entities begin reviewing their supply chains and operations to comply with the new reporting obligations.
What is the timing?
A modern slavery statement must be submitted within six months after the end of the reporting entity’s financial year. The reporting period is the entity’s first full financial year that commences after 1 January 2020.
|Entity’s annual financial reporting period||First reporting period under the Commonwealth Act||Due date for statement|
|1 July to 30 June||1 July 2019 to 30 June 2020||31 December 2020|
|1 January to 31 December||1 January 2020 to 31 December 2020||30 June 2021|
|1 April to 31 March||1 April 2019 to 31 March 2020||30 September 2020|