Canada terminates $222 million PPE contract following forced labor investigation

Canada terminates $222 million PPE contract following forced labor investigation

Public Services and Procurement Canada has terminated two supply contracts with Supermax Healthcare Canada following allegations that the nitrile gloves it manufactured in Malaysia for use by Canadian healthcare workers were made with forced labor.

Those contracts for synthetic rubber medical gloves, worth more than $222 million, were part of the $8 billion push led by former Supply Minister Anita Anand to equip Canadian healthcare workers with the personal protective equipment they needed during the COVID-19 pandemic.

In November, the ministry announced that deliveries from this company were blocked until the government can review the results of an independent audit of Supermax’s operations.

“Given the seriousness of the allegations and the anticipated timelines for the final results of the audit, the Government of Canada has decided, and Supermax Healthcare Canada has agreed, to terminate by mutual consent the two existing contracts for the supply of nitrile,” the ministry said. told CBC News in an email on Tuesday, confirming an earlier report from Reuters that Canada’s contract with the Malaysian supplier had ended.

The United States first decided to ban shipments

Canada’s decision follows action taken by US Customs and Border Protection on October 21.

US officials have banned shipments of gloves made by Supermax Corporation Bhd. and its subsidiaries based on information that “reasonably indicates their use of forced labor in manufacturing operations”. The US survey identified 10 of the International Labor Organization’s indicators of forced labor.

Malaysia provides around two-thirds of the world’s supply of disposable medical gloves. (China is the other major global manufacturer.)

Following public allegations last January of human rights abuses and possible migrant worker abuse among Malaysian glove makers, Canadian officials asked six suppliers, including Supermax, further questions about the how their workers were treated.

Based on the company’s initial response, Canada initially maintained its contracts with Supermax, but following the US decision, it sought additional assurances that it was not using forced labor. The company hired an independent firm to carry out a full audit of its operations.

“The Government of Canada is committed to ensuring that it does not do business with companies that employ unethical practices, either directly or within their supply chains,” the department said in November. that it was suspending further deliveries from Supermax.

Taking the compliance issue “seriously”: Supermax

PSPC has yet to respond to follow-up questions from CBC News about how many gloves were delivered before deliveries were suspended or what kind of checks the government carried out on the company’s employment standards before signing the contracts.

In a statement earlier this month, Supermax said so takes compliance “seriously” and has been striving to meet ILO standards since 2019. It introduced a new foreign worker management policy and other changes to its human resources practices which it said had been in effect since November 2021. .

The competitive global supply race for PPE at the start of the COVID pandemic in 2020 has been described as “the Wild West”.

British lawyer Nusrat Uddin said that was no excuse for countries to turn a blind eye to working conditions which she likened to “modern slavery”.

Governments have been warned, lawyer says

His firm, Wilson Solicitors, is taking legal action against the UK government, seeking a judicial review of its national health service’s decision to continue to buy gloves from Supermax, despite its own promises to crack down on forced labour.

Uddin told CBC News on Tuesday that governments knew as early as 2013 or 2014 that the medical glove industry in Malaysia was highly problematic and that workers were at high risk of abuse.

She praised US officials for taking the allegations seriously and working with groups on the ground to investigate how the migrant workers who make these gloves are being treated.

Healthcare workers in Edmonton in full PPE gear. (Massimo Pinca/Reuters)

Most are from Bangladesh and Nepal, she said, and are heavily in debt paying problematic “recruitment fees” to their employers. Their families depend on them to send income home, but they are economically dependent on their employer.

Their working days are long and hot; Malaysia only recently changed its law to ban working seven days a week. Uddin said he saw evidence of workers being housed in rows of bunk beds in overcrowded accommodation.

She said workers’ movements were restricted during the pandemic. Some had their passports withdrawn and were unable to leave their employer’s premises for 18 months, she added.

“It’s an extremely complex and sophisticated system of controlling workers and exploiting them for the billions in profits that are being made on their backs in this global pandemic,” she said.

The United States leads the campaign to suppress

The Americans led the way on this issue by banning gloves from five Malaysian manufacturers, Uddin said. Previously, due diligence audits only worked on the surface.

When buyers from rich countries look deeper and start cutting companies one by one, Uddin said, it becomes possible to start changing industry norms.

The United States is now pushing close trading partners like Canada to crack down on forced labor.

Whether or not it resulted from American pressure, Canadians should be proud to see these contracts terminated, she said.

“We cannot just protect our own people by exploiting other people,” she said. “The world is getting smaller. We really understand how much of our products – whether in our supermarkets… our clothes… now our medical supplies – are truly tainted with the exploitation of others around the world.

Canada only finalized changes to its procurement code of conduct to ban the use of forced labor by government suppliers a few months ago.

But the use of forced labor is prohibited in several of Canada’s current trade treaties, including the revised North American Trade Agreement that Canada is working with US and Mexican officials to enforce.

Canada grapples with law enforcement

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) also prohibits the use of forced labor. Malaysia was one of its first signatories, but has yet to ratify and implement the agreement. Canada ratified the CPTPP in 2018 and was one of six initial partners when it entered into force at the end of that year.

Canada is currently in trade negotiations with the Association of Southeast Asian Nations (ASEAN), of which Malaysia is a member. Trade Minister Mary Ng calls Canada’s trade deals “high-level deals” when it comes to things like protecting workers’ rights, suggesting that any agreement ASEAN reaches with Canada would include a labor chapter that reflects Canada’s progressive values.

The allegations against this glove maker suggest that some ASEAN partners may struggle to meet and enforce ambitious standards.

But Canada is also struggling to keep products made with forced labor out of its domestic market.

Last year, an investigation by CBC’s Marketplace revealed that Canadian retail giant Reitmans Ltd. sold clothes made in a factory in China suspected of using North Korean forced labor. In another episode, Marketplace also revealed that major Canadian food retailers were selling tomato products harvested and made by Uyghurs and other ethnic minorities under oppressive working conditions in China.

Labor Minister Seamus O’Regan’s mandate letter asks him to introduce legislation to eliminate forced labor from Canadian supply chains and ensure that Canadian companies do not contribute to human rights abuses. person abroad.

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