Guidance Note No. 2: A Guidance Note for Canadian companies on the Review Process of the Office of the Extractive Sector CSR Counsellor

The Office of the Extractive Sector Corporate Social Responsibility Counsellor
Government of Canada
1 Front Street West
Suite 5110
Toronto, Ontario M5J 2X5 Canada

Views expressed herein are those of the Office of the Extractive Sector CSR Counsellor.

Errors and omissions remain the responsibility of the Office.

June 2011

The Office's Key Guiding Principles:

Accessible, Effective, Independent, Transparent, Responsive, Predictable

Background : What is this Office and what is its mandate?

As part of the Government of Canada's Strategy on Corporate Social Responsibility (CSR) for the International Extractive Sector, the Office of the Extractive Sector CSR Counsellor was established in October of 2009. Broadly speaking, the CSR strategy is designed to help Canadian mining, oil and gas companies meet their social and environmental responsibilities when operating abroad, and employs a suite of initiatives, working in tandem, to support improved CSR performance.

The Government of Canada has articulated its expectation that Canadian companies adhere to all local laws of the country of operations. Canada has long endorsed the OECD Guidelines for Multinational Enterprises. Canada continues to maintain its National Contact Point (NCP) for the OECD Guidelines. The role of the NCP is to promote awareness of the Guidelines and ensure their effective implementation.

The CSR Strategy endorsed three new performance guidelines for the overseas operations of Canadian mining, oil and gas companies:

  • the International Finance Corporation (IFC) Performance Standards on Social & Environmental Sustainability for extractive projects with potential adverse social or environmental impacts,
  • the Voluntary Principles on Security and Human Rights for projects involving private or public security forces, and
  • the Global Reporting Initiative for CSR reporting by the extractive sector to enhance transparency and encourage market-based rewards for good CSR performance.

Mandate: The Office of the Extractive Sector CSR Counsellor

The Counsellor's mandate is contained in an Order-in-Council, which is available on the Office's website.

Part of the mandate of the CSR Counsellor is to review the CSR practices of Canadian extractive sector companies operating outside Canada. In fulfilling the review mandate, the Office acts as an impartial advisor and facilitator, an honest broker that brings parties together to help address problems and disputes. This approach is based on the view that a credible, impartial and transparent process with appropriate checks-and-balances may find win/win options to resolve disputes.

What is the review process?

The Review Process is a dispute resolution mechanism. The objective of the Review Process is to foster constructive dialogue between parties, help resolve conflicts and promote a workable path forward for those involved. There is a great deal of flexibility in the process for parties to seek ways and means to resolve their disputes in a constructive manner. In working with the CSR Counsellor, the Participants might be expected to agree to a problem-solving exercise, enter into a dialogue with one another, and/or engage in mediation if they agree to do so.

The Office is a balanced, informed interlocutor. The Office seeks to understand issues from as wide a perspective as possible, but does not take sides or advance positions.

The review process is not "investigative" but it can undertake site visits, desk research, interviews and so on in an effort to enhance understanding of issues.

The process is not "adjudicative" - it will not pronounce in favour of one party or another.

The process is about "practical problem-solving" and has a great deal of leeway to be constructive and creative. Participating in this process does not prevent parties from pursuing other ways to seek redress (for example, using the judicial system or regulatory authorities).

This process can help both project-affected communities as well as Canadian companies resolve issues on the ground. With this goal in mind, we welcome joint submissions from companies and project affected groups, communities and/or individuals, who feel that a third party may assist them in resolving an issue or series of issues.

How was this process built?

Our objective in constructing the process was to ensure it was credible and would add value to companies' operations. First, we engaged in a series of conversations that made us realize that the "process of constructing the process" mattered to stakeholders. We were told that the way we developed the rules of procedure would make a critical difference in our eventual ability to deliver a trusted, credible mechanism. Again, a balanced approach was key, as all potential users would need to be comfortable entering into the process. Many non-judicial processes are voluntary. To be used and useful, they must meet the needs of all potential participants and be seen as "fair" for all sides.

From the hundreds of conversations, inputs, lessons learned and information-gathering, the key demand was to construct a process that would lead to some sort of change on-the-ground, ensure communities were heard, and lead to an improvement in practice and conditions. This would help companies gain a better understanding of the issues, build trust with communities and manage risks.

The draft rules of procedure for the Review Process were subject to extensive workshopping after their public posting in May 2010. Significant industry input and comment was obtained both in Canada and overseas, in the context of workshops in Vancouver, Calgary, Toronto, Montreal, Ottawa, Mexico, Mali and Senegal. Although the process is non-judicial, we also held three legal experts workshops to enhance our understanding of the legal issues at stake. The final rules were approved by the Minister of International Trade in the fall of 2010. After our process was finalized, both the Mining Association of Canada and the Prospectors and Developers Association of Canada issued news releases welcoming the review mechanism.

Participating in a request for review

If I'm a responding party why should I participate?

The process is voluntary. But we worked hard to understand how it could provide value to companies. Often, in the absence of accessible recourse mechanisms, particularly dialogue-based mechanisms, communities that have issues or are frustrated may employ media or protests to get the company's attention.

The Office provides a safe space for dialogue, serving as a neutral third party. It provides a forum for building trust and relationships, enhancing understanding of the issues, and creating a constructive path forward.

What to expect

If you are named as a Responding Party, you will receive a phone call from the Office within 24 hours of receipt of the Request by the Office, and you will be sent a copy of the Request for Review shortly thereafter.

Once the Office has made a decision on eligibility, you will be notified at the same time the Requester is notified. If the request is eligible, the Office's website registry will be updated to reflect:

  • (1) the name of the Requestor;
  • (2) the name of the Responding Party;
  • (3) the date of the Request; and
  • (4) the status of the Request.

This eligibility screening is not a judgement on the merits of the request.

Note that the Office will never post the original Request on our website.

What if I decide not to participate?

This is a voluntary process and you are free to decline participation. If you decide not to participate in the Review Process, this will be noted in the CSR Counsellor's public report concerning the Request in question.

What if I wish to bring a request to the Office?

The mandate also allows companies to bring issues before the Office. Canadian mining, oil and gas companies who believe they are the subject of unfounded allegations concerning their overseas corporate activities may bring requests to the Office.

You would need to name a Responding Party. The party you name will normally be a project affected individual, group or community. The Office is not a "first resort" mechanism – you are asked to attempt first to engage in dialogue with the other party. You may wish to engage the party directly, or, in the case of an organization, explore any organizational codes of conduct or internal complaints processes before bringing the request to the Office.