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Canada's National Contact Point (NCP)

Annual Report 2003

Introduction

The OECD Guidelines for Multinational Enterprises is an instrument of the Organization for Economic Cooperation and Development (OECD). The recommendations set forth in the Guidelines are a voluntary, multilateral framework of standards and principles on responsible business conduct.

As a member of the OECD and signatory to the Guidelines, Canada is obligated to establish a national contact point (NCP). The role of the NCP is to promote awareness of the Guidelines and ensure their effective implementation. This report provides a summary of the activities undertaken by Canada's NCP in the past year (June 2002 - June 2003) to fulfill its responsibilities.

The Canadian Policy Context

The Guidelines are an important element of the Government's approach to promoting corporate social responsibility (CSR). A number of government departments are active in this area, through activities such as information dissemination, facilitation of dialogue among interested parties and support for the development of international norms. The Guidelines are a part of these activities, their contribution heightened by the fact that they represent the shared views of thirty-seven national governments on what constitutes appropriate corporate behaviour. The business community in Canada is promoting CSR as well, with an increasing number of enterprises adopting codes of ethical conduct and related management strategies. The Guidelines can provide a frame of reference for private sector initiatives and efforts to encourage progress in this area internationally.

Corporate social responsibility, and the Guidelines, make an important contribution to the Government's policy on promoting sustainable development. Achieving sustainable development requires the responsible engagement of all sectors of society, including the business community. The Guidelines encourage corporations' contribution to sustainable development and help to strengthen the basis of mutual confidence between enterprises and the societies in which they operate. Thus, while our NCP has a clear mandate to implement the Guidelines, its activities also support other broader policy objectives of the Government.

Institutional Arrangements

The key responsibilities of Canada's NCP are to promote the Guidelines, respond to inquiries and contribute to the resolution of problems that may arise in relation to the operations of multinational enterprises. Important guiding principles for the NCP''s activities include visibility, accessibility, transparency and accountability.

Canada's NCP is an interdepartmental committee of the federal Government. It comprises representatives from a number of departments, including the Department of Foreign Affairs and International Trade, Industry Canada, Human Resources Development Canada, Environment Canada, Natural Resources Canada, the Department of Finance and the Canadian International Development Agency. The diversity of the issues covered by the Guidelines and the potentially broad spectrum of public interest (business, labour, non-governmental organizations) in Canada underscores the importance of structuring the NCP in this way.

Other departments and agencies participate in NCP activities as well. Export Development Canada is a frequent participant in NCP meetings and communications, and more recently the Canadian Commercial Corporation has become involved. The NCP representatives exchange communication frequently and meet as required, depending on the issues at hand.

The Canadian NCP's key business and labour interlocutors on the Guidelines are the Canadian Council for International Business (CCIB), the Canadian Labour Congress (CLC) and the Confédération des syndicats nationaux (CSN). A regular point of contact with the NGO community is in the process of being established.

Information and Promotion

a) Information and Promotional Tools
The Canadian NCP web site, established in June 2001, continues to be a useful tool for promoting the Guidelines. The web site has also become an efficient way to communicate information on the Guidelines to our overseas missions. All of our embassies and high commissions have been informed of the Guidelines and the importance of this instrument for the promotion of corporate social responsibility. Overall, the web site offers a convenient point of reference for a growing number of Canadian organizations and businesses that are seeking information on the issue of corporate social responsibility. The site receives about 100 visits per week.

An official Government of Canada brochure on the Guidelines continues to be distributed to a number of stakeholder organizations, including business, labour and NGOs. The brochure continues to be available on-line from the NCP web site and the virtual Publications Catalogue of the Department of Foreign Affairs and International Trade.

b) Promotion with Social Partners
The Canadian NCP reviewed and updated its strategy for the promotion of the Guidelines. A number of promotional activities have been identified for the coming year. The aim of the strategy is to ensure that the Guidelines are recognized in Canada as an international business ethics instrument that is endorsed and recommended by governments, including the Government of Canada.

Canada's Trade Commissioner Service includes corporate social responsibility as an important aspect of its promotional activities. Guidelines brochures are made available to companies that participate on trade and investment promotion missions abroad, and consideration is being given to further integrating corporate social responsibility activities into these missions. The missions normally include government Ministers and attract many Canadian firms interested in doing business abroad. As a result, they are an excellent forum for the promotion of the Guidelines in cooperation with the business community.

Promotional activities with the Canadian mining sector have been actively pursued during 2003. An official from Canada's NCP presented a session on the OECD Guidelines for MNEs at the Canadian Institute of Mining, Metallurgy and Petroleum annual conference in Montreal, Canada in May 2003. The Prospector's and Developer's Association of Canada (PDAC) drew their members attention to the OECD Guidelines for Multinational Enterprises in December 2002 by publishing a short article about the Guidelines in PDACs online News and Activities summary. Guidelines brochures's were also distributed at PDAC's annual meeting held in Toronto in March 2003.

In May 2003, members of the Canadian NCP along with other Government of Canada officials met with Canadian non-governmental organizations (NGOs) interested in Canadian mining activities in the Democratic Republic of Congo (DRC). The same officials also met with Canadian firms involved in mining in the DRC. The primary purpose of the two meetings was to obtain the views of participants on the Second UN Panel of Experts Report on Illegal exploitation of natural resources in the DRC. NCP members took the opportunity to promote the Guidelines and seek participants' cooperation in future promotional activities.

OECD Guidelines brochures were included in the delegate kits of two prominent Canadian CSR conferences in 2003 – the Corporate Knights Driving the Return on Responsibility conference held in Toronto in June 2003 and the Canadian Council on Africa's Corporate Social Responsibility and Business Renaissance in Africa conference held in Calgary in June 2003.

Industry Canada continued its activities to promulgate the Guidelines, relevant resources and electronic links through organizations such as business councils and associations, including the Canadian Council for International Business.

c) Promotion Within the Government
Promoting the Guidelines within the government is an essential aspect of the NCP''s responsibility to raise awareness of the instrument. A number of departments and agencies interact directly with the business community, labour groups and NGOs through their programs and consultative activities. This is an important channel for alerting these groups of Canada's commitment to support the Guidelines.

The Department of Foreign Affairs and International Trade (DFAIT) has integrated the Guidelines into its activities to promote corporate social responsibility at the international level. The Department provides information sessions on the Guidelines for its overseas trade officials. The provision of Guidelines information is also a part of human rights training for government officials preparing for overseas postings. A formal training program on CSR targeted at trade officials is planned, and will include a session on the application of the Guidelines abroad. The Guidelines are also an important element of the Department's strategy to promote sustainable development.

Industry Canada continued its promotion of the Guidelines within the department's Sustainable Development Strategy. This involves not only identifying concrete deliverables respecting the Guidelines, such as developing promotional materials, but also reporting publically on these efforts. The department's web site pages related to the OECD Guidelines were updated as well.

Members of the NCP made a presentation on the Guidelines to Canadian International Development Agency officers responsible for developing the Agency's private sector development strategy. A part of their strategy will include promotion of the Guidelines with companies participating in the delivery of Canadian foreign assistance programs.

Corporate social responsibility, and the policies and procedures that underpin it, continue to evolve at Export Development Canada (EDC). As part of its efforts to promote ethical corporate conduct and continue a dialogue with exporters, investors, NGOs, and other stakeholders on CSR issues, EDC has been meeting regularly with these groups to discuss issues covered in the Guidelines, such as environmental responsibility, anti-corruption and anti-bribery efforts, and human rights. During the course of these discussions and by means of its web site, speeches, and other communications vehicles, EDC continues to support the NCP's efforts to promote the recommendations of the Guidelines within the Canadian exporting and investing community.

Environment Canada has met with the Canadian Environmental Network (CEN) and explained the role of the NCPs in supporting the Guidelines. The CEN has plans to distribute the website information to its members.

Inquiries

A number of inquiries about the Guidelines have come to the NCP in the past year. Inquiries received via e-mail are often from think-tanks and academic institutions looking for information on Canada''s experiences with the Guidelines. Other inquiries come through meetings with businesses or non-governmental organizations. The purpose of such meetings is usually to discuss issues related to corporate social responsibility, and in this context an inquiry will be made about the OECD Guidelines and their relevance to the situations in question. As well, the Guidelines are occasionally raised in the public's correspondence with Ministers..Implementation in Specific Instances

a) UN Panel of Experts Report on the DRC
Canada is one of ten OECD member countries with companies listed in Annex 3 of the Second UN Panel of Experts Report on Illegal exploitation of natural resources and other riches in the Democratic Republic of Congo (DRC). The listed companies are alleged to be in violation of the OECD Guidelines for MNEs. The Panel's Report was commissioned by the UN Security Council.

The Report gave no indication of how seven of the eight listed Canadian companies had violated the Guidelines, leading these companies to express serious misgivings about the process followed by the Panel in developing Annex 3. The UNSC has asked the Panel to do some follow-up work, including meeting with the companies to discuss their concerns. A third report is expected to be submitted to the UNSC in July 2003. The NCP met with the Canadian companies to discuss the UN process and encouraged them to engage the Panel prior to the release of the third report. The NCP also informed the companies of the Government's expectation that they respect the Guidelines in their overseas operations.

A coalition of NGOs has been in touch with the NCP to register their concern about the activities of the Canadian companies in the DRC. They requested that Annex 3 be considered as a "specific instance" under the Guidelines. The NCP met with the NGOs to discuss the Panel's Report and the OECD Guidelines. The NGOs were informed that the NCP will await the release of the third report before considering whether or not to pursue formal procedures under the Guidelines.

Canada's NCP has been working with other NCPs through the OECD Committee on International Investment and Multinational Enterprises (CIME). Through the CIME, a dialogue with the UN Panel has been opened and a formal request has been made for the information upon which the Panel based its conclusions regarding the OECD member country companies named in Annex 3.

b) Burma
The Canadian NCP received a formal complaint from a national Canadian labour group regarding the operations of a Canadian mining company in Burma. The complaint, which is focussed on elements of the Guidelines chapter on Employment and Industrial Relations, was reviewed by the NCP and will be considered as a "specific instance" under the Guidelines. Procedures are being developed to bring the parties together for a dialogue process.

Concluding Remarks

The OECD Guidelines for Multinational Enterprises has become a central element of the Government's approach to promoting corporate social responsibility, domestically and internationally. The interdepartmental structure of the NCP has proven useful in the promotion of the Guidelines within the Government and with departmental constituencies, including business, labour and NGOs. The NCP looks forward to further promotional activities in the coming year.

The UN Panel of Experts Report on the DRC has raised new and unique questions for NCPs relating to the implementation of the Guidelines. It is too early to draw final conclusions on the lessons learned as the Panel process is not yet completed. Nevertheless, one thing has become clear - the CIME plays a valuable role in coordinating the response of the NCPs to the UN Report.