Canada's National Contact Point (NCP)

Annual Report 2005

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 2004 - June 2005).

The Canadian Policy Context

The Guidelines continue to be 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 central part of these activities, their contribution heightened by the fact that they represent the shared views of thirty-nine 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 offer a frame of reference for private sector initiatives and the NCP serves as a mechanism to facilitate cooperation between the government and the business community in the promotion of CSR. The Guidelines and NCP also provide a forum for engagement with other key stakeholders, such as labour groups and non-governmental organizations (NGOs) on CSR issues.

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 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 specific instances of corporate conduct in relation to the Guidelines. 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 International Trade, Foreign Affairs, Industry, Human Resources and Skills Development, Environment, Natural Resources, Finance and the Canadian International Development Agency. The diversity of the issues covered by the Guidelines and the broad spectrum of public interest (business, labour, NGOs) 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. NCP representatives exchange communication frequently and meet as required, depending on the issues at hand. The role of NCP Chair rests with the Investment Trade Policy Division of the Department of International Trade.

The Canadian NCP's key business and labour interlocutors on the Guidelines are the Canadian Chamber of Commerce (CCC), the Canadian Labour Congress (CLC) and the Confédération des syndicats nationaux (CSN). The NCP also has frequent contact with domestic and international NGOs.

Information and Promotion

a) Information and Promotional Tools
The Canadian NCP web site is a useful tool for promoting the Guidelines. The site experienced an average of 10,000 successful hits per month from January - April, 2005. It 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 CSR. Overall, the web site offers a convenient point of reference for a growing number of Canadian organizations and businesses that are seeking information on CSR.

The Department of International Trade updated its Corporate Social Responsibility web site in 2005. The updated web site has a dedicated page on the Guidelines with links to the Canadian National Contact Point website. 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 is available on-line from the NCP web site and the virtual Publications Catalogue of the departments of Foreign Affairs and International Trade.

b) Promotion with Social Partners
The Canadian NCP is pursuing a more strategic approach in the promotion of the Guidelines with the business community. More focus is being given to the extractive sector (mining, oil and gas). Because Canada is a major player in the global extractive sector, both the Canadian Government and the Canadian industry share an interest in maintaining a positive image of Canada in this sector, and ensuring that Canadian businesses contribute positively to the broader social and environmental objectives of the communities in which they operate. Promoting the Guidelines in this sector is a concrete way for the Government to engage Canadian companies in supporting these objectives.

The NCP has initiated plans to co-sponsor and deliver a workshop with Transparency International Canada this fall on the Guidelines. The workshop will promote the Guidelines with the Canadian mining community, particularly junior mining companies. Canada's Trade Commissioner Service includes CSR as an important aspect of its promotional activities. Guidelines brochures are made available to companies that participate in trade and investment promotion missions abroad. Training material has been developed to illustrate to trade and investment promotion staff how the promotion of CSR (including the Guidelines) cam be integrated into the delivery of the core services provided to Canadian companies operating abroad.

Canadian missions abroad attract many Canadian firms interested in expanding their international business operations. As a result, missions are an excellent vehicle for the promotion of the Guidelines in cooperation with the business community. As mining is the single largest sector of Canadian foreign investment in the Americas, our embassies in this region are particularly focussed on incorporating CSR-relevant information, including references to the Guidelines, in the briefings they give to their Canadian clients. They also communicate the Government of Canada's commitment to CSR to both Canadian and local business audiences, and ensure that host governments are aware of their CSR initiatives. For example in February 2005 the Canadian Embassy in Columbia in conjunction with the Canada-Colombia Chamber of Commerce (CCCC) organized a CSR Forum in Bogotá, Colombia. The event drew an impressive cross section of the local business community, local and national governments, academics, media and NGO's consisting of over 100 attendees.

Industry Canada continues to promote the OECD Guidelines as part of its suite of CSR activities to strengthen the capacity of Canadian businesses to develop and use CSR practices, tools, and knowledge to achieve positive social, environmental and economic performance results. For example, in its most recent Sustainable Development Strategy, the Guidelines were used to help shape departmental commitments for the next three years. Commitments include: broadening and deepening CSR promotion to make the CSR approach more mainstreamed; developing the knowledge base with respect to CSR tools, voluntary standards, best practices, and data bases, and; augmenting CSR reporting by industry. A variety of actions will be pursued to help meet these commitments.

Environment Canada is actively collaborating with the private sector, academics, non-governmental organizations and other government departments to explore CSR principles and policies that encourage and support corporate sustainability leadership and are broadly aligned with the principles of the Guidelines. These activities are outlined in Environment Canada's Sustainable Development Strategy and include: ascertaining where the business case for environmental and social performance is strong and seizing opportunities to advance CSR when they arise; encouraging, advancing and recognizing CSR best practices; developing and disseminating CSR tools, reporting approaches and domestic and international voluntary standards; and, supporting the development of human capital and human resource skills to strengthen CSR expertise.

Export Development Canada (EDC) meets frequently with its customers, various business associations, NGOs, and other stakeholders on CSR issues as part of its efforts to promote ethical corporate conduct and continue a dialogue with these groups. Issues relating to the Guidelines, such as the environmental and social impacts of projects, anti-corruption and anti-bribery efforts, and human rights are discussed. During the course of these discussions and by its undertakings to promote the Guidelines through its web site, the distribution of the NCP's Guidelines brochure, speeches, and other communications vehicles, EDC supports the NCP's efforts to promote the recommendations of the Guidelines within the Canadian exporting and investing community. EDC co-organized a short course entitled, "Managing Social and Environmental Risk in the Mineral Exploration Sector", which was delivered as a pre-event prior to the annual convention of the Prospector's and Developer's Association of Canada (PDAC) held in Toronto in March 2005. The session had over 50 participants representing mining companies of various sizes, non-governmental organisation and consultants all of whom received a copy of the Guidelines brochure.

In February 2005 at the Department of Foreign Affairs and International Trade's annual human rights consultations with Canadian NGOs, members of the NCP met with about thirty representatives of the Canadian human rights NGO community to talk about the Guidelines. Members of the Canadian labour community were present as well. The discussion provided an opportunity for the NCP to raise awareness of the Guidelines among the groups present. Increasingly, questions are being raised by the NGO community about the application of the Guidelines to human rights violations abroad.

Guidelines brochures were circulated at a number of events during the year. For example, the brochures were included in participant kits for a human rights and business training course held in Calgary in May 2005.

In March 2005, the Labour Program of Human Resources and Skills Development Canada hosted a two-day Tri-National Conference on the Labour Dimensions of Corporate Social Responsibility. The Conference, which took place in Ottawa, was held under the auspices of the North American Agreement on Labour Cooperation Cooperative Activities Program and included representatives from Government, labour and business from Canada, Mexico and the United States. A Senior Economist with the OECD Committee on Investment and Multinational Enterprise addressed conference participants on OECD Guidelines for MNEs during a session entitled Multilateral Approaches to Corporate Social Responsibility. In addition to featuring the Guidelines, the session also included presentations on the ILO Tripartite Declaration concerning Multinational Enterprises and the Global Compact.

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 interdepartmental structure of the NCP greatly facilitates promotion within government.

The Department of Foreign Affairs and International Trade provides information sessions on the Guidelines for overseas trade officials. The provision of Guidelines information is also a part of human rights training for government officials preparing for overseas postings.

Industry Canada continues to promote the Guidelines as part of its work activity to improve the coordination and advancement of corporate responsibility and sustainability within federal activities (e.g., federal sustainable development strategies). This also involves working in international fora, such as the OECD, and domestic conferences to improve the Department's knowledge and understanding of CSR and related practices. Industry Canada works closely with a number of other federal departments to build more cooperation and collaboration on the promotion of CSR practices. This interdepartmental group collaborates closely with the NCP.

Environment Canada works closely with other federal departments on the development and implementation of projects to support and advance CSR principals and practices relevant to the Guidelines. This includes the administration of a memorandum of understanding between the departments of Natural Resources, Industry, Foreign Affairs and International Trade and Environment for collaboration on projects that specifically relate to: development and dissemination of information that supports CSR and sustainability decision-making; increasing understanding of the business value of CSR and sustainability; and, development and dissemination of information on the use of CSR and sustainability tools to a broad range of companies.

The Canadian International Development Agency is promoting the Guidelines through internal knowledge networks comprised of officials working in private sector development and governance. The Guidelines are also being mainstreamed in work on conflict prevention and on poverty reduction in fragile states. CIDA raises awareness of the Guidelines among its partners and stakeholders in the private and other sectors through participation in outreach events across Canada, e.g. International Development Days. CIDA has supported initiatives to encourage sustainable business practices among local or foreign enterprises in developing countries with a view to supporting a positive contribution by the private sector to poverty reduction.

Inquiries

A number of inquiries about the Guidelines were received by 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 NGOs. Often such inquiries are about the nature of the Guidelines and their possible application in certain situations. The media made a number of inquiries in the past year as well, mostly related to the UN Panel of Experts reports on the DRC. As well, the Guidelines are occasionally raised in the public's correspondence with Ministers.

The NCP was requested to appear before the Parliamentary Sub-Committee on Human Rights and International Development on May 11, 2005. The Sub-Committee was interested to know more about the OECD Guidelines and MNEs and the role of the NCP. The context for their interest is hearings they are conducting on the Philippine operations of a Canadian mining company. Tensions have arisen between the company and local community groups. The NCP informed the Sub-Committee that on November 4, 2004 the Canadian NCP met with a Canadian NGO and a visiting Philippine delegation from the area affected by the mining operation. The NCP briefed the NGO and visiting delegation on the Guidelines and the process for raising a complaint; the NCP has not heard further from either group on the issue.

The NCP attended a meeting between Canadian government officials and a coalition of NGOs on Canadian mining operations in Guatemala. Inquiries were made about the Guidelines in relation to an ongoing dispute between a mining operation and local communities. No request for a specific instance procedure was requested.

Implementation in Specific Instances

a) UN Panel of Experts Report on the DRC
Canada is one of ten OECD member countries home to companies listed in the Second UN Panel of Experts Report on Illegal exploitation of natural resources and other riches in the Democratic Republic of Congo (DRC), released in October 2002. The listed companies, including eight mining companies from Canada, were alleged to be in violation of the OECD Guidelines for MNEs in respect of their activities in the DRC. A coalition of NGOs registered their concern with the NCP about the companies and requested that their letter be considered as a formal request for a specific instance procedure under the Guidelines.

The NCP maintained a dialogue with the NGOs and involved companies and held several meetings with both sides to discuss the Guidelines and the UN Panel of Experts process.

The Panel was instructed by the UN Security Council to carry out further consultations with the listed companies and to prepare a final report; the report was released in October 2003. Seven of the eight Canadian companies were listed as issues "Resolved - no further action required." One company was listed as "Pending Cases with Governments". The NCP accepted the Panel's conclusions and followed up with the "eighth" company. A letter was sent to the coalition of NGOs clarifying the NCP's position.

In response to the NCP's follow-up actions, the company replied with a letter describing their involvement in the DRC. The letter indicated that the company had not been active in the DRC since 1997 and they had officially halted all activities in the DRC as of June 4, 2004. The NCP has brought this case to a close in terms of its status as a specific instance procedure.

As noted above in the section on Promotion with Social Partners, the NCP is planning a workshop for later this year to promote the Guidelines with Canadian mining companies, including junior exploration companies. The NCP will encourage the Canadian companies listed in the UN Panel of Expert's reports to attend. The workshop will address issues raised by the Panel in their reports.

b) Burma
The NCP received a complaint in November 2002 from a Canadian labour group regarding the operations of a Canadian mining company in Burma. The complaint, which focussed on elements of the Guidelines chapter on Employment and Industrial Relations, was reviewed by the NCP and a decision was taken to pursue it as a specific instance procedure under the Guidelines. The Guidelines recommendations with respect to forced labour and the right to organize were alleged to have been violated. The union believed there were demonstrable links between the company's joint venture mining operation with the Burmese government and the mass conscription of forced labour. The company strongly denied these allegations in letters to the NCP in 2003 and 2004. While the NCP had a number of discussions and meetings with each party, separately, and offered to facilitate a dialogue between the two sides, we were unsuccessful in bringing them together to discuss their differences.

The NCP has informed the parties that it has taken a decision to discontinue its efforts to facilitate a dialogue between the parties concerning the mining company's operations in Burma. We will be sending a letter to the union and company indicating that the NCP is bringing the specific instance procedure to a close.

c) Recent Submissions

1. A Canadian labour union submitted a complaint to the NCP on November 29, 2004 concerning the operations of a foreign multinational enterprise in one of the Canadian provinces. The union alleged the company had violated Guidelines recommendations of the Employment and Industrial Relations Chapter. As labour issues falls into the jurisdiction of the provinces, the NCP's consideration of whether to pursue the matter entailed a thorough examination of the remedies available in the province in question. The NCP has taken its decision and will be communicating such to the labour union imminently.

2. An international labour union submitted a complaint to the NCP on January 25, 2005 concerning the operations of a Canadian multinational enterprise in a non-adhering country. The international union was acting on behalf of a local union. The unions alleged that the company, through its handling of a labour dispute with its employees, had violated recommendations of the Guidelines chapter on Employment and Industrial Relations. The international union met with the NCP to present its concerns. The NCP has also been in contact with the company to get its side of the story. Information relating to the labour dispute has also been obtained from Canada's mission in the non-adhering country. A final decision has not yet been taken by the NCP on whether to pursue further the unions' request for a specific instance procedure.

3. A coalition of Canadian NGOs submitted a complaint to the NCP on May 16, 2005 concerning the operations of a mining company in a non-adhering country. The company is incorporated in a Canadian province. The complaint was submitted on behalf of community groups affected by the mining operation. The NGOs and a representative of the affected communities met with the NCP to present their submission. The NCP is in the process of gathering information to make a determination of whether to pursue the complaint as a specific instance procedure.

Concluding Remarks

The OECD Guidelines for Multinational Enterprises continue to be a central element of the Government's approach to promoting corporate social responsibility, domestically and internationally. The interdepartmental structure of the NCP facilitates the promotion of the Guidelines within the Government and with departmental constituencies, including business, labour and NGOs. The NCP looks forward to new opportunities in the coming year to promote the Guidelines.

The NCP is receiving an increasing number of inquiries concerning the operations of mining companies in non-adhering countries. In the coming year, we anticipate continued interest from NGOs and community groups on the application of the Guidelines to the mining sector.