Responsible Business Conduct Abroad
On April 8, 2019, the Government of Canada appointed Sheri Meyerhoffer as the first Canadian Ombudsperson for Responsible Enterprise – the first of its kind in the world. See the news release, Ombudsperson web page, and FAQ to learn more.
Table of contents
- What is Responsible Business Conduct (RBC)?
- What are the Expectations for Canadian Companies Doing Business Abroad?
- Why is RBC Abroad Important to Business?
- How Does the Government of Canada Support RBC Abroad?
- Canada’s Approach to Supporting RBC Abroad
- Voluntary Dispute Resolution Mechanisms
- Multi-stakeholder Advisory Body
- Supporting RBC in Specific Areas
- Anti-Corruption and Anti-Bribery Efforts
- Resources and Tools
- Related Links
- Canada’s Approach to Supporting RBC Abroad
What is Responsible Business Conduct (RBC)?
A variety of terms are used when talking about companies and their responsibility to society, such as corporate social responsibility, responsible business conduct, business and human rights, sustainability, and more. A number of these terms are used interchangeably such as corporate social responsibility and responsible business conduct.
The term Corporate Social Responsibility (CSR) is a familiar term and is defined by the Government of Canada as the voluntary activities undertaken by a company, over and above legal requirements, to operate in an economically, socially and environmentally sustainable manner. RBC is about Canadian companies doing business abroad responsibly in an economic, social and environmentally sustainable manner. It is also about conduct that demonstrates respect for human rights and is consistent with applicable laws and internationally recognized standards. It emphasizes both the positive voluntary contributions that businesses can make to sustainable development and inclusive growth; and, avoiding negative impacts and addressing them when they do occur. Risk-based due diligence by businesses is key to this process. Overall, it is about HOW a company does business, and is important for any company, of any size, in any sector.
What are the Expectations for Canadian Companies Doing Business Abroad?
The Canadian Trade Commissioner Service (TCS) has trade offices across Canada and in 161 offices around the world. TCS provide Canadian businesses with on-the-ground intelligence, qualified contacts, partnership opportunities and practical advice on foreign markets to help businesses make better, more timely and cost-effective decisions in order to achieve their goals abroad.
Responsible investment and business operations plays an important role in promoting Canadian values globally. The Government of Canada understands that responsible corporate behaviour by Canadian companies active abroad not only enhances their chances for business success but can also contribute to broad-based economic benefits for the countries in which they are active and for Canada.
The Government of Canada is therefore committed to promoting responsible business practices; and expects and encourages Canadian companies working internationally to respect human rights and all applicable laws, to meet or exceed international RBC guidelines and standards, to operate transparently and in consultation with host governments and local communities, and to conduct their activities in a socially and environmentally sustainable manner. This expectation applies to all Canadian companies, of any size, in all sectors. For those companies working or exploring opportunities in jurisdictions where local laws are not aligned with Canadian values, the Government of Canada encourages them to find ways to reflect Canadian values that also respect local laws. If this is not possible, companies may wish to reconsider their investment. Companies should be prepared with appropriate due diligence in assessing and mitigating risks in these instances in particular, if they choose to proceed with their operations.
Why is RBC Abroad Important to Business?
When companies operate in an economically, socially and environmentally responsible manner, and they do so transparently, it can create shared value. Identification and mitigation of social and environmental risks are increasingly important for business success abroad as the costs to companies of losing community support, in terms of social conflict, reputation and the bottom line, may be significant. As Canadian firms take advantage of global opportunities, there is an increasing understanding that incorporation of responsible business practices into investments and operations abroad not only benefits local economies and communities, but makes good business sense.
How Does the Government of Canada Support RBC Abroad?
The Government of Canada has in place a variety of initiatives which demonstrate Canada’s longstanding commitment to promoting responsible business practice. Through its actions, the Government facilitates the commercial success of Canadian companies active abroad while enhancing the contribution of their activities to the broad economic growth of Canada and its trading partners, including those with developing and emergent economies. We work with the Canadian business community, civil society organizations, foreign governments and communities as well as other stakeholders to foster and promote responsible business practices and thus support sustainable economic growth and shared value.
Canada’s Approach to Supporting RBC Abroad
The Government provides RBC-related guidance to the Canadian business community, including through Canadian embassies and missions abroad. Recognizing, however, that company actions alone do not guarantee commercial success or sustainable local benefits, the Government of Canada works with a range of interlocutors to promote RBC abroad. Canada’s network of diplomatic missions abroad actively promote responsible business practice and creates opportunities for relationship building through conferences, workshops and other activities involving companies, representatives of host governments, civil society, and communities. Through its fund for RBC, Global Affairs Canada provides funding to roughly 50 projects and initiatives each year in countries around the world, via Canada’s network of missions abroad. Some examples include:
- Collaborative sustainable development - Peru (Embassy of Canada to Peru website)
- Corporate Social Responsibility in the extractive sector: Canada-Uruguay collaboration (Embassy of Canada to Uruguay website)
Canada also promotes RBC at multilateral and bilateral levels. Multilaterally, Canada promotes international standards for RBC in a number of fora including the OECD, the Group of Seven, Asia Pacific Economic Co-operation and the Organization of American States. Participation in multilateral fora provides Canada not only an opportunity to share knowledge, but also to work together to promote and strengthen international RBC guidelines for the benefit of all stakeholders. Canada’s efforts to promote RBC are further advanced at the bilateral level. For example, the inclusion of voluntary provisions for corporate social responsibility in recent Foreign Investment Promotion and Protection Agreements (FIPAs) and Free Trade Agreements (FTAs). Read more on Canada's trade and investment agreements.
Voluntary Dispute Resolution Mechanisms
Many of the Government’s RBC efforts are aimed at encouraging positive relations between companies and their stakeholders. However, when necessary, Canada has two mechanisms to assist with company - community dialogue facilitation and dispute resolution: the review process of Canada’s National Contact Point for the OECD Guidelines for Multinational Enterprises (NCP), for all sectors; and the recently-appointed Canadian Ombudsperson for Responsible Enterprise. See the news release, and frequently asked questions about the appointment to learn more.
Canada also ties access to Government of Canada trade advocacy support in foreign markets to a company’s good faith collaboration with the government’s dispute resolution mechanisms. If a company chooses not to engage in good faith with the NCP or future Ombudsperson, the NCP or Ombudsperson can recommend that the Government of Canada deny/withdraw individualized trade advocacy support. A recommendation by the NCP or Ombudsperson would also be evaluated and considered by Export Development Canada (EDC) when making decisions about new or renewed financial support to companies. EDC’s environmental and social risk management framework guides all of its financing decisions and is underpinned by the OECD Common Approaches, the United Nations Guiding Principles on Business and Human Rights, the Equator Principles, and the International Finance Corporation (IFC) Performance Standards. (EDC is Canada’s export credit agency.)
Multi-Stakeholder Advisory Body
The multi-stakeholder Advisory Body on Responsible Business Conduct was created in January 2018 to advise government on the effective implementation and further development of its laws, policies and practices addressing business and human rights and responsible business conduct for Canadian companies operation abroad in all sectors. See Advisory Body web page to learn more.
Supporting RBC in Specific Areas
Canada’s Extractive Sector Abroad
The extractive sector, which includes mining, and oil & gas, has significantly contributed to Canada’s economic growth and prosperity, including through the strength of its international presence. To enhance the ability of Canadian extractive sector companies to manage social and environmental risks, and to operate in a way that brings lasting benefits to local communities and host countries affected by their projects, Canada created a framework to guide corporate social responsibility (CSR) efforts of the extractive sector known as the CSR Strategy. Launched in 2009, and updated in 2014, the CSR Strategy is part of Canada’s efforts to help foster and promote sustainable economic development and responsible business practices in countries where Canadian extractive sector companies operate abroad. For further information on the CSR Strategy, please see: Doing Business the Canadian Way: A Strategy to Advance CSR in Canada’s Extractive Sector Abroad. The 2014 CSR Strategy included a commitment to review the strategy in 2019.
Canada is advancing RBC through its efforts to improve transparency and accountability in the extractive sector. The Extractive Sector Transparency Measures Act (the Act) was brought into force on June 1, 2015. The Act delivers on Canada’s international commitments to contribute to global efforts to increase transparency and deter corruption in the extractive sector by requiring extractive entities active in Canada to publicly disclose, on an annual basis, specific payments made to all governments in Canada and abroad. Further information can be found on the Natural Resources Canada web page of the Act.
Canada also joined the Extractive Industries Transparency Initiative (EITI) in February 2007, as a supporting country and donor. The EITI supports improved transparency in resource-rich developing countries through the full publication and verification of company payments and government receipts from oil, gas and mining operations.
The Government of Canada, companies, and civil society have been at the forefront of efforts to create a global consensus on responsible mining and sourcing practices to address the phenomenon of “conflict minerals” in the gold, tin, and tantalum and tungsten sectors. The Government of Canada played a leading role in the negotiation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, and continues to be actively engaged in its promotion and implementation. Canada has also provided strategic funding of key projects towards peace and prosperity in the African Great Lakes Region, and was a founding member of the Kimberley Process, which came into effect in 2003, to stem the trade in conflict diamonds.
Due Diligence in the Retail Garment Industry
Canada is also supporting due diligence and responsible business practices within the ready-made garment industry, and sustainable sourcing of ready-made garments from international suppliers and manufacturers. Governments, businesses, non-profits and other organizations are increasingly integrating social and environmental objectives into the purchasing process which can be a means for leveraging social benefits and fostering sustainable economies. An example of Canada’s efforts in this area is $8 million in support over four years for a joint initiative with the International Labour Organization for improving working conditions in the ready-made garments sector in Bangladesh, to help ensure that Bangladesh’s garment factories are properly assessed for safe working conditions, and remedial action is undertaken. Further information on Purchasing for Sustainability can be found in the CSR toolkit of Innovation, Science and Economic Development Canada on the Government of Canada website.
Anti-Corruption and Anti-Bribery Efforts
Canada's legislation to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the Corruption of Foreign Public Officials Act (CFPOA), came into force on February 14, 1999. The Act makes it a criminal offence to bribe a foreign public official in the course of business. Under this law, individuals as well as corporations can be prosecuted for offenses committed inside and outside of Canada. The CFPOA reinforces Canada's leadership role in fighting corruption and promoting good business practices at an international level and confirms the Government's commitment to the OECD Anti-Bribery Convention.
In June 2013 Parliament amended the CFPOA to increase the maximum penalty for convicted individuals, to create a new books and records offence and to expand jurisdiction based on nationality. In addition, the 2013 amendment stated that at a later date the Government would eliminate the exception for facilitation payments. Facilitation payments are those made to foreign public officials to secure or expedite the performance of acts of a routine nature that are within the scope of the official's duties. This exception was removed from the Act by way of an Order in Council which came into force on October 31, 2017, meaning that facilitation payments now are included under the scope of the CFPOA. Learn more about bribery and corruption on the Global Affairs Canada website.
Resources and Tools
RBC Snapshots for Companies
Below are a series of snapshots developed for companies that respond to specific situations and challenges related to RBC.
If printed, these Snapshots are better viewed in legal format.
- CSR Snapshot – Community Stakeholder Engagement: HTML version | PDF version * 0.5 MB
- CSR Snapshot – Managing Requests for Community Support: HTML version | PDF version * 0.7 MB
- CSR Snapshot – Hiring Responsibly: HTML version | PDF version * 0.4 MB
- CSR Snapshot – Conflict-sensitive good business practices: HTML version | PDF version * 0.1 MB
- CSR Snapshot – Local procurement: HTML version | PDF version * 0.1 MB
- CSR Snapshot – Site-level community response mechanisms engagement: HTML version | PDF version * 0.09 MB
- CSR Snapshot – Private Sector Support for Human Rights Defenders: A Primer for Canadian Businesses: HTML version | PDF version * 0.3 MB
Corporate Social Responsibility Standards Navigation Tool
The tool helps users to find and understand Government of Canada standards about social and environmental performance of Canadian extractive companies operating abroad. (Office of the Extractive Sector CSR Counsellor website)
Mechanisms for Company - Community Dialogue Facilitation and Conflict Resolution
- Canada's National Contact Point for the OECD Guidelines for Multinational Enterprises (NCP)
Canadian Ombudsperson for Responsible Enterprise.
Tools and Resources from Other Departments
Innovation, Science and Economic Development Canada: CSR home page
- CSR: An Implementation Guide for Canadian Business (Provides practical advice to companies on CSR: how to build a business case for carrying out CSR initiatives; how to develop and implement a CSR strategy; and how to measure and communicate the outcomes.)
- SME Sustainability Roadmap (Each section is part of a larger area of management, operations or leadership. Examples of sustainability in practice are offered throughout, where possible, referring to the practices of small and medium-sized enterprises (SMEs).)
- CSR Toolkit (Governance for Sustainability, Structured Decision-Making, Human Resources for Sustainability, Purchasing for Sustainability, Marketing for Sustainability.)
Natural Resources Canada: CSR home page
- CSR Checklist for Canadian Mining Companies Working Abroad (A tool for companies developing mining projects abroad to plan for, and mitigate, potential environmental, social and ethical challenges they may encounter.)
- Catalogue of CSR Practices (CSR e-Catalogue) (Data repository designed to publicly showcase and promote the CSR practices of Canadian mining and exploration companies. Contains detailed information on CSR activities, and some of the positive impacts they have had, as described by the companies themselves.)
- Exploration and Mining Guide for Aboriginal Communities (A communication tool for communities to better understand the mining process in Canada. Has since been adapted by a number of countries through Canadian Embassies.)
Employment and Social Development Canada: Supporting CSR Initiatives
Articles, Podcasts and Webcasts
- CanadExport Article: Canada sets a world standard for sustainable mining (The Canadian Trade Commissioner Service Website)
- CanadaExport Article: Finding sustainable markets abroad for Canada’s natural resources (The Canadian Trade Commissioner Service Website)
- CanadExport Podcast: Shining a light on corporate social responsibility (The Canadian Trade Commissioner Service Website)
- CanadExport Article: Paying the price - Confronting corruption in international business (The Canadian Trade Commissioner Service Website)
- CanadExport Article: How one company tackled corruption abroad (The Canadian Trade Commissioner Service Website)
- Doing Business in China – The Dangers of Engaging in Corrupt Practices (The Canadian Trade Commissioner Service Website)
Guidelines and Standards for RBC
Internationally-recognized guidelines and standards for RBC are important for companies and their success operating abroad. They provide information on the considerations that can improve companies’ economic, environmental and social performance, including respect for human rights. The Government of Canada expects Canadian companies operating abroad to meet or exceed widely-recognized international standards for RBC. Where host country requirements differ from the international standards listed below, the Government of Canada expects Canadian companies to meet the higher, more rigorous standard.
The Government of Canada has been engaged in the development, advancement and dissemination of key international standards for RBC, such as those below. Guidelines endorsed in Canada’s 2014 CSR Strategy for the Extractive Sector Abroad are marked with an asterisk (*) below. They reflect Canada’s long-standing engagement with the guidelines, their importance among stakeholder groups, their relevance to the Canadian extractive industry, and their wide recognition as key instruments for guiding companies in RBC. The CSR Strategy also includes promotion of guidance developed in Canada, such as the Mining Association of Canada’s Towards Sustainable Mining, and the Prospectors & Developers Association of Canada’s e3 Plus initiative. The 2014 CSR Strategy includes a commitment to review the strategy in 2019, which would include the guidelines that are endorsed within.
- *OECD Guidelines for Multinational Enterprises for responsible business conduct
(Recommendations for responsible conduct on a broad range of business activities and are applicable to all sectors.)
- OECD Due Diligence Guidance for Responsible Business Conduct
- *OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
- OECD Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector
- The OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector
- OECD-FAO Guidance for Responsible Agricultural Supply Chains
- Responsible Business Conduct for Institutional Investors
- New! OECD guidelines – a Canadian handbook for responsible business conduct (A sector-specific guide for Canadian businesses of all sizes to understand and carry out the recommendations of the OECD Guidelines for Multinational Enterprises.)
- *United Nations (UN) Guiding Principles on Business and Human Rights (Identify distinct but complementary responsibilities of companies and governments regarding human rights, resting on three pillars: 1) the state duty to protect against human rights abuses by third parties, including business; 2) the corporate responsibility to respect human rights through due diligence; and 3) ensuring greater access to effective remedies for victims.)
- *Voluntary Principles on Security and Human Rights (Designed to help extractive sector corporate actors anticipate and mitigate risks related to the deployment of public and private security, such that operations can be protected without excessive force or human rights abuses.)
- The Government of Canada has also supported the development of related tools:
- Child Rights and Security Checklist (Designed to help governments and companies assess the extent to which their security frameworks are attentive to, and protective of, children’s rights.) (Developed by Government of Canada, UNICEF, UNICEF Canada and Barrick)
- Child Rights and Security Handbook (A companion to the Checklist. Designed to help governments and companies improve the protection of children’s rights within security arrangements and minimize security-related human rights abuses of children and young people.) (Developed by Government of Canada, Barrick and UNICEF Canada)
- International Finance Corporation’s (IFC’s) Performance Standards on Social & Environmental Sustainability (Set expectations for conduct that companies receiving IFC support are to meet throughout the life of a project, including on stakeholder engagement and human rights.)
- *Global Reporting Initiative (GRI) (International reporting standard which includes reporting principles, guidance and indicators for organizations of all sizes and sectors.)
The Government also acknowledges that there are many other guidelines and standards for RBC, and related tools, that companies and sectors utilize, such as:
- Children’s Rights and Business Principles (CRBPs) (Offer guidance to businesses on respect for children's rights in the workplace, marketplace and communities in which they operate.) (Developed by UNICEF, UN Global Compact and Save the Children)
- UNICEF Tools for Business (To equip business to integrate children’s rights into policies and due diligence.)
- ILO-IOE Child Labour Guidance Tool for Business (Aims to improve global supply chain governance, due diligence and remediation processes to advance the elimination of child labour.)
- United Nations Global Compact (UNGC) – Ten Principles (Address human rights, labour standards, environment and the prevention of corruption.)
- The Canadian network, Global Compact Network Canada (GCNC), also provides resources to help organizations implement the Ten Principles and 17 Sustainable Development Goals, such as the: OECD Guidelines for RBC and Sector-Specific Guidance - A Manual for Canada. (To help Canadian businesses implement the OECD Guidelines and further embed responsible practices in operations domestically and throughout the world.) (Developed by GCNC Working Group with support from Global Affairs Canada)
- Sustainable Development Goal (SDG) Compass (Provides guidance for companies on how they can align their strategies as well as measure and manage their contribution to the realization of the SDGs.) (Developed by GRI, UNGC, and World Business Council for Sustainable Development)
- ISO 26000 – Social Responsibility (Provides guidance on how businesses and organizations can operate in a socially responsible way.)
- International human rights (Government of Canada): Learn how Canada promotes and protects human rights and reflects Canadian values on the international stage.
- Human rights policy (Export Development Canada): This Policy provides the principles and commitments that guide EDC’s approach to respecting human rights and their internal decision making in connection with the transactions they support.
- Growth that works for everyone (Government of Canada): Canada believes that inclusive growth requires the full and equal participation of women in the economy.
- Governance of the natural resource sector (Government of Canada): Developing countries often face serious challenges in managing their natural resources. Through international development programming in this area Canada seeks to: address human rights abuses; improve transparency and fight corruption; improve environmental sustainability and management of natural resources.
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