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.

Global Affairs Canada is undertaking a renewal of the 2014 CSR Strategy “Doing Business the Canadian Way: A Strategy to Advance CSR in Canada’s Extractive Sector Abroad” and is currently undertaking public consultations via the Consulting with Canadians website. This process will remain open until 23:59 p.m. (Pacific Time) on October 26, 2020. We encourage you to participate.

Find out about Canada’s approach to Responsible Business Conduct abroad in times of COVID-19.

Table of contents

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:

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.  

Transparency

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.

Conflict Minerals

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.

COVID-19 and Responsible Business Conduct

During these challenging times, the Government of Canada continues to expect Canadian companies operating abroad to do business responsibly. They should respect human rights, operate lawfully and conduct their activities in a socially and environmentally responsible manner. This includes being consistent with international principles and standards on Responsible Business Conduct, like the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights. Canada also encourages businesses to enhance human rights and environmental due diligence in their operations and their supply chains. They should also look out for groups made even more vulnerable by the pandemic like:

  • Indigenous peoples
  • human rights defenders
  • women and children
Responsible Business Conduct abroad is a competitive advantage for Canadian business

A robust approach to Responsible Business Conduct can help companies:

  • mitigate risks
  • improve competitiveness
  • strengthen their brand 

This makes companies more resilient, helps them adapt to change and weather challenges presented by a changing economic environment. The Government of Canada invites Canadian companies active abroad to respond to the challenges presented by COVID-19 with a commitment to Responsible Business Conduct principles, in a manner reflective of Canadian values. Canada also expects companies to adapt their activities and supply chains quickly to the situation. This means companies should put processes in place to try to protect the health and safety of their workforces, customers, and surrounding communities. They should also follow the rules and laws of the country where they are operating. 

Consult the following guidance on COVID-19 from recognized leaders in responsible business:

Get help with your approach to Responsible Business Conduct

If you need help to develop or adapt your Responsible Business Conduct  strategy to the COVID-19 reality, Canada’s Trade Commissioner Service (TCS) can help! The TCS provides Responsible Business Conduct related guidance to Canadian companies from more than 160 offices in Canada and around the world.

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.

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
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

Employment and Social Development Canada: Supporting CSR Initiatives

Articles, Podcasts and Webcasts
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. 

The Government also acknowledges that there are many other guidelines and standards for RBC, and related tools, that companies and sectors utilize, such as:

Related Links

  • 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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