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A strategy for the future: Responsible Business Conduct for Canadian companies abroad

September 2020

Table of Contents

Introduction

Since 2009, the federal government has prioritized strengthening the Responsible Business Conduct (RBC)  of Canadian companies active around the world through the release of two strategies: Building the Canadian Advantage: Canada’s Corporate Social Responsibility Strategy for the Canadian International Extractive Sector (2009) and Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector (2014). Global Affairs Canada is now undertaking stakeholder engagement for a renewed strategy to guide the Responsible Business Conduct of Canadian companies active abroad for the next five years. The renewal is an opportunity to spark a dialogue and explore ideas and measures to position Canada, and Canadian companies active abroad, as leaders in Responsible Business Conduct.

This paper provides context on Canada’s approach to Responsible Business Conduct abroad and also shares key themes which emerged during an initial round of pre-consultations held in March 2020. Input received from the consultations will support the drafting of a new strategy with the following overarching goals:

Overarching goals of the renewed Strategy
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  1. Contribute to a strengthened and inclusive Responsible Business Conduct environment globally
  2. Support Canadian companies achieve and exceed Responsible Business Conduct best practices
  3. Enhance accountability through providing access to dispute resolution, dialogue, recourse and remedy

How to Participate

The Government of Canada is seeking ideas on the direction and scope of the renewed strategy. In particular, the Government of Canada is seeking your ideas for Canada to: 1) Contribute to a strengthened and inclusive Responsible Business Conduct environment globally; 2) Work with diverse stakeholders to create an enabling environment to ensure that Canadian companies achieve and exceed Responsible Business Conduct best practices; 3) Enhance accountability through providing access to dispute resolution, dialogue, recourse and remedy; 4) Develop tools, incentives and partnerships that the Government could support to further Responsible Business Conduct abroad; and, 5) Contribute to key international frameworks, standards and guidelines that Canada could consider promoting or adopting which focus solely on, or intersect with Responsible Business Conduct.

We invite you to share your views and ideas with the Responsible Business Practices division at Global Affairs Canada by email at RBCconsultationsCRE@international.gc.ca, or by mail to:

Responsible Business Practices Division
Global Affairs Canada
111 Sussex Drive
Ottawa ON K1A 0G2

Background

Global Affairs Canada

Global Affairs Canada (GAC) defines, shapes and advances Canada’s interests and values in a complex global environment. This includes managing diplomatic relations, promoting international trade and providing consular support. GAC also leads international development, humanitarian, and peace and security assistance efforts and contributes to national security and the development of international law. Within GAC, the Trade Commissioner Service (TCS) promotes Canada’s commercial interests.

Terms and definitions

A variety of terms are used interchangeably when talking about how companies manage their social and environmental risks and impacts such as: Corporate Social Responsibility (CSR), Responsible Business Conduct, Corporate Sustainability, Environmental, Social and Governance (ESG) practices, and more.

Global Affairs Canada uses the following definitions:

Corporate Social Responsibility: Voluntary activities undertaken by a company, over and above the legal requirements, to operate in an economically, socially and environmentally sustainable manner (this is the term used in the 2009 and 2014 strategies).

Responsible Business Conduct: Emphasizes the adoption of Responsible Business Conduct practices within internal operations, and includes the integration of sustainable development practices, as well as accountability measures to avoid and address negative impacts from business activities. The Organization for Economic Co-operation and Development (OECD) uses the term Responsible Business Conduct, and Canada has adopted this practice in recent years.

Environmental, Social and Governance (ESG): The OECD defines ESG factors as indicators used to analyze a company's prospects based on measures of its performance on environmental, social, ethical and corporate governance criteria.

Canada’s approach to Responsible Business Conduct abroad

Responsible Business Conduct is at the nexus of many priorities for Canada such as the respect for human rights, fighting climate change, inclusive trade, and respecting the rights of Indigenous communities. Through multiple governments departments, more than 50 policies and initiatives address and promote one form or another of Responsible Businesses Conduct and corporate sustainability.

By incorporating Responsible Business Conduct into their operations, companies are better equipped to manage social, environmental, reputational and economic risks. Responsible Business Conduct supports companies in identifying issues proactively, helps them resolve problems before they escalate and allows them to  adapt their operations and safeguard long-term success. According to the OECD Centre for Responsible Business Conduct, companies that incorporate responsible and sustainable practices are often driven by the desire to contribute to the creation of a better world, while improving productivity and creating additional opportunities to become an investment partner, brand and employer of choiceFootnote 1.  Studies are increasingly recognizing the benefits of Responsible Business Conduct for companies:

The Government of Canada expects Canadian companies active abroad to respect human rights and all applicable laws, to operate transparently and in consultation with host governments and local communities, to work in a socially and environmentally responsible manner and to show leadership on reconciliation with Indigenous communities abroad. These expectations also apply to Canadian companies that export products and services abroad.  

Canadian companies are also expected to adopt best practices and internationally respected guidelines on Responsible Business Conduct, as well as to pursue measures to mitigate potential corruption. The government of Canada’s approach to Responsible Business Conduct has most recently been  articulated in the 2014 Strategy,  Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector. While this strategy focused on the extractive sector, expectations on Responsible Business Conduct apply across all industry sectors.

The 2014 Strategy was based on four key pillars:

Four key pillars
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Provide advice and guidance:

  • Promote RBC guidance
  • Share market intelligence
  • Offer tools, resources and training

Foster works and partnerships

  • Engage stakeholders
  • Convene companies, communities and host governments

Dispute resolution

  • Canada’s National Contact Point
  • Canadian Ombudsperson for Responsible Enterprise

Strengthening the RBC environment

  • Combat corruption
  • Free trade agreements and Foreign Investment Protection Agreement
  • Engage multilaterally and bilaterally
  • Alignment with Foreign Affairs and international assistance policy

Further to this, Canada has been engaged in the development, promotion and advancement of the following six key international Responsible Business Conduct frameworks and guidelines (please see Annex for more details).

Key Global Affairs Canada initiatives intersecting with Responsible Business Conduct

Several key initiatives led by, or supported by Global Affairs Canada have important intersections with Responsible Business Conduct. Some of the most relevant include:

Anti-Bribery and Corruption: The Corruption of Foreign Public Officials Act (CFPOA),which came into force in 1998, criminalizes the bribery of a foreign public official.  This law implements Canada’s obligations under the OECD Convention on Combating Bribery in International Business Transactions. In September 2018, a Remediation Agreement (RA) regime came into force through the creation of a new Part (Part XXII.1) of the Criminal Code. An RA is a new tool available for use by prosecutorial authorities – at their discretion, in the public interest and in appropriate circumstances – to address corporate criminal wrongdoing.  

Canada’s Inclusive Approach to Trade: Recent Free Trade Agreements (FTAs) and Foreign Investment Promotion and Protection Agreements (FIPAs) currently being negotiated are advancing Canada’s inclusive approach to trade. In FTAs, for example, this includes strengthened provisions on labour rights, the environment, anti-corruption and Responsible Business Conduct in addition to new provisions on Small and Medium Sized Enterprises (SMEs), gender equality, and Indigenous peoples. Pursuant to a new provision in the labour chapter of the Canada-United States-Mexico Agreement (CUSMA), Canada prohibits the importation of all goods produced by forced or compulsory labour. This ban which applies to all goods, irrespective of their country of origin, is an additional tool at Canada’s disposal to combat forced labour globally.    

Diversifying Canada’s trade and investment opportunities: Canada’s Trade Diversification Strategy, announced in 2018, included a commitment to broaden Canada’s reach to compete and succeed in more thriving and fast-growing global markets and sectors.  As Canadian companies expand to new and diverse markets they may face enhanced RBC risks. 

Canada’s National Contact Point (NCP) for Responsible Business Conduct: Since 2000, Canada’s NCP has been promoting the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, the most comprehensive set of internationally recognized standards guiding business on how to act responsibly in all sectors and including a wide range of issues, such as human rights, labour issues, environmental issues and bribery. Canada’s NCP also responds to enquiries and facilitates dialogue and mediation for parties to address concerns arising from the activities of companies, both in Canada and abroad, and works toward reaching a mutual agreement.  The NCP is composed of officials from seven federal departments: GAC, Natural Resources Canada, Environment and Climate Change Canada, Innovation, Science and Economic Development, Employment and Social Development Canada, Public Procurement and Services Canada, Crown-Indigenous Relations and Northern Affairs Canada, and Finance Canada. In February 2018, an OECD Peer Review of Canada’s NCP was undertaken and recommendations were made to improve its effectiveness.

Canadian Ombudsperson for Responsible Enterprise (CORE): The Government of Canada announced the appointment of Ms. Sheri Meyerhoffer as the first CORE on April 8, 2019. The CORE is mandated to: promote the implementation of the UN Guiding Principles and the OECD Guidelines; advise Canadian companies on their policies and practices with respect to Responsible Business Conduct; review allegations of human rights abuses arising from the operations of a Canadian company abroad in the mining, oil and gas and garment sectors; offer informal mediation services; and, provide advice to the Minister on any matter relating to the CORE’s mandate. The CORE has the ability to receive complaints, undertake a review at their own initiative, conduct joint and independent fact-finding; make recommendations; follow-up on those recommendations; and, report publicly throughout the process.

Multi-stakeholder Advisory Body: A multi-stakeholder Advisory Body (MSAB) on Responsible Business Conduct was established in January 2018 with the mandate to advise the Minister on the effective implementation and further development of laws, policies and practices with respect to Responsible Business Conduct for Canadian companies active abroad in all sectors.  

Sustainable Development Goals (SDG): In 2019, the Government launched the development of its SDG National Strategy to create a common understanding and vision of Canada’s path towards the SDGs.  GAC is responsible for the international implementation of the 2030 Agenda and works with bilateral and multilateral partners, including through the Feminist International Assistance Policy towards the achievement of the SDGs.

Voices at Risk: Canada’s Guidelines on Supporting Human Rights Defenders – In December 2016, Canada adopted Guidelines on Supporting Human Rights Defenders. The Guidelines outline Canada’s approach and offer practical advice for officials at Canadian missions abroad and at Headquarters to promote respect for and support human rights defenders. Missions will do their utmost to implement these Guidelines, recognizing that each approach should be tailored to local contexts and circumstances, and respond to the specific needs of individual human rights defenders.

Feminist International Assistance Policy:In June 2017, Canada adopted the Feminist International Assistance Policy (FIAP) in recognition that supporting gender equality and the empowerment of women and girls is the best way to build a more peaceful, more inclusive and more prosperous world. To do this, it supports targeted investments, partnerships, innovation and advocacy efforts with the greatest potential to close gender gaps and improve everyone’s chance for success.

The following timeline captures several key milestones with respect to Global Affairs Canada’s approach to Responsible Business Conduct.

Global Affairs Canada’s Key Reponsible Business Conduct milestones
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Canada’s RBC Key Milestones

1976

  • Canada adhered to the Organisation for Economic Co-operation and Development (OECD) Guideline 

1998

  • Canada's adoption of the Corruption of Foreign Public Official Act which criminalizes the bribery of foreign public officials in international business transactions 

2000

  • Creation of Canada's National Contact Point for the OECD Guidelines for Multinational Enterprises 

2007

  • Release of the National Roundtables on Corporate Social Responsibility (CSR) and the Canadian Extractive Industry in Developing Countries - Advisory Group Report 

2009

  • Global Affairs Canada releases the first CSR Strategy: Building the Canadian Advantage: Canada's CSR Strategy for the Canadian International Extractive Sector
  • Appointment of the first CSR Counsellor, Dr. Marketa Evans (2009-2013) 
  • Inclusion of RBC related language in Free Trade Agreements and in Foreign Investment Promotion and Protection Agreements  

2010

  • Canada's adoption of UN Guiding Principles on Business and Human Rights which are a set of guidelines for States and companies to prevent, address and remedy human rights abuses committed in business operations.

2011

  • Canada adopted the updated OECD Guidelines for Multinational Enterprises which are recommendations addressed by governments to multinational enterprises operating in or from adhering countries

2014

  • Global Affairs Canada releases the updated CSR Strategy: Doing Business the Canadian Way: A Strategy to Advance CSR in Canada's Extractive Sector Abroad 

2015

  • Appointment of second CSR Counsellor, Mr. Jeffrey Davidson (2015-2018) 
  • Canada adopted the 2030 Agenda for Sustainable Development at the UN General Assembly
  • The Extractive Sector Transparency Measures Act which aims to deter corruption in the global extractive sector by making government revenues from natural resources transparent to the public came into force

2018

  • Creation of the multi-stakeholder Advisory Body to advise government on RBC for Canadian companies operating abroad in all sectors.
  • National Contact Point Peer Review  to identify strengths as well as areas for improvement

2019

  • Appointment of Sheri Meyerhoffer as the Canadian Ombudsperson for Responsible Enterprise
  • Evaluation of the 2014 CSR Strategy

2020

  • Development and Consultation for renewed Strategy 

Global context and Government of Canada commitments

Since the first iteration of Canada’s Responsible Business Conduct Strategy in 2009, the global landscape has evolved with Responsible Business Conduct expectations taking on an increasing importance for industry, governments, civil society and consumers. Some key global trends include the SDGs, climate change, reconciliation with Indigenous peoples, and the increasing adoption of technology. Several countries around the world are also adopting measures, tools and incentives to advance Responsible Business Conduct. Although not a conclusive list, this section highlights some key global trends which could influence the development of the renewed Strategy.  It also references commitments that the Government of Canada has made with respect to some of these global trends.

COVID-19 and Responsible Business Conduct

In the COVID-19 context in which this paper is being developed, governments and businesses are facing unprecedented challenges that will have consequences on the global economy and on the health and livelihoods of communities where Canadian companies are active. The Strategy renewal will need to consider the profound changes which the pandemic will have on traditional business models, and the changing economic environment.  It will also need to set a framework whereby Canadian companies are positioned to adapt to future global disruptions in a way that puts Responsible Business Conduct at the heart of their activities and engagements.  

Sustainable Development Goals

In September 2015, 193 UN Member States, including Canada adopted the 2030 Agenda for Sustainable Development. This initiative is a global call to action to end poverty, protect the planet and ensure that all people can enjoy peace, prosperity, and their human rights by 2030. Achieving the SDGs requires the contribution of all actors, and the private sector has an important role to play, including through offering access to markets, sharing innovative approaches and expertise, and fostering new opportunities to promote growth in developing countries.

Reconciliation with Indigenous peoples

According to the United Nations, the United Declaration on the Rights of Indigenous Peoples (UNDRIP) is the most comprehensive international instrument on the rights of indigenous peoples. It establishes a universal framework of minimum standards for the survival, dignity and well-being of the Indigenous peoples of the world and it elaborates on existing human rights standards and fundamental freedoms as they apply to the specific situation of indigenous peoples. It was adopted by the UN General Assembly in 2007 and Canada endorsed the UNDRIP in 2010 and again in 2015, without qualification, and committed to the full implementation of the declaration. Canada is currently working on co-developing legislation with First Nations, Inuit and Métis that will fully respect the intent of the UNDRIP and will chart a path to reconciliation, including the harmonization of laws of Canada with the UNDRIP by the end of 2020.

Climate change

The Paris Agreement was adopted by 197 Parties to the United Nations Framework Convention on Climate Change (UNFCCC). The Agreement seeks to strengthen the global response to climate change by keeping global temperature rise to well below two degrees Celsius and pursuing efforts to limit the increase to 1.5 degrees, strengthen the ability of countries to deal with the impacts of climate change, and make finance flows consistent with low greenhouse gas emissions and climate resilient pathways.  The Paris Agreement has been ratified by 194 Parties including Canada, and entered into force on November 4th, 2016.  The Agreement requires all parties to put forward national greenhouse gas reduction targets, or Nationally Determined Contributions (NDCs), and report regularly on their emissions and progress towards their climate commitments.   Under the Paris Agreement, Canada committed to reducing its greenhouse gas emissions by 30% below 2005 levels by 2030. In December 2019, the Government committed to exceed its 2030 target. It also announced that it will set a target to achieve net-zero emissions by 2050.

Responsible Business Conduct and new technologies

The development of new technologies such as Artificial Intelligence (AI), Machine Learning, and Blockchain technology are transforming the way Canadian companies do business, posing simultaneous risks and opportunities for Responsible Business Conduct. For instance, while AI poses specific risks, transparent and accountable use of AI, grounded in international human rights law, could present advantages for Responsible Business Conduct. Machine-learning algorithms could assist companies, investors and governments analyze thousands of pages of corporate reporting to identify patterns and develop actionable insights. Blockchain technology, with its potential to create an immutable and transparent record of contracts, could improve the ability of firms to perform supply chain due diligence. The development of new technologies grounded in international human rights law is a global goal and Canada supports international collaboration. The OECD Principles on Artificial Intelligence, adopted in May 2019, promotes international collaboration to ensure the stewardship of AI that is consistent with human rights, diversity and the rule of law. Canada was a founding member of the Global Partnership on Artificial Intelligence (GPAI) an organization that contributes to ensuring that these OECD principles are embedded in the development of AI. Canada also hosted the first annual GPAI Multi-stakeholder Experts Group Plenary in December 2020.

Industry standards and certification

Industry standards and certification have gained broad acceptance globally and demonstrate the commitment by private sector groups to promote Responsible Business Conduct. For instance, ISO 26000 is a guidance document (created by the International Standards Organization) on how business can operate in a socially responsible way. Canadian industry has also contributed to creating and promoting standards. Towards Sustainable Mining (TSM), launched in 2004 by the Mining Association of Canada, is an example of an industry standard for responsible mining which is increasingly being adopted in mining jurisdictions around the world. Canada’s development of Responsible Business Conduct related standards also helps existing provisions related to inclusive trade chapters in FTAs and FIPAs, such as those on Labour, Environment, Trade and Gender, SMEs, and Trade and Indigenous Peoples. 

Due diligence and supply chain legislation

Responsible sourcing and advancing sustainable supply chains, particularly as it relates to combating human trafficking/forced labour have received attention in numerous international fora, including the G7 and G20. There are also steps being taken by some countries such as the United Kingdom and France to mandate companies of a certain threshold to disclose the policies and practices they are undertaking to address human rights, human trafficking and child/forced labour. In Canada, in the spring of 2019, Employment and Social Development Canada (ESDC) led consultations on potential global supply chain legislation, the results of which are under consideration.  Separately, on February 5th, Bill S-211 (Modern Slavery Act) was introduced to the Senate. This proposed bill imposes an obligation on certain entities that meet a certain threshold to report on the measures taken to prevent and reduce the risk that forced labour or child labour is used at any step in the production of goods in Canada or elsewhere.

What we heard so far

In March 2020, an in-person engagement session, as well as a series of interviews and group discussions were held with approximately 50 stakeholders whose work is directly related to Responsible Business Conduct abroad. These stakeholders represented Canadian industry, civil society and academia.  The following section presents some of the views and ideas expressed during these pre-consultations and are presented for your consideration in providing feedback. The pre-consultations and subsequent reporting, were facilitated by Coro Strandberg, Strandberg Consulting and Global Affairs Canada.

Aspirational vision for Canada

Most participants interviewed were aligned on the idea that Canadian business should be in full compliance with international standards such as the UN Guiding Principles and the OECD Guidelines for Multinational Enterprises, and that they should contribute positively to the local communities where they operate.  This aspirational vision for Canadian companies is compatible with Canadian foreign policy and Canada’s commitments to inclusive trade, human rights, achieving the Sustainable Development Goals, Climate Change targets, and our Feminist International assistance policy.  Participants at the Gatineau session developed the following vision statement.

“By 2030 Canadian companies are recognized as best-in-class leaders domestically and internationally in Responsible Business Conduct implementation, accountability and transparency. They, and their suppliers, meet and exceed global Responsible Business Conduct good practices and address the SDGs. They apply innovation, technology, stakeholder engagement and compliance and exceed international guidance and standards. They promote the SDGs through capacity-building, knowledge sharing and collaboration resulting in SDG achievement. They are a catalyst of durable, regional development/community engagement, as an effective development partner to local communities, local government and civil society organizations and are involved in cross-industry collaboration addressing environment, social and governance issues.

Canadian companies also contribute to and lead the development of sector wide Responsible Business Conduct standards that get adopted and scaled internationally. Colleges and universities and others are helping to define standards with business associations and other stakeholders.”

Global trends and best practices

Business case for best practices in Responsible Business Conduct

Participants agreed that best practices in Responsible Business Conduct can foster company and sector competitiveness and that companies with strong responsible business practices are more viable in the long-term. The business case for Responsible Business Conduct best practices has been further outlined in the background section of this paper.

Indigenous rights and reconciliation

Almost all participants raised the importance of implementing the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) at the federal level, as a key international framework which should be integrated into the renewed Strategy.

UN Sustainable Development Goals

Many participants referenced the UN Sustainable Development Goals as a relevant overarching framework for the next ten years. They saw the 2030 Agenda as a set of aspirational targets for which they would like the private sector to contribute.

Governance

Many participants recognized the important role of boards of directors in a company’s governance and oversight in advancing Responsible Business Conduct. Boards of directors need to signal the importance of Responsible Business Conduct to management, to increase take-up in the company. The importance of boards of directors and governance professionals having capacity and support measures to enhance the board’s oversight role was particularly highlighted with respect to the activities of Canadian companies abroad. It is notable that this is an area where GAC would need to work with numerous partners.

Role of industry standards

Many participants would like to see Global Affairs Canada and the federal government take a greater role in partnering with industry associations to advance Responsible Business Conduct standards, as well as promoting the adoption of Canadian developed industry standard such as Towards Sustainable Mining (TSM) internationally.  Promoting TSM and other sector standards abroad could help build Canada’s reputation and create a competitive advantage for Canadian industries operating abroad. Canada’s development of Responsible Business Conduct related standards can also help enhance existing Responsible Business Conduct provisions in FTAs and FIPAs particularly in inclusive trade chapters such as those on Labour, Environment, Trade and Gender, SMEs, and Trade and Indigenous Peoples.  

Responsible Business Conduct innovation and technology

Some participants highlighted a future in which Canadian companies set the pace for Responsible Business Conduct innovation overseas. They expressed a desire for Canadian companies to lead on the creation of new responsible business practices that are adopted by other companies, industries and jurisdictions. They also expect emerging technologies to play more of a role in future.

Recommendation

Multi-stakeholder and Multi-sector collaborations

In order for progress to be realized and positive Responsible Business Conduct impact to be generated, diverse stakeholders (civil society, industry, effected communities and academia) should be convened to co-develop and identify solutions. While some issues will necessitate a multi-stakeholder approach involving civil society organizations, industry associations, academics/post-secondary institutions, and others, other issues may be best addressed through collaboration with in a specific industry sector.

Responsible Business Conduct in supply chains

Some participants referenced supply chains as an integral part of business operations. They realize that to be successful, businesses need their suppliers to demonstrate best practices in Responsible Business Conduct. They expressed views that companies are responsible for the practices of their suppliers and as such their suppliers, particularly overseas suppliers, need to demonstrate Canadian standards in their operations. They suggested that GAC work closely across government on this issue, particularly as it touches on the mandates of several federal departments. 

The role of Global Affairs Canada

Participants agreed that GAC has an important role to play with respect to advancing Responsible Business Conduct polices and best practices within Canadian companies and sectors operating overseas. In particular, they highlighted that GAC’s network of missions abroad and business lines related to Responsible Business Conduct policies and practices (i.e. Development, Trade, Political, Consular) position it for an influential role. The key areas where participants saw GAC advancing Responsible Business Conduct policies and practices abroad include through:

The role of Global Affairs Canada
Providing  Responsible Business Conduct specific advice and informationSupporting sector associations to enhance Responsible Business Conduct capacity of sector
Enabling stakeholder dialogue and partnershipsFacilitating multi-stakeholder awareness and collaboration on Responsible Business Conduct topics and best practices
Developing and disseminating Responsible Business Conduct  related resourcesCommunicating Strategy progress
Supporting Government of Canada Policy CohesionProviding effective Dispute Resolution mechanisms
Advancing Responsible Business Conduct through multilateral and bilateral engagementIntegrating Responsible Business Conduct language in Free Trade Agreements and Foreign Investment Protection Agreements

Whole of government approach

Although GAC’s international trade mandate is to foster and to promote the expansion of Canada’s international trade and commerce, participants underscored that they expect the involvement of other government departments in the development and execution of a renewed Responsible Business Conduct Strategy. 

Accountability and performance management

Participants highlighted the importance of embedding Responsible Business Conduct into the DNA of GAC through ensuring that all elements of the Department have Responsible Business Conduct training, goals and plans and department-wide Responsible Business Conduct related performance indicators. In addition, participants highlighted the need for ongoing communication with respect to the Strategy’s progress, though, for example, annual progress reporting and annual stakeholder forums. 

Recommendation

Advancing RBC with small and medium sized enterprises

Some SMEs lack resources to build their internal capacity for best Responsible Business Conduct practices.  The Government of Canada has an opportunity to work closely with the higher education sector, and associations to help equip SMEs for Responsible Business Conduct considerations when entering new markets through, for example, sharing of tools, guides and training. 

Emerging priorities

Three topics emerged as priorities during the consultation: climate change, benefits to local communities (equity considerations) and the impact of emerging technology such as artificial intelligence. Other important references included the need to promote inclusive policies with respect to gender, age, and diversity. These themes are aligned with work already being undertaken by the Government of Canada and suggests an opportunity for GAC and the Government of Canada as a whole to further embed Responsible Business Conduct across its policies and programming.

RBC promotion

Participants expressed hope that Canada becomes a champion of Responsible Business Conduct in international forums such as the UN, the OECD and the G7. They also highlighted the role of the Trade Commissioner Service in promoting Canadian Responsible Business Conduct standards and best practices. 

Human rights best practices

There was a consistent theme expressed by some stakeholders that voluntary measures are not sufficient to accelerate take-up of responsible business practices by Canadian companies operating overseas. These participants recommended:

Companies shouldGovernment should
Demonstrate best practices with regards to human rights including Indigenous rights and reconciliation, by adhering to and going beyond global frameworks (e.g. United Nations Guiding Principles)Strengthen dispute resolution mechanisms
Ensure their human rights approach covers their global supply chains, subsidiaries and all their operationsDevelop a national action plan on business and human rights
Provide remedy from harms arising from their business operationsAdopt mandatory measures including human rights due diligence legislation, monitoring and enforcement
Disclose their human rights practices and performanceHelp business understand, respect, and support the rights of Indigenous peoples by illustrating how these rights are relevant to business activities

Tools and incentives

In the session which took place in Gatineau, as well as during interviews, participants discussed various tools that could be developed or leveraged to advance Responsible Business Conduct related policies and practices being undertaken by Canadian companies active abroad. Key tools and incentives suggested by participants included:

Prevention and access to remedy

Interviewees were asked how GAC can strike a balance between supporting Canadian companies in preventing negative Responsible Business Conduct impacts and provide access to remedy when Responsible Business Conduct related challenges occur. They were asked where the focus should be, on prevention or access to remedy, and why. In response interviewees were split into three groups: those who thought both were equally important, those who preferred a focus on prevention and those who preferred a focus on access to remedy. The role of Canada’s network of missions abroad to provide intelligence to help Canadian companies better understand specific Responsible Business Conduct risks, or, of the CORE and NCP to help promote tools such as the UN Guiding Principles or the OECD Guidelines for Multinational Enterprises were referred to as ways that Canada could help mitigate Responsible Business Conduct related risks.  On the other hand, both the NCP and CORE were cited as important tools to help address Responsible Business Conduct related challenges involving Canadian companies active aboard.

Canada’s dispute resolution mechanisms provide for accessible, low cost and constructive dispute resolution founded on two voluntary mechanisms that reflect the objectives of the UN Guiding Principles,and, the OECD Guidelines. Canada’s National Contact Point (NCP) was established in 2000 as part of the Government of Canada’s commitment to the OECD and covers all sector. The Canadian Ombudsperson for Responsible Enterprise(CORE) was announced in 2018, and covers the mining, oil and gas and garment sectors.

The NCP and CORE are complementary. The NCP is a seven-member interdepartmental committee chaired by Global Affairs Canada. It is mandated to promote the OECD Guidelines, respond to enquiries, and offer facilitated dialogue and mediation for all sectors and for a wide range of issues, including, labour issues, human rights, environmental issues and bribery. The CORE’s mandate focuses on human rights and the CORE can initiate reviews at their own initiative. Canada’s dispute resolution mechanisms do not preclude pursuing recourse in other forums such as courts in host countries or in Canada. Although voluntary, Canada’s dispute settlement mechanisms are robust. Not collaborating in good faith could result in a recommendation to deny or withdraw Government of Canada trade advocacy support and future financial support from Export Development Canada (EDC).

International frameworks

Global Affairs Canada currently promotes the following international frameworks (additional details are in the Annex).

While many participants agreed that these are the key Responsible Business Conduct related frameworks, they also highlighted the need for the promotion of the following:

Thank you!

Thank you for taking the time to review this material and share your perspectives with us. Your time and insights are invaluable, and we appreciate your effort to assist us in renewing this Strategy.  This feedback will assist Global Affairs Canada in developing a renewed Strategy that will help frame Canada’s approach to Responsible Business Conduct abroad, positioning Canada and Canadian companies and industries at the forefront of best practices.  

We would like to remind you that your input must be received by mail or email by October 26 so we will have time to take your contributions into consideration. 

Views and ideas can be shared with the Responsible Business Practices division at Global Affairs Canada by email at RBCconsultationsCRE@international.gc.ca, or by mail to:

Responsible Business Practices Division
Global Affairs Canada
111 Sussex Drive
Ottawa ON K1A 0G2

Annex

Strategy renewal methodology

Evaluation of 2014 CSR Strategy

In 2019, Global Affairs Canada and Natural Resources Canada undertook an evaluation of Canada’s 2014 Strategy Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector. The purpose of this evaluation was to provide neutral and evidence-based findings, recommendations, and conclusions on the overall relevance, effectiveness, and coherence of the Strategy and its related tools and resources. The results of the evaluation are expected to be published during the fall of 2020.

Phase one – key stakeholder pre-Consultations

Pre-Consultations were held in March 2020 with approximately 50 diverse stakeholders whose work is directly related to Responsible Business Conduct abroad and who represented civil society, industry and academia.  Their initial input has helped shape the “what we heard” section of this paper. 

Phase two – public consultations

The current phase of consultations is an opportunity for all Canadians to share their ideas about the scope of a renewed strategy.

Phase three – developing a new strategy

Phase Three will incorporate the feedback received in the first two phases, as well as the results of the evaluation of the 2014 strategy. GAC, with the support of other government departments, will develop a new strategy. 

International RBC guidelines

Canada currently endorses the following international RBC guidelines:

OECD Guidelines for Multinational Enterprises (MNEs): The OECD Guidelines for MNEs provide recommendations for responsible conduct on a broad range of business activities and are applicable to all sectors. Canada is an active supporter and promoter of the Guidelines, having participated in their periodic updates and contributed to the development of implementation guidelines of particular interest to the extractive sector.

United Nations Guiding Principles on Business and Human Rights: The Guiding Principles (GPs) operationalize the Protect, Respect and Remedy Framework first presented to the UN Human Rights Council in 2008 by the Special Representative on Business and Human Rights, Dr. John Ruggie. The GPs identify distinct but complementary responsibilities of companies and governments regarding human rights, resting on three pillars: 1) the state responsibility 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 (VPs): The Voluntary Principles on Security and Human Rights were designed to help corporate actors in the natural resources sectors anticipate and mitigate human rights risks related to the deployment of public and private security.

International Finance Corporation’s (IFC’s) Performance Standards on Social & Environmental Sustainability: The IFC’s eight Performance Standards 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. Updated in 2012, the Performance Standards form a basis for the Equator Principles (EPs). Signatories to the EPs are financial institutions (80 in 35 countries, including all five of Canada’s major banks) which collectively provide more than 70 percent of project financing in emerging markets, where many extractive sector opportunities are located. These financial institutions use the EPs as their benchmark for assessing environmental and social risk in projects.

OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: The 2011 Guidance was developed in response to the problems posed by conflict minerals, whereby minerals and metals are illegally mined and their illicit proceeds used to finance armed conflict. The core guidance document and mineral-specific supplements explain how multinational companies sourcing and trading minerals can do so responsibly and avoid fueling conflict. While the Guidance is voluntary in nature, it has strong industry support, and has contributed to peacebuilding and stabilization efforts in mineral-rich fragile states, particularly in the Great Lakes Region of Africa.

Global Reporting Initiative (GRI): The GRI is a broadly recognized international reporting standard which includes reporting principles, guidance and indicators for organizations of all sizes and sectors. Canada worked with the GRI and stakeholders to develop supplements for reporting by oil and gas and by exploration companies.

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