About responsible business conduct abroad
Responsible business conduct integrates the management of risks to the environment, people and society into a business’ core activities. It makes a company more resilient through awareness of production and supply chain risks (operational, financial and legal).
Responsible business conduct includes measures for prevention, mitigation and targeted legislation.
- Prevention: addressing potential problems before they occur
- Mitigation: having strategies in place to address adverse scenarios
- Legislation: Canada has legislation in place in critical areas related to responsible business conduct, such as corruption, transparency and most recently, forced labour through amendments to the Customs Tariff.
Responsible business conduct is a priority for Canada
Responsible business conduct is central to Canada’s trade diversification strategy, inclusive trade and sustainable and inclusive economic growth. It complements Canada’s approach to taking action on climate change, sustainable development, multilateralism and a rules-based trading system.
Responsible business conduct also aligns closely with the Government of Canada’s Feminist Foreign Policy, including its Feminist International Assistance Policy and its commitments to human rights, upholding the rights of Indigenous peoples and children, eradicating poverty, gender equality and inclusion and diversity — including digital inclusion.
On the global stage, Canada has committed to responsible business conduct through ratifying several international treaties and adhering to various guidelines that promote responsible business conduct.
Canadian companies with good responsible business practices contribute to achieving Canada’s objectives by upholding Canadians’ expectations, enhancing the Canada brand and generating sustainable benefits in the countries where they are active.
Government of Canada’s expectations
The Government of Canada expects all Canadian companies active abroad to:
- respect human rights, to operate transparently and in consultation with host governments and local communities
- work in a socially and environmentally responsible manner, while respecting applicable laws
- adopt best practices and internationally respected guidelines on responsible business conduct and take measures to meet anti-corruption objectives
These expectations apply to Canadian companies of any size, in all sectors and in any market.
Business case for responsible business conduct
There are several benefits for companies to adopt responsible business practices.
De-risk: Canadian companies may face increased risks when they continue in and expand to new markets. Integrating responsible business conduct helps companies evaluate transactions through a broader lens, which ultimately enhances their reputation and competitiveness.
Build resilience: The COVID-19 pandemic highlighted the need for greater company resilience and the importance of adaptability. Throughout the pandemic, companies with strong responsible business policies and practices have been better able to assess their production and supply chain risks. As a result, these companies could address potential problems and put mitigation strategies in place.
Competitive advantage: Responsible business conduct can lead to attracting investment, increasing brand value and customer attraction and retention. This is because more consumers want to buy ethically made goods. Current and potential partners (including financial partners) also seek companies that meet environmental and social governance requirements.
Canadian law: The July 2020 Customs Tariff amendment, for example, makes it illegal to import goods that are mined, manufactured or produced wholly or in part by forced labour. The Corruption of Foreign Public Officials Act passed in 1998 criminalizes the bribery of a foreign public official. In September 2018, a Remediation Agreement regime came into force, which is a tool available for use by prosecutorial authorities at their discretion, in the public interest and in appropriate circumstances to address corporate criminal wrongdoing. Furthermore, the Government is committed to enacting legislation to eradicate forced labour from Canadian supply chains and ensure that Canadian businesses operating abroad do not contribute to human rights abuses. Under the Extractive Sector Transparency Measures Act, Canada requires extractive companies listed in Canada to declare all taxes paid and where they are paid.
Access to international markets: Canadian companies must comply with all local and international regulations related to labour, the environment and due diligence. As some international jurisdictions introduce mandatory measures related responsible business conduct such as labour, the environment and due diligence, Canadian companies will also need to comply with these regulations.
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