In November, the Government of Canada announced a revised Corporate Social Responsibility (“CSR”) strategy for the extractive sector. Building on Canada’s plan for Responsible Resource Development, the strategy (“Doing Business the Canadian Way: Advancing Corporate Social Responsibility in Canada’s Extractive Sector Abroad“) focuses on the activities of extractive sector companies, but is intended to provide “a more general audience with an overview of Canada’s approach to promoting and advancing CSR abroad.”
The strategy states clearly that “[t]he Government of Canada expects Canadian companies operating abroad to respect human rights and all applicable laws, and to meet or exceed widely-recognized international standards for responsible business conduct.”
The revised strategy explicitly references the Canada’s intent to promote the U.N. Guiding Principles on Business and Human Rights, which were released after the strategy’s initial publication in 2009. Other guidelines and standards referenced in the strategy include:
- the OECD Guidelines for Multinational Enterprises;
- the Voluntary Principles on Security and Human Rights;
- the International Finance Corporation’s Performance Standards on Social and Environmental Responsibility;
- the OECD Due Diligence Guidance on Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas; and
- the Global Reporting Initiative.
Other key aspects of the strategy include:
- increased support for CSR initiatives at Canadian missions in countries around the world;
- strengthening the mandate of the Canada’s CSR Counsellor, such that the Counsellor will have more latitude to promote strong CSR practices within the Canadian extractive sector; and
- promoting the role of the CSR Counsellor as a entity that will “prevent, identify, and resolve disputes in their early stages” and, when formal mediation may be necessary, will “encourage and help” parties to refer disputes to Canada’s National Contact Point (“NCP”) pursuant to the OECD Guidelines for Multinational Enterprises.
The strategy notes that, while participation in the dispute resolution processes of the CSR Counsellor or the Canadian NCP remains voluntary, decisions by either party not to participate in these processes will be made public.
Most notably, the strategy includes a penalty for companies “found not to be embodying CSR best practices” or that “refuse to participate in the CSR Counsellor’s Office or NCP dispute resolution process” will lose certain forms of diplomatic support from the Government of Canada, including “issuance of letters of support, advocacy efforts in foreign markets, and participation in Government of Canada trade missions.”
As governments around the world face increasing scrutiny with regard to their efforts to promote responsible business conduct, Canada’s revised CSR Strategy establishes a strong benchmark for those seeking to ensure that government efforts to promote economic development are linked with efforts to promote social and environmental responsibility.