Canadian Government Acknowledges Power to Act on Extractive Companies, Declines to Do So

Date of publication: 
14 November 2014

Canada’s CSR Strategy for Extractives 2.0 – Government Acknowledges Power to Act, Declines to Do So

(Ottawa) Today the Government of Canada released its revised Corporate Social Responsibility (CSR) Strategy for extractive companies operating overseas, finally recognising its power to withdraw the substantial support that it provides such companies in order to make them accountable, but declining to apply that power in any meaningful way.

Coming five years after the 2009 launch of the Government’s initial CSR strategy, the updated policy leans heavily on a revised role for the CSR Counsellor, a failed institution under the original plan, and on enhanced involvement of Canada’s missions abroad.

While a more substantive review of the updated strategy will depend on specifics that have yet to be released, for example regarding the CSR Counsellor’s mandate, a few things jump out.

The Government of Canada still says that it “expects” Canadian companies operating overseas to respect human rights, all applicable laws and recognized international standards for responsible business practices, as well as “Canadian values.” But it notes that if this is not possible, “companies may wish to reconsider their investment.” This is important guidance for Canadian companies operating in places such as Eritrea or Tibet where it is flatly impossible for them to meet these requirements.

The Government also recognizes that it provides, and has the power to withhold, significant services to Canadian extractives companies operating overseas through “economic diplomacy,” as well as through financial support by, for example, “financing by Government of Canada crown corporations, like Export Development Canada (EDC) and the Canadian Commercial Corporation (CCC).”

The revised CSR Strategy claims to make these services contingent on Canadian companies demonstrating their alignment with the CSR strategy, but the only specific threat is that these services will be withdrawn if companies do not participate “in the dialogue facilitation processes of Canada’s NCP and Office of the Extractive Sector CSR Counsellor.” (The “NCP” is the National Contact Point for the implementation of the OECD Guidelines for Multinational Enterprises.) Both of these institutions have consistently failed to make a meaningful contribution to resolving conflicts instigated by Canadian companies, and merely ensuring that companies at least participate in their processes is unlikely to change this.

MiningWatch Canada and the Canadian Network on Corporate Accountability have called for the creation of an extractive sector Ombudsman with the power to respond to complaints by actually conducting an independent investigation of a company’s behaviour overseas and reporting on the findings. The Ombudsman would also have the power to recommend remedy in cases where it has been found that companies have breached established guidelines and caused harm to complainants, as well as recommending that Canadian government financial and political support be withheld.

The Government’s revised CSR Strategy does not address the need many complainants have expressed for independent investigations to substantiate the facts of the complaints and report on those findings and potential remedies.

Finally, the revised CSR Strategy posits the CSR Counsellor as an initial or “front-end” office for complainants to bring concerns. Complainants would only be referred to the NCP if the Counsellor’s efforts to resolve concerns “have not succeeded or are not appropriate, or if the CSR Counsellor determines that a situation would benefit from formal mediation.” While the NCP’s track record is almost as bad as the Counsellor’s, complainants should in no way be obliged to go through the Counsellor prior to lodging a complaint or seeking mediation through the NCP.

Contact: Catherine Coumans, (613) 569-3439 or (613) 256-8331, catherine [at] miningwatch [dot] ca


Government fails to create an extractive-sector Ombudsman, despite broad public support

Canadian Network on Corporate Accountability press release

14 November 2014

OTTAWA – The Canadian Network on Corporate Accountability (CNCA) is deeply disappointed that the federal government is not establishing an independent Ombudsman to investigate human rights complaints involving corporate activity abroad, as part of the five-year review of its Corporate Social Responsibility (CSR) Strategy announced today.

Over 95,000 Canadians wrote to Parliament in the past year to call for the creation of an extractive-sector Ombudsman, through the CNCA’s Open for Justice campaign. Last month, a private member’s bill to create such an Ombudsman, Bill C-584, received support from all opposition parties in Parliament but was voted down by the government.

“The Government of Canada’s CSR Strategy failed, and will continue to fail, because it doesn’t allow for independent investigation of corporate activities abroad or any remedy for local communities or workers who are harmed by irresponsible corporate conduct,” said Ken Neumann, Canadian National Director of the United Steelworkers.

“While it’s positive that the government strategy now acknowledges companies have a responsibility to respect human rights, there are no new mechanisms to ensure compliance but more of the same voluntary approach and self-regulation,” said Ian Thomson of KAIROS Canada.

Despite public calls for substantial reform, International Trade Minister Ed Fast announced today that the Office of the Extractive Sector CSR Counsellor is being retained. Canadian mining companies have not cooperated with the CSR Counsellor’s grievance mechanism process since it was launched in 2010, choosing instead to walk away and effectively shutting down any review of their conduct. It is not clear how the government’s new approach of threatening to remove a few limited government services, such as letters of recommendation or a spot on a trade mission, will compel companies to act more constructively.

According to Catherine Coumans of MiningWatch Canada: “Industry and civil society have so little respect for the CSR Counsellor’s Office because it’s totally ineffective. The solution is not to force companies to participate in an ineffective process, but to make it more meaningful by establishing real powers of fact-finding, public reporting and remediation.”

“Ultimately, it is the most vulnerable communities adversely impacted by Canadian companies who will pay the highest price because they have no genuine recourse when their human rights are violated,” said Josianne Gauthier of Development and Peace.

CNCA had hoped the government would make substantial reforms to its CSR Strategy for the International Extractive Sector this year. The Open for Justice campaign will continue to call for the creation of an extractive-sector Ombudsman and legislated access to Canadian courts for non-nationals harmed by Canadian companies abroad.

The Canadian Network on Corporate Accountability (CNCA) brings together human rights, international development, social justice and environmental NGOs, faith groups and labour unions to advocate for mandatory corporate accountability standards for Canadian extractive companies operating abroad, especially in developing countries.

For further information: Ian Thomson, CNCA Chairperson, ithomson [at] kairoscanada [dot] org, 613-235-9956 ext. 222; Bob Gallagher, United Steelworkers, bgallagher [at] usw [dot] ca, 416-434-2221; Kelly DiDomenico, Development and Peace, kelly.didomenico [at] devp [dot] org, 514-257-8710 ext. 365


Ottawa to punish resource firms that break social-responsibility rules abroad

By: The Canadian Press –

14 November 2014

Canadian International Trade Minister Ed Fast is pictured in Toronto on October 31, 2014. THE CANADIAN PRESS/Frank Gunn

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Canadian International Trade Minister Ed Fast is pictured in Toronto on October 31, 2014. THE CANADIAN PRESS/Frank Gunn

OTTAWA – The federal government is planning to punish bad behaviour by Canadian resource firms operating abroad if they break Ottawa’s new rules on corporate social responsibility.

International Trade Minister Ed Fast announced Friday that Ottawa will withdraw government support from Canadian mining and energy companies that refuse to help resolve disputes with local communities.

Fast said companies that do not co-operate will lose the support of Ottawa’s economic diplomacy and trade services, according to the prepared text of a speech he delivered in New Westminster, B.C.

The Canadian mining sector has large operations in developing countries, where companies have faced numerous allegations — from environmental destruction to human rights abuses.

Critics, meanwhile, have said the government hasn’t done enough to crack down on Canadian companies accused of transgressions abroad.

“We are ensuring that Canadian companies engage in our process because if they do not, or fail to embody CSR (corporate social responsibility) best practices, we will withdraw Government of Canada support,” the text of Fast’s speech said.

“Our message is simple: If you don’t play ball by doing business the Canadian way, then we won’t go to bat for you.”

The change in strategy came as a result of consultations Fast started last year.

He said he will also give the government’s corporate social responsibility “counsellor” a more proactive mandate to prevent and detect disputes between Canadian firms and local communities. Ottawa is looking to fill the position left vacant after the departure of the last counsellor, Marketa Evans.

Until now, the role of the office was to solve problems by bringing parties together, not by investigating allegations.


Ottawa vows to protect ‘Canada brand’ with social responsibility policy

Shawn McCarthy

The Globe and Mail –

14 November 2014

OTTAWA — The federal government plans to punish mining and energy companies that run afoul of its new corporate social responsibility policy by withdrawing support they receive from agencies such as Export Development Canada and embassies abroad.

International Trade Minister Ed Fast is to announce the measure in a speech in Vancouver Friday, saying it is important to protect Canada’s “brand” as a global heavyweight in the resource industries.
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“Let there be no mistake,” the minister says in a draft copy of the speech provided to The Globe and Mail, “Canada’s expertise in the extractive sector is second to none; Canada is a world leader in sustainable technology, and in environmentally, ethnically and socially responsible business practices. That is the ‘Canada brand’ – it is how we are known throughout the world.”

The government is launching a corporate social responsibility (CSR) strategy as part of its broader effort to enhance the business prospects for resource companies abroad. Toronto is a global centre for mining finance and Canadian-based companies are particularly prominent in Africa and South America, where more than 250 companies controlled $81-billion in assets in 2011.

Moving with the European Union and the United States, Ottawa is already set to impose new transparency standards on resource companies, having introduced legislation this fall that will require them to report all payments made to national, state and local governments both at home and abroad.

In the speech to be delivered Friday, Mr. Fast said he will appoint a new CSR counsellor to fill a post that has been empty for a year, and give the ombudsman role some teeth by insisting companies co-operate with the office or lose the support of the government. Many mining and oil companies rely on Export Development Canada to provide insurance against political risk and other losses, as well as lines of credit and other financial support. Commercial counsellors in embassies can play an important advisory role, particularly in politically unstable or violence-prone countries.

“Our message is clear: If you don’t play ball by doing business the Canadian way, then we won’t go to bat for you,” he said.

While the Trade Minister extols the international reputation of Canadian companies, many critics have complained about human rights and labour abuse and poor environmental practices. And they argue that a government ombudsman should be given investigatory powers and the ability to ensure companies co-operate in arbitration cases.

Mr. Fast has now concluded a review of the corporate social responsibility policy that was first announced in 2009. Under the mandate of the CSR counsellor, company co-operation will still be voluntary and informal, but with a “hammer” that failure to adhere to Ottawa’s policy and work with the counsellor will mean the forfeiture of government support. Ottawa will also require companies to adhere to CSR guidelines set out by the Organization for Economic Co-operation and Development, which include formal dispute settlement mediation.

The previous counsellor, Marketa Evans, was handicapped by the lack of enforcement power in her role as arbitrator of disputes between Canadian companies and local unions and communities. Ms. Evans drew criticism for spending time and money to attend conferences but doing little investigative work; she quietly resigned a year ago.

She was able to mediate none of the six cases that were filed with her office. One case involved Toronto-based Excellon Resources Ltd., which walked away from the process when Ms. Evans attempted to hold talks between the company and its workers at the La Platosa Mine in Durango, Mexico.