With interests in more than 8,000 properties in more than 100
countries, Canadian extractive-industry companies account for
almost half of the world's mining and mineral exploration
It should therefore come as no surprise that Canada has come
under scrutiny in the past, by international organizations like
Transparency International and multilateral organizations like the
OECD, for its less-than-rigorous corporate social responsibility
(CSR) leadership abroad. In fact, it wasn't until 2009 that
Canada published its first CSR strategy, providing ethical guidance
to, and laying out the government's expectations of, Canadian
Fast-forward five years and the government has had the
opportunity to engage industry groups across the country,
soliciting feedback on the strategy and taking note of important
suggestions for improvement.
The outcome, announced on Nov. 14, 2014, by Minister of
International Trade, the Honourable Ed Fast, is Canada's
enhanced strategy, Doing Business the Canadian Way: A Strategy
to Advance CSR in Canada's Extractive Sector Abroad (the
"Strategy"). The Strategy builds on Canada's
experience since 2009 and encourages Canadian companies to adhere
to the "highest CSR standards and best practices while
operating abroad" by setting the water-mark of acceptable
behavior higher than it's been before. It also sets out
penalties for companies that are considered to have contravened the
Strategy's ethical objectives.
Key elements of the enhanced CSR Strategy include:
Making, for the first time, the Government of Canada's
"economic diplomacy" conditional on a Canadian
company's alignment with the enhanced CSR Strategy;
Increased support and additional training for Canada's
missions abroad to ensure Trade Commissioners and staff are
equipped to detect issues early on and contribute to their
resolution before they escalate
Withdrawal of Government of Canada diplomatic support in
foreign markets as a result of a company's non-participation in
government sanctioned dispute resolution mechanisms; and
Increased support and training for CSR initiatives and services
through Canada's diplomatic network of missions abroad to
ensure a consistently high level of CSR-related services for
Canadian businesses and local networks and communities.
One of the most important changes to the previous policy is the
threat of revoking diplomatic support abroad for companies that the
government considers are not aligned with Canada's enhanced CSR
Strategy. Such support might include the writing of letters of
support to local authorities, advocacy efforts in foreign markets
and participation in Government of Canada trade missions.
When the enhanced Strategy was announced, Minister Fast made it
clear that Canadian companies are expected to promote Canadian
values and operate abroad with the highest ethical standards. He
stated:"The enhanced CSR strategy bolsters our commitment to
helping our Canadian extractive companies strengthen their
responsible business practices. We expect our Canadian companies to
promote Canadian values and to operate with the highest ethical
standards," said Fast. Further: "the Government
expects Canadian companies to integrate CSR throughout their
management structures so that they operate abroad in an economic,
social and environmentally sustainable manner" and
"respect...all applicable laws,..to meet or exceed
widely-recognized international standards for responsible business
The challenge for Canadian companies lies in understanding how
they can act to ensure they're "aligned" with the
Strategy's values. The Strategy does not elaborate on
government's decision-making parameters: there are no clear
standards to be maintained, no clear guidance or deliverables
offered and no real, tangible consequences for companies that
don't implement the Strategy.
The government's objective may be to leave the details blank
with the hope that this uncertainty compels companies to be
proactive in aligning themselves with the Strategy.
There are many tools that a company can use to ensure its
operations abroad are as ethical as possible, including codes of
conduct, business integrity policies, employee and business partner
education and training, and strong corporate and financial
oversight mechanisms. Increasingly, Canadian resource companies are
understanding that compliance with best CSR practices, in addition
to allowing a company to remain onside with the enhanced Strategy,
also allow companies to enjoy many other benefits of a strong CSR
program. CSR can propel innovation, cost savings and brand
differentiation. It can also assist a company to attract investors,
employees and customers. It can be invaluable to local community
engagement. Ensuring long-term local support for projects can go a
long way to promoting a company's stability and corporate
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