Canada desperately needs to update its approach on corporate accountability. The SNC-Lavalin affair that rocked the Canadian government earlier this year provided a stark picture of how corporate influence operates in the backrooms of Ottawa today. It revealed the great lengths that lobbyists will go to prevent companies from being held accountable for serious misconduct abroad.
The Canadian government has said repeatedly that it expects companies to obey local laws and respect international human rights wherever they operate in the world. However, when it comes to human rights, it continues to rely on voluntary measures and its appeals for more “corporate social responsibility” have failed to curb the worst abuses.
The problem is serious and widespread. The Canada Brand, a 2017 study by Osgoode Hall Law School in Toronto, found that between 2000 and 2015, Canadian mining companies operating in Latin America were reportedly associated with 44 deaths, 403 injuries (most of which occurred during protests and confrontations) and 709 cases of criminalization of dissent.
Following the October 2019 federal election, here are five actions that Canada’s next government should take to move the country forward on the corporate accountability file:
1. The new Canadian Ombudsperson for Responsible Enterprise should become more independent and be granted real powers of investigation.
Hopes were raised in January 2018 when then Minister of International Trade, Francois-Philippe Champagne, announced the government would be appointing a Canadian Ombudsperson for Responsible Enterprise. The news was welcomed by human rights advocates after a decade of public campaigning for the creation of such an office. Fifteen months later, Sheri Meyerhoffer was appointed the new Ombudsperson, but without any of the independence or legal powers of investigation originally promised. The reversal on the Ombudsperson promise was a serious blow. The Ombudsperson needs a new Order-In-Council that grants powers under the Inquiries Act to compel documents and testimony during its investigations. Fact-finding is an essential role of the Ombudsperson, which is why the office needs strong legal powers to get to the bottom of the serious allegations brought forward by victims.
2. Canadian companies should be required to conduct due diligence around human rights and demonstrate how they are minimizing the risks of adverse human rights impacts.
Most businesses accept that they have a responsibility to respect human rights and not infringe them in their operations or through their supply chains. Due diligence involves systematically assessing human rights-related risks and taking steps to minimize harm. Requiring all companies to conduct such due diligence would create a level playing field and provide everyone – workers, investors, communities and governments – with assurance that human rights risks are being properly managed. In response to a recommendation from the House of Commons subcommittee on international human rights, the government agreed to consult Canadians on whether Canada needs new legislation mandating companies to conduct due diligence on eliminating forced labour and child labour in their supply chains. This is a positive sign that the government is open to examining how legislation can be part of the public policy toolbox to promote corporate accountability. Due diligence on forced labour and child labour is too narrow, and the next government should broaden the scope of any legislation on company due diligence to encompass all human rights.
3. Export Development Canada’s legislation should be reformed to include explicit requirements on international human rights and gender equality.
Export Development Canada is the biggest public financier of Canadian investment abroad. EDC should be prohibited by law from supporting deals that violate human rights, and be more transparent about how it reviews and assesses its clients. The Canadian Parliament is mandated to review EDC’s governing legislation every 10 years, and 2019 was the year it was supposed to happen. However, the government tabled its report on EDC on June 20, the very last sitting day of this Parliament, essentially delaying the legislative review until after the election.
4. The next government should ditch the 2014 Corporate Social Responsibility Strategy, which was rooted in a mantra of trade promotion, and adopt a Business and Human Rights Strategy that integrates Canada’s political, trade and development mandates.
The Corporate Social Responsibility Strategy of Global Affairs Canada, which acts as the operating manual on responsible business conduct for the Canadian foreign service, has not been revised since 2014. While the government did adopt the helpful Voices At Risk guidelines in 2016 to encourage Canadian diplomats to support human rights defenders abroad, in cases involving “Canadian corporate entities,” they simply refer back to the outdated CSR Strategy and the under-equipped Ombudsperson. Until the overarching government policies and approaches change, Canadian diplomats will be hamstrung and find it challenging to prioritize human rights concerns over private commercial interests. The new approach should centre not on companies but on people as rights-holders, particularly those who face barriers to realizing their rights due to repression or systemic discrimination. A balanced approach would also direct more of Canada’s international assistance to women human rights defenders working to defend their communities against business-related human rights abuses. Strong and vibrant women’s rights organizations and citizen movements are essential to counter-balance the power of multinational corporations.
5. Finally, Canada should join the community of nations who are working to develop and adopt a binding treaty on business and human rights at the United Nations.
Although a long-term endeavour, the binding treaty is one of the most promising avenues to hold companies to account when they are complicit in human rights abuses. Canadian government officials have been largely absent from the process so far. This needs to change if we hope to strengthen the rules-based international system that Canada has staked its reputation on defending.
In an unpredictable global economy, strong rules and institutions are more essential than ever. Raising the bar on corporate conduct abroad will not only be good for human rights defenders and their communities. It also signals clearly to companies that human rights should be everybody’s business.
Ian Thomson is a Policy Specialist leading our policy work on gender justice in the mining, oil and gas industries.