Thank you very much, Mr. Chair, for the opportunity to speak to you today.
Having served abroad in Colombia, Switzerland, and Israel and as a Canadian ambassador to Panama and Costa Rica, I can tell you firsthand that corporate social responsibility, or CSR, is an issue of great relevance to Foreign Affairs and International Trade Canada, both at headquarters and in our diplomatic missions around the world. The department plays an active role in supporting Canadian companies to develop and implement CSR practices and in fostering uptake of these principles within Canadian corporate culture. As you are aware, our departmental priorities include advocating and supporting respect for freedom, democracy, human rights, and the rule of law. The Prime Minister has directly, and often, reiterated these priorities.
Another key departmental priority is promoting and achieving greater economic opportunity for Canada, with a focus on growing and emerging markets. The department pursues a global commerce strategy to secure Canada's growth and prosperity. This does not mean we promote Canadian companies at any cost. We believe strongly in a win-win approach and that Canadian investment can and should contribute to prosperity and sustainable development in other countries. Having 150 missions across Canada and around the world allows us to pursue this growth and prosperity for Canadians and the Canadian economy.
With respect to the role of the Government of Canada in the area of corporate social responsibility, the trade commissioner service performs several key roles, including advising and counselling companies on Canada's CSR expectations and referring clients to relevant and applicable information tools and guidelines.
Canada's approach to CSR is to encourage and expect Canadian firms operating abroad to respect all applicable laws and international standards and to reflect our values and international commitments. Canada also supports and encourages the Canadian business community to develop and implement CSR standards, tools, and best practices. There is, however, a limit to what companies can provide to support the social, health, environmental, and education concerns of the communities in the sovereign states within which they operate. Host governments are responsible for legislation and programs that meet the needs of their own citizens. Foreign corporations must operate within that domestic legal framework.
Canada also engages on CSR-related issues at a variety of multilateral fora, including the Organization for Economic Cooperation and Development--the OECD; Asia-Pacific Economic Cooperation--APEC; G-8; la Francophonie; the Organization of American States--the OAS; and the United Nations.
Through the engagement of DFAIT, Canada has supported the work of the special representative of the UN Secretary-General on business and human rights, Dr. John Ruggie, since 2005, and welcomed the release of his report, “Protect, Respect and Remedy: a Framework for Business and Human Rights”, in 2008.
In light of the importance of CSR, the Government of Canada continues to enhance the ability of our trade, political, and development officers in Canada and abroad so that they have the information and tools they need to provide timely and effective CSR counsel and advice to our companies operating abroad. To this end, DFAIT has
First, trained trade and political officers including departing Heads of Missions with respect to CSR policies, guidelines and standards.
Second, created an internal intranet website which is at the disposal of all missions abroad and regional offices in Canada as the primary vehicle for guidance on CSR.
Third, created a $180,000 CSR fund which is a resource for missions and regional offices to foster and promote CSR.
Fourth, issued CSR e-bulletins on a monthly basis from headquarters to all the missions with the latest CSR news from headquarters and around the world to keep the missions informed of the latest CSR developments.
And lastly, created an Internet CSR website which contains a significant amount of information about the department's activities and policies.
Most companies understand that CSR has become a critical part of doing business, and that in order to be credible, CSR principles must be embedded within core business strategies and corporate culture. This is reflected in the concept of "earning" the social licence to operate. We understand that it is also essential to obtaining financing.
The government's new CSR strategy, “Building the Canadian Advantage”, was developed through consultations undertaken with a number of stakeholders, including the national round tables as well as recommendations raised by the Standing Committee on Foreign Affairs and International Trade in its 2005 report entitled “Mining in Developing Countries--Corporate Social Responsibility”.
A number of federal departments and agencies contributed to its development, including Natural Resources Canada, the Canadian International Development Agency, Industry Canada, Environment Canada, Indian and Northern Affairs Canada, Justice Canada, Human Resources and Skills Development Canada, and Finance Canada, as well as Export Development Canada.
Canada's new CSR strategy builds on Canada's long-standing adherence to the OECD guidelines for multinational enterprises, which contain recommendations for voluntary performance standards for responsible business conduct.
Since 1999, the Department of Foreign Affairs and International Trade has been home to Canada's national contact point, or NCP for short, which is responsible for promoting awareness of the OECD guidelines and reviewing reports of specific instances of non-compliance with these guidelines. The NCP provides a mechanism for dispute resolution. Canada's NCP is set up as an interdepartmental committee, which I presently chair.
With respect to Canada's new CSR strategy, it is founded on four key pillars. The first pillar calls for continuing assistance from CIDA for the governments of developing countries to enhance their capacity to manage natural resources in a sustainable and responsible manner. Resource governance, transparency, and accountability in developing countries are critical to ensuring that the extractive sector contributes to poverty reduction. These factors are also essential to creating a business environment that is conducive to responsible corporate conduct in countries where Canadian companies operate. This first pillar builds on existing initiatives where CIDA has played a key role. For example, in Peru, CIDA has worked extensively with the Peruvian government, mining companies, and affected communities to develop regulatory requirements for social and environmental management.
The second pillar of this strategy calls for the promotion of internationally recognized voluntary CSR performance and reporting guidelines. In addition to our continued support for the OECD guidelines, the government will promote the following international CSR performance guidelines.
First are the International Finance Corporation performance standards on social and environmental sustainability for extractive projects with potential adverse social or environmental impacts. These are the de facto performance benchmarks for projects in developing countries that require substantial financial investments.
Second are the voluntary principles on security and human rights for projects involving private or public security forces. At the 2009 plenary in Oslo, Canada was welcomed to this process as the first engaged government under the new participation framework.
Third is the global reporting initiative, or GRI, for CSR reporting by the extractive sector to enhance transparency and encourage market-based rewards for good CSR performance.
These widely recognized international standards will form the basis for Canada's commitment to supporting continuous improvement in the CSR performance of our extractive sector companies operating abroad.
The third pillar of this strategy involves support for the development of a new CSR centre of excellence. In order to address CSR in their operations, Canadian companies need information, education programs, and tools. This one-stop shop would provide information for companies, non-governmental organizations, and other relevant stakeholders. We're currently in discussion with the Canadian Institute of Mining, Metallurgy and Petroleum, CIM, in Montreal, to provide a home for the CSR centre of excellence, which will work with stakeholders to develop the centre.
Finally, the fourth pillar of this strategy calls for the creation of the office of the extractive sector CSR counsellor. This office would be responsible for providing assistance in the resolution of social and environmental issues related to Canadian extractive sector companies operating abroad. The counsellor will review and document the CSR practices of Canadian extractive companies operating abroad and advise stakeholders on the implementation of CSR performance guidelines. Requests for review by the counsellor may originate from an individual, group, or community, or their representatives, who reasonably believe that it or they may have been adversely affected by the activities of a Canadian extractive company outside Canada. The counsellor will undertake reviews with the consent of the involved parties.
This consensus-based approach will help facilitate constructive and meaningful engagement among stakeholders toward finding a sustainable resolution to CSR-related concerns.
The counsellor will issue a public statement after each review, including on requests that could not be completed because there was no agreement amongst the parties to proceed. The counsellor will also submit an annual report to be tabled in Parliament by the Minister of International Trade.
We anticipate that the advertisement for the counsellor's position will be published in the Canada Gazette in the next few weeks, and we are aiming to have the position filled by September 2009.
In conclusion, “Building the Canadian Advantage” strategy represents a comprehensive step in defining our role in supporting and promoting responsible corporate practice.
Thank you, Mr. Chair. We'd be pleased to answer the committee's questions.
