(Pix (c) Larry Catá Backer 2015)
The Organization for Economic Cooperation and Development has, for a long time now, put forward its Guidelines for Multinational Enterprises (2011) as a societal framework for the management of the behaviors of enterprises the operations of which cross borders. I have been considering the role of National Contact Points as a vehicle for the emergence of a societal jurisprudence for a normative system of business conduct related to human rights (See here and here).
One of the great issues of the OECD system is its reliance on states; the Guidelines are recommendation addressed by governments to multinational enterprises. And as such governments serve as both stakeholder and barrier to the development of the framework as an autonomous source fo governance coherent within its own terms. Another is the relationship between states and state owned enterprises where, as a result of their ownership relationship, the public character of SOE ownership might change the character of a commercial enterprise from purely private in character (as those terms are conventionally understood) to substantially public (with a profit objective aligned to state sovereign market power based goals) (discussed here and here).
It is the later problem that comes front and center in a recent action from the Canadian National Contact Point: Final
Statement on the Request for Review regarding the Operations of China
Gold International Resources Corp. Ltd., at the Copper Polymetallic Mine
at the Gyama Valley, Tibet Autonomous Region (April 8, 2015).The proceedings are notable for a number fo reasons--it suggests the potentially shrinking space within which states operating through commercial enterprises might be able to avoid the disciplinary effects of emerging global standards; it suggests as well the consequences for China of its now generation old "Go Out" (走出去战略) policy; it also suggests the deepening of the importance of global ownership chains for substantially extending the jurisdiction of the network of NCPs over the conduct of globally dispersed multinational enterprises, however organized; and most important, the development of sanctions for enterprise failures to participate in NCP proceedings now have some sharper teeth.
The post includes some preliminary analysis and the text of the Final Statement in Operations of China Gold International Resources Corp. Ltd.
The most interesting part of th Final Statement, and one that, if Canada sticks to its guns will mark a significant advance in the operationalization of the Guidelines framework was set out nicely in the executive summary to the Final Statement:
It is hereby reiterated that the Government of Canada expects that Canadian companies will promote Canadian values and operate abroad with the highest ethical standards. They are expected to respect human rights and all applicable laws, and to meet or exceed widely recognized international standards for responsible business conduct, including and in particular the OECD Guidelines for Multinational Enterprises. On November 14th, 2014, the Government of Canada launched its enhanced CSR Strategy Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility (CSR) in Canada’s Extractive Sector Abroad (Annex 4) which included new measures to be applied in case of non-participation in the NCP process. As the Company did not respond to the NCP’s offer of its good offices, the Company’s non-participation in the NCP process will be taken into consideration in any applications by the Company for enhanced advocacy support from the Trade Commissioner Service and/or Export Development Canada (EDC) financial services, should they be made. As the goal of both the NCP and the CSR Strategy is to encourage improvement in terms of a company’s use and integration of CSR standards and best practices, should the Company wish to be able to access future support of this type, it will need to submit a Request for Review to the NCP, or show the Government of Canada it has engaged in good-faith dialogue with the Notifier.
What makes this particularly potent is not so much its application to the controlling entity of a Chinese SOE, and thus, a challenge to Chinese state policy with respect to CSR (the Chinese are moving more aggressively to embrace, at least formally) an embrace of global CSR standards, though with perhaps some potentially important exceptions and waivers). Rather it is the possibility that this standard, and the repercussions it suggests might apply equally to U.S companies whose operations bleed over into Canada. That is a particularly interesting result because: (1) the Americans continue to take a fairly restrictive view of the utility and purpose of its NCP apparatus (with the result that its work remains a backwater); (2) American views of CSR, heavily tilted toward its own interpretation of the foundational importance of civil and political rights, might now have to accommodate some of the baseline premises of social, cultural and economic rights not otherwise given much play int he United States; (3) to the extent that CSR may touch on obligations to native people's the Canadian NCP approach to the Guidelines may challenge U.S. positions on native peoples and CSR both on native lands and elsewhere where their interests may be affected. Yet for all that potential, the functional effect of this approach may be quite modest, especially if the procedures become, in effect, merely an annoying transaction cost of doing business.
As important, the role of NCPs in fostering mediation as a critical first step is to be lauded. While governance formalists sometimes become obsessed with the use of private conflict to build public law (or the societally based jurisprudence around private governance systems) (cf. here re investment treaty arbitration), that focus is misdirected, unsustainable, and inefficient. It is misdirected because the NCP procedures are not nor are they capable for substituting for legal action. It does, however, suggest, the limitations of legal remedies within the domestic legal orders of interested states (cf. here). It is unsustainable because essentially quirky (by necessity as a consequence of the essence of the state as a unique governance organ representing mass tastes for legislation) domestic legal orders are incapable of serving as the moving force in legal harmonization. That has traditionally been a function either of international organizations (and the development of customary law), or of the convergence of private practices among leading economic forces and expressed in governance. It is inefficient precisely because the process of domestic public law making through national judicial organs cannot reach the entirety of the supply or production chains that together constitute the global enterprise and the piecemeal efforts of national courts to affect portions of such global chains can either distort aggregate governance or more likely create multiple and incoinsistant standards around which the enterprise must navigate.
As important, the Final Statement deepens the notion of a broad standing rule for NCP proceedings. I noted the importance of this broadened approach to standing the the 2009 proceedings involving Vedanta before the U.S. NCP (see here). This approach provides civil society with a substantially expanded role to represent those who are incapable of doing so though they are directly affected by the humabnr ights wrongs fo enterprises and the states complicit in those behaviors. There is a danger, though, that such broad representation might be abused, especially where the civil society actors have no contact with the individuals on whose behalf they purport to act. But that can be policed through the development of appropriate standards fo review. It might, though, also require an addition to the procedural rules of NCP proceedings. I might error on the side of broader rather than narrower more legalistic standing given that the proceedings are voluntary and the there is no legal effect to the NCP proceedings.
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Executive Summary
On January 28, 2014, the Canada Tibet Committee (hereinafter referred to as “CTC” or “the Notifier”), on behalf of a group of affected communities, submitted to the National Contact Point (NCP) the Request for Review regarding the mining activities of China Gold International Resources Corp. Ltd. (hereinafter referred to as “China Gold” or “the Company”) in the Gyama Valley of China’s Autonomous Region of Tibet.
The Notifiers raised issues with regards to the 2000 and 2011 OECD Guidelines for Multinational Enterprises, specifically the Chapters relating to General Policies, Human Rights, the Environment, Employment and Industrial Relations, and Disclosure (a full list is included in Annex 1). The Notifiers indicated that they were seeking dialogue with China Gold to have the company align with the OECD Guidelines for Multinational Enterprises. The Notifiers put forward several recommendations to achieve this goal.
The Company declined to respond to the Request for Review or the information contained therein.
Based on the materials presented in the Request for Review and further background research, the NCP’s Initial Assessment was that the issues raised were in part substantiated, and that the Specific Instance merited further examination. The review of the Specific Instance was conducted using the 2011 edition of the OECD Guidelines for Multinational Enterprises. Pursuant to the process outlined in the OECD Guidelines for Multinational Enterprises, the Canadian NCP offered its “good offices” to facilitate dialogue between the Parties, giving the deadline of November 28th, 2014, for a response, thus allowing three months for the Parties to accept the NCP’s good offices. The Initial Assessment can be found in Annex 2.
An overview of the Chronology of the NCP process can also be found in the section Request for Review Process for the Specific Instance, pages 4 to 5
The Notifiers agreed to the Canadian NCP’s offer of its good offices. The Company did not engage or respond to the Canadian NCP’s correspondence and follow-up outreach. As the dialogue facilitation requires the consent and participation of both Parties, the NCP is unable to conduct dialogue facilitation for the Parties and must close the Specific Instance. With the issuance of this Final Statement on April 8, 2015, the NCP concludes the Request for Review regarding the mining activities of China Gold International Resources Corp. Ltd. (hereinafter referred to as “China Gold” or “the Company”) in the Gyama Valley of China’s Autonomous Region of Tibet.
It is hereby reiterated that the Government of Canada expects that Canadian companies will promote Canadian values and operate abroad with the highest ethical standards. They are expected to respect human rights and all applicable laws, and to meet or exceed widely recognized international standards for responsible business conduct, including and in particular the OECD Guidelines for Multinational Enterprises. On November 14th, 2014, the Government of Canada launched its enhanced CSR Strategy Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility (CSR) in Canada’s Extractive Sector Abroad (Annex 4) which included new measures to be applied in case of non-participation in the NCP process. As the Company did not respond to the NCP’s offer of its good offices, the Company’s non-participation in the NCP process will be taken into consideration in any applications by the Company for enhanced advocacy support from the Trade Commissioner Service and/or Export Development Canada (EDC) financial services, should they be made. As the goal of both the NCP and the CSR Strategy is to encourage improvement in terms of a company’s use and integration of CSR standards and best practices, should the Company wish to be able to access future support of this type, it will need to submit a Request for Review to the NCP, or show the Government of Canada it has engaged in good-faith dialogue with the Notifier.
In the absence of receipt of information from the Company on its operations and their alignment with the OECD Guidelines, and based on the information provided by the Notifier, it is the prima facie assessment of the NCP that the Company has not demonstrated that it is operating in a manner that can be considered to be consistent with the voluntary OECD Guidelines for Multinational Enterprises. In this context, the NCP recommends:
i. That the Company familiarise itself with the OECD Guidelines for Multinational Enterprises and promptly take steps to incorporate them into company operations. Canada, as an adherent to the OECD Guidelines expects all Canadian companies working abroad, and all multinational companies working in Canada, to respect and implement the OECD Guidelines as well as other CSR standards, as outlined in Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility (CSR) in Canada’s Extractive Sector Abroad.The NCP’s is of the view that dialogue between the Company, the Notifier, and the individuals the Notifier represents would be of great benefit in moving towards resolution of the issues raised in the Request for Review. Should the Company and Notifier be able to engage in good faith dialogue following the issuance of this Final Statement, the NCP requests that the Parties keep it informed. This will help the NCP better respond to clients’ needs in the future.
ii. That the Company engage in dialogue with the Notifier, the individuals the Notifier represents, and stakeholders, including its workers and local communities that are affected by the issues raised in the Request for Review.
iii. That the Notifier continue its efforts to reach out to the Company to engage in dialogue.
iv. That the Company conduct due diligence through a review of its environmental, human rights, labour, and health and safety activities through audits of past and current activities, and assessments of the potential impacts of anticipated activities on the environment, human rights, labour, and health and safety.
v. Where it is within its control, that the Company take steps to address the environmental, human rights, labour, and health and safety issues raised in the Request for Review. Where there are differences between international and local practices, that the Company work with stakeholders and the local government in an effort to align its operations with local and international CSR standards. The Company should follow through on recommendations stemming from the reviews and audits mentioned in Recommendation IV, in collaboration with stakeholder groups including its workers and local communities affected by its operations
vi. Where and when possible, that the Company improve its efforts to engage transparently with stakeholders, including its workers and local communities, about its policies and practices and their implementation. That the Company disclose any past reports and/or audits that were conducted, and, that the company commit to, and follow-through on, disclosing any future reports or audits it produces or commissions with relation to its activities. That the company engage meaningfully with stakeholders, including its workers and local communities, throughout these reporting and auditing processes, and share the results with stakeholders, including recommendations.
The NCP considers this Specific Instance to be closed.
Introduction to the OECD Guidelines for Multinational Enterprises
The OECD Guidelines for Multinational Enterprises are recommendations addressed by governments to multinational enterprises operating in or from adhering countries. They provide voluntary principles and standards for responsible business conduct in areas such as employment and industrial relations, human rights, environment, information disclosure, combating bribery, consumer interests, science and technology, competition, and taxation.
Each OECD Member State is obliged to establish an NCP for purposes of promoting the Guidelines and contributing to the resolution of issues that arise relating to the implementation of the OECD Guidelines in specific instances. The NCP will review specific instances of alleged non-observance of the OECD Guidelines by a multinational enterprise in Canada, or by a Canadian multinational enterprise operating in a country without an NCP.
Upon receiving a Request for Review in relation to a specific instance and allegations of non-observance of the Guidelines, an NCP will conduct an initial assessment with a view to determining whether the issues raised merit further examination. If the NCP’s conclusion is that the issues raised merit further examination, the NCP will then offer its “good offices” as a platform for facilitated discussion between the Parties in an attempt to resolve the issues. If the Parties involved do not reach agreement on the issues raised, the NCP issues a statement, and makes recommendations as appropriate, on the implementation of the Guidelines.
It is important to note that the Guidelines are not laws. Similarly, NCPs are not law enforcement agencies or courts. The primary value-added of NCPs is the facilitation of dialogue for purposes of resolving disputes.
Additional information on the OECD Guidelines can be found in Annex 3. The Procedures Guide for Canada's National Contact Point for the Organisation of Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises can be found in Annex 5. The Terms of Reference Canada’s National Contact Point for the OECD Guidelines for Multinational Enterprises are attached in Annex 6.
Location and Parties to the Specific Instance
The Request for Review was submitted by the Canada Tibet Committee, a Canadian non-governmental organisation based out of Montreal, QC. It was submitted on behalf of members of the affected communities, who are not named for reasons of personal security.
The Request for Review is addressed to China Gold, a mining company registered and headquartered in British Columbia, and listed on the Toronto Stock Exchange (TSX). China Gold is the flagship, and only overseas listing vehicle, of the largest gold producer in China, China National Gold Group Corporation (China National Gold), which is a state-owned enterprise. In 2010, China Gold acquired the Gyama mine from China National Gold (which owned 51%) and Rapid Results Investments of the British Virgin Islands (which owned 49%).
The Request for Review centers on the Gyama Copper Polymetallic Mine located in the Siphub Village in the Gyama Valley, in China’s Autonomous Region of Tibet.
Specific Instance
The NCP was asked by the Notifier, on behalf of a group of affected communities, to review the specific instance regarding the mining activities of China Gold on the basis that China Gold is registered in Canada. China is not an adherent to the OECD Guidelines. The CTC has asked the NCP to facilitate dialogue between representatives of the CTC and China Gold for the purposes of resolving the issues of concern raised within the Request for Review.
Documents received from the Notifier indicate that the Request for Review was largely prompted by a March 29, 2013, landslide that hit part of the Gyama Valley, resulting in the death of 83 mine workers living in a mining camp. The workers were reportedly asleep in their tents when they were buried by a mass of mud, rocks and debris that was three kilometres wide and thirty metres deep. The camp belongs to Tibet Huatailong Mining Development Ltd., a wholly owned subsidiary of China Gold. The Notifier alleges that the landslide was a manmade disaster related to mining operations and that the Company had ignored previous warnings and local protests. The Request for Review also alleges other adverse environmental impacts resulting from the mine, human rights issues such as discriminatory hiring and forced evictions, and inadequate disclosure by the company, claiming those are indicators of a lack of adherence to OECD Guidelines for Multinational Enterprises (OECD Guidelines). This prompted the Notifier’s attention in terms of hiring practices, environmental and human rights issues, and disclosure of information, as outlined below:
A) Environment: With respect to the environment, the Request for Review alleged that the Company: 1) failed to undertake sufficient environmental due diligence; 2) failed to design and implement adequate environmental and health and safety mitigation measures; and 3) contributed to the loss of life and prevented access to compensation for families.
B) Human Rights: With respect to human rights, the Request for Review alleged that the Company: 1) engaged in discriminative hiring practices; 2) forced evictions and resettlement of land; 3) violated freedom of religious issues through denial of access to religious sites; 4) violated the freedom of expression and to project-related information disclosure; and 5) by contributing to negative environmental factors, violated the rights of local communities to water and to health.
C) Disclosure: With respect to information disclosure, the Request for Review alleged that the Company: 1) failed to disclose accurate information about the environmental risks associated with the project; 2) failed to disclose the full impact of the project to local communities; and 3) failed to allow independent inspectors to ascertain the causes of the aforementioned landslide disaster.
In the Request for Review, the Notifier cited sections from several chapters of the OECD Guidelines on Multinational Enterprises: General Policies, Disclosure, Human Rights, Employment and Industrial Relations, and Environment. Some of the OECD Guidelines that were cited were derived from the 2000 Edition, and the NCP based its assessment on the 2011 Guidelines, and determined the corresponding paragraphs within the 2011 Edition. The full list of sections cited, and the cross references between the 2000 and 2011, can be found in Annex 1.
Request for Review Process for the Specific Instance
On January 29, 2014, the Canadian NCP received the Request for Review entitled: The Operations of China Gold International Resources Corp. Ltd., at the Copper Polymetallic Mine at the Gyama Valley, Tibet Autonomous Region.
Given that the Request for Review included end notes that linked to several websites and PDF documents, the NCP requested that the Notifier submit the supporting documentation directly to the NCP. This procedure has been established to ensure clarity with respect to the reference documentation cited and to mitigate against the possibility that information on websites may be changed or removed while the review is underway. The Notifier submitted the supplementary documentation between February 7-14, 2014. The NCP conducted research to determine the operational status of the Company, and to determine the appropriate contact for the Company. The NCP conducted outreach to the Company, and on March 28, 2014, emailed a letter to the Company requesting a reply in relation to the content of the Request for Review that was submitted by the Notifier. The Company responded on April 11, 2014 indicating that they would not engage or provide information, and the NCP confirmed this position in follow-up outreach calls.
The NCP reviewed all the information presented in the initial submission of the Request for Review, as well as the supplementary materials presented by the Notifier at the request of the NCP, conducted additional research on the Specific Instance, and assessed the Request for Review against the criteria listed in the Procedures Guide for Canada's NCP for the OECD Guidelines (see section OECD Guidelines and the NCP Mandate), upon which the NCP made its determination that the issues raised in the Request for Review merited further examination by the Canadian NCP.
As per the Procedures Guide for Canada’s National Contact Point for the OECD Guidelines for Multinational Enterprises, on July 25, 2014, the NCP shared a draft of the Initial Assessment with the Parties to receive their input for fact-checking, and requested a response by August 21, 2014. The Notifiers responded on August 7, 2014, that they were in agreement with the representation of the specific instance in the draft Initial Assessment. The Company responded on August 14, 2014, stating that they would not comment on the draft Initial Assessment.
Given the NCP’s determination that the issues raised in the Request for Review merited further examination, the NCP offered its good offices to the Parties, and submitted the finalised Initial Assessment to the Parties on August 29th, 2014. In order to allow the Parties time to communicate with their representatives and/stakeholders, and make an informed decision on participating in the NCP’s offer for dialogue facilitation, the NCP requested the Parties respond within three months to its offer of its good offices, giving November 28th as the deadline for the Parties to confirm their willingness to engage in the dialogue facilitation process. In this communication, the NCP noted that should the NCP’s good offices be accepted, it would work with the Parties to structure a dialogue facilitation process that would best meet the needs of the Parties to the Request for Review. It was also reiterated that as per the NCP’s procedures, the end of the Request for Review process includes the release of the NCP’s Final Statement that outlines the process and outcomes of the Request for Review process. The NCP reiterated its priority for helping parties to resolve differences through dialogue facilitation.
The Notifiers responded on September 23rd, 2014, noting their willingness to engage in dialogue facilitation. The Notifier also outlined what it felt were key elements for a dialogue facilitation process to meet their needs.
The Government of Canada expects that Canadian companies will promote Canadian values and operate abroad with the highest ethical standards. They are expected to respect human rights and all applicable laws, and to meet or exceed widely recognized international standards for responsible business conduct, including and in particular the OECD Guidelines for Multinational Enterprises. On November 14th, 2014, the Government of Canada launched its enhanced CSR Strategy Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad (Annex 4), in which new measures were put in place for companies that do not participate in the NCP’s process:
“While participation remains voluntary, a decision by either party not to participate in the CSR Counsellor Office’s or NCP’s review process will be made public.On November 28th, the NCP wrote to the Company to remind them of the deadline for accepting the offer of the NCP’s good offices, to encourage them to participate in the dialogue facilitation process offered by the NCP, and to communicate the expectations of the recently released enhanced CSR Strategy. The Company did not, however, respond further to the NCP’s correspondence following the NCP sharing the finalised Initial Assessment with the Parties and its offer of its good offices, as well as subsequent attempts by the NCP to engage with the Company. In sum, the Company failed to respond to the request to engage in dialogue facilitation.
Companies will also face withdrawal of TCS and other Government of Canada advocacy support abroad for non-participation in the dialogue facilitation processes of Canada’s NCP and Office of the Extractive Sector CSR Counsellor.
In addition, in line with the Government’s ‘economic diplomacy’ approach, Government of Canada services include the issuance of letters of support, advocacy efforts in foreign markets and participation in Government of Canada trade missions. Canadian companies found not to be embodying CSR best practices and who refuse to participate in dispute resolution processes contained in the CSR Strategy, will no longer benefit from economic diplomacy of this nature. Furthermore, such a designation will be taken into account in the CSR-related evaluation and due diligence conducted by the Government of Canada’s financing crown corporation, Export Development Canada (EDC), in its consideration of the availability of financing or other support.”
To ensure that the Company was well informed of the potential implications of not participating in the dialogue facilitation process offered by the NCP, and to offer them the opportunity to engage, upon completion of the draft of the Final Statement, the NCP wrote to the Company on February 18, 2015, in order to: 1) inform them of the new provision in the enhanced CSR Strategy and again offer its good offices; and, 2) if the good offices are not accepted, to review the draft Final Statement for factual errors. The Notifier was also requested to review the draft Final Statement for factual errors. The Company did not respond to the NCP by the March 9th deadline, nor at the time of issuance of the Final Statement.
Analysis and Considerations
Operational Status of the Company: The NCP undertook legal research and analysis to identify the legal and operational status of the Company. As noted in the Summary section above, China Gold is a TSX listed mining company trading under the symbol CGG that is focused on gold production and acquisitions. Based in Vancouver, this company is China National Gold’s overseas flagship vehicle. The Canadian NCP found that these ties to Canada substantiated the Canadian NCP’s jurisdiction over this specific instance.
Initial Assessment of Materiality and Substantiation: Many of the themes presented in the Request for Review were of a cross-cutting nature, and the Canadian NCP reviewed them in that context. The Request for Review rests on allegations relating to environmental, human rights and disclosure issues, which are identified in further detail in the Issues Raised and OECD Guidelines Cited section above. Based on the NCP’s assessment, some of the issues raised surrounding labour practices and resettlement, freedom of association and assembly appear to be Government of China policies, and would thus be beyond the mandate of the Canadian NCP. However, the NCP believed that should dialogue facilitation be accepted by both Parties, this might not preclude discussions aimed at establishing a better understanding of these issues. Furthermore, the Canadian NCP determined that the issues that pertain to the Company’s alleged actions in terms of environmental due diligence, health and safety issues, stakeholder engagement, and adequate disclosure on these issues appear material, and substantiated at least in part. Based on the NCP’s review of the documentation provided by the Notifier, and subsequent analysis of the factors outlined above, the NCP found in its Initial Assessment that some of the issues presented in the Request for Review were partially substantiated, and there was merit for further examination.
Offer of the NCP’s Good Offices: The NCP offered its good offices to the Parties in order help facilitate dialogue between the parties, in an effort to assist them in resolving the issues outlined in the Request for Review that were within the Parties’ purview. The NCP also noted that should the NCP’s good offices be accepted, it would work with the Parties to structure a dialogue facilitation process that would best meet the needs of the Parties to the Request for Review. The NCP reiterated the importance of communication and dialogue towards the resolution of the issues raised in this Request for Review and the overall advancement of the community and stakeholder interests.
The Notifier responded to the NCP, accepting the offer of its good offices. The Notifier outlined several structural elements of dialogue facilitation that it felt would assist in productive dialogue process, given the dynamics of the Specific Instance and the potential implications for the individuals they represent. The Company did not respond to the NCP’s outreach and communications following the NCP’s Initial Assessment.
The fundamental principle underlying dialogue facilitation is that both parties to an issue must be engaged. As the Company has refused to engage in the NCP process, both in writing preceding the Initial Assessment, and by not responding to the NCP’s further communications, the NCP is not able to facilitate dialogue between the Parties of this Specific Instance. Given this, the NCP must now close the Specific Instance.
As the purpose of the NCP is to encourage better implementation of the OECD Guidelines, and that the Request for Review was deemed to be merited by the NCP and dialogue between the Parties was considered to be helpful in this Specific Instance, it is reiterated that should the Company change its view and wish to participate in good faith dialogue facilitation with the Notifier, it may itself submit a Request for Review requesting dialogue facilitation. The NCP notes that should this occur, a new Request for Review process would be launched and the full process would be followed.
Launch of Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad: As was noted in paragraph 29, the enhanced CSR Strategy stated that “Companies will also face withdrawal of TCS and other Government of Canada advocacy support abroad for non-participation in the dialogue facilitation processes of Canada’s NCP and Office of the Extractive Sector CSR Counsellor.” Given this new feature in Canada’s CSR Strategy which would impact a company’s access to Government of Canada support from the Trade Commissioner Service and/or Export Development Canada (EDC) financial support, and that the NCP informed the Company of the launch of the CSR Strategy, the Company’s non-participation in the NCP process will be taken into consideration in any applications by the Company for such services, should they be made. As the goal of both the NCP and the CSR Strategy is to encourage improvement in terms of a company’s use and integration of CSR best practices, should the Company wish to be able to access future support of this type, they will need to submit a Request for Review to the NCP, or show good-faith dialogue with the Notifiers.
Recommendations
In the absence of receipt of information from the Company on its operations and their alignment with the OECD Guidelines, and based on the information provided by the Notifier, it is the prima facie assessment of the NCP that the Company has not demonstrated that it is operating in a manner that can be considered to be consistent with the voluntary OECD Guidelines for Multinational Enterprises. In this context, the NCP recommends:
i. That the Company familiarise itself with the OECD Guidelines for Multinational Enterprises and promptly take steps to incorporate them into company operations. Canada, as an adherent to the OECD Guidelines expects all Canadian companies working abroad, and all multinational companies working in Canada, to respect and implement the OECD Guidelines as well as other CSR standards, as outlined in Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility (CSR) in Canada’s Extractive Sector Abroad.The NCP is of the view that the dialogue between the Company, the Notifier, and the individuals the Notifier represents would be of great benefit in moving towards resolution of the issues raised in the Request for Review. Should the Company and Notifier be able to engage in good faith dialogue following the issuance of this Final Statement, the NCP requests that the Parties keep it informed. This will help the NCP better respond to clients’ needs in the future.
ii. That the Company engage in dialogue with the Notifier, the individuals the Notifier represents, and stakeholders, including its workers and local communities that are affected by the issues raised in the Request for Review.
iii. That the Notifier continue its efforts to reach out to the Company to engage in dialogue.
iv. That the Company conduct due diligence through a review of its environmental, human rights, labour, and health and safety activities through audits of past and current activities, and assessments of the potential impacts of anticipated activities on the environment, human rights, labour, and health and safety.
v. Where it is within its control, that the Company take steps to address the environmental, human rights, labour, and health and safety issues raised in the Request for Review. Where there are differences between international and local practices, that the Company work with stakeholders and the local government in an effort to align its operations with local and international CSR standards. The Company should follow through on recommendations stemming from the reviews and audits mentioned in Recommendation IV, in collaboration with stakeholder groups including its workers and local communities affected by its operations.
vi. Where and when possible, that the Company improve its efforts to engage transparently with stakeholders, including its workers and local communities, about its policies and practices and their implementation. That the Company disclose any past reports and/or audits that were conducted, and that the Company commit to, and follow-through on, disclosing any future reports or audits it produces or commissions with relation to its activities. That the company engage meaningfully with stakeholders, including its workers and local communities, throughout these reporting and auditing processes , and share the results with stakeholders, including recommendations.
Conclusion
With the publication of this Final Statement, the NCP considers this Specific Instance to be closed.
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