Can Canada Restore Its Dudley Do-Right Reputation?

For many, Canada is a pristine wilderness whose denizens are polite, clean-cut and civilized. Canadians are, quite rightly, proud of their image as an easygoing, peace-loving nation.

However, a major blot on the country’s wholesome image is the questionable behaviour and ethics of some of its mining and energy companies both at home and overseas—prompting the introduction by Canada’s Ministry of Foreign Affairs, Trade and Development of a revised Corporate Social Responsibility (CSR) Strategy for the extractive sectors (Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the Canadian International Extractive Sector).

The new rules require Canadian natural resources companies involved in disputes with local communities to take part in a resolution process. Canadian mining and energy companies that run afoul of the new CSR policy will lose the support of such agencies as Export Development Canada and overseas embassies. Mining and oil companies rely on Export Development Canada for insurance against political risk and other losses, as well as for lines of credit and other financial support, and commercial attachés in embassies often play an important advisory role, particularly in politically unstable or violence-prone countries.

“The enhanced CSR strategy bolsters our commitment to helping our Canadian extractive companies strengthen their responsible business practices,” announced minister of international trade Ed Fast in November. “We expect our Canadian companies to promote Canadian values and to operate with the highest ethical standards.”

Fast was keen to stress the importance of “Canada Brand,” and it is noteworthy that the government is promising to strengthen the mandate of its official “CSR counsellor” to promote strong CSR guidelines to the Canadian extractive sector and to advise companies on incorporating the guidelines into their operations. The CSR counsellor will build on the work conducted at missions abroad by refocusing efforts on preventing, identifying and resolving disputes in their early stages. The post has been vacant for a year, and the previous incumbent made little headway, as companies were not obliged to cooperate. The new guidelines are also nonbinding, so it’s unclear if anything will change.

The revised CSR guidelines come a month after parliament passed a law to curb bribery by mining and energy companies by demanding more transparency from them. The law requires the disclosure of all payments made to domestic and foreign governments.

Canada is home to more than half the world’s mining companies, which are the largest investors in mining in South America and second only to South African companies for investment in Africa.

Local communities in Congo, Guatemala, Peru and Romania have accused Canadian companies of environmental and human rights abuses. With operations in more than 100 countries, it’s high time the Canadian government set guidelines for their behaviour abroad and monitored compliance. Perhaps they can also influence their neighbors to the South to reevaluate their own practices.