29 March 2007
This report was prepared by the Advisory Group to the Roundtable process. The Advisory Group included representatives from industry associations; individuals currently or formerly employed by extractive-sector companies active overseas; civil society organisations; labour; academics; and the responsible investment sector. The report reflects agreement on the part of the Advisory Group on a set of recommendations for adoption by the Government of Canada. The report also includes recommendations for the consideration of industry, financial institutions, the investment community, pension funds, and civil society and as means to enhance the CSR performance of the Canadian international extractive sector working in developing countries.
The central recommendation in the report concerns the development of a Canadian CSR Framework. Advisory Group members urge the Government of Canada, in cooperation with key stakeholders, to adopt a set of CSR Standards that Canadian extractive-sector companies operating abroad are expected to meet and that is reinforced through appropriate reporting, compliance and other mechanisms.
The main components of the Canadian CSR Framework and their key attributes, as recommended in the report, are:
- The Canadian CSR Standards, for initial application, based on existing international standards that are supported by ongoing multi-stakeholder and multilateral dialogue.
- CSR reporting obligations based on the Global Reporting Initiative, or its equivalent during an initial phase-in period, at a level that reflects the size of the operation. The Global Reporting Initiative relies on an international multi-stakeholder process for its development and continued improvement and applies universally-applicable reporting principles, guidance and indicators for organisations of all sizes and sectors.
- An independent ombudsman office to provide advisory services, fact finding and reporting regarding complaints with respect to the operations in developing countries of Canadian extractive companies.
- A tripartite Compliance Review Committee to determine the nature and degree of company non-compliance with the Canadian CSR Standards, based upon findings of the ombudsman with respect to complaints, and to make recommendations regarding appropriate responses in such cases.
- The development of policies and guidelines for measuring serious failure by a company to meet the Canadian CSR Standards, including findings by the Compliance Review Committee. In the event of a serious failure and when steps to bring the company into compliance have also failed, government support for the company should be withdrawn.
- A multi-stakeholder Canadian Extractive Sector Advisory Group to advise government on the implementation and further development of the Canadian CSR Framework.
The report also recognizes that in many instances, Canadian extractive companies are operating in countries where governance capacity is weak, where there is corruption and, in some cases, armed conflict. In these circumstances, human rights protections and the enforcement of environmental regulations are often weak or non-existent. It is therefore recommended that the Government of Canada: work with those developing countries that seek to promote economic and social development through investment in the extractive sectors to develop strategies to optimize the social and economic benefits of extractive projects; exercise influence in multilateral and regional fora to advance the rights of indigenous peoples with relation to extractive-sector issues; enhance revenue transparency; build capacity for host country judicial systems; and work with like-minded countries to strengthen CSR requirements at the World Bank Group and the regional development banks related to lending and support to private sector clients.
In making these recommendations, the Advisory Group recognizes that the transformation of the ideas and concepts which underlie them into practical, workable measures will require additional work beyond that which was achievable during the Roundtable process. The Advisory Group further acknowledges that the CSR standards and reporting frameworks recommended for initial application fall short of addressing the full range of issues of concern regarding the extractive industry, particularly with regard to human rights. As a result, an ongoing process has been recommended to ensure that the standards and overall framework are improved over time.
The Advisory Group believes that, taken together, the recommendations contained in this report will drive significant progress towards achieving the high performance levels that Canadians expect of the Canadian extractive industry operating abroad. The Advisory Group commends the Government of Canada for providing the opportunity afforded by the Roundtables to develop these recommendations and urges all parties to work together on their implementation.
This report includes a background discussion and recommendations for each substantive area of the text. However, for the convenience of the reader, the complete set of Advisory Group recommendations are also found below.
