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Corporate backlash hits plans for CSR legislation

January 2010

Canadian extractive companies have mounted a campaign against proposed legislation that would make them accountable for the negative social and environmental impacts of their foreign operations.  

The measure, in the form of a private member’s bill being considered by the Canadian parliament, would create a mechanism allowing complaints against companies to be filed with the government, which could then investigate and publish a report on its findings within eight months.

Any company found to be acting in a socially or environmentally irresponsible manner could be excluded from investment by the Canada Pension Plan, and from financial support by the foreign affairs department and Export Development Canada, which provides export credits to domestic companies.

Bill C-300, as it is known, was introduced by John McKay, of the opposition Liberal Party, in April. It is now at the committee stage. However, it does not have the support of the minority Conservative government and therefore has a low chance of reaching the statute book, even though it is likely go to a final vote early this year.

Mining companies in Canada have strongly criticized the measure as naive and counterproductive, and have said they will oppose it at all points. Canada’s main gold producers, Barrick Gold, Goldcorp and Kinross Gold, issued a highly critical joint submission to the Standing Committee on Foreign Affairs and International Development in the House of Commons, which has been scrutinizing the bill.

The submission said the measure would encourage ‘a flood of frivolous and vexatious complaints’ against Canadian companies, could drive some out of Canada altogether, and would discourage investment in projects in developing countries.

It claimed the extractives sector in Canada will make faster CSR progress in other ways, including through the government’s newly-created office of the extractive sector corporate social responsibility  counsellor, which will offer mediation in responsible business practice disputes (EP11, issue 3, p3).

Although McKay’s bill does not have the support of companies, it has been backed by a number of NGOs and trade unions, including Amnesty International and the United Steelworkers of Canada.

The latter said there was a ‘huge disparity’ between the corporate behaviour of Canadian companies at home and abroad – and that the government’s present measures do not go far enough because they do not feature effective complaints mechanisms or sanctions.

Debate over the issue has been given added importance by the fact that the United Nations special representative on business and human rights, John Ruggie, is considering ways of setting up a global system to investigate allegations of corporate human rights abuses. Bill C-300’s provisions offer one way of assembling such a system, and the corporate backlash may inform Ruggie’s deliberations.




North America | Legislation

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