Responsible Business Conduct: How Canada’s National Contact Point Can Help Inform Smart Business Practices Abroad
Information Session - Monday, November 19, 2012
Today's Session
- Significance of Revised (2011) Guidelines
- The NCP: Recent trends & developments
- Canada’s NCP and broader CSR Strategy
- Your perspectives and open exchange
Awareness
- PWC 2010: 50% align company strategy with CSR
- KPMG 2011 - 70% increase in CSR Reporting since 2001
- Direct value of CSR initiatives on operations:
- Increase in direct revenue
- Improvement in market standing
- Increased reporting from emerging markets
- Direct value of CSR initiatives on operations:
- 2012 Survey on Extractive Sector: 85% motivated by community support
The OECD Guidelines
- Government-endorsed voluntary framework
- Applies to all industrial sectors
- 44 adhering countries
- NCP a required mechanism for implementation
- Substantively revised in May 2011
Value of the Guidelines: The Cost of Conflict
- Dispute Process: (UK CEDR)
- Every £1M in dispute costs = average 3 years of a managers’ average salary to resolve
- Lost productivity: (ICMM)
- Delays in mining operations worth US$ 3-5B : $20 M per day
- Loss of Social License to Operate: Priceless
Key Revisions: May 2011
- Human Rights Chapter
- government’s responsibility to protect, companies’ responsibility to respect
- Due Diligence
- extended to supply chains
- Stakeholder Engagement
- Strengthened NCP Procedural Guidance
Why Revise the Guidelines?
Strengthened Implementation and Promotion of Responsible Business Conduct
- Better reflection of globalized business environment
- 2009-10 – 50% increase in requests for review
- Country NCPs already reforming structure and activities
The Guidelines cover:
- I.Concepts and Principles
- II.General Policies
- III.Disclosure
- IV.Human Rights
- V.Employment and Industrial Relations
- VI.Environment
- VII.Combating Bribery, Bribe Solicitation and Extortion
- VIII.Consumer Interests
- IX.Science and Technology
- X.Competition
- XI.Taxation
Annexed Procedural Guidance for “Specific Instances”
II General Policies:
MNEs:
“Avoid causing or contributing to adverse impacts on matters covered by the Guidelines through their own activities.”
“Seek to prevent or mitigate an adverse impact, where they have not contributed to that impact, when the impact is nevertheless directly linked to their operations, products or services by a business relationship.”
IV. Human Rights:
“.... Enterprises should, within the framework of internationally recognised human rights, respect the international human rights obligations of the countries in which they operate as well as relevant domestic laws and regulations.”
“Carry out human rights due diligence as appropriate to their size, the nature and context of operations and severity of the risks …”
V. Employment & Industrial Relations
“… Workers …” instead of “…employees…” throughout
“When multinational enterprises operate in developing countries, where comparable employers may not exist, provide the best possible wages, benefits and conditions of work…. related to the economic position of the company, but should be at least adequate to satisfy the basic needs of the workers and their families.”
VII. Combating Bribery, Bribe Solicitation and Corruption:
2009 Recommendations for Further Combating Bribery of Foreign Public Officials in International Business Transactions
2009 Recommendation on Tax Measures for Further Combating Bribery of Foreign Public Officials
Emphasis on MNEs’ internal controls, ethics and compliance measures related to detection.
The NCP Mandate:
- Ensure effective implementation of OECD Guidelines, notably resolution of disputes
- Promote their awareness and broader application among stakeholders
Managing a “Specific Instance”
- Receipt of a Request for Review
- Initial Assessment
- Voluntary Dispute Resolution
- Final Statement
- Follow-up
Voluntary Dispute Resolution
Who: Notifier(s) + MNE (s)
When: MNE activity = contravention
How: Confidential dialogue
- Professional mediation
- Minimal cost to parties
Why: Effective in reaching resolution
OECD NCP Trends
- 2000-2008:164 cases. By 2012: 300
- Majority filed by 1) NGOs 2) labour unions
- 55% in non-adhering countries
- 38% involve parallel proceedings
- Increase in states’ collaboration via NCPs
OECD Trends (continued)
Most-cited chapters:
- II General Policies
- V Employment/Industrial Relations
- VI Environment
- Human Rights-related review requests: - 50% of new cases since 2011
Canada’s National Contact Point for the OECD Guidelines
- Canada a signatory to the Guidelines since 1976
- Canada’s NCP established in 2000
- Comprises 8-member interdepartmental committee
- “Social Partners” – CCC, CSN, and CLC
- 8th most-utilized NCP
- Terms of Reference at National Contact Point (www.ncp.gc.ca)
Canada’s CSR Strategy: Building the Canadian Advantage
- Enhance the Capacities of Developing Countries
- Promote Standards:
- VPs
- IFC’s PS
- GRI
- OECD
- Guidelines for MNEs
- Centre for Excellence in CSR (CfE)
- CSR Counsellor for the Extractive Sector
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Challenges
- Awareness
- Reluctance to Engage
- Selection of a mediator
- Confidentiality
- Parallel Proceedings
- Fact-finding / Site visits
- Coordination between NCPs
- Costs and timelines
The Benefit
Long –term sustainability for Canada and Canadian business
- Mitigating costs and risks of conflict
- Creating added value in the marketplace
- Leadership by Canadian businesses in markets abroad
Looking Ahead: The OECD’s Proactive Agenda
- Practical Guidance
- Stakeholder Engagement
- Financial Services
- Supply Chains
Canada’s National Contact Point (www.ncp.gc.ca)
Office of the CSR Counsellor for the Extractive Sector: csr-counsellor@international.gc.ca
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