Canadian Manufacturing

Ottawa to punish firms that break social responsibility rules abroad

New corporate social responsibility rules will punish Canadian mining, energy firms working internationally



OTTAWA—The federal government is planning to punish bad behaviour by Canadian resource firms operating abroad if they break Ottawa’s new rules on corporate social responsibility.

International Trade Minister Ed Fast announced Ottawa will withdraw government support from Canadian mining and energy companies that refuse to help resolve disputes with local communities.

Fast said companies that do not co-operate will lose the support of Ottawa’s economic diplomacy and trade services, according to the prepared text of a speech he delivered in New Westminster, B.C.

The Canadian mining sector has large operations in developing countries, where companies have faced numerous allegations, from environmental destruction to human rights abuses.

Critics, meanwhile, have said the government hasn’t done enough to crack down on Canadian companies accused of transgressions abroad.

“We are ensuring that Canadian companies engage in our process because if they do not, or fail to embody CSR (corporate social responsibility) best practices, we will withdraw government … support,” the text of Fast’s speech said.

“Our message is simple: If you don’t play ball by doing business the Canadian way, then we won’t go to bat for you.”

The change in strategy came as a result of consultations Fast started last year.

He said he will also give the government’s corporate social responsibility “counsellor” a more proactive mandate to prevent and detect disputes between Canadian firms and local communities.

Ottawa is looking to fill the position left vacant after the departure of the last counsellor, Marketa Evans.

Until now, the role of the office was to solve problems by bringing parties together, not by investigating allegations.

The Canadian Network on Corporate Accountability (CNCA) launched a call to action in October 2013 for stricter rules governing Canadian resource firms working abroad.

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