Canada Establishes Ombudsperson to Investigate Allegations of Human Rights Abuses by Canadian Corporations Abroad

On January 17, Canada's Minister of International Trade François-Philippe Champagne announced the creation of the Canadian Ombudsperson for Responsible Enterprise (CORE) and a multi-stakeholder advisory body to advise the government and the CORE on responsible business conduct abroad (the Advisory Body). The CORE's mandate will initially focus on the mining, oil and gas and garment sectors, but may expand to other sectors in the future.

What You Need To Know

• The CORE's mandate will include investigating allegations of human rights abuses connected to Canadian corporate activity abroad and, wherever possible, assisting in the collaborative resolution of disputes or conflicts between impacted communities and Canadian companies.
• The CORE's powers will include the initiation of investigations (without the need for consent from the business being investigated), and the publication of documents and independent reports at various stages of investigations.
• The CORE will have a broad power to make recommendations, including recommendations relating to compensation, changes to corporate policy, apologies, changes to government policy, and the withdrawal of trade advocacy support and/or Export Development Canada financial support. It will also have the power to monitor and report on the implementation of its recommendations.
• The Advisory Body's role will be to provide advice to the federal government about responsible business conduct abroad and to support the government in developing the CORE's mandate and operating procedure. Professor John Ruggie of the Harvard Kennedy School, who is well known for his work in the area of corporate social responsibility, will act as Honourary Chair to the Advisory Body. A wide range of organizations have announced that they will be members, including the Mining Association of Canada, the Canadian Association of Petroleum Producers, Prospectors and Developers Canada, the Canadian Labour Congress, United Steelworkers and Amnesty International.

The CORE and the Advisory Body

The CORE and the Advisory Board represent a change in the Canadian government's approach to corporate social responsibility (CSR) abroad. In 2009, Canada introduced a new CSR framework for the extractive sector through the creation of the Extractive Sector Corporate Social Responsibility (CSR) Counsellor role. That framework was enhanced in 2014. The Extractive Sector CSR Counsellor acted as a special advisor to the Minister of International Trade, and provided CSR-related advice to extractive sector companies. However, unlike the CORE, the Extractive Sector CSR Counsellor did not have the power to initiate independent investigations and focused on the extractive sector alone. Additionally, much of the Extractive Sector CSR Counsellor's work remained confidential.

Details regarding the appointment of the CORE and the specific operating procedures for it and the Advisory Board have not been released. The government has indicated that it intends to appoint the CORE "as soon as possible," and that it will select an appointee based on a transparent and merit-based selection process. The CORE's term will be up to five years. In the interim, the Extractive Sector CSR Counsellor will continue his mandate to May 2018.

Although the complaint process has not been established, it is anticipated that there will be an online complaint portal through which members of the public can submit complaints to the CORE’s office. However, neither the CORE nor the Advisory Board will affect the right of any party to bring legal action in any Canadian jurisdiction regarding alleged unlawful conduct of Canadian companies abroad.

Implications for Canadian Businesses

Companies in the targeted sectors should review and, if required, update their codes of conduct and corporate policies to ensure that they:

• clearly define the roles and accountability of management with respect to ethical conduct abroad and human rights standards, as well as the oversight role of the board and its committees; and
• establish appropriate reporting channels and protocols (internally and with third parties) to prevent and manage these risks.