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New recommendations on corporate responsibility

May 19, 2007

A series of Canadian government-sponsored roundtables on corporate social responsibility (CSR) in the extractive industries sector (e.g. mining, oil and gas) has resulted in a set of recommendations that could raise the bar on Canadian government oversight of corporate actions.

The consensus recommendations, outlined in a report from an Advisory Group made up of industry, trade union and civil society representatives, include measures to increase industry transparency and tie government assistance to performance on human rights standards.

In many cases, the recommendations could be applicable to other sectors including the apparel and textile industries, and thereby form a useful guide to establishing a stronger regulatory regime in Canada to limit sweatshop labour abuses in apparel supply chains.

About the Global Reporting Initiative

The Global Reporting Initiative (GRI) produces guidelines for corporate reporting including reporting on environmental, labour and human rights performance. The guidelines are produced through multi-stakeholder dialogue and are regularly updated. The goal of the GRI is to set common standards for transparent corporate reporting on sustainability issues so that results can be better compared between organizations. The GRI is developing a supplemental set of standards that are applicable to apparel and footwear companies.

For example, the group recommends adoption of a set of standards for overseas operations based on World Bank social and environmental standards, mandatory annual public reporting on CSR based on the Global Reporting Initiative guidelines, and investor disclosure requirements for mutual and pension funds.

The Group proposes that company adherence to social and environmental standards be enhanced by appointing an independent ombudsman to investigate complaints of violations. The ombudsman’s findings would be reviewed by a tri-partite Compliance Review Committee that would make public recommendations on steps to be taken by companies it deemed in violation of international standards. If no action were taken, the Committee could recommend withdrawal of government funding or services to the company in question.

The Canadian Network for Corporate Accountability (CNCA) organized civil society participation in the government roundtables last year. In response to the Advisory Group’s report, the CNCA recommended that the CSR framework set out in the report be implemented immediately – preferably through binding legislation – and that the government go beyond the steps outlined in the consensus document in a few areas.

“What’s useful about the recommendations is that the labour standards that Canadian mining firms are being asked to meet are firmly centred on the International Labour Organization’s core labour standards,” said Ian Thomson, Program Coordinator for Corporate Social Responsibility of KAIROS: Canadian Ecumenical Justice Initiatives. Thomson also pointed to the idea of an ombudsman and review committee as a model that might work in other sectors, provided they have well-defined powers and mandates enshrined in Canadian law.

“However,” he said, “some of the recommendations may be more difficult to implement in the apparel sector since the ownership structure of mining companies is more direct than apparel companies that rely on a chain of subcontractors.”

In recent years, regular human rights and environmental complaints about Canadian mining companies have brought corporate responsibility to the forefront. The Canadian roundtable process was initiated in response to a set of strong recommendations from the Parliamentary Standing Committee on Foreign Affairs and International Trade, which called for the regulation of Canadian mining companies operating abroad.

The Ethical Trading Action Group made a submission to the roundtables which is available for download here. (PDF) 

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