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Responsible Business Conduct Abroad: Canada’s Strategy For The Future (2022 To 2027)

Guiding Canadian Companies Positive Impact Abroad

Global Affairs Canada, through the Trade Commissioner Service, aims to work with other institutions to support Canadian companies in incorporating responsible business practices abroad

Responsible Business Conduct Abroad: Canada’s Strategy for the Future (2022 to 2027) builds upon two previous strategies, namely Canada’s enhanced Corporate Social Responsibility (CSR) Strategy, “Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad”, which was enacted in 2014, and Canada’s first CSR strategy, “Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the Canadian Extractive Sector Abroad,” which was adopted in 2009.

The core idea of “Doing Business the Canadian Way” revolves around the values of responsibility, sustainability and building a better future for all. It thus places a strong emphasis on respecting human rights, including advancing the rights of under-represented groups, protecting the environment, advocating for gender equality, combatting discrimination and furthering diversity and inclusion.

The aim of the Government of Canada is to encourage Canadian companies, both operating at home and abroad, to satisfy high standards of responsible business conduct. Many Canadian businesses are already widely recognized as leaders in responsible business practices that are integrated throughout every facet of their operations.

This Strategy envisions governmental support to Canadian companies for starting up, scaling up, and accessing new global markets, by providing them the tools, guidance, and support necessary to operate according to high ethical and environment standards while remaining competitive. This line of action is consistent with the government’s approach to inclusive trade, and the effort to ensure Canadian companies make a positive impact on the local communities in which they operate, improving the lives and livelihoods of people both at home and abroad.

Responsible Business Conduct Abroad: Canada’s Strategy for The Future is a fiveyear strategy (2022–2027) that sets out priorities for the Government of Canada to support Canadian companies that are active abroad. “It recognizes a culture shift, whereby responsible business conduct (RBC) is increasingly seen as central to business success, and it recognizes the role that the Government of Canada, through the Trade Commissioner Service (TCS) and partners, can play in helping Canadian companies achieve world-leading responsible business practices”, says The Honourable Mary Ng, P.C., M.P., Minister of International Trade, Export Promotion, Small Business and Economic Development.

This Strategy accordingly provides a framework and new innovative tools, such as digital resources, the development of a standard and a requirement for all TCS clients to complete a Digital RBC Attestation. These efforts will assist all Canadian companies in integrating leading responsible business practices into their operations regardless of their size, sector of industry, or scope of activities.

These policies are closely connected to other values embraced by the Government: a rules-based trading system, which recognizes, respects, protects and fulfills the rights of Indigenous peoples, and children, eradicating poverty, combatting discrimination, promoting gender equality and inclusion and diversity—including digital inclusion.

There are three interconnected elements guiding the implementation of the Responsible Business Conduct Abroad Strategy: Building awareness and championing action through the Trade Commissioner Service; increasing uptake of RBC via a focus on due diligence and accountability; strengthening the global RBC ecosystem by contributing to the rulesbased international system

Furthermore, these policies are aligned with the Government of Canada’s Feminist Foreign Policy, including its Feminist International Assistance Policy.

At the global level, Canada supports further improvements of the RBC policies through the ratifying of several international treaties and adherence to various guidelines that promote RBC, including the United Nations Guiding Principles on Business and Human Rights (Guiding Principles), the OECD Guidelines on Multinational Enterprises (OECD Guidelines) and, as it relates to respect for and recognition of the human rights of Indigenous Peoples, the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).

Such an approach has important positive effects on Canadian businesses.

The first relates to combatting risks. As Canadian companies continue operating abroad and expanding to new markets, they may face increased risks. Integrating RBC helps companies evaluate operations through a broader lens, ultimately enhancing their reputation and competitiveness. The second aims to build resilience, the need for which was emphasized by the Covid-19 pandemic. Specifically, throughout the pandemic, companies with strong responsible business policies and practices were better able to assess their production and supply chain risks, allowing them to address potential problems and have mitigation strategies in place.

Equally important are the competitive advantages of RBC that can lead to investment attraction, increased brand value, and customer attraction and retention, as more consumers seek to buy ethically produced goods, and partners (including financial partners) strive to meet Environmental, Social, Governance (ESG) requirements. This can also lead to the creation of greater potential for increased access to capital.

Legislative changes reflect these efforts. July 2020 saw the introduction of an amendment to the Customs Tariff prohibiting imports of goods that are mined, manufactured or produced, wholly or in part, by forced labor. In the next step, the Government is committed to enacting legislation to eradicate forced labor from Canadian supply chains and ensure that Canadian businesses operating abroad do not contribute to human rights abuses. The aforementioned legislative activities were much-needed, as some international jurisdictions introduce mandatory measures related to labor, the environment and due diligence. Canadian companies will consequently also need to comply with these regulations in order to maintain or gain market access.

Further in the past, several new pieces of legislative have been adopted in support of these causes. The Corruption of Foreign Public Officials Act (CFPOA), passed in 1998, criminalizes bribery of a foreign public official. In September 2018, a Remediation Agreement (RA) regime came into force, which is a tool available to prosecutorial authorities—at their discretion, in the public interest and in appropriate circumstances—to address corporate criminal wrongdoing.

While this strategy continues Canada’s balanced approach to RBC, featuring prevention measures and access to remedies, underpinned by legislation covering critical areas like forced labor, transparency and corruption, there are several strategic shifts from previous strategies: it firstly focuses on RBC actions rather than specific industry sectors (extraction sector in particular); it secondly introduces new tools, as well as enhancing existing ones, to help Canadian companies achieve leading responsible business practices; while it thirdly offers broader coherence with the priorities of the Government of Canada and, fourthly, is accompanied by an action plan and associated monitoring and evaluation framework.

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