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Statement at the end of visit to Canada by the United Nations Working Group on Business and Human Rights

Ottawa, 1 June 2017

Introduction

In our capacity as members of the United Nations Working Group on Business and Human Rights, we have today ended our ten-day visit to Canada. We thank the Government for its support and facilitation of this visit, as well as the many people from civil society and the business community with whom we were able to engage in an open and frank dialogue on current initiatives, opportunities and challenges to implement the UN Guiding Principles on Business and Human Rights.

During our visit, we met with Government officials from federal departments and agencies (Global Affairs Canada; Department of Justice; Economic Development; Employment and Social Development Canada; Indigenous and Northern Affairs Canada; Canadian Environmental Assessment Agency; Environment and Climate Change Canada; Natural Resources Canada; Status of Women Canada; Innovation, Science and Economic Development Canada; and Public Services and Procurement Canada), crown corporations (Export Development Canada, Business Development Bank of Canada, and Royal Canadian Mint), as well as the Corporate Social Responsibility Counsellor for the Extractive Sector, the Chair and secretariat of Canada’s OECD National Contact Point, members of the Subcommittee on International Human Rights of the Standing Committee on Foreign Affairs and International Development of the Canadian Parliament, and the Parliamentary Secretary to the Minister of International Trade. We also met with officials from departments of the Provincial Governments of Ontario, Alberta and British Columbia, as well as from the City of Williams Lake.

In addition, we met with representatives of representatives of Canadian indigenous peoples, as well as with civil society organizations and academia (in Ottawa, Toronto, Edmonton, Williams Lake, Vancouver and Calgary); the Canadian Human Rights Commission; the Alberta Human Rights Commission; the Toronto Stock Exchange; business associations and some of their members (Canadian Association of Petroleum Producers, Canadian Employers Council, Mining Association Canada, and Prospectors and Developers Association of Canada); members of the Canadian network of the United Nations Global Compact; as well as individual business enterprises that made themselves available to share their experiences with the Working Group, including Goldcorp, Imperial Metals and Suncor.

During our visit we held meetings in Ottawa, Toronto, Edmonton, Williams Lake, Vancouver and Calgary.

In our statement, we outline some initial observations from our visit. Our official mission report to the 38th session of the Human Rights Council in June 2018 will include further observations and recommendations.

General Context

We welcome that the Canadian government is demonstrating leadership in promoting human rights, including of women, both within and outside Canada.

In relation to business and human rights specifically, efforts in Canada to promote the corporate responsibility to respect human rights, in line with the United Nations Guiding Principles on Business and Human Rights, have primarily focused on human rights abuse in the extractive sector and on business operations of Canadian companies abroad. This is illustrated by the 2009 CSR Strategy for the Canadian International Extractive Sector, which was updated in 2014, and the ongoing advocacy of Canadian civil society organizations to strengthen this national strategy.

Another salient feature of Canada’s business and human rights landscape is the situation of the country’s indigenous peoples. In 2015, the Truth and Reconciliation Commission of Canada presented its final report, “Honouring the Truth, Reconciling for the Future”, to shed light on the colonial history of more than a century-long policy to eliminate indigenous cultures and governments. Underlying many of our conversations about business and human rights in Canada was the need to create a new relationship with indigenous peoples based on equal respect, dignity and human rights. We appreciate the recent commitment made by the federal government to implement the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).

Extractives

The extractive sector was a particular area of focus during our visit, because of the importance of this sector to Canada’s economy, and the industry’s global footprint. Canada is home to more than half of the world’s mining companies, operating in Canada and across the globe, and is also a centre for extractive sector finance, with 57% of the world’s public mining companies listed on the TSX and TSX-Venture Exchanges. Overall the extractive industry (mining and oil and gas extraction) in Canada accounts for around 7% of the country’s GDP, with the mining sector being the largest private sector employer, employing some 375,000 persons.

We believe that there is greater room for both federal and provincial governments, industry associations and companies, to consider their activities both domestically and overseas through a human rights lens, using the UN Guiding Principles as a baseline to assess corporate respect for human rights. We found evidence of some emphasis on the Guiding Principles with respect to the Canadian extractive sector abroad, but in the domestic context, the focus appeared to be more on sustainability, environmental protection and the rights of indigenous communities.

We note that the Canadian federal government has undertaken key initiatives to address business and human rights in the extractive sector. Canada, for example, is one of the nine governments that are members of the Voluntary Principles for Security and Human rights.

As part of our visit, we met with some key associations in the extractive sector. We learned that use of the Guiding Principles is at an early stage. The Mining Association of Canada, for example, refers to the UN Guiding Principles as part of its Towards Sustainable Mainlining Initiative. Yet, its guidance to members does not fully address human rights due diligence as outlined in the Guiding Principles. Industry associations have a key role to play in disseminating the UN Guiding Principles, and in encouraging alignment of their business practices with respect for human rights at home and abroad.   

The federal government also championed the enactment of the Extractive Sector Transparency Measures Act (ESTMA), which came into force on 1 June 2015. As we learned, ESTMA was supported by the private sector as well as civil society, and is an example of effective multi-stakeholder collaboration. This law requires extractive companies to report   payments to foreign governments as well as to government entities within Canada at all levels. The requirement to disclose payments to First Nations should provide some transparency regarding payments made as part of impact benefit agreements.

Corporate respect for human rights overseas

Concerns about reported abuse by Canadian companies operating abroad and access to remedies by victims have been raised by international human rights treaty bodies, such as the Committee on Civil and Political Rights; the Committee on Economic, Social and Cultural Rights; and the Committee on the Rights of the Child. Cases of alleged human rights abuse by Canadian companies abroad are also tracked by civil society organizations and continue to be a cause for serious concern. One recent study reported 30 targeted deaths and 709 cases of ‘criminalization’, during the period from 2000 to 2015, associated with the operations of 28 Canadian companies. The Business and Human Rights Resource Centre identifies Canada as one of the top three countries with companies connected to reported cases in its database of threats to human rights defenders.

The current enhanced CSR strategy for the extractive sector is derived from the CSR Extractive Sector Roundtables convened by the federal government in 2006. There is room for Canada to broaden and deepen its emphasis on business and human rights in its CSR strategy. The Government can set out clear expectations for Canadian companies operating overseas in several ways. 

Leadership of Global Affairs Canada and the Trade Commissioner

Global Affairs Canada notes that it expects all Canadian companies to respect human right and all applicable laws in their operations abroad. This would include meeting or exceeding widely recognized standards for responsible business conduct. Much of the CSR mandate is carried out by the Canadian Trade Commissioner Service, and related ministries such as Natural Resources Canada.

We learned that Global Affairs Canada provides CSR training to its trade officers posted overseas. We recommend that focused training relating to the UN Guiding Principles, and how businesses can address and remediate human rights impacts be provided. Global Affairs Canada could also play a stronger role in disseminating the UN Guiding Principles among trade and export programs at the provincial level. For example, the current CSR Checklist for Canadian Mining Companies Working Abroad discusses how companies can manage social impacts rather than how to respect human rights in overseas operations.   

Human Rights Due Diligence

The UN Guiding Principles calls upon companies to conduct human rights due diligence to identify, mitigate and remediate adverse human rights impacts in business operations and business relationships. We heard from many stakeholders that Canada should encourage more robust human rights due diligence from extractive companies and should begin to address issues such as human trafficking/modern slavery and other human rights abuses in global supply chains. We would encourage the federal government to examine how it might use regulatory measures focused on mandatory due diligence and non-financial disclosure as means of promoting respect for human rights. We note that the Public Works and Government Services Canada, the main procurement agency for the federal government, is examining how its own procurement processes may be revised to require companies seeking a government contract to engage in human rights due diligence.

Export Credit

Export Development Canada is a Crown corporation which provides a range of trade-related financing to Canadian companies for overseas investment and trade activity. As part of its work, it considers the social and environmental impacts of the companies it finances. We learned that EDC asks private sector applicants to engage in some type of human rights due diligence as part of a financing decision. Concern was raised by stakeholders that this process is not transparent and that some extractive companies that have been implicated in allegations of human rights abuses have received export financing. Therefore, EDC should consider ways to improve its processes to instill public confidence such as releasing an annual human rights report.   

Trade Missions and Other Trade Privileges

We would also encourage Global Affairs Canada to explore what additional tools of economic diplomacy it might use as leverage to promote greater corporate respect for human rights. Companies may be asked, for example, to align their activities to the UN Guiding Principles as a condition to receiving other benefits such as advocacy services, or participation in trade missions.

Role of Provincial Trade and Investment Offices

At present, it appears that the provincial governments are not actively involved in promoting business and human rights as part of their own trade and investment promotion activities.  Since most of the companies are incorporated at the provincial level, there is an opportunity for provincial governments to promote respect for human rights through their own trade promotion.

Alberta has an innovative office, Alberta International Development Office (AIDO), which forms part of its Economic Development and Trade Ministry. AIDO coordinates the Government of Alberta’s participation in global development work and helps identify new areas of collaboration between the public and private sectors, foreign governments and international financial institutions. Since AIDO already works with the private sector to promote economic development projects abroad, it has an opportunity to ask its private sector partners to respect human rights as a prerequisite to partnering in projects abroad.   This model could be deployed by provincial trade offices that promote Canadian business overseas.
Corporate respect for human rights in Canada

Adverse human rights impacts related to the extractives and other industries are not limited to operations outside Canada. During the visit, we heard testimonies about adverse impact of extractives’ activities on the environment and human rights, including the rights of indigenous peoples. It is often not possible to draw a clear distinction between efforts to promote corporate respect for human rights in Canada and abroad. Often business operations in Canada are linked to human rights outside Canada through supply chains and business relationships. The same tools are required to assess and address the risk of adverse human rights impacts. When looking at business-related human rights risks of companies operating within Canada, several issues deserve attention.

Meaningful Engagement with Indigenous Communities

Indigenous peoples in Canada – First Nations, the Métis Nation, and Inuit – make up around 4% of the total population, representing more than 600 distinct nations and more than 60 indigenous languages. Around half of these peoples live on their traditional lands. Many of these indigenous people live under a very low level of socio-economic development as compared to other Canadians. For instance, despite being a water-rich country, many indigenous communities, especially those living in remote parts, do not have adequate access to safe drinking water. The Canadian government should pay special attention to the needs of indigenous communities while implementing the Sustainable Development Goals.

Part of the backdrop to our visit were visible protests by indigenous communities to several large-scale development projects, such as the proposed expansion of the Trans Mountain oil pipeline, the construction a large-scale hydroelectric dam (Site C Dam), and continued expansion of development projects of extractives industries. Several of these cases have also been repeatedly raised by UN human rights human rights mechanisms, such as the situation of the Lubicon Cree Nation, whose territories are affected by extensive oil sands extraction. In several indigenous territories, extensive mining and oil and gas extraction are accompanied by significant adverse environmental impacts affecting the right to health.

A main grievance expressed by indigenous peoples concerns the lack of meaningful consultation in the context of business activities on their lands. The Canadian Supreme Court has established in a series of decisions since 2004 that the Government has a legal “duty to consult” with indigenous peoples. While the duty rests with the Crown, we learned that in some provinces consultations about business operations impacting indigenous rights are delegated to and carried out by business enterprises, with limited government oversight. We also observed that there was often a lack of trust about whether consultations were carried out in good faith. Over the past decade many court cases have been brought by indigenous communities about lack of meaningful consultation and accommodation. Even if such cases are won by the indigenous communities after a long and expansive battle, the court rulings often merely serve as guidance to Government authorities to “correct the course” for future consultation processes.

Another concern expressed by indigenous peoples was that initial mineral exploration could be carried out and claims staked on indigenous land without prior notification to the affected communities. We learned that in some provinces companies are only required to notify when more heavy machinery is used for mineral exploration, and in most provinces actual consultation only became mandatory as part of the request for permission to start actual extraction. When consultations only start at a stage when significant investments have already been made, these tend to become a “check-box” exercise rather than genuinely seeking to obtain the informed consent of affected communities. Both the Government and businesses should appreciate that unlike other people, indigenous communities share a unique relation with their land, a fact that should be kept in mind while engaging them to obtain “free prior and informed consent” as per UNDRIP.

We learned that some companies are finding a business case for a stronger engagement with indigenous communities as part of their social license to operate. Nevertheless, we saw a need for stronger engagement of the federal and provincial Governments to facilitate meaningful consultation processes which consider impact assessment of projects in a cumulative, independent, gender-sensitive and holistic manner. Indigenous communities should be provided resources to understand better the implications of proposed projects on their way of life. Moreover, rather than merely engaging chiefs and band councils, consultations should be conducted widely with communities that may be impacted by proposed business activities.

Going forward one key issue for Canada will be how to bring the existing “duty to consult” framework in line with the principle of FPIC as set out in UNDRIP. To achieve this goal, we encourage the Canadian government to conduct wide and inclusive consultations will all relevant stakeholders regarding UNDRIP’s implementation, and ratify the ILO Convention No. 169.  

Environmental and Social Impact Assessments

We learned that efforts are under way to revise existing regulations on environmental and social impact assessments at the federal and provincial levels. At the federal level, an expert panel was sent up in August 2016 to provide advice and recommendations based on broad multi-stakeholder consultations. We encourage the Government to follow up on the important recommendations presented in the expert-panel’s report “Building Common Ground: A New Vision for Impact Assessment in Canada” on how to include indigenous peoples in decision-making at all stages through a collaborative process that is developed in partnership with impacted indigenous communities.   

The Mount Polly Dam Breach

We learned about recent steps taken to improve oversight of mining operations, in the aftermath the 2014 tailings dam breach at the Mount Polly Mine. The dam failure resulted in the release of 8 million cubic meters of mine tailings into Polley Lake, Hazeltine Creek and Quesnel Lake. Communities expressed concern about the long-term health impacts of the environmental contamination, as well as incomprehension that the company after the spill had been granted permission to discharge effluents into the lake and that no one had been held accountable for the mining dam breach. Four lawsuits have been filled by indigenous communities over the failure to protect against environmental pollution of the lake connected to the breach. While a socio-economic impacts study by the provincial government is underway, indigenous first nations undertook their own study finding a high level of emotional stress related to concerns about impacts of contamination on fisheries and their sacred water sources. We were told that the mining company as well as the provincial government are monitoring impacts on water quality, providing regular updates on dedicated websites. We note that a criminal investigation relating to the breach is underway.

We encourage the British Columbia government to complete expeditiously the impact study, continue to monitor closely the short-term and long-terms impacts of the tailings discharge, and communicate more widely their findings and proposed actions. Moreover, the provincial government should consult more broadly with indigenous communities who may have concerns about the breach and its impact on their lives. We also recommend the British Columbia government to consider establishing an independent body to assume compliance and monitoring of mining regulations, as recommended in the Auditor General’s report.

Labour Issues

We heard from a number of stakeholders’ concerns regarding labour rights, especially of those pertaining to persons with disabilities, foreign temporary workers, seasonal agricultural workers and subcontractors.

The minimum wage in Canada does not provide for a living wage and a decent living for workers and their families (as required under the International Covenant on Economic, Social and Cultural Rights to which Canada is a party). In this regard, we welcomed the announcement made by the Government of Ontario that it will raise the provincial minimum wage to $15 an hour by 2019 and make changes to the provincial Employment Standards Act aimed at promoting better work-life balance for employees. 

We were informed that people with disabilities still suffer stigma and barriers to workforce entry. We encourage the federal government to align its current legislation with international standards on the rights of persons with disabilities. The other provinces should also follow the lead of the Ontario government and enact legislation to protect the rights of persons with disabilities.

We also heard concerns that certain categories of workers are barred from freely exercising their right to collective bargaining. This we were told this is the case for workers in seasonal agricultural employment, irregular migrants’ workers and foreign temporary workers, and those who are in subcontractor positions. In this regard, we welcome the announcement that Canada will ratify ILO Convention No. 98 on the right to organise and collective bargaining.

Furthermore, we learned that temporary foreign workers are at a significant risk of abuse as they are tied to a specific employer as part of their visa conditions. We note that the government is considering policy reforms such as the uncoupling of work authorization linked to a sole employer for the length of the visa period.

Women’s human rights and business

Women experience adverse human rights impact of business activities differently from men. We therefore appreciated the policy of both federal and provincial governments to conduct a “GBA+” (gender-based analysis plus) of their policies, programmes and laws. However, we also observed that certain social, economic and cultural structures in Canada still constrain the extent to which women’s unique experiences are recognized in the business and human rights landscape. Consequently, women continue to suffer from pay disparity, gendered division of work, harassment at workplace, and under-representation in top decision-making positions. Out of 677 companies listed on the Toronto Stock Exchange, women made up only 12% of all board seats and 45% companies had not even a single woman on their boards. The gender diversity disclosure requirement introduced by the Canadian Securities Administrators is a promising step, but more needs be done to ensure that women – including from indigenous communities – are adequately represented on corporate boards.  We note with interest a bill (C25) introduced in September 2016 to promote corporate diversity, including by promoting women’s participation on corporate boards and in senior management.

We also observed that women might become more vulnerable to discrimination and abuse because of a special working context (e.g., care givers, call centre employees), while other women may become an easier target of violence because of the predominance of male workers in certain industries (e.g., extractives). Both the government and businesses should therefore pay special attention to preventing discrimination and sexual violence against women in these contexts, and apply a gender lens to impact assessments. Proactive measures should also be taken to address pay equity. The federal government should fulfil its commitment to enact legislation to bridge the wage gap.

Access to effective remedies

Promoting respect for human rights, both at home and abroad, is a core component of Canadian values. However, rights without effective remedies do not mean much in practice.

Canada has a number of mechanisms such as courts, human rights commissions/tribunals, the National Contact Point (NCP), and the CSR Counsellor to provide remedies for business-related human rights abuses. Nevertheless, we found evidence of the victims of human rights abuses continuing to struggle in seeking adequate and timely remedies against Canadian businesses. We therefore recommend the federal government to work with the provincial governments to strengthen access to both judicial and non-judicial remedial mechanisms. The government should also use its leverage to encourage businesses to establish operational-level grievance mechanisms in conformity with the effectiveness criteria stipulated in the UN Guiding Principles.

Moreover, steps should be taken to ensure that even individuals and communities impacted by the overseas operations of Canadian businesses are able to obtain effective remedy in Canada in appropriate cases. 

CSR Counsellor

The CSR Counsellor advises extractive companies on the implementation of CSR standards, reviews the CSR practices of Canadian extractive companies operating abroad, and assists companies and project-affected stakeholders outside of Canada with dispute resolution. The value of this unique institution can be buttressed by clarifying its relationship with the Canadian NCP, so as to avoid duplication of functions. We recommend that the Counsellor should primarily focus on raising awareness, advising and building capacity around business respect for human rights in all sectors, including the extractive sector.

National Contact Point

We believe that a number of steps should be taken to enhance the NCP’s effectiveness in providing access to adequate remedies. To address concerns about a perceived conflict of interest between promoting trade objectives and human rights goals, the Canadian government should make the NCP more independent, including by introducing a multi-stakeholder component. The NCP should also be vested with adequate resources to discharge its mandate. The NCP should include findings about any breach of the OECD Guidelines in final statements, improve transparency in its functioning, and try to regain trust of civil society about its utility as a remedy provider. The upcoming peer review of the NCP is an opportunity to address some of these concerns.  

The Canadian NCP has creatively used the threat of denying or withdrawing economic diplomacy support as a “lever” against Canadian companies which refuse to engage in good faith with its mediation process. Since this tool is still in its early stages, we encourage the government to share more information as to how this lever is working in practice.  

Ombudsperson

During the visit, the Working Group was made aware of a proposal to establish an Extractive Industries Human Rights Ombudsperson. Considering the significant footprint of Canadian extractives’ overseas operations, we believe that there is a role for an institution like an ombudsperson to provide effective remedy in a timely and inexpensive manner. In order to be effective, the government should establish an entity which is independent, well-resourced, and has power to investigate allegations, conduct fact finding, and enforce its orders, in line with other similar institutions in Canada.

Courts 

Canada has a robust and independent system of courts which can be accessed to seek remedies in cases involving human rights abuses by businesses. However, despite a few recent cases being heard by courts in Ontario and British Columbia, access to Canadian courts for people impacted by overseas operations of Canadian businesses remain a matter of concern. The government should take measures to remove well-known barriers in access to judicial remedies, including for foreign plaintiffs.  The guidance provided by the OHCHR in its June 2016 report to the Human Rights Council (A/HRC/32/19) is a useful resource.

The Westray Amendments

In 2004, the federal government amended the Canadian Criminal Code so that companies and individual managers could be prosecuted for criminal negligence. The Westray amendments, were a response to an explosion at the Westray Mine which killed 26 mine workers.  Since the amendments took effect in 2004, there have been few prosecutions in Canada.    
We heard concerns that the Westray law is not being properly implemented and enforced. We heard that there was a lack of coordination between key government parties, to secure sites of industrial accidents, for further investigation and inspection. We note that the Government of Alberta recently signed a new memorandum of understanding with ten police forces and Alberta Justice, that defines protocols for notification, investigation and communication between departments when there is a serious workplace incident. Other provinces should follow Alberta’s lead.

Human rights defenders and civil society space

During our visit, we heard concerns that Canadian extractive companies are not doing enough to protect to protect human rights defenders, who have been subjected to arrest, harassment, intimidation, criminalisation, sexual violence, and killing. We are pleased to hear about the Federal Government’s new guidelines to support human rights defenders. We note with appreciation that the guidelines do recognize that Canadian business entities have a key role to play with respect to support for human rights defenders.

During our visit, we were told of the criminalization of peaceful protests and the use of security personnel and police to break up and arrest activists who were exercising their democratic right to protest against extractive projects both within and outside Canada. The government should work all relevant stakeholders to ensure more space for peaceful dissent and protest at home and abroad.   

During our meetings with Government officials in Ontario we were encouraged to hear that the provincial government had introduced an Anti-SLAPP legislation.  Quebec also amended its Civil Code in 2009 to address SLAPP lawsuits. Such legislation is a welcome development, and we would encourage other provincial governments to develop similar Anti-SLAPP legislation.

Policy coherence

A common theme that we observed is the absence of a coherent policy framework to promote business respect for human rights, a problem which is exacerbated by the complexity of division of powers between the federal government and provincial governments. The federal government is responsible for the oversight only of business enterprises that are federally incorporated (around 11% of the total of 2.6 million businesses incorporated in Canada). Regulation and oversight of most companies falls under the jurisdiction of individual provincial governments, each with their own independent regulatory framework. We would encourage the federal government to assume leadership to drive greater coherence between the federal and provincial governments. Moreover, it is important to create mechanisms for sharing information and good practices regarding implementation of the UN Guiding Principles between federal and provincial authorities as well as across departments at both federal and provincial levels.

The Canadian government should also ensure that its existing as well as future trade and investment agreements include adequate safeguards to protect the environment, human rights and labour rights.

The role of other stakeholders in implementing the UN Guiding Principles

While several of the companies and business associations we met with were familiar with the UN Guiding Principles, we observed that the Principles were mainly used as a reference to guide human rights due diligence for business operations outside Canada. A common observation made was that laws and regulations provided a sufficient framework to ensure corporate respect for human rights within Canada. This perception is also reflected in the way the CSR strategy is focused on business operations abroad.

We would encourage industry associations to take a proactive role in encouraging their members to embed the UN Guiding Principles throughout their business operations, for example, by establishing human rights due diligence processes and company-based grievance mechanisms. Other bodies like the Toronto Stock Exchange should also encourage its members to respect human rights as per the UN Guiding Principles.

National Action Plan

Canada was one of the first countries to undertake a process of multi-stakeholder dialogue on a national strategy to promote responsible business conduct, through the roundtable discussions held in 2006. Many of the recommendations that came out of that process remains relevant today and could serve as a basis for renewed efforts to address identified gaps, including the possible establishment of an ombudsperson with a mandate to investigate allegations of business-related human rights abuse. Building on the work already undertaken to strengthen corporate respect for human rights of Canadian companies abroad, it is important to promote of corporate respect for human rights in Canada. In this regard, we encourage the federal government to work together with provincial governments to develop a comprehensive national action plan on business and human rights. 

In conclusion, despite challenges faced, we are encouraged that there is a commitment on the part of the Canadian Government to address gaps in protecting and remedying business-related human rights abuse. We are also encouraged that civil society organizations are actively involved in promoting corporate respect for human rights and that leadership is also shown by several Canadian companies and industry associations to move this agenda forward.

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