The Canadian Network on Corporate Accountability (CNCA) unites 25 non-governmental organizations including labor unions, human rights NGOs, solidarity groups, religious organizations in Canada who advocate for greater corporate accountability by Canadian corporations operating abroad in the extractive sector. Established in 2005, the network aims at ensuring that Canadian companies respect the fundamental rights of people irrespective of where they operate. Many of the network’s members have been involved in advocacy for corporate accountability for many decades and therefore have long-standing relationships with workers, communities, human rights and environmental defenders and indigenous people from across the world. Some of the members of the network are Africa-Canada Forum, Above Ground, Americas Policy Group, Amnesty International Canada, Amnistie Internationale Canada francophone, Asia Pacific Working Group, British Columbia Teachers’ Federation, and Canada Tibet Committee amongst others. This paper revisits some of the work the network has been involved in including its advocacy for a Human rights ombudsperson.
Canada remains a global giant in mining, oil and gas and is in fact home to over half of the mining companies in the world. Canadian companies operating overseas are however often associated with environmental damage and human rights abuses that entail sexual violence, disrespect for the rights of indigenous communities and forced displacement. Quite often, those who suffer these abuses lack proper redress mechanisms. Those redress mechanisms that exist within Canada are often inaccessible to victims, are ineffective and more importantly lack stakeholder confidence.
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The Canadian public has been at the forefront of demanding that the Canadian government takes more action to address reports of environmental damage and systematic human rights abuses that are linked to Canadian gas, oil, and mining across the globe. This is evidenced by the fact that over 100,000 Canadians have since 2013 joined the Open for Justice Campaign that aims to redress these injustices while preventing their future recurrence. In addition, over fifty civil society organizations in Canada have signed statements echoing the call of the Open Justice Movement. Communities and people that have been directly affected by the actions of Canadian companies have also testified before the Canadian Parliament. Various parties including the Green Party of Canada, the Liberal Party of Canada, Bloc Quebecois and New Democratic Party of Canada in 2015 committed themselves to adopt and implement concrete measures that promote corporate accountability in Canadian extractive sector. Therefore the initiative by CNCA is at the heart of what many Canadian people want.
The clamor for greater accountability by companies operating in the global extractive industry is however not Canada specific. Developments in other parts of the world give greater impetus for the Canadian initiative. The ‘Protect, Respect and Remedy Framework’ on Human Rights and Business by the United Nations put legal responsibility on states to protect, respect and fulfill human rights. The UN framework was a culmination of years of debate over the responsibilities of businesses in matters human rights. Thus, the sub-commission on Human Rights of the UN in 2004 imposed human rights obligations on transnational corporations, similar to what had been imposed by states. The only distinction was that states would have primary responsibilities while companies would have secondary duties. Opposition to the commission’s recommendations especially by businesses has given way to the 2011 UN Framework. The first pillar of the explicitly places responsibility on the state to protect against human rights violations by third parties that include businesses through appropriate regulation and adjudication. Canada had however done little to fulfill these obligations by 2012. This is despite the litany of human rights abuses that have dogged the Canadian mining companies.
Perhaps the most comprehensive report that brought to the fore the extent of abuses perpetrated by Canadian companies abroad was the ‘Canada Brand’ which was published by the Justice and Corporate Accountability Project in 2016. The report documented incidents of violence by Canadian companies in Latin America. The report was exceptional since it compiled information over a duration of 15 years from 14 countries in Central and South America. Latin America, as a focus of the research, was also apt since over 40 percent of mining companies in the region are Canadian. According to the report, 28 Canadian mining companies were involved in intrusion into indigenous people’s land who became victims of criminalization and violence. In 14 Latin American countries under scrutiny, there were 44 deaths of which 30 were reported to be targeted. 403 cases of injuries were also reported during protestations to mining activities. According to the report, there were also cases of sexual assault of women in indigenous communities. The actual number of violence and repression victims is likely to have been higher owing to the broad focus of the report. In one of the controversial mines in Guatemala for instance, where the Canadian mining giant Goldcorp has operated for a decade, there has been many deaths, criminalization and prostitution in what the report termed as the ‘gradual poisoning of an entire community. One year to the company ending her gold extraction mission in the area, there were still unclear plans for environmental remediation.
These events have often been accompanied by targeted attacks on human rights and environmental defenders. Canada requires that such incidents are reported by their companies once they occur. However, in the past years, the tendency has been to underreport or not to make reports. Even when reports are made, CNCA reports suggest that little follow-up action has been taken. To remedy this situation, CNCA in 2006 presented during the National Roundtables on Corporate Social Responsibility and on behalf of Canadian civil society-submissions on how to reinforce the corporate social responsibility of Canadian mining companies operating abroad. The submissions have formed the core of CNCA’s advocacy campaign.
It submitted that there needs to effective ways for victims of Canadian corporate abuse in overseas extractive operations to seek justice in Canada through the creation of an independent ombudsman and seeking judicial redress in Canadian courts. Such measures, submitted CNCA, would ensure Canadian corporations operating abroad respect internationally accepted environmental and human rights standards. According to CNCA, this was especially important since a majority of host governments often have inadequate enforcement capacity or simply lack the political will to do so. Even when protections exist in these overseas jurisdictions, they are often weak and therefore vulnerable to the power wielded by these companies. The CNCA reasoned that even where international protections exist, international courts and tribunals cannot attend to all of them. Foreign citizens, at least as of 2006, faced tremendous difficulties initiating legal claims over overseas transgressions with out of court mechanisms often being ineffective. By adopting such measures, Canada would be honoring her international commitments on human rights. This is because home states do have a legal responsibility to the ensure human rights protection of third parties.
The CNCA also submitted that Canada needed to create an independent Ombudsman specifically for the extractive sector who could launch investigations into complaints of violations by Canadian mining companies overseas as well as develop guidelines for these companies. The non-judicial grievance mechanism existent at the time was not responsive to the justice demands of overseas victims. Company participation in CSR counselor proceeding was often optional, and most companies failed to turn up or withdrew in the course of the process. Furthermore, the CSR counselor had no mandate to investigate complaints or determine which companies breached government guidelines. The recommendations of the CSR were also not binding. The independence of the CSR was also in doubt since the office was under the Trade Minister. The National Access Point of Canada, the other none judicial remedy, suffers serious flaws since it does not carry out investigations nor make determinations on whether there have been breaches. In such circumstances, CNCA was right to submit that Canada was in need of an Ombudsman in the extractive sector with adequate independence and investigatory powers.
The CNCA also argued that there was a need for Canada to come up with legislation that allowed victims of abuses by overseas Canadian multinationals to better access the Canadian legal system. Non-Canadians as of 2006 faced enormous handicaps accessing the Canadian courts. This was perhaps best reflected by the high number of abuses cases that rarely translated into court cases. Canadian courts have declined cases filed by foreign plaintiffs. Under the principle of Forum non conveniens , the courts always made a finding that other forums existed for such cases. Besides lacking legal standing, they also face the additional handicap of finances and logistics. As of 2006, six attempts had been made to bring corporate abuse cases before Canadian courts. Only in one instance did a lower court agree to hear the case, a decision that would be quashed on Jurisdictional grounds upon appeal. CNCA thus pointed to the need for federal legislation that grants access to non-Canadians aggrieved by her extractive companies.
CNCA also advocated for the adoption of mandatory disclosures for instance of payments made by extractive companies to governments. This acts as a tool through which the government can deter mismanagement and corruption, citizens can hold the government accountable for revenue management and enhances informed public debate. Groups also demanded that the level of support, whether in the form of political backing or finances, granted to Canadian multinationals be contingent on the degree to which they embrace these accountability measures. The demand for mandatory disclosures by networks like CNCA led to Prime Minister Stephen Harper committing in 2013 that the government was going to institute compulsory reporting standards for extractive industries within and outside the country.
Also at the core of CNCA advocacy was that Canadian companies in the extractive sector pay their share of royalties and taxes whether domestically or abroad. Extractive companies across the world have been some of the greatest users of tax havens whether in the shifting of profits or tax avoidance. The CNCA has pointed to the need for this to stop for developing countries in the global south to have a fair chance at economic growth. Many countries in the global south have to contend with challenges of tax retention losing billions of dollars unscrupulous and illegal financial flows. A majority of these flows are through tax evasion and avoidance by mostly transnational corporations in the extractive sector. The African Union has termed illicit financial flows as the single most important factor inhibiting economic growth in the African continent. Africa alone, having lost over $1.3T in illegal financial flows over the past three decades, has become a net creditor to the rest of the world. This is despite Sub-Saharan African being home to the world’s most vulnerable population thanks to poverty.
Canada is a major player in encouraging tax havens. Canadians for Tax Fairness has noted that about 20% of all Canadian investments abroad in 2011 went to the major tax havens, an increase from the 10% reported in 1987. Financial transparency is further complicated by the fact that Canada is one of the easiest destinations for setting up a shell company. CNCA has therefore argued that greater transparency and accountability more so in the payment of royalties and taxes could potentially help in the eradication of global poverty. Canada has since 2011 taken necessary steps to curb these challenges including a commitment to Automatic Tax Information Exchange that could give considerable succor to efforts by the G8 to contain tax havens. Banks are also required to reveal information on the owners of their secret accounts.
CNCA has also sought to have multi-stakeholder participation in the development and execution of Canada’s corporate social responsibility. The Centre for excellence in Corporate Social Responsibility has thanks to this initiative become a multi-stakeholder space that brings together civil society groups in Canada, government entities from the International Trade Canada, Ministry of Foreign Affairs, Natural Resources Canada to the Canadian International Development Agency (CIDA). Due to the embrace of a multi-stakeholder approach, several CNCA members sit in the center. The center has since its formation been hailed as a platform for frank deliberations with the launch of initiatives that benefit victims of mining being considered.
Office of the Ombudsperson
Perhaps the greatest accomplishment for the CNCA has been the establishment of the office of Ombudsperson which, as it has been demonstrated earlier, has sought to have established for over a decade. While politicians made numerous promises that the office was going to be formed, it was not until 2018 that it was created, a culmination of efforts by various stakeholders. Given the propensity for extractive industries to create conflict and instigate community grievances, the establishment of an ombudsperson for this sector was long overdue. While the office is primarily meant to protect potential victims of Canadian extractive companies, it can also be an important tool for the companies themselves since conflict tends to create negative publicity and interruptions for companies as well. CNCA is therefore right to underscore that the establishment of an impartial and credible mechanism that is independent may serve both the interests of Canadian extractive companies operating overseas and communities in those regions.
Even before the creation of the office, the CNCA had commissioned model legislation for the creation of the office based on extant legal procedures and principles. The model provided for strong procedural protection for complainants and companies under investigation. The model further provided for measures meant to ensure the office remains credible and independent through transparent investigations, clear mediation procedure and provision of mechanisms for implementation of recommendations. The model was presented to the Canadian government and has largely formed the basis for the creation of the office.
The creation of an office of the ombudsperson is not a new phenomenon. The first ombudsperson’s office to be created was in Sweden in 1809. Since then, the office has been created in multiple other jurisdictions to listen to complaints against administrative acts of government. In some systems, the ombudsperson has the discretion to investigate complaints within the public and private sectors. While in some jurisdictions they are completely independent, they are at often required to be accountable, at least in certain respects, to the public body that established them such as parliament. Typically, the ombudsperson receives a budgetary allocation from the government though in some jurisdictions they receive direct funding from the legislature to maintain their independence. Industry ombudsperson is therefore meant to address concerns or complaints within a particular industry. Their creation is in most instances a product of consensus by the various actors within that industry. The rationale of an ombudsperson to serve the Canadian extractive industry is therefore not without precedent.
Concerned about the influence of Canadian companies relative to complainants, the CNCA and other advocates set out to have a highly independent ombudsperson for the industry. Thus, any person or community that believes it is likely to suffer harm from Canadian mining or oil and gas can launch a complaint. The ombudsperson is legally obligated to investigate each allegation as long as it concerns the violation of environmental norms or international human rights or there is a risk of such violations taking place. The ombudsperson, however, has the discretion to turn down the investigation of certain complaints if they feel that the matter is lacking in serious, beyond the mandate of the office, if it was not filed in good faith or that it was satisfactorily dealt with in another proceeding. However, in such cases, the ombudsperson must issue an explanation for such a decline. The office of the ombudsperson may also launch its investigations without the benefit of a complaint in case there is a suspicion that crimes are likely to be or have been committed. This mechanism is especially important since victim groups may not always be aware that such crimes are being committed or may lack the wherewithal to launch such complaints.
Before commencement of investigations, the ombudsperson is obligated to publicly notify the parties, with few exceptions. Within a month of this notice, the ombudsperson can issue a request for any evidence that relates to the issue of investigation. Parties are obliged to respond to that request within 60 days and disclose any other relevant information such as another party who may have access to that information. In their disclosures, companies may make confidentiality requests from the office. The office of ombudsperson has specialized expertise and therefore develops its mechanisms for effective investigation. The office may give the opportunity to the parties to make submissions before the body and may review external material.
Given the complexity of modern-day multinationals, the office is obligated to investigate a company with presence in Canada, their affiliates or subsidiaries. This ensures that companies do not escape responsibility through the use of proxy entities meant to mask their responsibility. Just like any other investigatory body, the office of the ombudsperson can pursue any information that it might feel is being withheld through a production order, investigative interview or through seeking a search warrant. While many offices of the ombudsperson in the Canadian system have the powers to compel production of documents or testimony without recourse to acquiring a court order, extractive sector ombudsperson is by law required to obtain a court order to ensure there is adequate protection for companies under investigation. The request for a court order must, however, meet specific thresholds including there being a reasonable basis to believe that harm has or will be committed. For a production order, the court must be convinced that the documents are indeed in possession of the party. In case of interview order, the court must be satisfied that other means have been employed in an attempt to obtain the requisite information. Where agreements exist between Canada and other states, the ombudsperson may obtain information from other countries through letters rogatory or mutual assistance agreements.
Often, multinational companies will seek mediation and settlement instead of going through publicly embarrassing investigations. This usually takes the form of damages payment thus running the danger of escaping adequately punitive action given the imbalances of power between the company and the complainant. Therefore, the ombudsperson is obligated to offer mediations services only when each party has given informed consent and the complainant is the only directly affected victim of the harm. In the interest of justice, the ombudsperson may on certain occasions foot reasonable legal cost of the complainant. Agreements reached after such mediation is binding on the parties with any suspecting breach having the option to pursue federal enforcement.
The findings of the ombudsperson ought to be made public with the recommendation being presented to government bodies. In making its findings, the office may refer to Canadian laws or international norms governing that practice. The office, however, has no powers to make findings of liability or guilt. Recommendations of the ombudsman may be made to any agency, person or entity within the Canadian government on matters of reparations and remedy, conflict resolution arising out of a project or additional investigations by a separate agency of the government. Any subject of recommendation must receive such recommendations in writing and must respond to the office within a specified time frame on the actions they have taken in conformity with the recommendations.
Conclusion
The Canadian Network on Corporate Accountability has been an important champion of accountability and respect for human rights and environmental law by Canadian extractive companies operating abroad. For over a decade, the network has successfully championed for greater financial transparency by Canadian companies, greater government oversight and support for indigenous communities. At a time when the plight of victims of Canadian extractive companies did not receive much attention, the network was crucial in rallying public support and getting policymakers to commit to addressing the matter. It has been argued that perhaps the greatest accomplishment for the CNCA has been getting the office of extractive industry ombudsperson established a project it had pursued for over a decade. Given the novelty of this office, the CNCA has pointed to the need to ensure that it remains optimally functional and more crucially that its independence is respected. The proper functioning of this office may remarkably depend on this independence, both in actuality and perception.
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