Canada is moving towards effective corporate oversight with new human rights watchdog

Emily Dwyer, Coordinator, Canadian Network on Corporate Accountability

For over a decade, the Canadian Network on Corporate Accountability has called for policy and law reform to prevent and remedy business-related human rights abuses. The Canadian government’s January 17thannouncement creating an independent ombudsperson to investigate claims of harms linked to overseas business activities is a major policy breakthrough that, if properly implemented, promises significant advance in the respect for human rights by Canadian companies.  

Independent investigations and public reporting

Canada’s new ombudsperson will be tasked with investigating complaints from around the world and will be founded on the principles of “advancing human rights and assisting Canada in fulfilling its international human rights obligations".

Canada’s new ombudsperson will be tasked with investigating complaints from around the world and will be founded on the principles of “advancing human rights and assisting Canada in fulfilling its international human rights obligations". The ombudsperson will be mandated to investigate; make public findings on allegations of harm; issue recommendations to remedy -and prevent- harm; and monitor the implementation of those recommendations. The Canadian government has committed to creating an office that is independent and has committed to ensuring that the ombudsperson has “all the tools required” to fulfill its mandate. Public reporting will help ensure stakeholder confidence in the process, and help inform communities, regulatory bodies, and investors.

Redress and withdrawal of government support

With the new ombudsperson, Canadian companies who do not properly address human rights issues, risk losing that support, including support through Export Development Canada (EDC). 

When harm is found, recommendations will be issued to companies regarding remedy and harm prevention. If recommendations are not implemented, or in cases of serious human rights violations, the ombudsperson may also make recommendations to the Canadian government to withdraw government support. Canadian government support to overseas extractive operations is extensive: including political backing from embassies and trade commissions and financing projects through loans and equity ownership - to the tune of billions of dollars a year. With the new ombudsperson, Canadian companies who do not properly address human rights issues, risk losing that support, including support through Export Development Canada (EDC). Making access to government services and program support contingent on respect for international human rights will be an essential part of Canada fulfilling its international human rights obligations. For the EDC itself, the public reporting and recommendations of the ombudsperson will likely increase the pressure on that crown corporation to respond to criticism that its due diligence processes repeatedly fail to weed out companies with serious allegations of human rights abuse.

Recommendations for policy and law reform

Currently, Canada lacks an effective regulatory framework and is lagging behind other countries that are adopting corporate accountability legislation. As a result, Canadian companies have not been constrained from engaging in practices that have led to egregious human rights abuses, largely impacting women and Indigenous peoples, with impunity. 

This new office can help identify legal and regulatory gaps in Canada and will advise the government of policy and legal reforms to prevent and remedy future corporate misconduct. Currently, Canada lacks an effective regulatory framework and is lagging behind other countries that are adopting corporate accountability legislation. As a result, Canadian companies have not been constrained from engaging in practices that have led to egregious human rights abuses, largely impacting women and Indigenous peoples, with impunity. As a home-country to companies operating around the world, Canada is failing to meet its duty to protect against human rights abuse and to provide access to effective remedy to those harmed.

Requirements of an effective office

The office’s credibility will depend on its independence and on its capacity to access the information needed to issue public findings. The ombudsperson will require the power to summon witnesses and to compel the production of documents, free from government interference. Armed with these tools, the new ombudsperson can serve as the foundation of an effective corporate accountability framework that deters companies from engaging in harm-causing activities and points to effective remedy when harm does occur.   

Marked improvement over existing mechanisms

Taking a lesson from the ineffectiveness of existing non-judicial mechanisms in Canada, the ombudsperson will not be hamstrung by a dependence on ‘good-faith’ voluntary company participation or an institutional culture that defines success as ‘getting the parties to the table’. For the new ombudsperson, cooperation by the company will no doubt be helpful, welcomed, and as the Minister of International Trade emphasized in the announcement, expected. But it is not the foundation of the office. Likewise, the ombudsperson – if all parties agree – may seek dialogue-based solutions, but the office’s raison d’être goes far beyond that.    

Cornerstone of a corporate accountability framework

The ongoing crisis at the Canadian-owned Media Luna mine in Mexico, where yet another mine worker was murdered just last week, highlights the urgent need for the establishment of a Canadian Ombudsperson on Responsible Enterprise with the mandate and tools to do the job. January’s announcement helps give some comfort that communities like those impacted by the crisis at the Media Luna mine might soon have somewhere to seek redress. In that sense, the new office will help fill the significant gaps in access to remedy identified by the UN Working Group on Business and Human Rights, during its June 2017 official visit to Canada.

Beyond mere remedy for harm already done, correctly constituted, this new office could move Canada towards the adoption of an effective corporate accountability framework. Its creation can be viewed as the beginning of a shift in orientation of Canadian policy: from a narrow focus on helping Canadian companies to manage risks in their international operations, to a business and human rights policy-oriented by the rights of impacted communities, and centered on fulfilling Canada’s international human rights obligations and the Canadian government’s commitments to a feminist and human rights-based foreign policy.