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Opening Remarks of CCIC's President and CEO About Corporate Responsibility and Corporate Accountability at a Meeting of NGOs and Government

May 15, 2001

Good Morning. My name is Gerry Barr, and I am the President and CEO for the Canadian Council for International Co-operation (usually referred to as CCIC). We are a coalition of about one hundred non-profit organizations working in Canada and overseas, joined together through our in common initiative to eliminate poverty and promote sustainable human development. On behalf of the NGOs here, I will be co-chairing today’s meeting with David Walker.

Let me start by providing some context to today’s meeting. Back in November, CCIC convened a meeting of NGOs and Unions actively involved in corporate responsibility issues both in Canada and abroad to share knowledge and discuss common needs. I should note, however, that there was limited representation from environment groups.

It was clear from the discussion, that in stark contrast to the private sector, our community has had up to now, limited access to government channels to discuss our urgent concerns on this file. The need for the meeting we are having today was identified by NGOs and subsequently proposed to DFAIT.

We are grateful to DFAIT particularly to the Human Rights and the Investment Trade Policy Divisions for their support in making this project possible. Adele Dion and Steve Brereton and their tireless staff have provided important leadership to this file, The NGO background/policy document—Canadian NGO Policy Views on Corporate Responsibility and Corporate Accountability—prepared for this meeting will help us frame and focus today’s discussion. This policy paper provides an overview of NGO principles, key issues and proposed policy options concerning four main areas where our community sees a pressing need for government action.

The paper is not meant to be exhaustive of all NGO proposals and views. It reflects, for example, particularly the views of those who participated in our meetings in the past year. The experience and work of environmental NGOs is not fully captured for instance.

So what are our objectives for today? Our community sees this meeting as an important opportunity for 1) deepening our mutual understanding of views and perspectives on this file; and 2) for identifying areas where we agree on future action as well as areas where we agree further dialogue will be needed.

This meeting should be seen as a step towards ongoing engagement and dialogue with NGOs on critical issues of corporate accountability.

Let us be clear: Sustainable and equitable development –whether in Northern or Southern societies--requires collaborative interventions which recognize the roles of the State, the private sector and civil society. The private sector can play a vital role in this as a promoter of economic growth. However as we know, growth does not guarantee equity, ensures sustainable development or respect for human rights.

What motivates much of NGO work on this issue is deep concern that current patterns of globalization have given corporations unprecedented benefits and power, including the power to do harm—without requiring accountability. For us, corporate accountability is the key issue for governance in the 21st century. NGOs have been working on increasing their own accountability. And, while that work must continue, the new challenge society faces, is to ensure accountability from the corporate sector. And this concern has growing breadth and depth in the public at large.

People feel it is unconscionable, for example, that trade agreement grant investors rights that trump environmental and health regulations in the public interest. We have seen this in recent NAFTA rulings, whether with Ethyl Corporation or the recent British Columbia Court ruling (NAFTA chapter 11) ordering Mexico to pay damages to a US company for blocking the building of a toxic-waste processing plant.

In a globalized economy, the maximization of profits for shareholders in one part of the world too often goes hand in hand with worker exploitation, political repression, increased poverty, and environmental degradation in another part of the world. Many of the organizations here today have first-hand experience of the role Canadian companies have played —particularly in the mining and oil and gas sectors— both in displacing communities, destroying people’s livelihoods and increasing the repressive capacity or activities of non-democratic regimes—I point to well-known cases of Sudan and Burma.

The violation of labour rights is also all too common in export processing zones worldwide. As reported by our colleagues from the Maquila Solidarity Network, Codes of Conduct are repeatedly being ignored in Chinese and Mexican factories producing brand-name products for the likes of Disney, Nike and Adidas.

Voluntary initiatives may have a place in the promotion of corporate responsibility. However, our community is concerned about the belief that the reliance only on voluntary initiatives at the domestic and multilateral levels will be enough to effectively ensure that corporations behave responsibly when operating in Canada and abroad. For this reason our community has adopted a multi-faceted approach to corporate social responsibility. In our view voluntary initiatives cannot replace the need for regulation.

It is true that some Canadian corporations are beginning to appreciate the relationship between profitability and corporate accountability, and many companies make positive contributions to society and the economy. But, the need for better social performance is too urgent to wait for corporate Canada to see the light, one CEO at a time. For one thing the pace is very slow.

John Leboutillier and Avie Bennett, co-chair and commissioner of the Canadian Democracy and Corporate Accountability Commission, for example, report little success engaging Canadian CEOs. Despite 1000 invitations sent out to Canadian CEOs, the Commission has, so far, received four responses.

To quote them, the corporate sector is bypassing their Commission, because of "the misguided hope that the corporate accountability issue will simply fade away". Well it won’t --but more than this, it underscores the need for government to act upon these issues.

So, what do we want? To put it succinctly, our community is calling on the Canadian government to develop a policy and legislative framework that will effectively support the promotion of a forward looking corporate responsibility agenda.

Proposals from our community call for a framework that includes legislative requirements for disclosure, corporate adherence to basic standards of responsible behavior based on international conventions signed by our government, sanctions for irresponsible behavior and incentives for best practices in corporate responsibility. The absence of such a framework will not only frustrate NGOs work on corporate responsibility but also prevent consumers and investors from using, effectively, their purchasing and investing power to shape corporate behavior.

Canadian efforts at the multilateral level are also critical to building consensus on the need to promote and enforce corporate accountability principles. We appreciate Canada’s efforts at different multilateral fora such as the OECD and the OAS, however, the slowness of this process can not prevent Canada from developing the necessary tools to ensure Canadian companies behave responsibly in their operations at home and abroad.

In the NGO policy paper, we summarized many of the policy options already being put forward by different coalitions and NGOs working on corporate accountability. Our discussions today will help us see the areas of work most likely to bear fruit in the short and medium term. But a few thoughts to remind us of the current context: Currently two important pieces of legislation—the Export Development Act and the Canadian Business Corporations Act—are under legislative review. This review provides a critical opportunity for government action on this file. Other opportunities for action are noted in the NGO policy paper.

Another areas of strong government interest is multistakeholder dialogue. Certainly the challenges of Corporate accountability in the 21st century require the engagement of all stakeholders in the identification of sustainable solutions for a forward looking agenda. While NGOs are concerned that these not be used as an obstacle for delaying urgent government action the NGO community sees multi-stakeholder dialogue as part of this process.

Several NGOs have participated in multi-stakeholder processes and many lessons have been learned. Innovative processes –such as the Ethical Trading Initiative of the UK and the KOMPAKT of Norway –are being explored. Multistakeholder dialogue will be discussed in greater depth in today’s agenda. Any future discussion on a Canadian multi-stakeholder process should build both on the Canadian experience and the experience of countries that are leading in this area.

These are juts some of the opportunities before us. We hope that today’s meeting will help further constructive dialogue between NGOs and the government and that this will allow us to start identifying opportunities for forward action. 

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