•  Home
•  Who We Are
•  What We Do
•  Media Centre
•  Publications
•  Humphrey Award
•  Reference
•  Links
•  Contact Us

Bridging Human Rights and Investment: Concrete Steps Forward

Presentation to the National Roundtables on Corporate Social Responsibility

Jean-Louis Roy
President
Rights & Democracy

Montréal, Québec
November 15, 2006

I am truly delighted to be here.

At the outset, I would like to commend the work of the Steering Committee and the Advisory Group in shaping and guiding the Roundtable process as it has moved across the country and through the important issues of human rights, investment, development and corporate social responsibility that we will address in Montreal.

I also would like to offer you Rights & Democracy’s encouragement and support for developing and implementing concrete recommendations and “actionable ideas” for improving the protection of human rights and Canada’s reputation and leadership as the culmination of this Roundtable process.

With great interest, Rights & Democracy has watched the genesis and progress of these Roundtables since the hearings of the Parliamentary Sub-Committee on Human Rights and International Development in the spring of 2005. The unanimous 14 th report of the SCFAIT Report on Mining in Developing Countries and Corporate Social Responsibility put its finger on a problem that people who have been working internationally have been aware of for some time. Canadian mining companies are working overseas in countries whose governments and legal frameworks cannot necessarily ensure that international human rights obligations—both ours and theirs—are respected and implemented.

Bridging human rights and investment

The human rights movement is not against investment per se. We realize the important potential links between investment and trade in terms of development, poverty alleviation and the realization of economic and social rights. However, we are against investments that exacerbate conflicts, degrade the environment and have negative impacts on human rights.

Our common challenge, therefore, is to bridge the entrepreneurial impulse of investors and corporations with the legitimate expectation of all individuals to have their rights protected and promoted.

The UN Secretary-General’s Special Representative, John Ruggie, identified some of the dimensions of this challenge in his Interim Report:

It is generally believed that economic development coupled with the rule of law is the best guarantor for the entire spectrum of human rights: from civil and political, to economic, social, and cultural rights. To the extent that globalization fosters both it enhances prospects for the enjoyment of those rights as well. At the same time, however, there are intuitive grounds for suspecting that the expansion and deepening of globalization, at least initially, has also increased the possible involvement of transnational firms in human rights violations. In part, this is a matter of sheer numbers: there are many more such firms operating in more countries around the world, increasingly in socio-political contexts that pose entirely novel challenges for their leadership, especially with regard to human rights. (1)

Given the magnitude of our extractive industry, Canada’s decision to bridge human rights and investment will have a major impact, as the following statistics help illustrate:

• 60 % of the world’s mining companies are registered in Canada.

• Canadian mining companies are operating 3200 projects in more than 100 countries around the world, including over 600 projects in Africa.

• The investments of Canadian mining companies total upwards of $50 billion – with $17 billion in new projects forecast for the coming 5 years.

There are numerous communities around the world for whom Canadian mining companies are the only face of Canada that they know. Therefore, this is an issue that affects our international reputation, as well as our economy. More importantly, when two-thirds of the cases of serious human rights abuses by corporations (as surveyed by the UN Special Representative) are related to the extractive industry, we have even more important reasons to address these issues in a practical, effective and rights-based manner.

This issue has become extremely important to Canadians who are working in international development and human rights. It’s an issue that has been on the radar of Rights & Democracy for over ten years. We did not choose this issue, but it simply kept coming to our attention through our work in developing countries in Africa, Asia and Latin America.

As a Canadian institution with a mandate to address the gap between international human rights standards and national implementation, we cannot ignore the recurring stories of polluted rivers; people dispossessed of their homes or deprived of their lands and their social and economic rights; and of complicity of some corporations in repression and crimes against humanity.

Moving Beyond Corporate Social Responsibility

At this point, I would like to say a word about framing this as an issue of corporate social responsibility. Like virtue, no one can be against corporations taking greater interest in issues of responsibility, accountability and good global citizenship.

But more often than not, corporate social responsibility is understood by businesses as a series of voluntary measures that they may undertake if they so wish. Voluntary CSR initiatives often lack teeth and, sometimes, appear to be pure marketing exercises. Furthermore, many voluntary CSR initiatives and commitments would likely evaporate in an economic downturn—or in a conflict situation where no effective local enforcement or protection exists.

As stated by the UN Secretary-General’s Special Representative, John Ruggie:

[T]here can be little doubt but that [voluntary] arrangements have weaknesses as well. One is that most choose their own definitions and standards of human rights, influenced by but rarely based directly on internationally agreed standards. Those choices have as much to do with what is politically acceptable within and among the participating entities than with objective human rights needs. Much the same is true of their accountability provisions. Moreover, these initiatives tend not to include determined laggards, who constitute the biggest problem – although laggards, too, may require access to capital markets and in the long run face other external pressures. Finally, even when taken together, these “fragments” leave many areas of human rights uncovered, and human rights in many geographical areas poorly protected. (2)

Furthermore, in this voluntary scenario, governments may play a role by promoting voluntary guidelines and offering various incentives to encourage responsible behaviour.

We support corporate social responsibility initiatives, but also maintain that they are not a sufficient response to ensure that States and corporations implement their respective human rights obligations.

Remember that human rights are not voluntary or aspirational in their essence, but rather legal entitlements of all people by virtue of the fact that they are human.

The essential message of the Parliamentary Committee’s report is that voluntary standards are not enough and bold new measures are required to ensure that Canadian corporations are held accountable if and when they violate human rights. However, the Government response tended to slip back into the paradigm of corporate social responsibility.

I have read over some of the submissions that have been made in Vancouver, Toronto and Calgary, and what I have heard from Canadians is that they expect this Government to put in place concrete and workable measures to ensure that Canadian corporations are not involved in environmental destruction and human rights violations when they invest in developing countries.

I want to insist upon this latter point.

If all these Roundtables result in is more voluntary guidelines, we will have wasted our time. We must seize this occasion to find practical, innovative and binding ways to improve corporate behaviour and provide redress for victims of violations committed by or with the assistance of Canadian corporations.

Concrete Steps Forward

In the time remaining, I would like to concentrate on three key points that Rights & Democracy would like see in the final outcome of these Roundtables:

1. A Multi-Stakeholder Working Group on Human Rights Impact Assessments

Firstly, we believe that the Government of Canada should make human rights impact assessments a requirement for foreign direct investment, particularly when these are investments are facilitated by public funds or services.

Rights & Democracy has been developing a methodology for human rights impact assessments for the past two years. We have been working with communities in several countries who have been affected by mining or metallurgical operations. And we have learned a great deal from these studies about how a systematic attempt to assess and implement human right norms could lead to improved decision-making, better business practices and positive impacts on the ground.

Let me give a few examples:

• When mining operations take place on indigenous land, early and constant efforts must be made to seek the consent of those communities. When consent is denied, operations should not go ahead.

• When private corporations hire security forces to protect their operations, they must be held accountable for their actions.

• When water sources are contaminated, the right to water, to health and to food is violated.

• People have the right to information about the projects that will affect their lives, which includes specific details and information about tax revenues, contacts, legal obligations, scientific studies.

• Freedom of speech and association has to exist around these projects. We cannot legitimately speak of “stakeholder engagement” in a context where people cannot express their opinions.

There are many ways that human rights impact assessments can be accomplished. They can be integrated into environmental or social impact assessments. They can be undertaken by local communities where the project takes place or by the corporations themselves. They can also be done by governments in home States or host States.

And Canada has an extraordinary opportunity to be an international leader in this field.

Rights & Democracy is prepared to come to the table with some concrete experience about how this should be done in a meaningful way. But we do not pretend to have all the answers.

That is why we are recommending the creation a multi-stakeholder working group on human rights impact assessmentswhere NGOs, government representatives and businesses sit down together, combine our expertise and find ways ensure that investments have positive human rights impacts and ensure that the abuses that have blackened the name of the extractive industry are eliminated.

2.Creation of an Ombudsman

Secondly, I would like to say a word about the Ombudsman. This is an original and interesting avenue to explore. However, in order for this Ombudsman function to work and be supported, several factors must be present. Allow me to insist on a few key elements from Rights & Democracy’s perspective:

• It must be a well-resourced and rigorously independent body, reporting directly to Parliament and free from interference from any sector, whether business, government or NGOs.

• Periodic evaluations need to be undertaken where different stakeholders can make their views known on the operation of the body.

• Its existence must be well-publicized in countries where Canadian mining companies have a significant presence.

• It must have an investigative mandate, including site visits and investigations that should involve a rigorous methodology that is open to input from the local community and government authorities.

• It must have the capacity to provide redress and compensation for victims. It also needs to have the powers to force payment and apply real penalties, including the withdrawal of government services, to those who violate the rules.

• Special procedures need to be developed to ensure this mechanism is culturally sensitive and relevant to local people.

Both the development of Human Rights Impact Assessments and the creation of an Ombudsman are achievable short and medium-term objectives. Obviously, the two initiatives should be conceived in a manner that they would work together.

The Ombudsman could offer advisory services to corporations on human rights and the Human Rights Impact Assessment would fit in the category of tools. Human Rights Impact Assessment techniques could also be used to assess complaints.

These matters remain to be worked out. But the last six month’s work on these Roundtables have made clear that doing nothing is not an option. Human rights need to inform our trade and investment policies, as well as Canadian business practices. And when they do not, those who have been harmed have the right to effective mechanisms for redress.

3. Linking Human Rights and Investment to Democratic Development

In a longer-term perspective, the protection of human rights with respect to investment and corporate conduct also requires democratic development. Canada’s policy should be inspired and defined by such a vision.

We are talking about conflict situations and fragile States, where public institutions are non-existent, impotent or corrupt. We are talking about places where there is no effective law enforcement, little tax collection and few social programmes. We are talking about countries in which civil society organizations lack capacity or may be harassed and brutalized.

The UN Secretary-General’s Special Representative speaks to these issues in his Interim Report, especially with respect to the extractive sector:

The extractive sector is unique because no other has so enormous and intrusive a social and environmental footprint. At local levels in poor countries no effective public institutions may be in place. This authority vacuum may compel responsible companies, faced with some of the most difficult social challenges imaginable, to perform de facto governmental roles for which they are ill equipped, while other firms take advantage of the asymmetry of power they enjoy. In other sectors the spectrum of affected human rights issues is more circumscribed, and each exhibits its own characteristic dilemma situations. Such differences should be reflected in public and private sector policy responses dealing with business and human rights.

Second, there is clearly a negative symbiosis between the worst corporate-related human rights abuses and host countries that are characterized by a combination of relatively low national income, current or recent conflict exposure, and weak or corrupt governance. Of course, there is an overlap with the extractive sector here, which operates in such contexts more often than other industries. But weak governance poses a more general challenge to the established international human rights regime and requires special attention from all parties concerned. (3)

Therefore, along with our practical efforts to make Canadian corporations more responsible and accountable, Canada should focus additional efforts on strengthening democratic institutions in developing countries. By reinforcing legislatures, courts, human rights institutions and civil society groups, we can help host governments effectively protect the human rights and economic interests of their citizens and strengthen the rule of law with respect to corporate behaviour.

The strengthening of democratic governance should be pursued through a comprehensive series of multilateral, regional and bilateral initiatives aimed at building the capacities of both governments and civil society organizations. And they should include targeted programmes aimed at strengthening the policies, mechanisms and tools that address the specific concerns and conducts of the extractive industry.

Conclusion

In conclusion, I would like to remind you about how important this issue is for Canada.

The international behaviour of our corporate citizens and the international policies of our government are important parts of our international reputation and credibility. As a nation with a proud heritage of promoting international human rights standards, the outcome of the National Roundtable process gives us an opportunity to position Canada as leaders both in business, as well as in human rights.

I invite all of you to seize this opportunity.

For Rights & Democracy and our partners in Canada—but mostly importantly for our partners in developing countries—we must insist that the effective implementation of international human rights should be at the center of the vision, ideas, outcomes and future work of all the participants of the National Roundtables.

(1) John Ruggie, “ Draft Interim Report of the Secretary-General’s Special Representative on the issue of human rights and transnational corporations and other business enterprises,” (UN Doc. E/CN.4/2006/97) February 2006 at paragraph 21.

(2) Ibid. , at paragraph 53.

(3) Ibid. , at paragraphs 29 and 30.