By Ginette Boissé, editor, Window on Values and Ethics
The Impact of Canadian Businesses Abroad: When Corporate Social Responsibility is coupled with Public Service Values
On October 8, 2007, Window on Values and Ethics met with Marie-Lucie Morin, Deputy Minister of International Trade, in her offices in Ottawa. Here is what Ms. Morin, who has been at the helm of the Department of Foreign Affairs and International Trade for over a year, had to say:
WVE – As Deputy Minister of International Trade, how would you define the role of the Department of Foreign Affairs and International Trade with regard to Canada?
 MLM – The focus of the Department of Foreign Affairs and International Trade is to promote and advance Canadian values and interests internationally and, with its regional offices across Canada and 168 foreign missions, it has a significant presence both in Canada and abroad.
As Deputy Minister of International Trade, I will speak to you briefly about our trade mandate, the goal of which is sustainable prosperity for Canada in the field of international trade.
What does that mean? Well, for us it means working on such issues as access to foreign markets – which offer the best prospects for the intensification of trade1 - for the benefit of Canadian businesses. We do this both in the multilateral context, where we are striving to defend Canada's position and interests in the Doha2 round of negotiations for development, and bilaterally, where we manage such existing trade agreements as NAFTA, which has generated widespread comment. It is interesting to note that this month we are marking the 20th anniversary of the ratification of the Free Trade Agreement (FTA) between Canada and the United States3 , the agreement that was the forerunner of NAFTA.
Other agreements we manage include the free trade sub-agreements with Costa Rica, Chile, Israel and other countries, and a number of bilateral agreements, including the FIPAs [ Foreign Investment Protection and Promotion Agreements] and the air services agreements, on which we work with Transport Canada .
We are currently engaged in bilateral negotiations with Peru, the Dominican Republic, CARICOM – an association of 14 Caribbean countries, and South Korea.
We also help Canadian businesses succeed in international markets through our network of trade commissioners. We have a large number of service points, and we are active in many sectors of the Canadian economy. We are working increasingly hard to promote Canadian investment abroad and technological partnerships with foreign corporations and institutions, because Canada has to be more and more involved in all aspects of innovation. Broadly speaking, that is the department's trade mandate.
WVE – What are the Government of Canada’s key priorities with respect to trade?
MLM – With respect to trade, I would mention North America first and foremost. In the NAFTA context, Canada's economic relations with the United States remain crucial for Canadian businesses, and for the country's prosperity. Our first priority has to be the advancement of our economic interests with our neighbours to the south.
Beyond the North American continent, there is also the priority set by Prime Minister Stephen Harper respecting the Americas, particularly Latin America, where Canadian businesses have significant economic interests in terms of investment and trade in goods and services.
There are also the emerging markets, including one country in the Americas — Brazil — as well as India and China. They raise the whole issue of the positioning of Canadian businesses in these populous markets with strong economic growth. They demand better understanding of the issues on our part, so that our businesses can take advantage of these markets and take their place in international supply chains, which are in full expansion worldwide and include, in particular, the major developing economies.
Lastly, I would restate the importance of our economic relations with Europe. Our businesses are very active in Europe, where they invest heavily. European businesses reciprocate, investing massively in Canada, and they also do a great deal of business with us. At the last Canada-Europe Summit, the Prime Minister accordingly announced a study of economic relations between Canada and Europe, the results of which will be submitted at the next summit.
Those, briefly, are our key priorities.
WVE – And how would you define the department’s role with regard to Canadian business?
MLM – As I said, the department promotes our commercial interests internationally. I referred briefly to the Trade Commissioner Service, which celebrated its 100th anniversary a decade ago, and of which we are very proud. Far from remaining static, the Trade Commissioner Service is engaged in a process of continuous transformation in order to respond ever better to the needs of Canadian businesses, which constantly have to reinvent themselves and adapt to the realities of an economy that is changing rapidly.
Our Global Commerce Strategy has three main elements. The first is to ensure better access to international markets for Canadian businesses; the second is to make Canada a destination of choice for foreign businesses seeking to expand, particularly in innovative sectors: it is important to continue building investments in Canada in all areas of the knowledge economy; and the third is to support Canadian businesses in international markets, particularly emerging markets.
WVE – Corporate social responsibility is generally understood to be the way firms integrate social, environmental and economic concerns into their values,4 culture, decision making, strategy and operations in a transparent and accountable manner [...]5. How does the department show “corporate social responsibility” in its work promoting Canada’s commercial interests on a commercial basis?
MLM – I believe that the correct interpretation of corporate social responsibility, something about which the OECD [Organization for Economic Cooperation and Development] has had a great deal to say, is the way firms integrate social, economic and environmental concerns into their way of doing business in countries around the world.
This is not a new concept. The OECD examined the issue more than a decade ago. Generally, I would say that Canadian firms have an excellent reputation internationally in this respect.
In particular, I would cite three aspects in which we are achieving the OECD’s policy objectives with respect to corporate social responsibility. For a number of years now, we have had, within the department, a national point of contact through which we promote familiarity with the OECD’s guidelines. The OECD developed a series of voluntary principles for corporate social responsibility. These principles were adopted by the OECD countries – which now number 39 or 40 major countries – and that represented an important step forward, because these countries are acting on a voluntary basis and have designated a national contact point [within their respective administrations] to which businesses can refer.
In addition, for a number of years, the Trade Commissioner Service’s briefings for corporations have included information and documentation on corporate social responsibility. Our trade commissioners are thoroughly familiar with the OECD guidelines, and are well trained to respond to questions from Canadian businesses active abroad. We also have an implementation handbook for Canadian businesses that is sort of an introduction to corporate social responsibility and contains a summary description of the OECD’s role.
I have had numerous opportunities to talk to business leaders and to visit Canadian firms doing business abroad, and I have been favourably impressed by how seriously Canadian firms take their corporate social responsibility.
WVE – Responsible business is good business. Is that really true for Canadian businesses doing business, especially in developing countries, and facing ruthless competition? Can corporate social responsibility really give them a competitive advantage or is it just an idealistic concept?
MLM – Personally, I believe that businesses are responsible entities that report to boards of directors. They have shareholders, and they have stakeholders. These days, clearly, business success goes hand-in-hand with responsible corporate behaviour, and a sound business strategy that takes everything into consideration.
Is corporate social responsibility a competitive advantage? Obviously, it is a competitive advantage, and I believe that Canadian businesses understand that very well. As I said, Canadian businesses are well regarded in this area, and for us they represent a way of promoting Canada, quite apart from the fact that their expertise is sought, and they are even cited as examples of best practices. Canada certainly has a favourable image internationally, from that point of view.
WVE – Are values and ethics linked to corporate social responsibility?
MLM – Looking at the corporate sector as a whole, I would say that all values and ethics issues, whether or not they are in the area of corporate social responsibility, are an integral part of the way people do business these days. You only have to look at the emphasis in the government recently on issues of good governance, accountability and so on.
Nor has the private sector escaped this focus. On the contrary, it is subject to the same scrutiny. But coming back to the question of shareholders and boards of directors, I believe that today, businesses conduct themselves highly responsibly. The businesses that are truly successful are those that are mindful of the principles and values that should guide all their decisions — whether these are related to accountability, transparency, decision making or human resources management.
Ultimately, I believe it is a question of respect. In the end, all the discussions about values and ethics that are happening in the public sector are also happening in the private sector. It's true that I do not work in the private sector, but these concerns are invariably mentioned in corporate annual reports.
WVE – Can Canadian values, in particular the values of Canada’s public service, be exported through the way our businesses do business abroad, and can they be used to exercise greater influence on the world stage?
MLM – I believe that Canadian firms bear witness to this. First, in the way business is done in Canada, and then in the way the practices and principles are replicated when the same Canadian firms do business abroad. Does their very way of doing business constitute an influence in itself? That is the question.
People from other countries have told me that, in general, they are very happy to do business with Canadian firms, and that Canada enjoys an excellent reputation internationally, of which we should be very proud.
Canadian firms benefit from this “Canada” brand name, and I think that one of the reasons Canada has such an image is due to the respect garnered by Canadian men and women working abroad in all areas, whether for international organizations — because some very great Canadians have worked in very high‑profile positions abroad — or for Canadian NGOs [non-governmental organizations].
Similarly, Canadian firms can also contribute to the “ Canada” brand. It’s a two-way street. Organizations benefit from being Canadian, and from the positive value associated with this, and Canada’s international image is enhanced even more by Canadian business success abroad.
What public service values can be exported? We are strongly rooted in democratic values. So when we are working abroad, we can’t help but transmit these democratic values. In this context I’m not talking about democracy as a political value per se, but rather, everything that supports or upholds a democratic system. There are also our professional values – like keeping one's commitments, doing the job properly – and we have already talked about the ethical values. Finally there are the values related to people – the treatment of individuals – these also can be communicated through our work in other countries.
1. Department of Foreign and International Trade – Report on Plans and Priorities, 2007-08, p.81
2. This round of trade negotiations was launched in November 2001 during the World Trade Organization 4 th Ministerial Conference in Doha, Qatar.
3. October 4, 1987 was a significant milestone in trade relations between Canada and the United States, with the conclusion of the Free Trade Agreement, which had no precedent and crowned 16 months of negotiation between the two parties.
4. Public service values include democratic values, professional values, ethical values and people values. Values and Ethics Code for the Public Service, pp. 7-10.
5. Corporate Social Responsibility: An Implementation Guide for Canadian Business, Industry Canada, 2006.
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