New EDC human rights policy lacks power, say workers and watchdogs

By Mike Blanchfield   

General Government Manufacturing EDC export government manufacturing ombudsperson

Nothing in the new policy is compulsory or binding on the agency or any of its corporate clients.

OTTAWA — Export Development Canada is declaring itself a leading defender of human rights, but workers groups and advocates say the Crown agency’s long-awaited new policy falls well short of what’s needed.

The agency, a lender and insurer for Canadian firms operating abroad, issued its first stand-alone human rights policy May 1, declaring itself to be “leading the way in the field of business and human rights” by setting standards for how companies it helps should behave.

But the United Steel Workers of Canada declared it a missed chance to show leadership in global finance, business and human rights.

“Instead, we have a policy that uses the right words in many places, but includes enough ambiguity and ample room for discretion that it raises concerns and questions about the ability of EDC to place human rights front and centre,” the union said in a review of the new policy.


The arrival of the new policy comes as Canadian businesses and human-rights advocates await a legal review by International Trade Minister Jim Carr that will determine the powers of the government’s new “ombudsperson for responsible enterprise.”

At issue is whether the new office will have the power to compel companies to co-operate with its investigations by ponying up documents and witnesses when human rights complaints are made.

The new EDC policy says that when its customers come to the attention of the new ombudsperson, it will take “reasonable steps to co-operate in these processes and will also encourage our customers to do so.”

One corporate-rights watchdog says that while the EDC deserves credit for trying to move the ball forward on accountability, nothing in the new policy is compulsory or binding on itself or any of its corporate clients.

Karen Hamilton, the spokeswoman for Above Ground, a non-governmental agency that specializes in tracking human rights infractions involving businesses, said the group hopes Carr’s legal review leads to a change in EDC’s legislation to make stronger human rights obligations mandatory.

“If we really want to see change, it has to be legislated,” Hamilton said.

The agency is committed to working with the new ombudsperson whatever her new powers “and to co-operate fully,” said Robert Fosco, the EDC’s vice-president of environment and social risk management.

Fosco acknowledged the criticism of shortcomings in the policy, but said the EDC is committed to following the best practices on human rights and business set out by the United Nations and the Paris-based Organization for Economic Co-operation and Development.

“We keep listening to the critics and to the feedback and (try) to get better as we move forward.”

The EDC wants to make its processes more transparent even if they can’t make the details of specific deal public because of corporate confidentiality provision, Fosco added.

“Obviously commercial confidentiality is there, but we’re finding businesses out there want to do the right thing and want to work with us to make things better,” he said.

“There’s a lot of business that we don’t do, that we refuse to do . . . We want to position ourselves as international risk experts because there is risk out there.”

The policy makes clear that the agency doesn’t have any actual power over the behaviour of its clients, said Hamilton.

“The language is confusing,” she said, and amounts to saying: “we will encourage our clients to do the right thing.”

The policy states that it will “use any available leverage to influence our customers’ actions to prevent and mitigate their human rights impacts.” It also acknowledges that there will be cases where the EDC has “insufficient leverage” and says in those cases “EDC will seek ways to increase our leverage so that those impacts are effectively prevented and mitigated.”

On April 30, Chris Pullen, the EDC’s director of environment and social risk management, candidly acknowledged the sometimes-murky circumstances that accompany business deals in some foreign jurisdictions during a symposium in Ottawa on corporate responsibility. Drafting a human rights policy in that context is challenging, he said.

“Doing this type of work in the world economy is like trying to paint a jet as it’s flying through the air.”



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