March/April 2010

Setting the CSR agenda

CSR counsellor to assist companies meet performance standards

By H. Ednie

To ensure Canada’s extractive industry meets corporate social responsibility (CSR) guidelines at all of its international operations, this spring the fed­eral government will formally open the Corporate Social Responsibility Counsellor’s office. The counsellor, one of the “four pillars” of the government’s CSR strategy, will work with those already devoted to capacity building in host countries, as well as promote key international CSR performance guidelines and the Centre for Excellence in CSR, one of the other of the four pillars that is being spearheaded by CIM. Work has already begun to shape a public consultation process that will drive the development of the rules of procedure which, in turn, will establish the review process of the counsellor’s office.

Marketa Evans, appointed the first CSR counsellor in late October 2009, is charged with bringing the idea to action. She will communicate the federal government’s expectations regarding corporate conduct of Canadian extractive companies (including mining, oil and gas) abroad, assist companies and stakeholders in the resolution of disputes, and assist with the implementation of CSR performance standards. “The counsellor position is a great opportunity to create a better dialogue between industry and NGOs [non-governmental organizations],” says Evans.

Evans is well-suited to the challenge.  As the first executive director of the Munk Centre for International Studies at the University of Toronto, her research and teaching focused on the role of non-state actors in international development and on global corporate citizenship. She helped establish the Devonshire Initiative, a forum for partnership and dialogue between NGOs and the mining sector.  Previously, Evans was a corporate banker with a major Canadian financial institution, as well as director of strategic partnerships at Plan International Canada, a world-leading development NGO. She also holds a PhD in political science from the University of Toronto.

“My experience has helped me build a relationship between the private sector and the international development community,” says Evans. “The power of such a relationship can be harnessed for poverty alleviation. Thanks to my work in the banking community, I have a very strong understanding of the private sector perspective, and I can see how the private sector can fit within international development efforts. I like to think I have realistic expectations and understand what drives company motives. For instance, there’s nothing wrong with having a profit motive in what we do — in fact, it makes programs more durable.”

Laying the foundation

A fundamental aim of the government’s overall CSR strategy is to clarify its expectations regarding performance standards.  The counsellor will use these to evaluate company performance. As a framework, the government has identified four existing standards it expects Canadian companies to meet: • the World Bank’s International Finance Corporation (IFC) Performance Standards  • the Voluntary Principles on Security and Human Rights • the Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises • and the Global Reporting Initiative.

The counsellor is appointed through an order in council, an administrative decision made by the federal cabinet and approved by the Governor General. Serving a three-year renewable term, the counsellor reports to the Minister of Trade. The office enjoys close links with the Department of Foreign Affairs and International Trade, Natural Resources Canada and the Canadian International Development Agency — the three sponsoring agencies of the government’s CSR strategy.

Shaping the pillar

The order in council lays out the elements of the counsellor’s mandate, providing a description of a CSR review process for Canadian extractive companies operating outside Canada.

A review would be initiated by a formal request from an individual, group or community that reasonably believes it is being, or may be, adversely affected by the activities of a Canadian company, and that these activities are inconsistent with CSR performance guidelines. As well, the counsellor may conduct a review at the request of a company that believes it is the subject of unfounded allegations.

The order in council has identified five stages for the review process: initial assessment, informal mediation, fact-finding, access to formal mediation, and reporting. “The detailed process and rules of procedure need to be fleshed out before the reviews can commence,” Evans explains. “That will be our key task of the coming months, through an extensive consultative process.”

The key goal of the review will be to assist companies in meeting established guidelines and to help bring any out-of-compliance companies into the fold.  Public reports will be issued in all cases. “The process will be cemented in the practice of transparency and open communication,” Evans notes.

Tracking performance

Collaboration and cooperation will be the backbone of the process. “We need all parties to agree to come to the table for successful improvements to be made,” explains Evans. “It is meant to be a non-judicial mechanism, based on the hypothesis that the reputational impact of such reports is very significant for industry. If a company refuses to participate, you can expect investors, bankers and other stakeholders to start asking some hard questions.”

The counsellor will submit an annual report on the office’s activities to Parliament, at which time it will be published and made public. Evans expects the office’s review processes and resulting reports will be useful tools to help Canadian extractive companies meet CSR guidelines. In her experience, Evans says companies want to be part of the solution, so the office will provide the setting to bring all stakeholders together to find mutually acceptable solutions. “If the rules of procedure are properly constructed, [the companies] will come into the process with tremendous incentives to participate,” says Evans.

The office, she adds, will take lessons from specific cases that can help guide other operators. A number of means of communicating these lessons are expected to evolve, including disseminating them through the Centre for Excellence in CSR.

Evans notes her mandate does not include the power to impose sanctions but she believes companies found to be non-compliant will not risk breaching financial covenants or losing their social licence to operate. Exposure to such risks will incent them to voluntarily work with the counsellor to bring operations within the approved guidelines.

“We are absolutely encouraging public involvement in the consultation process,” Evans adds. “The more voices at the table, the better a solution we will build.”

For more information about the Office of the Extractive Sector Corporate Social Responsibility Counsellor, please contact:

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