Press Responses: April 15, 2009

EDC Legislative Review Riles Rights Groups

Embassy - Canada's Foreign Policy Newspaper

by Michelle Collins

Leading civil society advocates are fuming that a review of Export Development Canada's business activities did little to advance the agency's obligations to human rights and transparency, and they are calling on the government to act.

As EDC reaps an influx of government stimulus money in recent months, advocates say the export agency wields a considerable amount of discretion and economic power for which it is not adequately accountable. And many consider the recently released review, which takes place every 10 years, a missed opportunity to recommend progressive changes to Parliament's Export Development Act.

Leading the political fight are Amnesty International Canada and the Halifax Initiative Coalition, who want the government to legislate standards of corporate social responsibility that EDC's corporate clients will, in turn, have to abide by.

EDC is a Crown corporation and export credit agency that facilitates Canadian trade, investment and business activity abroad. Its greatest interests are in the extractive and mining sectors, primarily in developing countries in Latin America and Africa.

The legislative review, which occurs every 10 years for the minister of international trade to consider, was put together by International Financial Consulting Ltd. The process is meant to assess how the government's credit agency is evolving, how to ensure it remains competitive, and to make recommendations where needed.

Both Amnesty and the Halifax Initiative provided submissions for EDC's legislative review, recommending the agency's legislation be modified to include corporate social responsibility measures and binding human rights standards. Additionally, they want to eliminate rules that allow EDC to protect "privileged" information on its customers from Access to Information requests.

Karyn Keenan, program officer with Halifax Initiative, said she had hoped recommendations for human rights standards would be forthcoming in the report. In recent years, she said, the international community has mounted pressure on other countries' export credit agencies to adopt rigorous corporate social responsibility, and to implement operating rules that respect human rights and the environment

Ms. Keenan and others, however, were disappointed by the final report.

"This is an amazing response," Ms. Keenan said of how the report interpreted their submission. None of their suggestions were incorporated in recommendations.

The Halifax Initiative argued that the standards EDC employs to assess project acceptability fall significantly short of international "best practice." They recommended Parliament introduce binding legislation to make financing for projects depend on compliance with human rights norms, and that a clear mandate be given to EDC to incorporate human rights and sustainability-based development.

"What we're asking for in our submissions is that the act be amended by Parliament to include an obligation that EDC follow Canada's human rights obligations," Ms. Keenan said.

EDC has signed on to the internationally renowned Equator Principles, benchmarks of social and environmental practice, and has also created an advisory board on CSR. But Ms. Keenan says these are voluntary and that there is a lot of leeway in how these are interpreted. Furthermore, she
said, EDC provides little documentation to demonstrate how these are followed.

"EDC doesn't have a very clear policy around ensuring effective human rights due diligence are carried out by its clients, and there's no legislative requirement for that. It's time to make this change," she said.

Fiona Koza, the business and human rights co-ordinator for Amnesty International, was equally disappointed with the report and felt it misrepresented some of the NGOs' core concerns on human rights and transparency.

"We thought it was completely condescending and dismissive of civil society's concerns and it really trivializes Export Development Canada's very serious and real human rights obligations as an arm of the Canadian government," Ms. Koza said. "They assess human rights risks, but they
are assessing them from an investor's standpoint, so they look at risky countries and they say in this country, there might be some human rights risks for our projects...and we have a problem with that."

Entirely separate from the report, but in line with the recommendations of both Amnesty International and the Halifax Initiative, is a private member's bill that as been introduced in the House of Commons by Liberal MP John McKay.

Mr. McKay's Bill C-300 on the corporate accountability of mining, oil and gas corporations in developing countries has garnered the support of Canada's civil society organizations. It is currently before the House of Commons, but Mr. McKay is optimistic it will soon go to committee for review.

He said his bill is designed to put the onus for CSR directly on the private sector, as well as EDC.

"The flip side is Bill C-300 is a message to the market, and the message to the market is effectively you can't use the government's credit card without complying with CSR expectations," Mr. McKay said. "The more I get into this, the more distressed I am about how some Canadian corporations are operating in some countries and in effect impairing Canada's brand.

"Generally speaking, we have a very good reputation around the world...but the corporations that behave badly, that don't adhere to CSR guidelines [and] that do degrade the environment, effectively impair our reputation and therefore our brand around the world."