Report targets secrecy in foreign mine, oil operations
Canada should revamp everything from its pension plans to its securities regulations, says a groundbreaking joint report by Canadian industry leaders in the mining and oil sectors and environmental and human rights advocates.
The proposed changes aim to force more disclosure from companies and large investors on how they deal with environmental and rights issues.
The report also aims to bring further transparency to corporate governance issues, such as executive compensation and accounting practices.
The changes would position Canada as a world leader in the field of socially responsible investment, the report says.
The report was drafted after a series of national roundtables convened by the federal government in response to allegations of human rights abuses and environmental disasters at Canadian mining and oil operations overseas.
"This is quite seminal, not just in Canada but also globally" says Robert Walker, of the BC- based Ethical Funds Company and a co- author of the report.
Such problems are not unique to Canadian firms, he notes: "Extractive companies worldwide are running into problems with allegations of human rights violations or complicity in violations or being turned back by local communities for failing to deliver local benefits."
The report urges the government to get securities officials to formally require the disclosure of environmental, social and corporate governance concerns that could pose a business risk, such as harming a company's reputation or long- term value.
It also asks the government to order all federally regulated pension plans to disclose how environmental, social and corporate governance factors are taken into account by fund managers in their investment decisions and their actions as shareholders through practices such as voting at annual meetings.
Federally regulated funds include not only pension plans for federal employees, but also funds for any industry regulated by the national government, such as banks and airlines.
About 1,300 pension plans fall under federal jurisdiction, or about 10 per cent of all pension plans in Canada, says Eugene Ellmen of the Toronto- based Social Investment Organization. Mr. Ellmen says only a handful of pension plans reveal how they take environment and human rights concerns into account. "It's a basic right to know what your plan is doing," says Mr. Ellmen.
Mr. Ellmen also noted that the report could be potentially more far reaching, as it calls for the federal government to encourage members of the provincial pension funds to follow suit.
Most pension funds in Britain, France, Belgium and Germany are already required to disclose how they deal with environmental, social and corporate governance concerns, Mr. Ellmen notes.