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Canada’s New Corporate Responsibility Ombudsperson Falls Far Short of its Promise

Published online by Cambridge University Press:  09 December 2019

Karyn KEENAN Open the ORCID record for Karyn KEENAN [Opens in a new window]
Karyn KEENAN*
Affiliation:
Director, Above Ground, Ottawa, Canada. Email: kkeenan@aboveground.ngo
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Abstract

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Keywords

Canadagrievance mechanisminvestigationombudsperson

Information

Type
Developments in the Field
Information
Business and Human Rights Journal , Volume 5 , Issue 1 , January 2020 , pp. 137 - 142
Copyright
© Cambridge University Press 2019

I. Introduction

For years international authorities have urged the Canadian state to address the harm caused by Canadian companies overseas. The extractive sector is regularly singled out for its harmful impacts on communities and the environment. Yet successive Canadian governments have responded to widespread allegations of human rights abuse by promoting voluntary codes of corporate conduct. What is more, the Canadian state provides political and financial support to some of the very companies implicated in overseas harm.

It appeared that this seemingly intractable holding pattern might finally give way when a new federal government was elected in 2015. One of the government’s many electoral promises was the creation of an extractive-sector ombudsperson.

The ombudsperson is a longstanding demand of Canadian civil society organizations and a central feature of the corporate accountability debate in Canada. It was first put forward during government roundtables convened in 2006. That year-long process culminated in a set of policy recommendations regarding the overseas extractive sector. The recommendations, which were developed and endorsed by industry and civil society, proposed a framework to enhance the corporate social responsibility of Canadian extractive companies that work in developing countries. The framework’s centrepiece is an independent ombudsperson mandated to investigate complaints concerning Canadian companies.

Civil society viewed the roundtable process as a unique opportunity to influence decision-makers. Organizations made numerous concessions to reach agreement with industry, believing that consensus among such unlikely partners would spur government action. Civil society publicly endorsed the process and lobbied government to adopt the consensus recommendations.

While industry publicly heralded the roundtable process, companies expressed concern about the outcomes in their correspondence with decision-makers.Footnote 1 As a result, the government ultimately dismissed the roundtable recommendations. Nevertheless, the ombudsperson proposal endured. Canadian civil society organizations, working jointly through the Canadian Network on Corporate Accountability (CNCA)Footnote 2 and in collaboration with international partners, sustained the demand for an independent ombudsperson.

This year, the Canadian government finally created an ombudsperson to receive complaints about the overseas operations of Canadian companies. Unfortunately, the office was established without the independence and powers needed to ensure its success.

II. Why an Ombudsperson?

Ombudspersons act in a variety of contexts to address imbalances in power. They investigate complaints regarding allegations of wrongdoing, frequently with regard to public office holders or institutions.Footnote 3 Ombudspersons often promote dispute resolution by issuing recommendations and/or offering mediation. Their power lies in the ability to independently and impartially investigate matters, and in many cases, to publicly report on their findings.

For those who suffer harm related to corporate activity, an ombudsperson can provide the opportunity to air their grievances and for these to be investigated by an impartial actor. The office can also recommend diverse forms of remedy to address the harms suffered by complainants.

Beyond individual victims, the ombudsperson’s findings can inform a range of actors including legislators, civil servants, investors, corporate boards and journalists. The office can address issues that transcend any single complaint, including the need for policy and legislative reforms effective in preventing future harm. If credible, the ombudsperson can act as a catalyst for such reform.

III. Open for Justice

In 2013 the CNCA launched its Open for Justice campaign to demand an extractive-sector ombudsperson. The network examined existing ombudsperson models in Canada and abroad,Footnote 4 consulted leading experts, and engaged with industry and government. The CNCA drafted model legislation,Footnote 5 creating a legal framework that would meet the office’s particular needs. The network hoped that legislation would confer the office with a sense of permanence.

The CNCA identified several key elements essential to the office’s credibility and efficacy, which it incorporated into its model legislation.Footnote 6 Those elements include:

  1. (i) A focus on human rights. The ombudsperson is intended to support Canada in the fulfilment of its international human rights obligations, including the duty to protect against human rights abuse and to provide remedy when such abuse occurs. The office is also meant to support companies in meeting their responsibility to respect human rights. These important functions require a mandate with a focus on human rights, including the right to a healthy environment. They also require that the ombudsperson have expertise in human rights, such as the investigation of human rights abuse and the development of recommendations regarding remedy.

  2. (ii) Independence. To have credibility, an ombudsperson must be impartial. The Canadian office must be free from interference by third parties and must operate at arm’s length from government.Footnote 7

  3. (iii) Transparency. The office’s work must be open to public scrutiny. To maximize their persuasive value, the ombudsperson’s findings and recommendations must be publicly available.

  4. (iv) Investigatory powers. The ombudsperson must have access to all relevant information to make credible findings of fact. Companies are unlikely to voluntarily disclose information viewed as compromising. Moreover, corporate disclosure may be constrained by bona fide legal considerations.Footnote 8 To overcome these limitations, the Canadian ombudsperson requires the power to compel testimony and document production.Footnote 9

  5. (v) Recommendations. The Canadian ombudsperson’s objective is to provide remedy to those who have suffered harm and to offer guidance to avoid future harm. This requires that the office be mandated to provide recommendations to any of the parties connected to its investigations, including relevant government agencies. It also requires a mandate to provide the Canadian government with analysis regarding broader corporate accountability issues, including the need for policy and legal reforms to protect against human rights abuse.

IV. The Canadian Ombudsperson for Responsible Enterprise

The CNCA shared this analysis and its model legislation with the Canadian government, and encouraged it to fulfil its campaign commitment to create an ombudsperson. In January 2018, the government announced that it would establish the Canadian Ombudsperson for Responsible Enterprise (CORE). The office would be multi-sectoral, focusing initially on mining, oil, gas and garment companies, eventually broadening its reach to include all economic sectors.

While the government’s initial proposal was short on detail, it named the essential features identified by the CNCA. A key point of divergence concerned the government’s decision to create the office through an order-in-council, a legal instrument developed by cabinet, rather than adopting legislation through parliament. In addition to the ombudsperson, the minister of international trade announced the creation of a multi-stakeholder body to advise the government on the development of laws, policies and practices concerning responsible business conduct abroad.

The CNCA responded to the announcement with cautious optimism,Footnote 10 exhorting the government to grant the office the independence and power it needed. The network agreed to participate on the government’s advisory body and nominated several delegates. The announcement was also welcomed by the United Nations Working Group on business and human rightsFootnote 11 and by the Inter-American Commission on Human Rights.Footnote 12

Following the announcement, the CNCA continued to engage with the political staff and civil servants involved in developing the office, providing detailed input on its design. Among other resources, the CNCA developed a model order-in-council for the office. The network’s primary concern was the ombudsperson’s capacity to undertake thorough and independent investigations. Without the power to make credible findings of fact, the office would be of little consequence. The CNCA recommended that the government employ a statute called the Inquiries ActFootnote 13 to grant the ombudsperson the power to compel testimony and document production. This could be achieved by designating the ombudsperson as a commissioner under the act in the office’s order-in-council.

The mining industry opposed this approach. In the fall of 2018, Canadian industry associations provided the government with a lengthy legal memorandum on the ombudsperson. The document voices the mining industry’s opposition to an independent investigatory function, focusing in particular on the power to compel disclosure under authority of the Inquiries Act.Footnote 14 The industry brief proposes a dramatically different approach, one grounded in collaborative dispute resolution and joint fact-findingFootnote 15 by the parties. The memo warns of the inevitability of legal action should the government grant the ombudsperson investigatory powers.Footnote 16

V. About-Face

After a lengthy delay, the government announced the appointment of Sheri Meyerhoffer as its new ombudsperson and released the office’s long-awaited order-in-council in April 2019.

Civil society expressed profound disappointment in the document. The order-in-council failed to deliver on several key commitments made by the minister of international trade. Of greatest concern was the office’s lack of investigatory powers and independence.Footnote 17

The document also included a clause authorizing the ombudsperson to review civil society organizations and community representatives. The order-in-council mandated the ombudsperson to receive complaints from companies regarding ‘unfounded’ allegations of human rights abuse. The members of the CNCA, who had engaged with the minister’s office on the ombudsperson for over a year, were neither advised of nor consulted on this measure. In their view, its inclusion undermined the office’s core objective of addressing the marked power imbalance that exists between companies and the parties they harm – an objective the network believed it shared with the Canadian government.

From the CNCA’s perspective, the office was an ombudsperson in name only. It lacked several defining features of an ombudsperson, including investigatory powers and independence. Moreover, the inclusion of companies as complainants hindered its ability to address the power imbalance that was the impetus for the office.Footnote 18 These concessions to industry eroded the CNCA’s confidence in what it believed was a shared commitment to create an effective accountability mechanism. The network publicly announcedFootnote 19 its withdrawal from the government’s multi-stakeholder advisory body, a decision that received sympathetic national media coverage.

VI. Too Little, Too Late

In September 2019, the government responded to this criticism and issued a new order-in-council for the office. The provision on corporate complaints was removed. However, the revised document remains silent on the issue of investigatory powers.Footnote 20 In fact, the order-in-council makes no mention whatsoever of investigation. Instead, it describes the ombudsperson’s work as a ‘review’ process. Nor does the revised order-in-council include measures to secure the office’s independence.

Days later, in a letter to the CNCA, the trade minister expressed the view that legislation was the most effective course of action to equip the ombudsperson with investigatory powers, after all.Footnote 21 Unfortunately, the letter was provided on the eve of a federal election, when new legislation could no longer be adopted – and a full two years after the government began its deliberations on the creation of an ombudsperson. The government’s delayed determination regarding the need for legislation, a key recommendation made by the CNCA at the beginning of the consultative process, was a further disappointment to the network, as was the government’s decision not to provide the office with investigatory powers on an interim basis, through the order-in-council, until legislation could be adopted.Footnote 22

Communities and individuals impacted by Canadian companies look to an office such as the Canadian Ombudsperson for Responsible Enterprise to impartially determine and report the truth. Without independence and the power to get at the facts, the new ombudsperson has little to offer these constituencies.

Whilst Canada remains stalled on establishing an office fit to the modest task of investigating complaints, other home states are moving far ahead by actually regulating multi-national companies. These governments are instituting meaningful accountability mechanisms that hold parent companies to account for the harm caused by their subsidiaries and in their international supply chains.

Canada has a great deal of ground to make up. It should begin immediately by remedying the ombudsperson’s significant deficiencies.

References

1 For example, letter from the Prospectors and Developers Association of Canada to the ministers of foreign affairs and international trade (19 July 2007); letter from Kinross Gold Corporation to ministers Bernier and Emerson (15 October 2007); letter from Barrick Gold Corporation to ministers Bernier, Lunn and Emerson (11 October 2007); letter from Nexen to ministers Bernier, Emerson and Lunn (10 October 2007).

2 The CNCA brings together over 35 civil society organizations including human rights groups, faith-based organizations and labour unions, among others.

3 Companies and non-profit organizations also employ ombudspersons to protect the interests of key constituencies.

4 Such as the federal privacy and information commissioners in Canada, the Office of the British Columbia Ombudsperson and the Compliance Advisor Ombudsperson of the World Bank Group.

5 CNCA, ‘The Global Leadership in Business and Human Rights Act: An Act to Create an Independent Human Rights Ombudsperson for the International Extractive Sector’ (2 November 2016), http://cnca-rcrce.ca/wp-content/uploads/2019/04/The-Global-Leadership-in-Business-and-Human-Rights-Act.pdf (accessed 3 November 2019).

6 The CNCA model legislation also includes provisions concerning: which complaints will be investigated; which corporate entities are subject to the office’s jurisdiction; how investigations relate to other proceedings; confidentiality; conflict of interest; mechanisms to protect and consider the needs of victims (such as the victims of sexual violence); and mediation, among others.

7 The CNCA recommended that the ombudsperson be designated as an officer of parliament. Parliamentary officers operate at arm’s length from government and report directly to parliament. The network also proposed that the office be designated as a department under the Financial Administration Act, legislation that governs public financial management. The department designation would give the ombudsperson control over hiring and financial decisions.

8 For example: documents may contain information protected under privacy legislation; officers may be concerned that disclosures interfere with their fiduciary duties, etc.

9 Analogous offices exercise these powers at both the federal and provincial levels in Canada.

10 CNCA, ‘At Last, Communities Impacted by Canadian Corporations Overseas will be Heard: Government Creates Human Rights Watchdog’ (17 January 2018), http://cnca-rcrce.ca/recent-works/press-release-at-last-communities-impacted-by-canadian-corporations-overseas-will-be-heard-government-creates-human-rights-watchdog/ (accessed 3 November 2019).

11 Human Rights Council, ‘Report of the Working Group on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises on its Mission to Canada’, A/HRC/38/48/Add.1 (23 April 2018).

12 IACHR, ‘IACHR Welcomes Creation by Canada of an Ombudsperson to Oversee Canadian Companies Operating Abroad’ (6 February 2018), http://www.oas.org/en/iachr/media_center/PReleases/2018/020.asp (accessed 3 November 2019).

13 The Inquiries Act governs public commissions and inquiries. It grants the commissioners who conduct these investigations the power to summon witnesses and compel document production. The statute has been used in circumstances analogous to those concerning the ombudsperson.

14 The memo raises questions about the federal government’s constitutional power to issue such power; requirements under the Canadian Charter of Rights and Freedoms; conflict of laws issues regarding the compelling of information outside Canada; among others.

15 The Office of the Compliance Advisor Ombudsman of the World Bank Group sometimes uses joint fact-finding in its dispute resolution work and defines it thus: ‘[j]oint fact-finding is an approach that encourages the parties to jointly agree on the issues to be examined; the methods, resources, and people that will be used to conduct the examination; and the way that information generated from the process will be used by the parties’.

16 Specifically, legal suits that challenge orders made by the ombudsperson to compel document production and/or summon witnesses under the Canadian Charter of Rights and Freedoms.

17 The ombudsperson and her staff were designated as civil servants at the Department of Foreign Affairs, Trade and Development. The ombudsperson was instructed to report to the minister. In addition, the government declined to designate the office as a department through a second order-in-council under the Federal Administration Act.

18 A further preoccupation concerned Ms Meyerhoffer’s lack of human rights expertise.

19 CNCA, ‘Government of Canada Turns Back on Communities Harmed by Canadian Mining Overseas, Loses Trust of Canadian Civil Society’ (11 July 2019), http://cnca-rcrce.ca/recent-works/news-release-government-of-canada-turns-back-on-communities-harmed-by-canadian-mining-overseas-loses-trust-of-canadian-civil-society/ (accessed 3 November 2019).

20 Other concerns about the new order-in-council include: a lack of clarity regarding which companies will be subject to investigation; the ombudsperson’s discretion to refuse a complaint that is under review or has been reviewed elsewhere; the lack of a mandate to advise the government on systemic questions including the policy and legal framework governing Canadian corporations; among others.

21 Letter from the Honourable Jim Carr, Minister of International Trade Diversification, to Emily Dwyer, Coordinator of the CNCA (10 September 2019).

22 The CNCA provided the minister’s office with information about an important precedent for this approach involving the Indian Specific Claims Commission.