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Compliance incentive: Canada to appoint a Canadian Ombudsman for Responsible Enterprise

Canadian Ombudsman for Responsible EnterpriseOn January 17, 2018, the Government of Canada furthered its “progressive trade agenda” and responded to calls from human rights groups by announcing that it is going to watch the activities of Canadian businesses operating in overseas markets more seriously. The Government of Canada will create an Office of the Canadian Ombudsman for Responsible Enterprise (CORE). This will be a different type of Ombudsman. The person appointed to this office will be charged with investigating Canadian companies operating in foreign markets rather than investigating the activities of Canadian government officials. The Canadian Ombudsman for Responsible Enterprise will receive complaints about Canadian companies from Canadians, competitors, foreign governments, foreign citizens, not-for-profit organizations, activists and others. These complaints will be investigated. This may be the first Corporate Responsibility Ombudsman anywhere in the world.

The initial scope of the Corporate Responsibility Ombudsman will be on the mining, oil and gas, and garment sectors. However, there is an expectation that the scope will expand within a year of the Corporate Responsibility Ombudsman taking office to other business sectors. This means that other business sectors should also get ready.

This new Corporate Responsibility Ombudsman will incentivize Canadian companies to implement compliance programs to ensure that they are complying with Canadian laws and the laws of foreign jurisdictions. In addition, the new Corporate Responsibility Ombudsman will incentivize compliance with human rights laws and Canadian values on human rights and corporate responsibility. Further, the new Ombudsman will incentivize Canadian companies operating overseas to implement policies to limit risk exposure for potential complaints to the Corporate Responsibility Ombudsman. This would cover not only the strict wording of laws, but complying with the object and spirit of laws and value propositions and taking a wider interpretation of the laws than a court might.

The Corporate Responsibility Ombudsman will be empowered to independently investigate, report, recommend remedy and monitor its implementation. The Ombudsman will be given the powers to recommend a “punishment” for “bad behaviour”. If a Canadian company has broken export controls, economic sanctions, anti-bribery or other laws, the Corporate Responsibility Ombudsman file should be handed to the Royal Canadian Mounted Police for prosecution so that a court can decide if an offence has been committed. If the “bad behaviour” of the Canadian company falls short of the existing legal standards, the Corporate Responsibility Ombudsman will have the power to impose trade sanctions, such as recommending the withdrawal of consular services or cutting access to Export Development Canada trade financing or insurance products and services. The Corporate Responsibility Ombudsman may also make non-binding recommendations concerning payment of compensation, which cannot be ordered by Canadian courts under Canada’s export controls, economic sanctions, anti-bribery and other international laws.

By Cyndee Todgham Cherniak, Canada-U.S. Blog

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