Lexpert Magazine

62 LEXPERT MAGAZINE | MAY 2018 including the government. Part of the Advisory's Body function will be to help the Government deter- mine the Ombudsperson's man- date and investigative procedures. Canadian companies operat- ing abroad are already required to respect applicable human rights and Canadian laws. ere's also considerable pressure from gov- ernments for companies to oper- ate to international corporate social and environmental respon- sibility standards. e ombudsperson's investigations and recommendations will also be made public. "Companies may have to disclose the existence of the investigations — even early-stage investigations — in securities filings, which could have an effect on share values," Nattrass says. "en there's the potential for class actions arising from the results of the investigation." Still, companies may have little choice but to cooperate with the Ombudsman. "e key thing so far is that companies who refuse to cooperate in the process can face sanctions, including denial or with- drawal of certain government services such as financial and trade advocacy support," says Vancouver-based Wendy King, VP, Legal Governance and Risk for Vancou- ver's Capstone Mining Corp. Whether or not a company should cooperate proactively, however, is not an easy question to answer. "Will being proactive help in the long run or will it come back to haunt you?" Nattrass asks. "Without further details, there are a lot of unknowns." Nattrass also notes that the govern- ment recently released an updated integrity framework in the procurement context. "So far, the integrity framework is fo- cused on economic crimes, but sanctions could be expanded to violations of environ- mental and maybe even human rights," he says. "It would make for an interesting overlap with the Ombudsperson's powers." Also potentially intertwined is the evolving Canadian jurisprudence on juris- diction over wrongs committed abroad in violation of international law. Simultan- eously, our courts are examining the extent to which parent and related companies can be responsible for the acts of subsidiaries that commit international human rights and environmental transgressions. e extent to which the new initiatives will have any teeth or produce any results remains to be seen. "If you look carefully at what's been said so far, it's precious little," says a for- mer general counsel of a Canadian min- ing multinational who has been involved in a number of international investiga- tions. "But ... it's very hard, very expen- sive, and all-consuming to do an inter- national investigation. "ere can also be serious language issues in terms of understanding the nuan- ces of cultural differences, local laws, and documents," he says. "As well, there are usually a host of players, including the complainants, the company, NGOs, and community stakeholders, quite apart from local, regional and national governments, all of whom typically weigh in." e federal government, he adds, could be going into this with a "very naïve" view of what's required to conduct fair investiga- tions that conform to international stan- dards and Canadian principles of transpar- ency and the rule of law. "e big picture question, then, is really the extent to which the government will commit resources to the process," the for- mer mining company counsel concludes. THE FEDERAL GOVERNMENT'S announcement of two new initiatives for responsible business conduct for Can- adian companies operating abroad has the potential to significantly increase reputa- tional and other risks for those targeted by the measures. e initiatives will create an independ- ent Canadian Ombudsperson for Respon- sible Enterprise and a multi-stakeholder Advisory Body on Responsible Business. At press time, details of how these entities would operate, or a date for adoption of the necessary order-in-council to implement the initiatives, had not been announced. "e way these initiatives are imple- mented has the potential for a lot of reputational risk," says Stephen Nattrass in Norton Rose Fulbright Canada LLP's Ottawa office. ey "should be very care- ful that reports aren't released premature- ly, that they're not too speculative, and that any information the company pro- vides is protected." e ombudsperson's mandate will be to investigate allegations of human rights abuses by Canadian companies abroad. e Ombudsman can undertake collab- orative and independent fact-finding, even in the absence of a complaint, and make recommendations to the parties involved, Two new government initiatives will oversee Canadian companies' business conduct overseas BY JULIUS MELNITZER Watchdogs to monitor firms abroad PHOTO: SHUTTERSTOCK | REGULATION | THE BORDER

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