Rogue or Reformer?

Learning from SNC-Lavalin.

SNC Lavalin is headline news day after day. But few Canadians know about the cases against Tahoe Resources in B.C., Hudbay Minerals in Ontario and Nevsun Resources at the Supreme Court. What these stories have in common is credible evidence of criminal behaviour by Canadian companies operating globally.

Complicity of Canadian companies in bribery, violations of basic human rights and destruction of the environment in less developed countries is a long-standing issue. If the current controversy brings the issue to a head, a good outcome would be clear ethical standards in law for all companies, big iconic ones and obscure ones. People without big names suffer the impacts of abuse of corporate power, such as assault by Tahoe’s security forces and slave labour by Nevsun Resources. Our neighbours in the Biblical sense will benefit if we focus on the core issue and don’t allow ourselves to get caught up in the political gotcha blame game. Both Conservative and Liberal governments have failed to take action on corporate governance, even though documented evidence of wrong doing and tragic harm has been presented time and again. 

For three decades international development and justice NGOs have pushed for stronger laws and public accountability. I recall sitting across from a former CEO of Talisman Energy in an attempt to broker an agreement to end the use of child soldiers and other human rights abuses directly linked to the company’s operations in Sudan. It was one more campaign that almost brought change but failed in the end. I recall the long campaign to establish minimum standards, Bill C-300, championed by MP John McKay, that ultimately failed to pass. A recent parliamentary study of Canadian firms in international supply chains that involve child labour and modern slavery heard powerful evidence of the harm done but issued lame recommendations. Many welcomed the announcement early in 2018 that Canada was finally going to appoint an ombudsman to address issues relating to Canadian companies operating abroad. The office is still vacant. No one has been appointed.  

What lies behind the failure to act? The biggest factor is lobbying by company CEOs, now exposed in the SNC Lavalin story. It happens under Liberal and Conservative governments alike. A second factor is the “too big to lose” argument, along with an excuse we would not tolerate from our children: “others are doing it too.” Finally, the perception that Canada is a leader on human rights diverts attention from bad behaviour. Honesty and transparency are a first step to reform. 

To move forward, we need to drop the notion of “too big to lose.” Bending rules because of size builds in perverse incentives to take short-cuts but prevent getting caught; and it is unfair to companies who do respect human rights. We also need to reject the “few bad apples” myth. Removing a few people does not solve the problem. We need clear laws and strong enforcement. If any of the measures proposed in the last two decades had been implemented, we would not be in the current mess. An article titled “The Long Road” in the Report on Business (March 2019), captured it well: “whether Canada plays the role of rogue or reformer matters a lot, both for our economy and for our standing among nations.” 

NOTE: After this article went to press, the Minister for International Trade appointed lawyer Sherri Meyerhoffer as the first Canadian Ombudsperson for Responsible Enterprise (CORE).  The Minister stated that the scope of the investigative powers of the office is still under consideration.  

  • Kathy Vandergrift, a public policy analyst, brings experience in government, social justice work and a Master’s Degree in Public Ethics to her reflections.

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