International Code of Ethics for Canadian Business

In early September 1997 it was reported that a group of Canadian companies active internationally had released an "International Code of Ethics" that was to provide an overall guide for appropriate standards of conduct. The Business Library staff were able to obtain a copy of the code from John McWilliams, Senior Vice President and General Counsel of Canadian Occidental Petroleum. Along with Professor Errol Mendes of the University of Ottawa, Mr. McWilliams is taking a leadership role in attempting to facilitate the further development of the code.

It was reported that the following companies have adopted the code: Alcan Aluminum; Beak International, Inc.; Cambior Inc.; Chauvco Resources Ltd.; John Neville Inc.; Komex International Ltd.; Liquid Gold Resources Inc.; Profco Resources and Pulsonic Corporation.

One of the first mentions of the code occurs in a Canada Newswire story on September 5, 1997 - "Canadianoxy Facilitates International Code of Ethics Initiative". The Financial Post followed with two stories: "Canadian Firms Sign on to New Code of Ethics" on September 6/8 and "Ethics Code a Significant Step" on September 9. The Globe also had a story on September 9, - "New Ethics Code Just a Start".

See UPDATE 2011 below

A copy of the code is provided below:

INTERNATIONAL CODE OF ETHICS FOR CANADIAN BUSINESS

VISION

Canadian business has a global presence that is recognized by all stakeholders as economically rewarding to all parties, acknowledged as being ethically, socially and environmentally responsible, welcomed by the communities in which we operate, and that facilitates economic, human resource and community development within a stable operating environment.

BELIEFS

We believe that:

* we can make a difference within our sphere of influence (our stakeholders)

* business should take a leadership role through establishment of ethical business principles

* national governments have the prerogative to conduct their own government and legal affairs in accordance with their sovereign rights

* all governments should comply with international treaties and other agreements that they have committed to, including the areas of human rights and social justice

* while reflecting cultural diversity and differences, we should do business throughout the world consistent with the way we do business in Canada

* the business sector should show ethical leadership

* we can facilitate the achievement of wealth generation and a fair sharing of economic benefits

* our principles will assist in improving relations between the Canadian and host governments

* open, honest and transparent relationships are critical to our success

* local communities need to be involved in decision-making for issues that effect them

* multi-stakeholder processes need to be initiated to seek effective solutions

* confrontation should be tempered by diplomacy

* wealth maximization for all stakeholders will be enhanced by resolution of outstanding human rights and social justice issues

* doing business with other countries is good for Canada and vice versa

VALUES

We value:

* Human rights and social justice

* Wealth maximization for all stakeholders

* Operation of a free market economy

* A business environment which mitigates against bribery and corruption

* Public accountability by governments

* Equality of opportunity

* A defined code of ethics and business practice

* Protection of environmental quality and sound environmental stewardship

* Community benefits

* Good relationships with all stakeholders

* Stability and continuous improvement within our operating environment

PRINCIPLES

A. Concerning Community Participation and Environmental Protection, we will:

* strive within our sphere of influence to ensure a fair share of benefits to stakeholders impacted by our activities

* ensure meaningful and transparent consultation with all stakeholders and attempt to integrate our corporate activities with local communities as good corporate citizens

* ensure our activities are consistent with sound environmental management and conservation practices

* provide meaningful opportunities for technology cooperation, training and capacity building within the host nation

B. Concerning Human Rights, we will:

* support and promote the protection of international human rights within our sphere of influence

* not be complicit in human rights abuses

C. Concerning Business Conduct, we will:

* not make illegal and improper payments and bribes and will refrain from participating in any corrupt business practices

* comply with all applicable laws and conduct business activities in a transparent fashion

* ensure contractor's, supplier's and agent's activities are consistent with these principles

D. Concerning Employee Rights and Health & Safety, we will:

* ensure health and safety of workers is protected

* strive for social justice and promote freedom of association and expression in the workplace

* ensure consistency with universally accepted labour standards, including those related to exploitation of child labour

APPLICATION
The signators of this document are committed to implementation with their individual firms through the development of operational codes and practices that are consistent with the vision, beliefs, values and principles contained herein.
Errol Mendes, Senior Associate,
Human Rishts Research and Education Centre
University of Ottawa,
57 Louis Pasteur
Ottawa, Onto KIN 6N5
FAX: (613) 562-5125
Tel: (613) 562-5775
e-mail: emendes@lJottawa.ca

  
UPDATE 2011
In 2003, an article appeared in the Corporate Knights magazine entitled  4 Companies and a Code April 28, 2003 Corporate  Knights Magazine
This article presents information on the International Code of Ethics for Canadian Business (ICECB) unveiled in September 1997 by several parties in Canada who are concerned about the prospect of crisis and controversy Canadian companies face in operating in regions where there is political stability. The ICECB focuses on how companies should treat communities, environment, employees, business conduct and respect for human rights. The ICECB is not perfect and has been criticized by various parties. Four companies in Ecuador and Colombia, such as Nexen Inc., Talisman Energy, Enbridge and EnCana Corp. have adopted ICECB.

Subsequently, an Audit Format Compliance Review was conducted in an attempt to ascertain the compliance and effectiveness of the ICECB.
The rationale for this exercise was relatively simple. With domestic criticism of Canadian companies' international
operations relative to social and environmental issues being a regular exercise, it was assumed that room exists within the
Canadian media context for a third.party review of how well a few Canadian companies are meeting the expectations of
their domestic citizenry while operating outside our national boundaries.
Michael Rea (MHR) therefore approached Corporate Knights to work in partnership to conduct an audit-based review of the
four companies, using a methodology not too dissimilar to the way in which Sustainability RepOlts (aka Corporate Social
Responsibility, EHS or Non·Financial Reports) are verified. The "audit" was formed around compliance to the "Principles"
set out in ICE (a full copy of ICE is included as Appendix I at the end of this document).
Although many international codes of conduct already exist, including The Global Compact and the ILO Standards for
Multinational Corporations (among many others), ICE was designed to provide a "Made in Canada" road map for managing
conduct outside Canada. It attempts to be a comprehensive, yet simple code of conduct that Canadian companies could
employ to ensure that their offshore enterprises adhered to the same standards of behaviour as their 'in-Canada' divisions,
while attempting to identify cOre areas of focus. 111ese include:
• Environmental Protection and Stakeholder Engagement;
• Human Rights;
• Business Conduct; and,
• Workers Rights, Health & Safety.
Unfortunately, with some notable exceptions, few companies have employed the ICECB to either monitor or manage their
activities outside Canada, while it appears that few, if any, groups have lobbied companies to ensure that the code is applied unifornlly. Moreover, little has been done to test the effectiveness of the code in measuring performance either within, or between industries. Nonetheless, it was decided that ICE was perhaps the most useful tool to be employed for this exercise, despite the fact that only 2 of the four participating companies are "signatories" of the code.

Participating Companies
Enbridge - Operating as part of OCENSA, a consortium managing an existing pipeline in Colombia. Not engaged in
development activities and therefore effecting minimal social or environmental impacts outside Bogota. Relatively few 'direct' employees in Colombia, and operating with minimal 'control' of the consortium
due to the nature and strucntre of OCENSA.
Not a "signatory" of the ICECB.

Encana - Operating both as part of OCP, a consortium managing a pipeline currently under construction in
Ecuador, and as AEC.Ecuador where "upstream" activities, including oil exploration and production, are
currently under way. Due to the high degree of development activities, EnCana is highly exposed to social
and environmental impact risks, and therefore is constantly under critical review by numerous NGOs and
special interest groups- Due to the combination of its stants as the largest foreign direct investor in
Ecuador, and its significant nttrnber of direct (AEC) and indirect (OCP) employees in Ecuador, EnCana is
a much higher profIle company than any those reviewed in Colombia_
Not a "signatory" oflhe ICECB

Nexen - With relatively few employees in Colombia, Nexen's exploration activities (moving towards the
development of wells) are primarily conducted using local contractors. Largely unknown in Colombia,
due to the size of its operations and strategically-designed low profile (for security purposes), Nexen is
currently exposed to rdatively minimal  social and/or environmental risks.
Co-author and "signatory" of the ICECB.

Talisman  - The most recent arrival to Colombia, with minimal seismic. and exploration activities, Talisman has the
fewest number of direct employees, and the least exposure to social and/or environmental risks. With the
exception of a small National office, external contractors are the sole source of operational activity within
Colombia.
A "signatory" of the ICECB, and previously audited against the code with respect to its global operations (with significant attention paid in Sudan).

How did they fare?

ICECB SCORING MATRIX
"Assurance Scoring" occurs on a scale of 0.0 through 4,0, where 0.0 to 1.5 equals "Bad", 1.5 to 2.5 equals "Fair", 2.5 to 3.5 equals "Good" and above 3.5 equals "Excelle·nt". In many cases, "Excellent" would be consistent with "Best Practice" (based on the project experience). A score of3.5+ indicates slightly better than 3.5, while 3.5- denotes slightly less than 3.5.

Although the Corporate Responsibility team at the Department of Foreign Affairs and International Trade in Ottawa has
indicated a move away from the International Code of Ethics for Canadian Business, and towards the application of the
OECD Guidelines for Multinationals, the lCECB is clearly an effective tool for measuring Corporate Responsibility outside
our national boundaries. It is a "National Response" to an international concern, and it is an excellent barometer if applied
consistently . 5/5/2003 Nexen Inc.

Treasury Board of Canada : Report on Governance Structures for  Values and Ethics 2011 Nexen Inc