C-438
Second Session, Fortieth Parliament,
57-58 Elizabeth II, 2009
HOUSE OF COMMONS OF CANADA
BILL C-438
An Act respecting the extraterritorial activities of Canadian businesses and entities, establishing the Canadian Extraterritorial Activities Review Commission and making consequential amendments to other Acts
first reading, September 17, 2009
NOTE
3rd Session, 40th Parliament
This bill was introduced during the Second Session of the 40th Parliament. Pursuant to the Standing Orders of the House of Commons, it is deemed to have been considered and approved at all stages completed at the time of prorogation of the Second Session. The number of the bill remains unchanged.
Ms. Deschamps
402330
SUMMARY
This enactment establishes the Canadian Extraterritorial Activities Review Commission to receive complaints and conduct inquiries to determine whether the extraterritorial activities of Canadian businesses and entities are conducted in a responsible and ethical manner; to prepare, with the assistance of an advisory committee, a draft code of Canadian standards governing the extraterritorial activities of Canadian businesses and other entities; to advise the government in order to help it support only those Canadian businesses and entities and those projects outside Canada that are in compliance with this code; and to notify the Minister of Foreign Affairs of situations that might justify imposing sanctions under the Special Economic Measures Act against a Canadian business or entity conducting extraterritorial activities.
The enactment amends the Special Economic Measures Act to give the Governor in Council the power to take measures against Canadian businesses and entities whose activities outside Canada he or she believes have led or are likely to lead to a threat to peace, serious and repeated violations of human rights or serious or irreversible degradation of the environment.
It also amends the Export Development Act and the Department of Foreign Affairs and International Trade Act to ensure compliance with the principles referred to in section 13 of this enactment.
Also available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
2nd Session, 40th Parliament,
57-58 Elizabeth II, 2009
house of commons of canada
BILL C-438
An Act respecting the extraterritorial activities of Canadian businesses and entities, establishing the Canadian Extraterritorial Activities Review Commission and making consequential amendments to other Acts
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Short title
1. This Act may be cited as the Extraterritorial Activities of Canadian Businesses and Entities Act.
INTERPRETATION
Definitions
2. The following definitions apply in this Act.
“Advisory Committee”« Comité consultatif »
“Advisory Committee” means the Tripartite Advisory Committee established by the Board of Directors under section 15.
“Board of Directors”« conseil d'administration »
“Board of Directors” means the Board of Directors of the Commission.
“Canadian business”« entreprise canadienne »
“Canadian business” means a body corporate incorporated or continued under the laws of Canada or of a province.
“Canadian entity”« entité canadienne »
“Canadian entity” means a trust, partnership, fund or unincorporated association or organization considered to be resident in Canada within the meaning of the Income Tax Act. 
“Chairperson”« président »
“Chairperson” means the Chairperson of the Commission. 
“Commission”« Commission »
“Commission” means the Canadian Extraterritorial Activities Review Commission established by section 5.
“extraterritorial activity”« activité à l’étranger »
“extraterritorial activity” means possession or operation of property, or the providing of services, outside Canada, directly by a Canadian company or entity or through an affiliated foreign entity or through another entity controlled by a Canadian company or entity.
“international human rights standards”« normes internationales en matière de droits de la personne »
“international human rights standards” means standards that are based on international human rights conventions to which Canada is a party and on international customary law.
“Minister”« ministre »
“Minister” means the Minister of Foreign Affairs. 
“Voluntary Principles on
Security and Human Rights
”« Principes volontaires sur la sécurité et les droits de l’homme »
“Voluntary Principles on Security and Human Rights
” means the set of principles announced in December 2000 by the governments of the United States and the United Kingdom to guide companies in maintaining the safety and security of their activities within an operating framework that ensures respect for human rights and fundamental freedoms.
PURPOSE
Purpose
3. The purpose of this Act is to ensure compliance of the extraterritorial activities of Canadian businesses and entities with Canada’s obligations under international human rights standards.
REQUIREMENTS
Extraterritorial activities
4. A Canadian business or entity operating abroad shall
(a) take all necessary measures to minimize the repercussions of its activities on the environment;
(b) take all necessary measures to ensure that its activities have no negative impact on human rights;
(c) act in compliance with international human rights standards; and
(d) act in compliance with the principles referred to in section 13.
ESTABLISHMENT OF CANADIAN EXTRATERRITORIAL 
ACTIVITIES REVIEW COMMISSION
Commission established
5. (1) There is hereby established a body corporate called the Canadian Extraterritorial Activities Review Commission consisting of a Board of Directors comprised of up to nine members, including a Chairperson and two Vice-Chairpersons. 
Board of Directors
(2) The Board of Directors shall conduct the Commission’s activities and shall include at least one member representing Canadian businesses or entities involved in extraterritorial activities and one member representing non-governmental organizations involved in international development and human rights. 
Appointment of directors
6. (1) The directors, including the Chairperson and the two Vice-Chairpersons, shall be appointed by the Governor in Council to hold office during good behaviour, with the approval of the Minister and after consultation with the appropriate Parliamentary committee, for a term not exceeding three years.
Qualifications for appointment
(2) Persons appointed to the Board of Directors must have knowledge or experience that will assist the Commission in the furtherance of its purpose.
Ineligible for appointment
(3) 
Full-time employees in the federal public administration are not eligible to be appointed to the Board of Directors or to continue as members of the Board of Directors.
Remuneration
(4) The Chairperson and the Vice-Chairpersons shall be paid such remuneration as is fixed by the Governor in Council.
Remuneration
(5) The members of the Board of Directors, other than the Chairperson and the Vice-Chairpersons, shall be paid such remuneration as is fixed by the Governor in Council for their attendance at such meetings of the Board of Directors, or of any of its committees, as the Chairperson directs them to attend, and for any special work for the Commission performed by them at the request of the Chairperson.
Expenses
(6) Members of the Board of Directors are entitled to be paid such travel and living expenses as are fixed by by-law of the Board of Directors while absent from their ordinary place of residence in the course of their duties under this Act.
Re-appointment
(7) Members of the Board of Directors are eligible for re-appointment only for a second term of office in the same or another capacity.
Resignation
(8) Members of the Board of Directors who wish to resign shall notify the Minister in writing to that effect, and the resignation becomes effective at the time the Minister receives the notice or at the time specified in the notice, whichever is the later.
CHAIRPERSON
Role of Chairperson
7. (1) The Chairperson is the chief executive officer of the Commission and has supervision and direction of the work and staff of the Commission.
Absence of Chairperson
(2) In the event of the absence or incapacity of the Chairperson, one of the Vice-Chairpersons shall be designated by the Board of Directors to exercise all of the powers and perform all of the duties and functions of the Chairperson.
MEETINGS
Meetings
8. The Board of Directors shall meet at least four times in each year, at such times and in such places as the Chairperson may select.
Constitution of committees
9. The Board of Directors may, subject to its by-laws, appoint an Executive Committee from among its members and appoint advisory and other committees consisting, wholly or partly, of members of the Board of Directors and persons who are not members of the Board of Directors.
BY-LAWS
By-laws
10. The Board of Directors may make by-laws respecting
(a) the expenses referred to in subsection 6(6) to be paid to the members of the Board of Directors, subject to the approval of the Governor in Council;
(b) the constitution of any committees appointed under section 9, the roles and duties of the committees and, subject to the approval of the Governor in Council, the expenses, if any, to be paid to any members of those committees who are not members of the Board of Directors;
(c) the procedure at meetings of the Board of Directors and its committees;
(d) the administration, management and control of the property of the Commission; and
(e) the conduct and management of the work of the Commission.
PURPOSE OF COMMISSION
Purpose
11. The purpose of the Commission is to
(a) receive complaints and conduct enquiries to determine whether Canadian businesses and entities are acting in a responsible and ethical manner in their extraterritorial activities;
(b) develop, in cooperation with the Advisory Committee, a Canadian code on the responsibilities of Canadian businesses and entities in their extraterritorial activities;
(c) advise the government and organizations in order to help them support only extraterritorial Canadian businesses, entities and projects that comply with the principles referred to in this Act; and
(d) inform the Minister of situations that might justify invoking the Special Economic Measures Act against a Canadian business or entity conducting extraterritorial activities.
POWERS OF COMMISSION
Powers
12. In order to carry out its purpose, the Commission may
(a) receive complaints about non-compliance by Canadian businesses or entities with the principles referred to in section 13;
(b) on its own initiative, at the request of the Minister, or having decided as the result of a summary assessment that a complaint was well founded, open an investigation to determine whether a Canadian company or entity is complying with the principles referred to in section 13;
(c) to assist in an inquiry, appoint one or more investigators to gather the facts, in Canada or in those places where the transgression of the principles referred to in section 13 is suspected to have occurred;
(d) summon witnesses and request documents in connection with its investigation;
(e) make the result of its investigation available to the public;
(f) conduct, on its own initiative or at the request of the Minister, general studies on the extraterritorial activities of Canadian businesses or entities in order to illuminate the thinking on ways to comply more fully with the principles;
(g) inform the Minister directly of any breach of the principles sufficiently serious to warrant, in the opinion of the Commission, sanctions under the Special Economic Meas- ures Act;
(h) draft, after consultation with the Advisory Committee, the Canadian Code on the Extraterritorial Activities of Canadian Businesses and Entities;
(i) advise all Government of Canada departments, agencies and organizations in order to ensure compliance with the principles referred to in section 13 as well as with the Canadian Code on the Extraterritorial Activities of Canadian Businesses and Entities;
(j) advise businesses and entities on the application of the principles referred to in section 13 as well as the application of the Canadian Code on the Extraterritorial Activities of Canadian Businesses and Entities; and
(k) expend any monies appropriated by Parliament for the purpose of the Commission.
PRINCIPLES
Inquiries
13. The Commission may conduct inquiries on the compliance of Canadian businesses and entities, in their extraterritorial activities, with the Canadian Code on the Extra-Territorial Activities of Canadian Businesses and Entities that is based on the principles set out in the following documents:
(a) the document entitled Performance Standards on Social and Environmental Sustainability, published by the International Finance Corporation (IFC) on April 30, 2006;
(b) the guidance notes of the document entitled Policy and Performance Standards on Social and Environmental Sustainability, published by the International Finance Corporation (IFC) on July 31, 2007;
(c) the OECD Guidelines for Multinational Enterprises issued by the Organisation for Economic Co-operation and Development (OECD);
(d) the Universal Declaration of Human Rights;
(e) the International Covenant on Economic, Social and Cultural Rights;
(f) the International Covenant on Civil and Political Rights;
(g) the eight fundamental conventions of the International Labour Organization: the Forced Labour Convention (No. 29), the Freedom of Association and Protection of the Right to Organise Convention (No. 87), the Right to Organise and Collective Bargaining Convention (No. 98), the Equal Remuneration Convention (No. 100), the Abolition of Forced Labour Convention (No. 105), the Discrimination (Employment and Occupation) Convention (No. 111), the Minimum Age Convention (No. 138) and the Worst Forms of Child Labour Convention (No. 182);
(h) the Convention on Combating the Bribery of Foreign Public Officials in International Business Transactions of the Organisation for Economic Co-operation and Development (OECD); and
(i) the Voluntary Principles on Security and Human Rights.
CANADIAN CODE ON THE EXTRATERRITORIAL ACTIVITIES 
OF CANADIAN BUSINESSES AND ENTITIES
Development
14. (1) Within three years after the day on which this Act receives royal assent, the Commission shall develop the Canadian Code on the Extraterritorial Activities of Canadian Businesses and Entities and submit it to the Minister.
Principles
(2) In developing the Code, the Commission shall have regard to the principles referred to in section 13 and shall formulate recommendations on ways to adapt them more closely to the reality of the extraterritorial activities of Canadian businesses and entities.
Consultation
(3) The Board of Directors shall develop, on behalf of the Commission, the Code in cooperation with the Advisory Committee established by section 15.
Regulation
(4) The Minister shall make a regulation to implement the Code within one year of its receipt.
Tabling
(5) The Minister shall cause the regulation to be laid before each House of Parliament within the first 15 days on which that House is sitting after the day on which it was made.
TRIPARTITE ADVISORY COMMITTEE
Constitution
15. (1) Three months after the coming into force of this Act, the Board of Directors shall establish a Tripartite Advisory Committee to provide advice on the drafting of the Canadian Code on the Extraterritorial Activities of Canadian Businesses and Entities referred to in section 14.
Composition
(2) The Advisory Committee shall consist of no more than 15 members, a third to come from Canadian businesses and entities conducting extraterritorial activities, a third from non-governmental organizations involved in international development, environmental protection or human rights, and a third consisting of experts and academics with no links to Canadian businesses or entities.
OFFICES
Creation
16. The Board of Directors shall establish such offices in Canada as it considers necessary to the furtherance of the Commission’s purpose. 
STATUS OF THE COMMISSION
Agent of Her Majesty
17. The Commission is for all its purposes an agent of Her Majesty in right of Canada and it may exercise its powers only as an agent of Her Majesty.
CONTRACTS
Contracts
18. The Commission may, on behalf of Her Majesty in right of Canada, enter into contracts in the name of Her Majesty or in its own name.
ACQUISITION OF PROPERTY
Property
19. Any property acquired by the Commission is the property of Her Majesty in right of Canada and title thereto may be vested in the name of Her Majesty or in the name of the Commission.
LEGAL PROCEEDINGS
Proceedings
20. Actions, suits and other legal proceedings in respect of any right or obligation acquired or incurred by the Commission on behalf of Her Majesty in right of Canada, whether in its name or in the name of Her Majesty, may be brought or taken by or against the Commission in the name of the Commission in any court that would have jurisdiction if the Commission were not an agent of Her Majesty. 
COMMISSION STAFF
Staff
21. (1) The Board of Directors may 
(a) appoint such officers and employees as are necessary for the proper conduct of the work of the Commission, including those individuals responsible for gathering facts during the inquiries referred to in section 13; and
(b) prescribe the duties of those officers and employees and the conditions of their employment.
Salaries and expenses of staff
(2) The officers and employees of the Commission appointed pursuant to subsection (1) shall be paid such salaries and expenses as are fixed by the Board of Directors.
ANNUAL REPORT
Annual report
22. (1) Within the first four months after the commencement of each fiscal year, the Chairperson shall submit to the Minister a report of the activities of the Commission for the preceding fiscal year.
Content of report
(2) The annual report shall include the relevant financial statements and an activity report, including a record and brief summary of the complaints and the grounds for any dismissal, the results of the inquiry when the complaint is upheld, a summary of the studies carried out by the Commission and, where appropriate, any recommendations to the government and Parliament on ways to improve the extraterritorial activities of Canadian businesses and entities.
Tabling
(3) The Minister shall cause a copy of the Commission’s annual report to be laid before each House of Parliament within the first 15 days on which that House is sitting after the day on which the Minister has received the report.
REVIEW OF PROVISIONS
Review
23. (1) Forty-two months after the coming into force of this section, the Minister shall cause a review of the provisions and operation of this Act to be undertaken.
Report to Parliament
(2) The Minister shall, within six months after causing a review to be undertaken pursuant to subsection (1), submit a report on the review to Parliament. If Parliament is not then sitting, the Minister shall submit the report to Parliament within the first 15 sitting days thereafter.
CONSEQUENTIAL AMENDMENTS
1992, c.17
Special Economic Measures Act
24. Subsection 4(1) of the Special Economic Measures Act is replaced by the following: 
Orders and regulations
(1) The Governor in Council may, for the purpose of implementing a decision, resolution or recommendation of an international organization of states or association of states, of which Canada is a member, that calls on its members to take economic measures against a foreign state, or where the Governor in Council is of the opinion that a grave breach of international peace and security has occurred that has resulted or is likely to result in a serious international crisis, or that certain economic or trade links between Canada or a Canadian and a foreign state have led to or are likely to lead to a threat to the peace, serious and repeated violations of human rights or serious and sustained environmental degradation,
(a) make such orders or regulations with respect to the restriction or prohibition of any of the activities referred to in subsection (2) in relation to a foreign state as the Governor in Council considers necessary; and
(b) by order, cause to be seized, frozen or sequestrated in the manner set out in the order any property located in Canada and owned by a Canadian that was acquired as the result of an activity described in subsection (2), or any property situated in Canada that is held by or on behalf of
(i) a foreign state,
(ii) any person in that foreign state, or
(iii) a national of that foreign state who does not ordinarily reside in Canada.
R.S., c. E-20; 2001, c. 33, s. 2(F)
Export Development Act
25. Section 10 of the Export Development Act is amended by adding the following after subsection (1.1):
Review of extraterritorial activities
(1.2) In the exercise of its powers, the Corporation shall consult the Canadian Extraterritorial Activities Review Commission to ensure compliance with the principles referred to in section 13 of the Extraterritorial Activities of Canadian Businesses and Entities Act.
R.S., c. E-22; 1995, c. 5, s. 2
Department of Foreign Affairs and International Trade Act
26. Section 10 of the Department of Foreign Affairs and International Trade Act is amended by adding the following after subsection (3):
Consultation
(4) In carrying out any of the duties referred to in subsection (3), the Minister shall consult the Canadian Extraterritorial Activities Review Commission to ensure compliance with the principles set out in section 13 of the Extraterritorial Activities of Canadian Businesses and Entities Act.
COMING INTO FORCE
Coming into force
27. Paragraphs 11(a) and (d) and 12(a) to (e) and g) and section 13 come into force two years after the day on which this Act receives royal assent.
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