Several explanations may be offered for this lack of effectiveness. First, due to their voluntary adoption, voluntary CSR initiatives inevitably fail to capture all industry members. This problem may be particularly acute where those corporations that resist the adoption of voluntary standards are also those with the worst records in the field the standards address. Furthermore, in the absence of effective enforcement measures, even those companies that do adopt a voluntary code may be able to disregard it where they are motivated to do so by other business interests.

Legislative measures
While several organizations such as the European Commission have defined CSR to encompass only voluntary initiatives, others, such as the government of Denmark, have passed legislation which mandates some minimum forms of CSR.

Legislative measures are also being contemplated in Canada. Bill C-300 would regulate the behavior of Canadian mining companies in developing countries. Such mandatory initiatives, whether they arise from legislation or other sources, have a number of benefits that are missing in voluntary initiatives.

The clearest difference between mandatory CSR initiatives and voluntary initiatives is the enforceability of the former. Where mandatory CSR requirements emerge from legislation, the specific mode of enforceability may be provided by that legislative document, and may include specific penalties which transgressors will be subject to, often through access to the courts.

The penalization of those who contravene mandatory CSR requirements might be expected to encourage higher levels of compliance with mandatory requirements. For example, the threat of a sufficiently substantial monetary penalty would be expected to engage the self-interest of the corporation so as to encourage it to proactively comply with the standard. This ability may be particularly important in situations where it is necessary to force corporate compliance with a CSR standard that is unlikely to be adopted voluntarily. Such situations may arise where the CSR initiative will require dramatic corporate outlays to achieve, or will require the drastic alteration of normal business practices to achieve a pressing social or environmental need.

As this enforceability applies equally to all corporate actors who are subject to the CSR requirement, mandatory requirements avoid to some extent the problem of the refusal of some corporations to sign on to voluntary initiatives.

As in the United States, the corporate law of Canada has a tradition of shareholder primacy. However, it also has a greater tendency to recognize stakeholder interests to a greater degree through the regulatory actions of the federal government. Exemplary of this is legislation that was recently introduced in the Canadian Parliament, which if passed will specifically regulate the behavior of corporations in the mining and gas industries when they operate in developing countries. Bill C-300 would require the ministers of foreign affairs and international trade to issue guidelines to corporations involved in these sectors.

The ministers would be empowered to investigate complaints that companies in that sector had violated the guidelines, and, if a complaint was found to be substantiated, to take action that would prevent that company from gaining access to government support through the Export Development Canada for its foreign activities.

While a set of potential guidelines under Bill C-300 have not been released, the bill specifies that they will incorporate the IFC’s Policy on Social & Environmental Sustainability, the Performance Standards on Social & Environmental Sustainability, and the Environmental, Health and Safety General Guidelines. As such, they would include requirements to provide workers with a “safe and healthy work environment”, and to mitigate the conversion or degradation of natural habitats.

By adopting standards initially adopted by another organization, Bill C-300 provides an example of the use of legislation to both expand the application of, and provide enforcement means for existing CSR standards.

Bill C-300 has received support from NGOs such as Amnesty International, which declared support for the bill and called for the Canadian government to “adopt stronger legal and policy frameworks to hold corporations to account for their abuse of human rights”. However, whether this bill will become law remains uncertain. To date, it has passed both first and second reading in the House of Commons, and was referred to the standing committee on foreign affairs and international development. While the committee is not currently sitting due to the prorogation of Parliament on December 30, 2009, it appears that it has heard criticism of Bill C-300 from both industry members, and Export Development Canada. As such, it is not possible to state whether the bill will pass as currently drafted, will face amendments, or will die on the order table.

OHS professionals will undoubtedly have to become more familiar with CSR to integrate occupational health and safety initiatives, standards and accountabilities with the broader mandate of many organizations.

Becoming familiar with the principles of CSR has been the purpose of this article. The Bill C-300 discussion has yet to be fully resolved in Canada at a political level. However, in my opinion, this private members bill is just the first of many similar legislative initiatives that fall within the CSR mandate. Therefore, a growing understanding of the principles of CSR, its drivers benefits is an important aspect of every OHS professional’s growing responsibilities.

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Norm Keith leads the national OHS practice at Gowling Lafleur Henderson LLP. You can reach him at (866) 862-5787 ext.85699 or by email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it