Human rights are basic rights and freedoms to which all people are entitled. We consider it our responsibility to understand the actual and potential risks and impacts on human rights of any business we support and to ensure that our decisions and actions respect and protect internationally recognized human rights.
Our corporate Statement on Human Rights confirms our commitment to promote and protect human rights. Human rights is one of our three strategic priorities, along with transparency and climate change, and we are working hard to enhance our due diligence.
EDC conducts human rights due diligence on its transactions. Pre-screening is conducted by business development teams and, where needed, further screening or assessment is done by the CSR group. Our standard practice is to look at a company’s track record and management capacity, the country risk for human rights impacts, and the product being exported and its end-use. For project financing in higher risk countries, EDC benchmarks against the IFC Performance Standards on Environmental and Social Sustainability and monitors performance over the life of a loan where the potential for impacts on human rights is greatest.
There were four human rights inquiries from external stakeholders during the year:
Three stakeholders wanted to understand our human rights review processes and how we take into account the rights of children, benchmark to international standards, and treat borrowers who may be found to have engaged in human rights and labour abuses.
Another stakeholder sought EDC’s assistance to influence Equator Principles Financial Institutions (EPFIs) to incorporate the concept of free, prior and informed consent (FPIC) into their analyses of deals and to incorporate the rights of indigenous peoples, including adoption and implementation of the UN Declaration on the Rights of Indigenous Peoples as a framework for reconciliation in the corporate sector and business community.
In each case, EDC responded as fully as possible, contacting EPFIs regarding FPIC and the UN Declaration, explaining how our human rights assessment process addresses the rights of all, including children, how benchmarking to international standards is done, and our enhanced due diligence approach when borrowers are allegedly implicated in human rights and labour issues.
We continued our involvement in human rights discussions and work through the OECD Export Credit and the Equator Principles Financial Institutions groups. EDC played a lead role in further integrating the OECD Guidelines for Multinational Enterprises (MNEs) and UNGPs into the latest revision of the OECD Common Approaches. We also participated in the 2015 United Nations Forum on Business and Human Rights, where we provided a statement from the floor describing how EDC considers Canada’s CSR position on a company in our own CSR due diligence, and in deciding whether or not to proceed with a transaction.
Where We’re Going
As our customers expand beyond traditional markets, and we serve more small- and medium-size enterprises (SMEs), we will continue to evolve our approach to human rights due diligence drawing on guidance from the international human rights community and the Government of Canada.