Commentary: Fulfilling CSR goals without violating anti-corruption laws -by Mark N. Sills and Jennifer L. Egsgard (Northern Miner – July 22, 2015)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Corporate social responsibility (CSR) is increasingly important to successful business operations. Yet CSR initiatives are often developed without attention to possible liability under anti-corruption laws.

CSR once referred primarily to a company’s voluntary philanthropic projects, such as donating to a local charity or building a school. While these types of projects are still important, today the term CSR refers more broadly to a corporate responsibility to understand and address the various impacts a company’s operations may have on its stakeholders in the economic, social and environmental spheres, as well as their relationships in the workplace, the marketplace, the supply chain, the community and the public policy realm.

An example of this newer concept of CSR is set out in the widely endorsed UN Guiding Principles on Business and Human Rights. These “Guiding Principles” state that businesses have a responsibility to respect all internationally recognized human rights by avoiding infringement on the human rights of others, conducting due diligence to monitor rights impacts and addressing adverse human rights impacts that may arise out of their operations.

CSR and anti-corruption initiatives are often approached differently both conceptually and within companies, yet they are linked. CSR considers the economic, social and environmental impacts of a company’s operations, and all of these spheres may be negatively affected by a company’s corrupt activities.

Socially, corruption undermines the rule of law and the legitimacy of public office, and creates an obstacle to democracy. Economically, corruption depletes national wealth, leads to the misallocation of scarce resources, can hinder the development of fair market value structures, distort competition and deter investment. Environmentally, corruption can contribute to environmental degradation, the exploitation of natural resources and insufficient regulation or enforcement to protect the environment.

Presenting or preventing corruption risk?

Corruption risk varies depending on the CSR approach a company takes. Corruption risk ought to decrease when a company is using the newer concept of CSR embodied in the Guiding Principles. Best practices in anticorruption compliance require policies, codes of conduct and due diligence to prevent and detect corruption, all of which are required by the Guiding Principles in respect of human rights.

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