Earlier this month the Canadian Minister of International Trade, Ed Fast introduced the government’s revised Corporate Social Responsibility (CSR) Strategy for the extractive sectors. This strategy is important because it lays out the best practices and international standards that Canada’s mining and fossil fuels industries are expected to follow, and outlines government programming and support for CSR related initiatives.
The implications of this strategy for economic and social development in Africa, South America and other parts of the developing world are immense. Canada is home to over half of the world’s mining companies, is the single largest source of mining investment in South America, and is second only to South Africa for investment in Africa. With operations in over 100 countries, the impacts of Canada’s mining industry on the developing world are unparalleled.
Under the new strategy, Canada’s trade commissioners who staff our foreign embassies and high commissions will be trained to provide support to Canadian companies working to increase purchases of local goods and services. They will help companies to identify local goods and services suitable for local procurement by providing guidance, and they also have the potential to host workshops and other events at embassies.
Here is the text in the strategy that outlines this new commitment:
“Under the enhanced Strategy, trade commissioners will bolster their capacity to identify local procurement opportunities and help Canadian companies work with communities to take advantage of them. This process will ensure that local communities reap the benefits of responsible resource development, both directly and indirectly.”
Helping Canadian companies to purchase more goods and services locally will have huge positive impacts on developing countries. Purchases of domestically supplied goods and services create local jobs and income, transfer skills and technology to host communities, and help to create vital domestic business networks.
A single mine will routinely spend hundreds of millions of dollars each year on goods and services, so even a small increase in the proportion that stays in a host country will create huge benefits. Across the entire developing world, even a one percent increase in local procurement by all Canadian companies would mean literally hundreds of millions of dollars in new revenue to reduce poverty.
Local procurement is good for Canada’s mining companies as well. Purchasing locally lowers procurement costs in the long term, improves supply chain efficiency and resiliency, and strengthens a mining company’s social license to operate.
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