Export Development Canada (EDC) Financial Services – Corporate Social Responsibility Requirements

1
Export Development Canada (EDC) Financial
Services Corporate Social Responsibility
Requirements

• Yolanda BanksSenior Corporate Social
  Responsibility Advisor
• Presented to Canada-South Africa Chamber of
  Business and MineAfrica Seminar, Toronto 22
  October 2009

2
Role of Export Development Canada (EDC)

• Our mandate
• Created in 1944, EDC is a Crown corporation that
  operates on commercial principles. Our mandate
  is to provide trade finance services to support
  Canadian exporters and investors in some 200
  markets, 130 of which are in developing markets.

3
Role of EDC (contd) indicates products most
used in Africa

• Our Basic Products and Services
• Credit Insurance
• Medium- and Long-Term Financing including
  Project Finance
• Bonding
• Political Risk Insurance - including
  non-honouring sovereign PRI
• Equity

4
EDC Business Volumes support for business in
Sub-Saharan Africa
5
Recent Sub-Saharan Africa - Project Finance Deals
Ambatovy Nickel Mine, Sherritt International
(Madagascar)
The Ambatovy nickel and cobalt mine in Madagascar
is expected to employ 1,900 Malagasy workers
during construction and 1,600 during operation.
Photos courtesy Sherritt International Corporation
6
Recent Sub-Saharan Africa - Project Finance Deals
Lumwana Copper Project, Equinox Minerals (Zambia)

As part of a Category A environmental review,
members of EDCs Environmental Advisory Services
group conducted a site visit of the Lumwana
Copper mine in Zambia in March 2006. Photo
courtesy Equinox Minerals
7
Recent Sub-Saharan Africa - Other Financing

• 2009South Africa Nedbank Ltd.Financing Sale
  of Telecommunication Equipment and Services100
  - 250 million in favour of Ericsson Canada Inc.
  other exporters

2009Zambia Développement International
Desjardins Inc.Financing Support of foreign
direct investment(FDI) lt 1 million

• 2008TanzaniaMIC Tanzania Limited
  FinancingTelecommunications equipment and
  related services15-25 millionin favour of
  Ericsson Canada Inc.

8
Recent Sub-Saharan Africa Bank Guarantees

• 2008MauritaniaCaisse Desjardins du Marigot de
  LavalGuarantee for Sale of various Canadian
  goods and services lt 1 millionFlexexportation
  Inc.

• 2008EthiopiaBank of MontrealGuarantee for
  Sale of engineering services lt 1
  millionHydrosult Inc.

• 2008Congo (Kinshasa)La Banque Royale du
  CanadaGuarantee for Sale of school manualslt
  1 millionBeauchemin International Inc.

9
EDCs CSR Statement of Commitment
At EDC we commit to carry out our mandate in a
socially responsible manner consistent with our
corporate values.
10
Our Commitments
CSR _at_ EDC

• CSR is an operating principle at EDC
• Reflects HOW we execute our mandate

11
CSR _at_ EDC key elements
How CSR Impacts EDC Customers

• Combating Corruption
• Environmental Review
• Transparency
• Human Rights Analysis

12
1. What you need to know -- Combatting
corruption

• Customer declarations
• Awareness-raising
• Documentary safeguards
• Due diligence
• Remedial actions

Concerted action OECD Export Credit Group
13
2. What you need to know -- Environmental (and
Social) Review
Environmental Policy

• We assess the environmental impacts of all
  business transactions
• International Agreements OECD Equator
  Principles, (joining the five largest Canadian
  banks -- representing 80 of the worlds
  project finance market), EDCs Environmental
  Review Directive (ERD)
• Use international standards, e.g. IFCs
  Performance Standards for Social and
  Environmental Sustainability, World Banks
  Safeguard Policies

14
2. Environmental (and Social) Review (contd)

• For Non-Project Transactions
• Risk Assessment, including environmental, social
  and reputational risk
• Using publicly available sources of environmental
  and social information, e.g. SEC filings,
  compliance records, CSR / Sustainability reports,
  indices (Dow Jones Sustainability Index, Jantzi
  Social Index)
• Team of specialists environmental / social and
  reputation risk

15
Environmental (and Social) Review (contd)

• For Projects (Due Diligence Requirements)
• Documentation
• Comprehensive Environment and Social Impact
  Assessment (ESIA) -- including Stakeholder
  Engagement Strategies, social risks labour
  working conditions
• Environment and Social Management Action Plan
• Resettlement Action Plan
• Biodiversity Action Plan
• Site visit by EDC Specialists
• Independent expert review
• EDC disclosure
• Environmental covenants
• Ongoing monitoring

16
3. What you need to know -- Transparency
Transparency

• Disclosure of Information
• Commitment to transparency
• At EDC, we strive for balance between public
  accountability and respect for customer
  confidentiality
• Disclosure Policy that governs release of
  customer information
• Federal Access to Information Act with protection
  of commercially confidential information

17
Disclosure on Category A Projects ex-ante
and ex-post (before after signing)
18
Disclosure on Category B Projects ex post
(after signing)
19
Disclosure on All Financing Support ex post
(after signing)
20
4. What you need to know -- Human Rights
Analysis

• Statement on Human Rights, April 2008
• Analysis conducted by Political Risk Assessment
  Department (PRAD)
• Project analysis two-way impacts -- on the
  project and of the project on the human rights
  situation
• Information sources DFAIT reports, other sources
  of intelligence

• EDC values human rights and promotes the
  protection of internationally recognized human
  rights, consistent with the policies of the
  Government of Canada. 
• Source EDC Code of Business Ethics

21
4. Human Rights Analysis (contd)

• What we are looking for from customers
• Largely, although not exclusively, affects
  extractive companies
• Looking for
• a heightened awareness of the issues,
  demonstrated sensitivity to how human rights
  impacts the project and how the project impacts
  the local human rights situation
• Reference to application of the Voluntary
  Principles on Human Rights and Security -- part
  of EIA under IFC Performance Standard 4
  Health, Safety Security
• Emerging best practice Human Rights Impact
  Assessments
• We can be helpful to you

22
Conclusion

• CSR Risk Mitigant

23
Contact Information

• International Business Development
• Africa, Europe and Middle East
• Patricia Bentolila, Chief Representative Africa
  and Middle EastTel [phone] Fax (613)
  598-2503 Email pbentolila_at_edc.ca
• Anne-Marie Gagnon, Regional Manager Africa and
  Middle EastMaghreb and West AfricaTel (613)
  597-8864 Fax [phone] Email
  angagnon_at_edc.ca

24
Your Questions

• For more information, consult
• Pour plus de renseignements, consultez
• www.edc.ca/csr
• www.edc.ca/rse
• ybanks_at_edc.caTEL 613-598-2586