MAC: Mines and Communities

Canadian bill to end abuses in foreign mines is defeated

Published by MAC on 2010-11-01
Source: Montreal Gazette, statements, others (2010-10-28)

Vote on Bill C-300 Signals Strong Momentum Towards Regulation of Canadian Mining Industry Overseas

MiningWatch Canada Release

28 October 2010

Ottawa - The narrow defeat in the House of Commons of Bill C-300, the "Responsible Mining Act", marks a significant turning point for the country. In spite of an unprecedented and sustained year-long lobbying effort by the mining industry aimed at defeating the Bill, the close vote reflects the degree to which legislators have come to understand the need to regulate the activities of Canadian mining companies operating internationally.

Put forward by Liberal MP John McKay, Bill C-300 would have set international human rights and environmental standards for the activities carried out by Canadian extractive companies in developing countries and would have led to increased accountability by making our government's financial and political support for their operations contingent on compliance. The bill was defeated by just 6 votes.

"A significant number of parliamentarians understand that too often the activities of Canadian mining companies operating overseas are causing serious harm to local people and environments," says Catherine Coumans of MiningWatch Canada. "There is finally awareness that we can and should ensure that government support is restricted to those that meet international standards."

A report obtained by MiningWatch Canada that had been commissioned by the Prospectors and Developers Association of Canada looked at community conflicts, environmental damage and unethical behaviour by mining companies around the globe. The study found that "statistics demonstrate that Canadian companies have been the most significant group involved in unfortunate incidents in the developing world."

In the course of Bill C-300's review in the House, thousands of Canadians wrote to support; it was well received by ministers and former ministers in countries where Canadian mining companies operate; it was praised by Canadian and international legal professionals, human rights advocates, faith-based groups, and trade unions; and it was welcomed by a United Nations special rapporteur, as well as villagers and organizations from hundreds of communities affected by Canadian mining companies in Africa, Latin America and Asia.

"The high profile industry drive to stop Bill C-300 was fuelled by profits from global mining operations and tax payer dollars," says Coumans. "It was a campaign based on fear mongering and in defence of continuing impunity in weak governance zones around the world," she adds. "Those who fought Bill C-300 are on the wrong side of history and will not ultimately be able to stop the push to secure greater justice for those who suffer from unconscionable mining practices."

For more information contact: Catherine Coumans (613) 569-3439


MPs defeat bill to end abuses in foreign mines

By Laura Stone

Montreal Gazette

27 October 2010

OTTAWA - A private member's bill that for the first time would have punished Canadian mining companies found to commit human rights and environmental crimes abroad was defeated in the House on Wednesday in a final white-knuckle vote.

Toronto Liberal MP John McKay's bill died in a 140 to 134 vote. Thirteen Liberals and four NDP members were absent for the vote.

McKay has for years been fighting for the legislation that would give the government power to investigate complaints and impose sanctions on Canadian companies that are found to be engaging in wrongdoing abroad. McKay said that encompasses everything from doing unlicensed work to environmental degradation to murder.

Following the vote, McKay said he was disappointed but placed the blame squarely on the Conservatives.

"This government has no interest in any kind of meaningful regulation of this particular industry," said McKay.

"There's no regulations whatsoever. If something outragous happens tomorrow, in any country, there is no accountability, no transparency, no calling to account of any mining companies whatsoever. And they like it that way."

Rumours swirled in advance of the vote, with some reports suggesting that Liberal leader Michael Ignatieff - who has spoken out against McKay's bill - had ordered party whip Marcel Proulx to tell caucus members not to attend the contentious vote, or to stay away if they planned on voting no. However, Opposition House Leader David McGuinty said he hoped the bill would pass.

Ignatieff told reporters that while he does not support the bill, he favours its principles.

"This is a private member's bill. I've made my reservations about the bill known for months, but I think it sends a very important message about corporate social responsibility," said Ignatieff, who did not vote on McKay's bill.

In a statement released after the vote, Ignatieff said, "Despite the defeat of C-300, the Liberal Party remains committed to the important principle of corporate social responsibility for Canadian industries at home and abroad."

The NDP, however, said in a release that the Liberals "once again failed to take a position on one of their own 'progressive' private member's bills."

Minister of International Trade Peter Van Loan denounced the bill, saying that it threatens thousands of Canadian jobs.

"The impact of bill C-300, if passed, will be to make it very challenging for companies to raise finances as they will be constantly tied up dealing with frivolous and vexatious complaints that will make investors think twice about operating here," he said.

"What this bill would do, would be to drive that leadership out of our country and put it into other countries that are competing with us to be headquarters of mining, leaders in mining, places like Australia, Brazil, the United States. We want to keep this critical sector alive and well here in Canada."

Van Loan also said that Canadian companies already adhere to some of the highest ethical standards in the world.

Industry representatives also opposed the bill, which they said has good intentions but is ultimately unjust.

"We're concerned that what it would do is punish Canadian mining companies not based on their behaviour but based only on complaints," Paul Hebert, a spokesman for the Mining Association of Canada, told Postmedia News on Tuesday.

Even former Liberal trade minister Jim Peterson spoke out against the bill, saying it would expose "our very successful industry to an unfair process and to financial problems which will hinder their competitive status in the world."

The bill would punish companies found to be engaging in immoral behaviour by putting sanctions on their Export Development Canada funding, as well as removing embassy promotion. EDC is an export credit agency that provides financing and "political risk" insurance to companies that invest abroad, sometimes in volatile regions.

Last week, the federal government appointed Marketa Evans as Canada's first counsellor of corporate social responsibility for mining.

McKay dismissed that office as "the appearance of doing something while doing nothing at all" because it is not legally binding.


He who pays the piper calls the mining tune

By Patricia Adams

Special to the Financial Post

26 October 2010

Some Canadian mining companies "consider Bill C-300 serious enough that they would contemplate relocating their head offices elsewhere if this comes into law," said Anthony Andrews, executive director of the Prospectors and Developers Association of Canada.

The bill could threaten Canada's status as a world leader in global mining finance, said MacPenney, director of government relations with Kinross Gold Corp., one of Canada's largest gold mining companies.

Bill C-300 "would mean the cancelling of projects and the cutting of jobs.... Many Canadian companies would simply not take the risk of pursuing new ventures in developing countries," stated Perrin Beatty, former secretary of state for external affairs and now president and chief executive of the Canadian Chamber of Commerce.

"If passed, Bill C-300 will undermine the competitive position of Canadian companies. It could cause an exodus of mining companies from Canada," warned Michael Bourassa, a partner and co-ordinator of the global mining group in the law firm of Fasken, Martineau DuMoulin, named "Global Mining Law Firm of the Year" for five straight years by Who's Who Legal.

These and numerous other captains of Canadian industry all came to Ottawa over the last year to deliver one message: Without taxpayer support for mining projects in the Third World -- what Bill C-300 is ultimately about -- Canada's mining industry would be unable to compete and could leave Canada.

Bill C-300, a private member's bill that's up for third reading today, is designed to give those affected by Canadian-backed mining projects in the Third World -- both the Canadian taxpayers providing the funds and the Third World citizens hosting the mines -- a say in projects accused of harming the environment or human rights. Under this bill, either the Minister of Foreign Affairs or the Minister of International Trade would be obliged to receive and investigate allegations of wrongdoing. If the allegations were borne out, the mining company would lose its taxpayer support, most of which comes from Export Development Canada, a Crown corporation that annually provides the mining industry with more than $20-billion in subsidized finance and insurance.

Companies willing to operate on a free-market basis would be exempt from penalty -- Bill C-300 targets only those companies unwilling or unable to operate without government support.

Critics of Bill C-300 argue that Canadian miners would be targeted unfairly, that the Canadian economy would suffer, and that the Third World would be deprived of desperately needed development. The critics are wrong on all counts.

First, there's nothing unfair about taxpayers wanting a say in how their funds are spent. What's unfair is a mining industry that wants carte blanche use of taxpayers' funds. EDC is able to exempt even the riskiest of its projects from environmental assessments, and from the normal disclosure requirements in the Access to Information Act.

Taxpayers typically have no right to meaningful details associated with any EDC disbursement to any mining company or mining project. Next, the notion that the Canadian economy benefits by subsidizing an industry has no currency, except with socialist true-believers. Governments are notoriously poor at picking winners.

Now let's examine the third claim from the critics, that the Third World would be deprived of needed development. This claim largely refers to projects in corrupt or lawless countries whose leaders tend to misuse funds intended for development, and which mining companies would steer clear of without government backing.

Take Africa, for example, the most corrupt region on earth. EDC, touting itself as willing to insure mining companies in the event that an African regime expropriates their property, tears up contracts, or otherwise reneges on deals, makes deals happen between Canadian companies and regimes that neither protect the environment nor the rights of their own citizens. With EDC's backing, mine shareholders can breathe easy when they invest in such countries, confident that if a politically risky project fails, Canadian taxpayers will come to their rescue.

Without EDC and other Canadian government backing, Third World development would indeed be affected -- for the better. Canada's mining companies and their financiers would now avoid projects with corrupt regimes in favour of countries that respected the rule of law -- where the mining firms need not fear the unlawful expropriation of their assets, for example. This would create true development -- jobs and wealth in nations that have the preconditions necessary for development.

Most of the criticisms of Bill C-300 stem from fears that the regulations that would be written to implement it might be unfair to mining companies. The critics have no basis for prejudging as-yet unwritten regulations. In any case, the regulations would in all likelihood be irrelevant if Canadian companies swore off taxpayer subsidies. Companies that need taxpayer largesse to remain in business should at least have the decency to grant their benefactors an accounting of their actions.

Patricia Adams is an economist and the executive director of Toronto-based environmental group, Probe International.


Bill C-300 is Mining for Change

By Shefa Siegel

The Mark News

25 October 2010

Passing a private member's bill to legislate responsible mining practices is the right thing to do, ethically and economically.

International exchanges of mining expertise are among the earliest recorded forms of foreign aid and diplomacy. In antiquity, when King Solomon - ruler of the land of milk and honey, not minerals and mines - broke ground on his temple atop Jerusalem, he asked the King of Tyre to lend him a metallurgical consultant.

Meanwhile, the original conference of the kind now hosted by the UN and other international institutions was held in the Hungarian mining town of Schemnitz. According to the 19th century naturalist Alexander Von Humboldt, "The learned of every nation met at the Congress of Schemnitz" to disseminate the German method of using mercury to accelerate silver extraction.

But the first modern proponent of international mining cooperation was a Canadian civil servant, Dr. Hugh Keenleyside, who, in the late 1940s, led the infant UN's first technical assistance mission, a study of Bolivia's failing tin mines. This mission led to Keenleyside's selection as director of the Technical Assistance Administration, a long-forgotten UN bureaucracy that preceded what we now know as international development.

Among other projects during his tenure, Keenleyside pushed for his vision of global cooperation in the mining sector. But as postwar internationalism spread in scope, mining drifted from a priority to a novelty, and across the eco-humanitarian conventions from the 1960s through the 1990s, there was a consistent theme: mining got left out.

Now, 60 years after Keenleyside's cry for an ethics of extraction, we finally have Bill C-300 - the responsible mining bill.

The private member's bill was introduced in February 2009 by Liberal MP John McKay, following five years of debate over the human rights and environmental standards of Canada's oil, gas, and mining companies operating in developing countries.

The bill is scheduled for a vote on Oct. 27. If successful, it will lay the legislative foundation for corporate responsibility in the extractive industries by creating an accessible mechanism for complaints and ensuring the Government of Canada invests public funds only in corporations that comply with environmental and human rights standards. A bill with similar objectives was signed into law in the United States in July.

However, the bill is meeting stiff resistance from people in the industry, who have voiced suspicions that the motive behind the bill is to "punish" companies.

In a discussion about this bill, McKay told me, "There's a saying in law school: 'When you've got neither law nor facts, just pound the table.' That's what [critics of the bill] are doing - pounding the table. We could have put punitive measures in this bill, but there are no criminal sanctions or civil damages. Mining will continue as usual - we just want them to be responsible."

Canada has a bipolar international reputation, as anyone who goes to remote parts of the developing world may discover. I once traveled to Adamah, a town in southern Ethiopia, where the people say, "When there is drought in Ethiopia, pray for rain in Canada" - a reference to their appreciation for Canadian food aid. This gratitude for our provision of wheat still buys a Canadian a cup of coffee or a bolt or two of araki.

The flipside of this reputation, however, is the perception of Canadian industry - especially junior mining companies - as particularly unscrupulous.

I spent September in Colombia, where the area I was scheduled to work - a mining town still scarred by the violent chaos and massacres of 1980s and '90s - was impassable due to the arrival of a Canadian gold mining company.

Six months earlier, the company had leased a claim in this troubled region, only to discover there were already 7,000 miners working the concession. The company's ultimatum to the miners - give up using mercury within three months (an impossible request) or get out - helped spark syndicalist protests marked by a general strike and renewed alliances with guerrillas.

There are of course more intense allegations against Canadian miners, including reports of involvement in rape, murder, and corruption. No new human rights ethics or legislation should be needed to persuade extractive companies to repudiate these crimes.

But the example from Colombia illustrates the subtle significance of the responsible mining bill: What about when a company destabilizes a fragile area? Is it possible to establish mechanisms - not necessarily punitive - to prevent this from occurring?

For centuries, extractive industries - not just Canadians - have operated with a manifest destiny captured by an expression I first heard in Spanish: No pido permiso, pido perdon - I don't ask permission, I ask forgiveness.

There is a certain legitimacy in this worldview. Minerals and fuels, along with agriculture, are preconditions of progress, and it is as much the incessant demand for the fruits of extraction as it is the desire for profit that drives the perpetuation of mining. Beyond coal and gas, an industrialized citizen needs 10 tonnes of steel and 150 kilograms of copper, lead, and aluminum to survive the day. Just as we are what we eat, we are what we mine.

Still, there are limits to what is acceptable in the pursuit of economic growth. Articulating these limits - as Michael Ignatieff effectively underscored during his human-rights career - is one of the triumphs of postwar internationalism. We finally have language, which was unavailable to Hugh Keenleyside, to discuss and interpret the interdependence of economic development, human rights, and environmental integrity.

The problem, therefore, lies not in our ideas but in our instruments. With mining left out of human rights and environmental conventions, industry accountability was relegated to the realm of voluntarism. In the last two decades, international institutions fabricated more than a dozen codes, agreements, declarations, practices, covenants, and principles, many of them conflicting, each with its own language, all short on authority and legitimacy.

Mine managers don't like the codes because they are too numerous and varied and require an enormous amount of paperwork. Environmental and human-rights advocates don't like them because they are toothless. People living near mines have never heard of the codes; even if they had, their impenetrable jargon would be a high hurdle, and there is no clear means of redress.

The only people benefiting from the voluntary system are consultants who profit from their ability to decipher the codes and play both ends against the middle by working as both assessors for international agencies and management consultants for companies.

By its own admission, Bill C-300, if passed, would do little more than adapt into law the social and environmental policies of these voluntary codes. "This bill moves the discussion three inches along the field, but it starts to set in place a regulatory framework," said McKay.

The bill does not need to be radical to be transformative - it just needs to align diverging customary practices and provide legitimate public arbitration. These are legislative functions that industry leaders, and especially investors, ought to be embracing.

Consolidating human rights and environmental ethics into a single law makes corporate responsibility easier, not harder, especially when companies are already participating in the voluntary system.

A legal obligation to accountability also expands risk assessment to "soft" areas typically ignored by engineers. Investors should not have to be surprised by local unrest that causes work stoppages, demands to renegotiate leases, and the derailment of projects. On the contrary, more transparent accounting would inform investors about potential conflicts before they sink capital into a mine occupied by guerrilla-backed miners.

As long as there are humans, there will be mining, and as long as there is mining, there will be costs. Mining is messy, impure, and - when ecological and humanitarian ideals are integrated as necessities - exceedingly complicated.

But to hide from this complexity is to deny a half-century of progress which if nothing else informs us, to paraphrase economist Gunnar Myrdal, there are neither economic problems nor eco-humanitarian problems - "there are simply problems, and they are complex."

Shefa Siegel is International Project Manager, U.S. State Department Andean Mining Project; Research Fellow, UBC


The leaked PDAC report is getting a lot of play here - in connection with the vote on Bill C-300 this week

Canadian mining companies need tougher rules

By Janet Bagnall

Montreal Gazette

22 October 2010

Two years ago, Norwegian Minister of Finance Kristin Halvorsen ordered Norway's government pension fund to divest itself of a $200-million-plus investment in Canadian mining company, Barrick Gold Corp.

Under Norwegian rules, the public pension fund is not allowed to invest in companies that, in the judgment of Norway's Council on Ethics, entail "an unacceptable risk of the Fund contributing to serious environmental damage."

Heavy-metal pollution, especially mercury buildup, from Barrick's Porgera mine in Papua New Guinea was an egregious case in point, the ethics council decided.

In other words, it is not exactly news that Canadian mining companies have been involved in sustained and flagrant violations of environmental protection. Norway's decision to sell off its shares in Barrick Gold let the cat out of the bag on that score.

Yet this week, there was the Canadian mining industry working overtime to try to contain the damage from a 2009 study it had commissioned and tried to keep buried.

The study, which the industry said was for internal consumption only, found that Canadian mining companies are implicated in four times as many environmental and human-rights violations as mining companies from other countries. Canadian companies accounted for nearly two-thirds of the 171 "high-profile" environmental and human-rights violations between 1999 and 2009, the study found.

By high profile, the researchers had in mind cases such as Talisman Energy Inc.'s investment in southern Sudan from 1998 to 2003, when the African country was embroiled in civil war. Talisman was linked to serious human-rights violations, including the Sudanese government's campaign of terror against the civilian population. Talisman pulled out of Sudan in 2003 after the United States threatened the company with exclusion from U.S. financial markets.

The study, commissioned by the Prospectors and Developers Association of Canada, was leaked. The point and timing of the leak were obvious. Next week, Parliament will vote on Liberal MP John McKay's private member's bill that would give the government authority to investigate complaints against Canadian resource companies operating in developing countries. This will be the third and final reading.

The industry -which contributed $42.6 billion to Canada's gross domestic product in 2007 and employs hundreds of thousands of workers in Canada and abroad - complains that the proposed law is unnecessary and would undermine their competitiveness internationally.

The industry argues that because Canada is home to 75 per cent of the world's mining and exploration companies, it isn't out of line for Canadian companies to be linked to as many violations of good corporate behaviour.

One, that hardly excuses such violations. And, two, the study suggests that there is a pattern of ignoring international standards of corporate responsibility.

Little sense of urgency is apparent, either within industry or government. It was just this week, on Wednesday, that a Canadian Corporate Social Responsibility counsellor opened for business. Marketa Evans, appointed a year ago, will preside over an entirely voluntary review process.

All that Bill C-300 is designed to do is to bring Canadian mining operations into line with what Canadians expect of their companies. The bill states its purpose is to "ensure corporations engaged in mining, oil or gas activities and receiving support from the government of Canada act in a manner consistent with international environmental best practices and with Canada's commitments to international human rights standards."

Bill C-300's penalties are more embarrassing than crippling. The proposed law would require the Canada Pension Plan to unload any interest in companies found to be non-compliant. Export Development Canada would have to withdraw financial support and Canadian trade commissions and embassies would stop whatever help they were providing.

It is also unlikely that the industry would be inundated with vexatious or bad-faith claims. Canada's ministers of foreign affairs and international trade will have the power to dismiss such allegations.

These are not onerous conditions. According to Catherine Coumans, research coordinator for MiningWatch Canada, the standards under which Canadian companies would have to operate are already largely endorsed by the Prospectors and Developers Association of Canada, the Mining Association of Canada and the Canadian government.

Meanwhile, back to Barrick Gold: Six people in the Dominican Republic were injured last week as mining workers protested against what they say is the Canadian company's refusal to respect their rights. Then this week, opponents of Barrick Gold and Goldcorp's $3-billion plans to reopen the Pueblo Viejo mine have gone to court to seek a delay. Environmentalists say the companies are using a 2001 permit, granted when the scope of the project was much smaller.

Bill C-300 still looks every inch a useful and necessary law.

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