MAC: Mines and Communities

"Aid not Trade" for mining companies?

Published by MAC on 2013-02-04
Source: Canadian Staff, Sydney Morning Herald (2013-03-31)

There has been an on-going controversy over the Canadian International Development Agency (CIDA) tying their aid to Canadian mining companies (see: Canada's government equates mining with "development" and Canada's support for controversial mining projects goes a step further). These have primarily been over concerns that promoting, or 'green-washing', Canadian businesses is not what aid money should be doing.

It now seems that at least one of the development NGOs has decided that such partnerships were not a good idea (given the public relations impact it has had).

However, such lessons appear lost on the Australian government which is rolling out a similar project (including the controversial Paladin energy in Malawi - see Malawi: is Paladin's uranium mine "headed for disaster"?).

Donors closing wallets to Canadian charities who work with CIDA, mining companies

By Rick Westhead

Canadian Star

31 January 2013

A leading Canadian charity says it is considering abandoning a controversial development project funded by the federal government and a Canadian mining company because of pressure from its donors.

Plan Canada, one of three NGOs involved in a Canadian International Development Agency project that pairs NGOs and the government with mining companies, says the mining sector's poor image threatens to tarnish its own reputation. Some Plan donors have complained the mining companies have enough money to fund their own social programs and that Plan shouldn't be partnering with them.

"Would we try it again? Probably not," Rosemary McCarney, Plan's president, said in an interview with the Toronto Star. "It's upsetting to donors. People are mad. The reality is that working with any mining company is going to be a problem. There are going to be (employee) strikes and spills. Is it worth the headache? Probably not."

Canadian mining companies operating overseas are perceived as running dirty businesses, which the industry itself acknowledges. It makes headlines for leaky tailings ponds, cyanide spills, and other environmental debacles. According to a report commissioned in 2009 by the Prospectors and Developers Association of Canada, Canadian mining companies had been involved in 171 incidents since 1999 involving human rights abuses, unethical practices, or environmental degradation in a developing country.

CIDA is giving Plan $5.6 million over five years to run an educational program in Burkina Faso. Iamgold, which operates a gold mine in the West African country, pledged another $1 million per year to the project. Plan has also committed $1 million.

Iamgold senior vice president of corporate relations Ben Little declined to comment, referring questions to the company's media relations officer Laura Young, who did not return phone calls or reply to emails.

Samantha Nutt, the founder of War Child, a non-profit that operates vocational training programs in countries such as Afghanistan, said that by touting the project as one that helps Canadian private investment, CIDA is losing sight of its mandate of poverty reduction.

"It has the potential to put NGOs in a conflict of interest position," Nutt said. "Nobody bites the hand that feeds."

"This is trying to help the needy countries . . . so that we don't have to continually bail them out with their food issues, their education, their health issues and on it goes," Fantino said during a conference call with reporters.

A CIDA spokesperson said, "The projects are rolling out as planned and each one is being monitored for what can be learned to apply to future programming . . . CIDA is pleased that these projects mobilized additional support from private sector companies."

McCarney said Plan deliberated over the partnership with Iamgold for three or four years before deciding to proceed.

"The debate is whether we should stand on the sidelines and critique or try this out and see what happens . . . It could be a colossal disaster," she said.

Plan Canada's project offers job-skills training for 6,400 children, focusing on regions of the country 500 km away from Iamgold's mine.

"There's been a lot of misinformation," McCarney said. "I think this program is good for children."

Still, the partnership has upset some donors, who have told Plan that, while they didn't mind the organization accepting $1.12 million a year from CIDA, they were bothered by Plan accepting any sum - $250,000 a year in this case - from a mining company.

"It's really a trivial amount of money," she said. "We generate $140 million a year and we're talking about $250,000. We won't compromise here. It's not like we're not going to say anything (critical of Iamgold) because we've taken that money."

McCarney said she wasn't sure how many individual donors have quit their monthly donations to Plan. "A lot of people have given us the benefit of the doubt," she said. "Four out of five who have called us have said, ‘OK, be careful.' The other says sorry and cancels."

McCarney said Plan's executive vice president of marketing Paula Roberts handled the disgruntled donors. A Plan spokesperson said Roberts wasn't available to comment.

Chris Eaton, the chief executive of the World University Service of Canada, said he wasn't willing to discuss his Ghana partnership, which sees WUSC receive $214,000 from Rio Tinto Alcan and $928,000 from CIDA over three years. "I have to be careful," he said, declining to elaborate.

"We've had very few donor cancellations, fewer than 10," Toycen said.

Tony Breuer, a former executive with the Canadian Hunger Foundation, told a conference in Ottawa last year about his NGO's partnership with gold company Placer Dome. The agreement died because Placer had unrealistic expectations about how fast the program in Papua, New Guinea might bear fruit, Breuer told the conference, according to three people who heard him speak.

Breuer explained his NGO had a five- to 10-year plan for development in a part of the island nation still unconnected by road to the capital Port Moresby. Placer, on the other hand, wanted results in 18 to 24 months, said Breuer, who declined to comment to the Star.

Partnerships between mining companies and NGOs are nothing new. Care Canada, for instance, has worked alongside Barrick for years.

"I think the mining companies feel misunderstood," said Care chief executive Kevin McCort. "They went into this partnership with expectations of good development and came out of it with bad press."


Firms use tax money for aid projects

Sydney Morning Herald

29 January 2013

WEALTHY resource companies operating overseas are tapping into Australian taxpayer funds to set up aid projects potentially benefiting their corporate social responsibility credentials.

Aid and mining watchdogs have expressed concerns about the practice, arguing the corporations are wealthy enough to bankroll their own aid and that linking donations to controversial mine operations is a conflict of interest.

Nine mining companies all operating in Africa have been linked to the successful applications via the Foreign Affairs Department's Direct Aid Program - a scheme that allows heads of missions to give up to $30,000 to local causes.

About $215,000 of taxpayers' money went to the mining company-conceived projects last financial year, including a school for the deaf, providing trade skill training to local workers, establishing women's groups and digging wells.

Two applications involved uranium mining companies, Paladin Energy in Malawi and Bannerman Resources in Namibia.

Other successful applicants included the niobium miner Globe Metals and Mining in Malawi, gold miner Endeavour Mining Corporation in Ghana and copper miner Mawson West in the Democratic Republic of Congo.

The coalminer Intra Energy Corporation, gold miner Resolute Mining in Tanzania and Middle Island Resources, which is involved in gold mining in Burkina Faso, also were associated with successful applications.

Paladin, which has been the subject of some controversy in Malawi over job cuts, was last year linked to a funding application through its employees' charity - Friends and Employees of Paladin for African Children.

Paladin's (African) Ltd general manager, international affairs, Greg Walker, who was invited late last year to be Australia's honorary consul to Malawi, was involved in the process, according to 2012 correspondence from Australia's ambassador to Zimbabwe, Matthew Neuhaus, to Mr Walker. The letter obtained under freedom of information confirmed Mr Walker's successful application for the employees' charity funding proposal.

The Aidwatch director Thulsi Narayanasamy said it was not the place of the Australian aid program to fund the corporate social responsibility programs of wealthy mining companies.

The Mineral Policy Institute's executive director, Charles Roche, said the programs created a conflict of interest with aid linked to the mining proposal rather than the fact it was coming from Australia.

But DFAT and the companies rejected the claims. "It is in everybody's interest to encourage Australian companies to operate in a socially and environmentally responsible manner,'' a DFAT spokeswoman said.

Several companies said they spent large amounts on aid which the DAP funding merely complemented.

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