MAC: Mines and Communities

An important step forward

Published by MAC on 2007-03-30

An important step forward

30th March 2007

The Final Report of the National Roundtables on Corporate Social Responsibility and the Canadian Extractive Industry in Developing Countries

29th March 2007

The Canadian Network on Corporate Accountability (CNCA) commends the Government of Canada for its ground-breaking consultation on Corporate Social Responsibility (CSR) and the Canadian extractive industry in developing countries. The process, which was led by a federal government Steering Committee, is an important step forward.

The roundtables culminated with the release of a final report, authored by a multistakeholder Advisory Group that included representatives from industry, civil society, academia, labour and the socially responsible investment community. The report outlines a set of consensus-based recommendations for the government. If implemented, these recommendations would establish Canada as a global leader in Corporate Social Responsibility.

The CNCA is calling on the Government of Canada to:

1. Promptly adopt the Final Report’s consensus-based recommendations.

2. Immediately implement the Canadian CSR Framework that is set out in the report.

The roundtables fulfilled a recommendation made by the Parliamentary Standing Committee on Foreign Affairs and International Trade (SCFAIT) in its landmark 2005 report on Mining in Developing Countries and Corporate Social Responsibility. The report called for major policy and law reform to ensure that Canadian companies comply with international human rights and environmental standards.

Member organizations of the CNCA participated in the national roundtable process that took place from June to November, 2006. CNCA members valued this opportunity to hear from other interested members of the Canadian public, national and international experts, and representatives from communities affected by Canadian mining, oil and gas companies. Many members made written submissions that are available on the roundtable website:

The centerpiece of the final report is the Canadian CSR Framework. The Framework is important because it:

* Establishes CSR standards and reporting obligations for Canadian companies;

* References international human rights standards and provides for the creation of human rights guidelines for the application of the CSR standards;

* Creates an ombudsman office to receive complaints regarding the operations of Canadian companies in the developing world and to assess corporate compliance with the standards; and

* Includes a provision for withholding government services from companies in cases of serious non-compliance.

The report’s recommendations address the negative environmental and social impacts that are so often associated with Canadian extractive operations. They represent an important step towards improved CSR performance in this sector. However, the Government of Canada must continue to build on this new platform. Once established, the Canadian CSR Framework must:

* Be incorporated into binding legislation so that compliance is mandatory as recommended in the SCFAIT report;

* Integrate the internationally-recognized principle of Free, Prior and Informed Consent for indigenous peoples;

* Reflect internationally-guaranteed human rights standards and the corresponding obligations of states and non-state actors to respect the human rights of individuals and communities.

Members of the Canadian Network for Corporate Accountability:

Amnesty International Canada
Africa-Canada Forum
Americas Policy Group
Asia Pacific Working Group
Canadian Catholic Organization for Development and Peace
Canadian Council for International Co-operation
Canadian Labour Congress
Entraide missionnaire
Friends of the Earth Canada
Halifax Initiative Coalition
Inter Pares
Kairos –Canadian Ecumenical Justice Initiatives
MiningWatch Canada
North South Institute
Rights & Democracy
Steelworkers Humanity Fund
United Church of Canada

Other Signatories:

Amnesty International (French Canadian Section)
Projet Accompagnement Guatemala
Social Justice Committee

Canadian mine firms adopt ethics rulebook

Accord aims to clean up image on human rights, environmental record

Kelly Patterson, The Ottawa Citizen

29th March 2007

In a move that could revolutionize the global mining industry, Canadian mining representatives have struck an unprecedented accord with environmentalists and human rights advocates on ways to ensure mining and oil companies act ethically in their overseas operations.

The report would create the world's first independent mining ombudsman and sketches out environmental and social standards for projects in the developing world, where standards are often lax or poorly enforced.

It also calls on government to withdraw services, such as diplomatic support and tax breaks, if companies fail to uphold those standards.

If the federal government implements the proposal, the repercussions would be felt around the world, since Canada is a colossus in the industry.

The groundbreaking report, which is to be released today, is the fruit of 10 months of intense negotiations between representatives of industry, advocacy groups such as Ottawa-based MiningWatch Canada, academics and government.

In recent years, the industry has been dogged by a growing international outcry over allegations of human rights abuses and environmental disasters at Canadian projects in more than a dozen countries in the developing world.

In June 2005, an all-party parliamentary committee urged the government to take action. That fall, the federal government announced it would set up a series of national roundtables, just days after the Citizen ran a seven-part series on the issue.

The proposals in the joint report would put Canada on the cutting edge of a growing international corporate social responsibility movement.

"Industry and civil society members have worked together in an unprecedented way and it is now up to government to implement these recommendations," says Catherine Coumans of MiningWatch Canada.

The report urges the government to adopt a made-in-Canada set of corporate responsibility standards based on benchmarks established by agencies such as the OECD and the International Finance Corporation.

It would also improve upon those rules on controversial issues, such as the compensation of people displaced by mining projects, the use of forced or child labour by suppliers, and mine-closing protocols.

An independent ombudsman would monitor firms to make sure they follow the rules and would refer serious concerns to a panel that could recommend government sanctions.

Industry did not agree with civil society groups that Canada's laws should be changed to make it easier to prosecute Canadians accused of corporate wrongdoing or criminal acts abroad -- a measure the 2005 parliamentary panel had recommended. But the two groups did agree the government should strengthen its law against bribing foreign officials and investigate charges the act is rarely enforced.

The recommended sanctions for not following the new Canadian standards would be significant:

- Firms that commit a serious breach of the Canadian rules would be cut off from any financial support from Export Development Canada, which offers millions of dollars in financial and insurance support for Canadian projects overseas.

- Firms eligible to deduct the tax they pay to a foreign government from their Canadian taxes would lose that privilege.

- Companies would lose the support they receive from Canadian consulates abroad.

The report also recommends offering refundable tax credits to companies that adopt the Global Reporting Initiative, which sets common standards for measuring a company's sustainability.

And it calls for a Canadian Corporate Social Responsibility (CSR) Centre of Excellence, which would advise Canadian firms and diplomats, and help brand Canada "as a country committed to CSR."

The report urges the government to adopt the Voluntary Principles on Security and Human Rights, a key accord that sets out guidelines for the corporate use of security forces.

The role of security forces has been at the centre of a string of alleged human rights abuses associated with some Canadian firms in recent years.

Private security forces and government troops at other Canadian mines have injured dozens of civilians in recent years.

Report targets secrecy in foreign mine, oil operations

Study addresses concerns about human rights abuses, environmental disasters


30th March 2007

Canada should revamp everything from its pension plans to its securities regulations, says a groundbreaking joint report by Canadian industry leaders in the mining and oil sectors and environmental and human rights advocates.

The proposed changes aim to force more disclosure from companies and large investors on how they deal with environmental and rights issues.

The report also aims to bring further transparency to corporate governance issues, such as executive compensation and accounting practices.

The changes would position Canada as a world leader in the field of socially responsible investment, the report says.

The report was drafted after a series of national roundtables convened by the federal government in response to allegations of human rights abuses and environmental disasters at Canadian mining and oil operations overseas.

" This is quite seminal, not just in Canada but also globally," says Robert Walker, of the BC- based Ethical Funds Company and a co- author of the report.

Such problems are not unique to Canadian firms, he notes: " Extractive companies worldwide are running into problems with allegations of human rights violations or complicity in violations or being turned back by local communities for failing to deliver local benefits."

The report urges the government to get securities officials to formally require the disclosure of environmental, social and corporate governance concerns that could pose a business risk, such as harming a company's reputation or long- term value.

It also asks the government to order all federally regulated pension plans to disclose how environmental, social and corporate governance factors are taken into account by fund managers in their investment decisions and their actions as shareholders through practices such as voting at annual meetings.

Federally regulated funds include not only pension plans for federal employees, but also funds for any industry regulated by the national government, such as banks and airlines.

About 1,300 pension plans fall under federal jurisdiction, or about 10 per cent of all pension plans in Canada, says Eugene Ellmen of the Toronto- based Social Investment Organization. Mr. Ellmen says only a handful of pension plans reveal how they take environment and human rights concerns into account. " It's a basic right to know what your plan is doing," says Mr. Ellmen.

Mr. Ellmen also noted that the report could be potentially more far reaching, as it calls for the federal government to encourage members of the provincial pension funds to follow suit.

Most pension funds in Britain, France, Belgium and Germany are already required to disclose how they deal with environmental, social and corporate governance concerns, Mr. Ellmen notes.

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