MAC: Mines and Communities

Lawyers take aim at mining companies Their rallying cry: 'corporate social responsibility'

Published by MAC on 2009-04-06

Cristin Schmitz

Two Ontario lawyers are spearheading a novel bill and lawsuit that would make domestic companies answerable in Canada for alleged violations of human rights abroad.

Last month, Murray Klippenstein of Toronto's Klippensteins filed a $1-billion- plus statement of claim in Ontario Superior Court against Vancouver-based Copper Mesa Mining Corp. (formerly known as Ascendant Copper Corp.) in connection with alleged violent attacks by the company's security forces on villagers protesting a proposed massive copper mine in the Andes of northwestern Ecuador.

The action contends that Copper Mesa is vicariously liable for alleged decisions made in Ontario by its board of directors which allegedly resulted in assaults on the plaintiffs.

The junior mining company "intends to vigorously defend its position that the claim is false and entirely without merit," Copper Mesa's chief financial officer, Rana Gill, told The Lawyers Weekly.

Win or lose, the litigation has attracted international attention, partly because it is structured in a way that could avoid the fatal application of the forum non conveniens rule. The rule previously led to similar allegations against a different mining company in Guyana being thrown out of Canadian court.

Unlike the Alien Tort Statute in the U.S., Canadian law does not empower foreign plaintiffs to sue domestic companies here for serious human rights abuses committed overseas, although there is growing public pressure from church and human rights groups to enact such legislation.

Meanwhile the doctrine of forum non conveniens remains a formidable obstacle to corporate accountability, argues Klippenstein, who expects years of litigation over this preliminary but critical issue.

"The plaintiffs feel that the forum non conveniens rule is...out of touch with the present globalized reality, and doesn't provide real legal accountability," he explains. "We are saying these rules are very cumbersome and not very effective, and that legal reform is seriously needed."

Klippenstein emphasizes, however, that the suit is based on the claim that the torts occurred in Canada.

"This lawsuit by Ecuadorean villagers focuses not on the hand that pulled the trigger in a faraway country, but on the financial and management decisions of corporations that happened here in Ontario, and that fundamentally allowed and caused the harm to happen in another country," he said.

Coincidentally, on March 3, the same day as Klippenstein filed the Copper Mesa claim, the Liberal MP for Scarborough-Guildwood, real estate lawyer John McKay, rose in the House of Commons to urge MPs of all parties to support his new private member's bill: the Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act.

Bill C-300 would require the federal Ministers of Foreign Affairs and International Trade to create "corporate accountability" guidelines for mining and oil and gas companies that are consistent with international environmental best practices and Canada's commitments to international human rights standards.

Companies who failed to comply with the "guidelines" would experience specified negative repercussions with respect to their reputations and finances.

"There are documented abuses by Canadian companies operating in Guyana, the Philippines, and possibly in as many as 30 other countries," argued McKay, an evangelical Christian who is active on foreign aid and development issues. "Not only is there a behavioural risk to an individual company, but there is also a risk to our national reputation," he stressed.

Without government support, private member's bills usually stand little chance of becoming law. The Harper government has urged MPs to vote against Bill C- 300.

But McKay has previously hit two legislative home runs (private member's bills on fireproof cigarettes and international poverty alleviation are now law) - a remarkable track record. He told The Lawyers Weekly he is optimistic he can slam another one out of the Parliamentary ballpark, notwithstanding that during second reading debate last month the Conservatives dismissed Bill C-300 as "redundant" because "our government will soon be introducing and announcing a more comprehensive corporate social responsibility approach for the Canadian international extractive sector." (At press time, International Trade Minister Stockwell Day had just announced that the government will create an Office of the Extractive Sector Corporate Social Responsibility Counsellor "to assist stakeholders in the resolution of CSR issues pertaining to the activities of Canadian extractive sector companies abroad.")

Yet expressions of support for Bill C-300 during Commons debate by the Bloc Quebecois and NDP - who are not enthusiastic about the voluntary compliance approach touted by the government - suggest McKay's bill could pass in the current minority Parliament.

"I am not doing this for exercise," McKay says. "I want to drive this to royal assent. The principle of corporate social responsibility has been debated endlessly. Either you are 'fer it', or 'agin' it'. And most people are for it. So the question is: 'Are you for it enough to accept these rather mild sanctions?'"

If a majority of the Commons votes to approve Bill C-300 in principle this month, as McKay anticipates, he believes the bill will make it through the opposition-dominated Foreign Affairs and International Development Committee. "I am pretty sure that I have got my votes locked down," he says.

That prospect has so alarmed the Canadian Chamber of Commerce that it took McKay to lunch last month to try to convince him to vote against his own bill. "Canadian businesses, particularly those in the commodities sectors, are in the midst of the most punishing economic and financial conditions in memory," Chamber CEO Perrin Beatty, a Mulroney-era Conservative cabinet minister, reiterated in a letter. "Now is not the time to add further layers of complex regulations where the need to do so is not clear."

"The thrust of your argument seems to be that the guidelines are fine as long as there are no meaningful consequences," McKay wrote back March 17, "My hope is that the bill will provide much needed clarity to expectations and a transparent, accountable path to compliance."

Bill C-300 would require the government to publish environmental and human rights guidelines, and hold mining and oil and gas corporations publicly accountable for compliance overseas. The government would investigate non- frivolous and non-vexatious complaints against companies, and report to Parliament on the results.

The bill also contains financial sticks that would tie Export Development Canada financing to compliance with the guidelines, and constrain the Canada Pension Plan from investing in companies that fail to live up to the guidelines.

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