MAC: Mines and Communities

While government stalls, private member launches bill to regulate Canadian mining overseas

Published by MAC on 2009-06-02

Four years ago, a Canadian all-party parliamentary committee urged the government to initiate a process by which domestic mining and oil companies would be held accountable for their actions when operating overseas, especially in the global South.

Despite a series of "roundtables" and many other meetings and articles devoted to the issue - including some support for the proposals from within the extractive industry itself - the government has stalled, if not stonewalled.

Now a private members bill has been introduced to parliament as a stronger alternative to the government's long-delayed reaction to previous recommendations coming out of the roundtable process.

Crackdown on bad companies

MPs want higher standards for Canadian firms working abroad

By Peter Zimonjic, National Bureau, Edmonton Sun

17th May 2009

OTTAWA -- Canadian companies deemed to be bad corporate citizens abroad could lose political and financial support from the federal government under a proposed law to be studied by MPs next week.

The private member's bill sponsored by Liberal MP John McKay would hit Canadian mining, oil and gas companies for environmental and human rights abuses in developing countries.

"The issue, for us, is that we want our Canadian companies to operate in a corporately responsible, environmentally responsible fashion," said McKay. "Surely to goodness that is not an onerous thing to do."

The bill, now past second reading, would demand extractive companies headquartered in Canada obey the same human rights and environmental laws when operating abroad that they do here. Companies that don't would lose diplomatic support, become ineligible for government loans and would have their stock tossed out of the Canada Pension Plan fund.

But the law would also let companies clear their names against malicious accusations of wrongdoing. Corporations that were investigated, but found innocent, would have evidence supporting their good standing published in the Canada Gazette.

Those in favour of the bill say it would help to resolve ongoing disputes such as the one involving the Canadian gold mining giant Barrick Gold Corporation and its operations in Papua New Guinea.

Last week Amnesty International joined Mining Watch Canada in asking the Canadian government to help stop alleged human rights abuses near Barrick's Porgera mine in that country. Amnesty alleges that families living near the mines are being burned out of their homes and forced off their land by police in violation of international law.

Barrick's spokesman, Vincent Borg, says the allegations are false, distort reality and the company is making direct complaints to Amnesty and Mining Watch to resolve the matter.

"We understand that only approximately 30-35 temporary shanties occupied by illegal miners, not legitimate landowners, were removed in full accordance with (Papua New Guinea) law," said Borg. "Police say this particular area was targeted because it sits at the very edge of the Porgera joint venture open pit and had become a staging ground for illegal miner incursions, as well as prostitution and alcoholism."

The bill has the support of all three opposition parties but the Conservatives and some business groups are opposed. The Canadian Chamber of Commerce wrote to ministers in March saying C-300 was unnecessary and would burden Canadian business in a recession.

But NDP MP Paul Dewar says Canadian companies that are poor corporate citizens bring Canada into disrepute, making it harder for other Canadian companies to do business abroad.

"It's our name on those companies, the Canadian name brand," said Dewar. "I think it's incumbent that Canada, the federal government, sets those standards."

Mining abuses abroad targeted; Liberal's bill aims to rein in Canadian firms in poor nations

Les Whittington, The Toronto Star

25th May 2009

A four-year effort to clean up the operations of Canadian mining and resource companies in poor countries takes a step forward today when a private member's bill on corporate social responsibility goes before the Commons foreign affairs committee.

The legislation spearheaded by Toronto Liberal MP John McKay would force the companies to live up to human rights and environmental standards when operating mines and oil wells in developing countries.
It is rare for private MPs' legislation to reach fruition but Bill C-300 narrowly passed second reading in the Commons last month despite opposition from Prime Minister Stephen Harper's Conservatives.

The push for tougher rules arises from numerous reports in recent years accusing Canadian resource firms operating abroad of dumping toxic waste, environmental destruction, being a party to the forcible relocation of native people and rights abuses.

"There are examples of Canadian corporations behaving badly in places like the Philippines and Guyana and as many as 30 other countries," says McKay, who will field questions at the foreign affairs committee today.

While many Canadian firms conduct themselves well, any environmental or human rights malpractices are a black eye, he says.

Action has been a long time coming. The all-party Commons foreign affairs committee first called for improvements in corporate social responsibility in a 2005 report that said activities by Canadian mining and resource companies in developing countries have had "adverse effects on local communities."

Following on that report, a 2007 study urged Ottawa to establish tough social responsibility standards, appoint an ombudsman and set up a regulatory committee to review non-compliance by companies.

Two years later, International Trade Minister Stockwell Day responded with voluntary guidelines for corporate social responsibility and the creation of a federal counsellor to assist companies with these issues.

The counsellor has yet to be appointed. Social justice groups and opposition MPs say Day's initiative is inadequate.

A step forward on corporate social responsibility

Marie-Claude Poirier

28th May 2009-06-01

In the autumn of 2005, Norway's Council on Ethics began investigating the use of a natural river system to transport and dispose of mine waste in Papua New Guinea. Accused of far-reaching environmental destruction, Canadian mining company Barrick Gold and its Porgera mine's tailings disposal system were placed under close scrutiny.

Issuing recommendations for Norway's $300 billion sovereign wealth fund and one of the largest global pension funds, the council found that Barrick Gold had not only neglected to take measures aimed at reducing the amount of waste produced by its mine, but that it had failed to stop the tailings disposal going directly through a pipeline into the local river system.

After an investigation spanning four years, the council established that "the mining operation at Porgera entail[ed] considerable pollution." The 2008 report went on to condemn the heavy metals contamination, particularly mercury, produced by the tailings. It concluded that severe and long-term environmental damage is likely to continue, and that it represents a serious health hazard for residents of the mining area and for the indigenous peoples living downstream from the mine.

Norway's Ministry of Finance later announced that it had excluded Barrick Gold from that country's pension fund for ethical reasons. Alongside other gold miners, cluster bomb and nuclear weapons manufacturers, Barrick Gold is now denied the opportunity to seek investment from Norway's government pension fund, and has lost the $200 million stock investment previously held by the fund.

While it is a significant blow for Barrick Gold, Canada's largest publicly traded company, the news of the Canadian extractive industry's questionable operations overseas may come as a surprise to many Canadians. It stands, after all, in stark contrast with the recent honours showered upon Barrick Gold's chairman and founder, Peter Munk, who received the Order of Canada the same year Norway's Council on Ethics issued its report. His name also adorns the Peter Munk Cardiac Center and the Munk Centre for International Studies at the University of Toronto.

Canada's lack of enthusiasm for corporate social responsibility (CSR) is rather well reflected in these symbolic gestures. It happens that Canada is a major player in the global mining sector. Canadian mining and exploration companies now account for 43 per cent of global exploration spending. In 2008, over 75 per cent of the world's exploration and mining companies were headquartered here. While the Canadian government encourages Canadian mining companies to conduct their activities in a socially and environmentally responsible manner, the reality is that they continue to fail to integrate, on a voluntary basis, social and environmental concerns into their business operations.

Despite a series of consultations with industry and civil society in 2006, the Canadian government only recently responded to the National Roundtables on Corporate Social Responsibility and the Canadian Extractive Industry in Development Countries. These roundtables were tasked with identifying opportunities to address the growing number of environmental and social conflicts created by Canadian oil, gas and mineral companies operating overseas, but the Canadian government's latest CSR strategy does nothing more than endorse current CSR standards and create administrative mechanisms, rather than legal ones, within the Department of Foreign Affairs and International Trade and at Canadian offices abroad.

With none of the original 27 recommendations from the multistakeholder roundtables being implemented, Canadians have begun sounding the alarm. Grassroots campaigns were held nationwide as sympathizers began to mobilize for the cause, and hundreds of thousands of Canadians have signed petitions calling for change.

The members of the Canadian Catholic Organization for Development and Peace (CCODP) are among the forerunners in issuing this call. On May 12, 2009, CCODP delivered 38 boxes filled with postcards addressed to Prime Minister Stephen Harper. Signed by more than 140 000 supporters, this petition called on the Canadian government to hold Canadian mining companies accountable through legal mechanisms. The total number of cards and letters they have delivered to the prime minister in the last three years is now well over half a million.

And members of the CCODP haven't stopped there. They are throwing their support behind Bill C-300, an Act on Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries. Tabled by Liberal MP for Scarborough-Guildwood Hon. John McKay, the private member's bill imposes tighter controls on the provision of government support to the Canadian extractive companies. It limits eligibility for this support to those complying with environmental, social and human rights standards, such as services provided by Export Development Canada and the Department of Foreign Affairs and International Trade, and not unlike the Norwegian Council on Ethics, the investments made by the Canada Pension Plan in Canadian mining companies.

Regrettably, Bill C-300 doesn't include provisions for an ombudsperson and independent investigation into complaints from overseas, since private member's bills cannot require the support of a budget. As an alternative, complaints would be directed to the Minister of International Trade and Foreign Affairs, and an investigation into whether or not a violation of CSR standards occurred would follow. The results of these investigations could mean bad PR for Canadian mining giants caught violating international human rights standards. While not perfect, the bill is an important step forward on social responsibility for Canadian companies.

Bill C-300 passed the second reading on April 22, 2009 and the Standing Committee on Foreign Affairs and International Development's hearings on Bill C-300 began on May 25, 2009. When the parliamentary session resumes in the fall, the bill will be considered on a clause-by-clause basis, and if accepted by the majority of the committee's members, it will return to the House of Commons for the third and final reading. V

[Marie-Claude Poirier is a recent graduate of Campus Saint-Jean, University of Alberta with a degree in political science and sociology. She has lived in and traveled to Asia on several occasions, and now works in the education sector of the Canadian Catholic Organization for Development and Peace.]

The text of the bill can be found at:

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