The Government’s New “CSR Counsellor” for the Extractive Sector

In March 2009 the Canadian government finally released its response to the March 2007 Advisory Group Report of the CSR Roundtables.

The government’s response, heavily influenced by two years of lobbying by individual mining companies, the Prospectors and Developers Association of Canada and the Chamber of Commerce, was not only two years late but was also thoroughly disappointing to anyone concerned about reducing the sometimes shocking human and ecological cost associated with Canadian mining activities internationally.

Entitled “Building the Canadian Advantage: A Corporate Social Responsibility (CSR) Strategy for the Canadian International Extractive Sector,”¹ the government’s response proposes to promote voluntary “guidelines” with Canadian extractive companies operating abroad. In addition to the OECD Guidelines for Multinational Enterprises, which Canada already supports, the guidelines to be promoted by the government are the International Finance Corporation’s Performance Standards, the US-UK Voluntary Principles, and the Global Reporting Initiative. The conditions included in the 2007 Advisory Group Report that ensured that Canadian standards for extractive companies operating abroad would reflect international human rights norms and practices was not adopted by the government. Collectively, the voluntary guidelines proposed by the Government of Canada do not reflect, nor do they ensure respect for, all international human rights norms and practices that may be affected by Canadian mining companies operating abroad.

“Building the Canadian Advantage” also omits the accountability mechanism that was at the heart of the 2007 Advisory Group report. It replaces the Ombudsman and Compliance Review Committee that the Advisory Group report had proposed with an “Extractive Sector CSR Counsellor” to “assist stakeholders in the resolution of CSR issues” related to the activities of Canadian extractive sector companies operating abroad.² Whereas the Ombudsman and Compliance Review Committee would have independently decided to review any complaint brought before them with respect to the proposed guidelines, the CSR Counsellor’s role is merely to “resolve CSR disputes.” The Counsellor will only “review” the CSR practices of particular companies with the explicit consent of the company. Regardless of the findings, the Counsellor will not “make binding recommendations or policy or legislative recommendation, create new performance standards, or formally mediate between parties”. The Counsellor will prepare an annual report to be tabled in Parliament by the Minister of International Trade.

As the CSR Counsellor is not in a position to recommend sanctions, a key element of the Advisory Group report that provided for government accountability to Canadians has been eliminated – the potential withdrawal of taxpayer-funded financial and/or political support by the government of Canada to companies found to be out of compliance with the standards.

The following summarizes shortcomings of the CSR Counsellor’s mandate:

• The CSR Counsellor acts in reference to the voluntary CSR guidelines the government has put in place. These guidelines fall far short in reflecting the full rage of human rights that may be affected by the activities of Canadian mining companies operating overseas.
• The CSR Counsellor may not create new performance guidelines.
• The CSR Counsellor may only “review” the activities of extractive companies with the explicit consent of the company in question.
• The CSR Counsellor has no ability to recommend any form of sanction for companies found to be out of compliance with the voluntary guidelines.
• The CSR Counsellor does not represent a mechanism by which Canadians can hold the Canadian government to account by conditioning government taxpayer funded political and financial support for extractive companies on their compliance with best environmental practices and with international human rights standards.
• The CSR Counsellor has been given the mandate to investigate complaints brought against NGOs by industry. This possibility was discussed, and promoted by the Prospectors and Developers Association of Canada, but not adopted in the 2007 Advisory Group Report. We know of no similar function in any other country.

In addition to these shortcomings, the details of the CSR Counsellor’s mandate raise concern about whether the role will be seen to be credible by civil society – and her political independence. For example, the mandate states that in deciding whether to take on a request for a review the Counsellor may consider a range of un-defined issues including: “the nature and seriousness of the issue;” “whether the request was made in good faith;” “the extent to which other redress mechanisms have been exhausted;” and “whether the issue is substantiated.” Additionally, before issuing a public statement based on a review, “the Counsellor shall (…) share the statement with the Minister [of Trade] and the Minister of Natural Resources, as well as the Minister of International Cooperation if, in the view of the Counsellor, the review is relevant to the mandate of the Minister of International Cooperation. The Minister [of Trade] may direct the Counsellor to study other matters related to the Counsellor’s mandate and the Counsellor shall report back to the Minister on those matters. The Minister shall determine whether to make public the results of such study.”