Blog Entry

Make the Canadian Mining Industry More Accountable

Jamie Kneen

National Program Co-Lead

[This article appeared as an opinion piece in the Toronto Star, March 22, 2010]

The Prospectors and Developers Association of Canada’s (PDAC) annual convention is one of the largest gatherings of mining interests in the world.

Much to the disappointment of those who are concerned about the impact of Canadian mining operations in developing countries, this year’s convention became a high-profile venue for launching a full-blown campaign against a bill aimed at improving the performance of Canadian mining, oil and gas operations operating internationally.

The PDAC campaign, complete with buttons, flyers and signs condemning the bill, urged convention participants to register their opposition with Ottawa. What is most unfortunate about this attack on a private member’s bill supported by a large cross-section of development, environmental and faith groups is that it is characterized by misleading and inaccurate information about the intent, scope and power of the bill.

Bill C-300, the Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act, proposes that Canadian extractive companies operating in developing countries adhere to environmental and human rights standards – incorporating those standards that have already been endorsed by PDAC, the Mining Association of Canada, and the Government of Canada.

Bill C-300 would apply only to those Canadian extractive companies that rely on taxpayer-funded financial support – for example, through Export Development Canada – or political promotion – for example, through Canadian embassies. If complaints were brought against these companies, they would be subject to investigation by the minister of foreign affairs and the minister of international trade. The ministers would have the right to decline to investigate complaints they deemed to be frivolous, vexations or made in bad faith. Companies found to be in violation of the proposed standards would lose their eligibility for some government services until they returned to compliance.

Rather than regulation, such as that provided by Bill C-300, the extractive industry associations advocate voluntary corporate social responsibility measures. They argue that mining companies operating in developing countries should be left alone to do the right thing at their own behest.

But while voluntary adherence to high standards of operations is necessary, it is not sufficient, any more than we can expect all drivers to adhere voluntarily to the rules of road. Regulations – and consequences for lack of compliance – exist to make sure laggards are not allowed to cause serious harm to society.

Recent testimony on Bill C-300 before the House of Commons Standing Committee on Foreign Affairs and International Development provides evidence that Canadian mining companies that are not living up to high standards in their operations are causing very serious environmental damage and social harm in Latin America, Africa and the Asia-Pacific region.

PDAC, the Mining Association of Canada, and the Government of Canada have all publicly acknowledged that Canadian mining companies are operating in many countries in which regulatory capacity and legal systems are inadequate to hold multinationals to account for environmental and human rights violations. What this means is that residents who may be harmed by the operations of Canadian mining companies do not have effective regulatory or legal protection in their own countries. Nor is there an international regulatory system or international legal system to which they can turn.

The United Nations has recently appointed a special representative, John Ruggie, to examine this very dilemma. Ruggie has noted that “governance gaps provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation.” Ruggie points to the very solution that is being proposed by Bill C-300. He finds that “there is increasing encouragement at the international level, including from the [United Nations] treaty bodies, for home states to take regulatory action to prevent abuse by their companies overseas.”

Ultimately, Bill C-300 is about government accountability – the accountability of the Canadian government to Canadian taxpayers and citizens with respect to the financial resources used by the Government of Canada to provide Canadian extractive companies financial and political support when they operate overseas. This was clearly understood by the 137 Members of Parliament who voted in favour of Bill C-300 at second reading in the House of Commons on April 22 last year.

It is also clear that even if the Canadian mining lobby ultimately manages to scuttle Bill C-300, other responsible governments will increasingly pass judgment on the operations of Canadian mining companies operating in developing countries. The Norwegian government, for example, regularly evaluates the holdings of its pension fund and divests from companies that do not meet its human rights and environmental standards. In 2009 the Norwegian government pension fund dropped its shares in Canada’s Barrick Gold as a result of its findings of “serious environmental damage” at Barrick’s operations at the Porgera mine in Papua New Guinea.

Catherine Coumans, Ph.D.
Research Co-ordinator
MiningWatch Canada