Feds move toward protecting Canada’s ‘brand’ in foreign mining operations

Canadian Press

At a Mining Association of Canada luncheon, two federal cabinet ministers emphasized the need for ethical standards 

Bruce Cheadle, The Canadian Press, November 22, 2014

OTTAWA – It’s taken almost a decade of loud, often unwelcome advocacy, but the federal government appears to finally recognize that Canada’s international brand needs a little spit and polish.

In back-to-back addresses this week to a Mining Association of Canada luncheon, two federal cabinet ministers repeatedly stressed the critical importance of what they called the “Canada brand” — and how it is a key to grabbing new business in the mining sector.

“We as a government and Canadians broadly speaking expect our companies to do business in a way that reflects the highest ethical standards, that reflects the highest environmental standards, the highest level of corporate social responsibility, the highest level of transparency,” International Trade Minister Ed Fast told the gathering at an Ottawa hotel.

Fast recited a host of laudatory statistics: about 1,200 Canadian mining companies operate more than 8,000 properties in over 100 countries, with 35 per cent of global exploration budgets coming from Canada.

“Can we do things better? Of course, there’s always things we can improve,” Fast finally conceded.

“But I’m absolutely confident that we have a very, very good story to tell.”

Natural Resources Minister Greg Rickford had already warmed up the crowd by cautioning that “there can be no compromise” on environmental stewardship and social responsibility.

“Our collective actions — government and industry — are critical to meeting our obligations (for) safety of the environment and the communities in which we operate, here and abroad,” said Rickford.

Their pitch came with a lot of puffery about further government assistance for Canada’s dominant mining sector — but also, notably, the hint of a stick, too.

For the first time, the federal government is threatening to withdraw financial and political support from Canadian companies that don’t live up to its social responsibility ideals.

For non-governmental organizations that have been fielding mining development horror stories for years, it’s a start.

A revamped, corporate social responsibility counsellor will screen foreign community complaints about mining operations and companies that refuse to co-operate with the counsellor will lose government support.

MiningWatch Canada began advocating for poor communities hurt by Canadian mining operations abroad in 1999 and spokeswoman Catherine Coumans says there used to be shocked disbelief that Canada’s Boy Scout self-image could be tarnished by poor corporate behaviour.

“Of course they won’t say in public there’s a big problem,” Coumans says of today’s government.

“But to see a Conservative government like this one say, ‘Look, we need to put things in place like a CSR counsellor, we need to have a penalty like withholding financial and political support’ — you don’t do that if you think there’s no problem.

“So we’ve definitely come somewhere.”

The new counsellor still has no power to independently investigate problems, recommend solutions or issue reports — but he or she will have leverage to at least get alleged offenders to come to the table to talk.

Under the previous federal counsellor, who resigned four years into her five-year mandate without explanation, three of six formal complaints she handled simply died when the companies involved refused to play ball.

The government also now says it will withdraw support from companies that don’t follow social responsibility guidelines. However, without any investigative mechanism, it is not clear how such a sanction would be adjudicated.

“Who will be in charge of the supervision of those companies and their operations abroad?” Ryan Worms of the Canadian Catholic Organization for Development and Peace asked in an interview.

“Who will make sure that there is some transparent investigations? No one. That’s the main problem we see again.”

Nonetheless he too, like MiningWatch’s Coumans, sees merit in something less than half a loaf.

“We are moving slowly, of course, but we are moving,” said Worms.

New federal legislation is also in the pipeline that would force Canadian companies to detail payments to all levels of government, a transparency measure designed to discourage graft, kickbacks and bribes.

Fast, speaking to reporters after last week’s mining lunch, said there is a long list of success stories of Canadian companies acting responsibly around the world, while acknowledging that the ugly incidents make the news.

Pierre Gratton, president and CEO of the Mining Association of Canada, said the increasingly dominant notion of resource companies requiring a “social licence” to operate is being applied at home and abroad.

He noted there are more than 260 agreements in Canada between aboriginal communities and mining companies. “Find me another sector that has anything close.”

He said the same principle applies abroad.

“We’re not going to pretend that every project we develop will be without incident. Sometimes there are,” said Gratton.

“But we’re getting better and committed to improving, and certainly there’s a recognition that corporate responsibility is not just a nice to-do. It’s core to being able to be welcomed in the countries where we develop and to grow within those countries.”

That bottom-line corporate recognition, coupled with the principle that Ottawa has and can wield some leverage on companies, is cause for optimism, said Coumans.

“We’re not talking anymore about whether or not there is an issue. We’re talking about what is the right way to deal with the issue — and even there I think we’re making some progress,” said the longtime advocate.