'No real role': Canada's watchdog for mining abroad struggles to sharpen its teeth

A lawsuit over alleged human rights abuses by a Canadian mining company in Eritrea highlights the challenges facing the federal government as it tries to step up its oversight of Canadian companies’ behaviour abroad.

Agency has new ‘enhanced strategy’ but critics question its effectiveness

Vancouver-based Nevsun Resources has a gold and copper mine in the Bisha mining district in northern Eritrea, adjacent to Sudan. (CBC)

A lawsuit over alleged human rights abuses by a Canadian mining company in Eritrea highlights the challenges facing the federal government as it tries to step up its oversight of Canadian companies' behaviour abroad.

The case, which centres on the Bisha gold mine in Eritrea that is controlled by Vancouver-based Nevsun Resources, comes at a time when Ottawa's Office of the Extractive Sector Corporate Social Responsibility Counsellor is trying to sharpen its teeth.

Echoing widespread criticism of the agency's past performance, Penelope Simons, a law professor at the University of Ottawa, says it can make little — if any — contribution to the Nevsun case.

"There's no real role for the counsellor's office because the company has allegedly violated international law — I would even say international crimes," she says.

Workers and visitors walk within the processing plant at the Bisha Mining Share Company in Eritrea on Feb. 18, 2016. (Thomas Mukoya/Reuters)

"The counsellor can't deal with situations where there may have been violations of human rights because the main role of the counsellor is conciliatory or to engage in mediation."

The Supreme Court of British Columbia agreed in early October to allow three Eritrean refugees to start legal proceedings against Nevsun. They allege the company allowed the use of forced labour and turned a blind eye to inhumane working conditions at the mine. Nevsun says the claims are unfounded.


Joe Fiorante, a lawyer for the Eritreans, said that the counsellor's office serves no useful purpose in complaints like that against Nevsun.

"It makes us look like we're doing something. It allows the government to stand up and say: 'We're encouraging best practices; we even have an office devoted to it.' Until they've established some success in dealing with it, I think it's actually counterproductive." 

Jeffrey Davidson, who took over last year as head of the federal agency, says he met with Nevsun managers shortly after taking office. 

"Part of this is raising these issues with companies like Nevsun and trying to create an awareness and a consciousness that they have to think about these things before they invest large sums of money and commit themselves to working in these kinds of environments."

The discussion included ways to ensure that Nevsun wasn't working with contractors that were taking advantage of Eritrea's labour laws. Under those laws, the government can force anyone under the age of 50 into indefinite conscription including military service.

Since its inception in 2009, the Corporate Social Responsibility (CSR) office has been lambasted as a toothless watchdog by activists, non-profit organizations and experts in the field. Even the latest efforts are drawing criticism.

Simons says despite its "enhanced strategy" launched in 2015, "it has been ineffective. It appears more like lip service that was put in place to quiet people about this issue."

Under Davidson's predecessor, Marketa Evans, the agency received six complaints involving Golden Arrow Resources Corporation, Silver Standard Resources Inc., New Gold Inc., McEwen Mining Inc., First Quantum Minerals limited and Excellon Resources Inc.

Declined to participate

In all six cases, one or both parties refused to participate in the process. In Excellon's case, the company informed the counsellor that it "did not consider the dialogue process facilitated by the office to provide value to the company or the company's shareholders."

The agency, which falls under Global Affairs Canada, was set up to address criticism that Canadian mining and energy companies were not living up to social responsibility standards in their operations abroad.

By the time Davidson took over in 2015, the agency had launched the "enhanced strategy" known as "Doing Business the Canadian Way."

Members of Indigenous communities from the Mallku Kota region in Bolivia clash with police officers during a protest in La Paz on June 7, 2012. They were protesting against mining operations on their lands by the Canadian mining company South American Silver Corp. (Juan Karita/Associated Press)

Under this policy, Ottawa expects that Canadian companies will adhere to the United Nations Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises.

Controversy over the impact Canadian mining companies have abroad is nothing new. A study published in late October by the Toronto-based Justice and Corporate Accountability Project, a volunteer-driven initiative run by lawyers, focused on Canadian firms in Latin America over a 15-year period.

The study, titled The "Canada Brand": Violence and Canadian Mining Companies in Latin America, documents violent incidents, including 44 deaths and 403 injuries at 28 Canadian-owned mining operations in Latin America from 2000 to 2015.

The report concludes that "neither the Canadian government nor industry are monitoring or reporting on these incidents."

According to Simons, the study's findings show that "as a country we are not respecting or taking steps to ensure that human rights are protected when our corporations operate in these other countries."

Voluntary process

The CSR office's work has so far centred on a voluntary mediation process that encourages aggrieved individuals, non-profits and local communities to resolve conflicts involving Canadian companies' foreign operations. Complaints can be filed alleging violations of social responsibility standards.

The counsellor — Davidson's formal title — is meant to help resolve such disputes. But the process is terminated if either party decides to pull out.  A report is published once the case is closed.

While Simons sees some educational value in this conciliatory approach, she says that disputes involving human rights and other alleged wrongdoings are "not going to simply be addressed by somebody who has no power to require companies to do anything."

A general view shows the sag mill and ball mill within the processing plant at the Bisha Mining Share Company. (Thomas Mukoya/Reuters)

She recommends an ombudsman who could investigate and determine whether a company has violated social responsibility standards and be able to enforce needed reparations.

Despite the criticism, Davidson says he is working more actively to build relationships with groups on both sides and is providing more guidance on how companies can implement internationally accepted social responsibility standards.

The new "enhanced" strategy also empowers him to recommend that government agencies like Export Development Canada withdraw "economic diplomacy" and funding from a company not implementing the UN and OECD principles.

"For the first time, the counsellor has a stick," he says. "In the first year, we've had over 50 meetings with companies, most of them face to face. The point is to open the door not just to companies but also to civil society organizations and others."

No reports

But the agency has yet to issue any reports on these initiatives. 

"We don't actually know if mining companies are applying certain standards, so it's hard to tell if a difference is actually being made," says Jamie Kneen, communications and outreach co-ordinator at MiningWatch Canada, an advocacy group. 

Kneen says that in at least one respect, the office is even less transparent than it used to be because it no longer issues reports on its work.

A truck drives through copper ore dust from the mining pit at the Bisha Mining Share Company. (Thomas Mukoya/Reuters)

When asked about the lack of reporting, Davidson says: "We're still struggling to get our website up properly." 

He aims to publish a report in which he will share observations on the mining sites he has visited, but that he "won't necessarily talk about the specifics of situations" because of confidentiality.

Davidson urges critics to be patient. He predicts the government "will make it clearer as to what the responsibilities of the counsellor's office are, what its mandate is and provide us with the wherewithal of the authority and the resources to do a good job.

"I've had my own challenges in terms of staffing and in terms of even getting an updated website. I started this process 14 months ago and nothing is easy." 


Ghada Alsharif graduated from the University of Toronto with a BA in political science and is fellow in journalism at the Munk School of Global Affairs. She has worked in the media and non-profit sector, most recently as associate program manager at Free the Children, a Toronto-based global NGO active in international development.