Ottawa's responsible mining review awaited by NGOs

The federal government’s five-year review of Canada’s corporate social responsibility strategy for the extractive sector is expected to be completed as early as next week. But the long-anticipated report is unlikely to recommend the creation of a legislated ombudsman for the industry.

Review of Canada's corporate social responsibility strategy likely won't recommend mining ombudsman

The government's five-year review of Canada's corporate social responsibility strategy for the extractive sector is slated to be completed in March 2014.

The federal government’s five-year review of Canada’s corporate social responsibility strategy for the mining, oil and gas industry is expected to be released as early as next week.

But documents obtained by CBC News suggest the long-anticipated report is unlikely to recommend the creation of a legislated ombudsman who would investigate complaints and oversee the activities of the extractive sector.

It's something non-governmental organizations have been calling for since 2007, without success.

The international trade minister’s office would not provide any details as to what the review, which began last September, would entail, saying only that it is “ongoing.”

The government has made it clear, however, it prefers voluntary initiatives over mandatory mechanisms.

In a letter contained in documents obtained through an Access to Information request, International Trade Minister Ed Fast responds to a call for an industry ombudsman by emphasizing “the government’s support for voluntary mechanisms for dispute resolution."

"The use of voluntary initiatives, based on internationally recognized standards, can be effective in resolving issues of mutual concern, and can advance public policy objectives in a more flexible, expeditious and less costly way than regulatory or legislative regimes," he wrote.

The government’s corporate social responsibility​ (CSR) strategy, dubbed Building the Canadian Advantage, was launched in March 2009 to help Canadian mining, oil and gas companies improve their competitive advantage abroad "by enhancing their ability to manage social and environmental risks."

As part of the mandated five-year review, the government is carrying out consultations with various stakeholders across the country.

I believe the time is right for fresh perspectives and sufficient flexibility to explore policy options.—Marketa Evans, Canada's former CSR counsellor

On Dec. 12, 2013, Fast held a meeting with 13 non-governmental organizations to solicit feedback for the review.

The consultation was run by parliamentary secretary Erin O'Toole, and, according to NGO representatives who attended, lasted about an hour. Each organization was given about three minutes to present their comments, which addressed the four pillars of the CSR strategy.

In 2009 the government had adopted the following strategies:

  • Support governance-building in host countries to reduce poverty through development assistance.

  • Endorse and promote international CSR guidelines.

  • Support development of a centre for excellence in CSR.

  • Create the office of the extractive sector CSR counsellor.

But some in attendance weren't satisfied with the consultation, noting its brevity.

"I'd say others were happy to be invited to give comments and they felt their comments were heard," said Jeff Geipel, venture leader at Engineers Without Borders.

But he added, "They might have wanted more time for input."

World Vision Canada's Harry Kits agreed and said there was "not a lot of chance for interaction."

The government did accept written submissions beyond the in-person consultation. Contained within some of those submissions is criticism of the government's strategy.

While much has been accomplished in advancing the social responsibility of mining companies, significant gaps need to be addressed, particularly with respect to the centre of excellence and the office of a CSR counsellor, according to some of the organizations that attended the Dec. 12 consultation.

More powers for CSR counsellor

The office of the CSR counsellor is still vacant after Marketa Evans quietly resigned from her position in October 2013 — four years after the position was created and a year before her contract was up. She didn't publicly provide a reason for her resignation.

A memo sent to Fast from his deputy minister quotes Evans as saying, "I believe the time is right for fresh perspectives and sufficient flexibility to explore policy options." 

Cases brought before CSR counsellor

April 7, 2011 — Excellon Workers, National Mining Union vs. Excellon Resources Inc. in Mexico

Aug. 14, 2011 — Maître Ahmed Mohamed Lemine, et al vs. First Quantum Minerals limited in Mauritania

July 9, 2012 — Center for Human Rights and Environment (CEDHA), Argentina and Fundación Ciudadanos Independientes vs. McEwen Mining Inc. in Argentina

Feb. 11, 2013 — Inhabitants of Cerro de San Pedro and the Mexico Canada Responsible Mining Network vs. New Gold Inc in Mexico

April 4, 2013 — Confidential requester vs. Silver Standard Resources Inc. in Argentina

July 9, 2013 — Confidential requester vs. Golden Arrow Resources Corporation in Argentina

The mandate of the CSR counsellor is to give individuals or groups that may have been harmed by activities of mining, oil and gas companies a place to bring complaints for a voluntary mediation process.

However, many NGOs have criticized the efficacy of the office, especially as the position had no judicial power or the ability to compel parties to remain in negotiations. All six cases brought before the office are closed. Of those six, at least three ended with mining companies walking out of the process.

It's because of these documented shortcomings that NGOs renewed their push for an ombudsman. 

"Reforming the office into an ombudsperson role, with powers of investigation and sanction, would help lower the potential for conflicts in resource-rich countries where Canadian countries operate. This in turn would help developing countries feel more confident in allowing Canadian-led natural resource projects to go forward," according to Engineers Without Borders' written submission to the federal government.

However, others are wary of a watchdog with such powers. 

Kernaghan Webb, founder of Ryerson University's CSR Institute, said the government's hesitance "is out of respect for the sovereignty of other nations to resolve disputes about matters taking place within their borders."

"Do we know better than the Latin American country [about] what should happen within that country? Isn’t that colonialism?" he said in an emailed response to CBC News.

The mining industry suggests combining the role of the extractive sector's CSR counsellor with the CSR office of the OECD, which promotes good business practices and addresses social concerns for the activities of multinational corporations.

The president of the Mining Association of Canada said his organization favours a two-step process that would start with mandatory verification of complaints by the CSR counsellor's office followed by voluntary mediation through the OECD if necessary.

"That sort of fact-finding role is critically important," Pierre Gratton said. "Let's make sure that's done properly."

'Major disappointment'

The centre for excellence was touted as a credible CSR information hub, operating independently from government, for experts from industry, the public sector, academia and NGOs. It was initially funded equally by industry and government, but an end to government funding has limited its activities.

MiningWatch Canada said in submission to the government that the centre "has been a major disappointment."

"We have serious concern that the centre, in line with government policy objectives, will become yet another vehicle for the advancement of government policy and/or corporate interests, rather than an institute that reflects and advances the interests of all stakeholders and rights holders," the submission read.

Official Development Assistance should not be supporting mining-related CSR projects and partnerships-—MiningWatch Canada, in a written report to the federal government

MiningWatch helped establish the centre and was part of its executive committee for four years, but left with a number of other founding NGOs after funding ran out. 

Ryerson's Webb, who is interim co-chair of the centre, said critics are "entitled to their opinion, but that doesn’t mean that their opinion is the correct one."

"The ones who leave have lost their ability to participate in its decision making, which is an unfortunate decision on their part given the important work that carries on after they leave," he said.

But World Vision, which recently joined the centre, nevertheless agreed with MiningWatch.

"Right now, it’s effectively not functioning much at all,” said senior adviser Harry Kits in an interview with CBC News.

Many, including Engineers Without Borders and World Vision, are calling on a renewed long-term government funding commitment.