Baby Teeth for the Mining Sector: Bill C-300 on Corporate Accountability

By Pete Smiley

Bill C-300 on Corporate Accountability for the Activities of Mining, Oil or Gas Corporations in Developing Countries is an unprecedented attempt to make Canadian mining companies accountable for their actions overseas. Currently winding its way through Parliament, the bill reflects a growing imperative that players in one of Canada’s principal economic sectors should respect their country’s values when operating abroad. Obstacles to its passage, originating both from industry and govern- ment, indicate that this moral impetus is far from unanimous.

It is no secret that Canadian mining and extraction firms have been implicated in human rights abuses abroad. Last year, Norway’s Ministry of Finance divested $245 million in Barrick Gold stock from its sovereign wealth fund, citing ethical concerns over the environmental impact of Barrick’s Papua New Guinea operations, particularly regarding the dumping of millions of tons of mercury-laced tailings into the Porgera River. This comes after the long-standing complaints of NGOs of human rights abuses – including torture and killings – by Barrick employees at the mine.

Parties concerned about the activities of Canadian mining companies overseas have traditionally had no domestic legal recourse. Canada has no equivalent of the U.S. Alien Tort Claims Act, and, consequently, the forum non conveniens rule ensures that such allegations rarely find their way before Canadian courts. The Canadian government’s failure to address this lacuna is being confronted by private member’s bill introduced by Liberal MP John McKay.

If passed, Bill C-300 would make the Minister of Foreign Affairs and the Minister of International Trade responsible for holding corporations accountable for their practices overseas. The legislation would enable complaints against Canadian resource companies operating in developing countries to be brought directly to the federal government irrespective of the complaint’s origin.

A successful complaint would prompt an investigation, which would have to be completed within eight months. Should that investigation yield a finding of environmental or human rights abuse, the corporate perpetrator would be rendered ineligible for financing from Export Development Canada (EDC) or the Canada Pension Plan Investment Board (CPP). In addition, the Ministers would be required to table an annual report to Parliament detailing the findings of any investigations and their reasons for dismissing any complaints.

In response to Bill C-300, the govern- ment has announced its own corporate social responsibility (CSR) initiatives, including the appointment of Marketa Evans as its first CSR Counsellor for the extractive sector. Evans was previously the founding Executive Director of the Munk Centre for International Studies, namesake of its philanthropic patron, Barrick founder Peter Munk. 

The Counsellor is a Governor-in-Council appointment reporting to the Trade Minister. She has limited powers: she cannot review the activities of a Canadian company on her own initiative or without the company’s consent, make binding policy or legislative recommendations, create new performance standards, or formally mediate between parties.

In creating the position, the government has managed to infuriate both ends of the CSR spectrum. The mining industry claims it is being unfairly singled out, while interested NGOs claim that the position is toothless and are outraged by the perceived conflict of interest arising from Evans’ relationship with the Munk Centre.

In an interview for the Rights Review, I asked McKay for his thoughts on the CSR Counsellor. He suggested that the position is an attempt by the government defuse the issue, but noted that it had the ironic effect of confirming for Canadians that a problem exists. He added that, in a further irony, C-300 complements the CSR position by providing it with the teeth it needs to be effective.

The bill nonetheless faces vocal opposi- tion. Peter Foster, writing in the National Post, described it as “a nail-biting private member's horror scenario that threatens to overwhelm the Canadian mining industry,” and argued that it would force Canadian mining companies to continually fend off trivial and vexatious allegations from NGOs fundamentally opposed to the extractive industries. I put these criticisms to McKay, who argued that it is increasingly a competitive advantage for companies to be perceived as leaders in corporate social responsibility.

“Ethical funds make up their minds about investment on a whole range of issues, not much of which has to do with evidence,” he said. “They hear reports, hearsay, rumour, gossip, and they redline these companies based on it. But where’s the actual evidence? Have they visited the site? Have they investigated? No. So it’s peculiar that companies would prefer to take their chances on trial by media than on ministerial investigation.”

McKay also rejected the argument that C-300 would put Canadian mining companies at a competitive disadvantage, arguing that the bill would simply give the CSR Counsellor the power to withdraw government funding for companies in breach of guidelines. “The companies can do whatever they want,” said McKay, “just not on the taxpayer dime.”

C-300 is currently before the Standing Committee on Foreign Affairs and International Development. McKay has had success with Private Members’ Bills in the past, and is cautiously optimistic about C- 300’s chances of becoming law. However, it is unclear well the bill would operate in practice under a government fundamentally hostile to its objectives.

A major concern is that the government would reject legitimate complaints as frivolous, vexatious or made in bad faith as per s.4(3) of the Bill. Some transparency is granted by the provision that the government would publish the reasons for such a finding in the Canada Gazette, but much work would still be required from the NGO community and the public to hold the government to account.

Another concern is that the mechanisms by which investigations would be conducted are left unspecified. The bill gives the minister substantial discretion in how he or she is to examine the matter in question, and in the hands of a hostile or apathetic minister this would seem to be a recipe for inaction.

Nonetheless, for all its imperfections, were C-300 to pass it would be an important first step in reforming the activities of Canadian resource companies.