Should Canada's Mining Mastery Come at the Cost of Human Rights?

By Meaghan Lowe, 1L

“We truly are a global mining giant,” Natural Re- sources Canada declared in a May 2009 media release, and the staggering statistics prove this is no exaggeration. 75% of the world’s mining companies are headquartered in Canada and traded on the TSX. The mining sector employs 350, 000 Canadians and accounts for 3.5% of our GDP. With Canadian mineral reserves depleting while global demand grows, companies are racing to secure foreign resources. Accordingly, 12% of Canadian direct investment abroad is bound for mining companies in developing countries. With such global dominance, one would hope for Canadian- inspired leadership.

However, in a recent survey of 171 high-profile allegations of corporate abuse in the sector, Canadian extractive companies were found to be the target of one third of allegations of human rights and environmental abuses. One recent example is RamÌrez v. Copper Mesa & TSX, a claim filed in March 2009 alleging violent attacks by security forces on villagers protesting a proposed copper mine in the Andes of northwestern Ecuador. Additionally, there are ongoing disputes between Barrick Gold and Chilean and Argentinean communities regarding the Pascua Lama project. This particular controversy began as Barrick stated that it would need to relocate three glaciers in order to access gold reserves. Realizing the environmental and cultural implications of the project, Barrick issued a report which claimed that the project would only intercept five hectares of the glaciers, as the remaining would naturally melt over time providing access to the gold. Barrick’s project received environmental approval despite opposi- tion highlighting threats to the valley’s eco-system, agriculture, and water quality.

The controversy surrounding the Pascua Lama project reveals tensions that can arise between human rights and environmentalism when the former is defined in economic terms to the exclusion of the latter. Barrick devotes pages of their website to respond to allegations, arguing that the Pascua Lama project furthers human rights via economic development. The company cites as evidence a letter signed by a community association supporting the mine as a means of combating unemployment. The average Barrick mine lifeline is 14 years and skilled workers fuel long-term productions. Developing the mine creates un-skilled employment opportunities and trickle down economic effects; however, the long term impact is unclear.

In response to public concern surrounding this and other allegations, Prime Minister Harper created Building the Canadian Advantage: A CSR Strat- egy for the Canadian International Extractive Sector. Part of this strategy is the Office of the Extractive Sector Corporate Social Responsibility (CSR) Counsellor. The current Director is Dr. Marketa Evans, who was previously employed at the Uni- versity of Toronto as founding director of the Munk Centre. The Office is developing a process by which allegations against Canadian companies can be brought. The IHRP working group, Accountability for Mining Companies Abroad (AMCO), is creating a guide on this complaints process for use by communities.

Dr. Evans met with the AMCO Working Group this past October. She seemed genuinely optimistic about the Office and spoke of opportunities for poverty reduction. The Office will perform a mediatory function, promoting an informal process that provides constructive dialogue and produces tan- gible results. However, obstacles exist in terms of budgetary restrictions, eligibility requirements, and the balancing the needs of communities against those of companies. For instance, complaints can only be brought with public information. The Office is subject to the Access to Information Act and is concerned that companies’ sensitive information could end up publicized. Furthermore, because companies with verified allegations will not suffer sanctions, the process it oversees is entirely voluntary and its success depends on participation by both communities and companies. This could encourage company participation but pose challenges for communities trying to submit complaints.

John McKay, a liberal MP, put an alternative to this approach before the House of Commons in the form of Bill C-300. This private members bill would have empowered the Minister of Foreign Affairs and the Minister of International Trade to investigate complaints and determine whether firms had violated standards and, if so, submit annual reports on the violations to the House of Commons and the Senate. Verified allegations would have resulted in tough sanctions including the removal of government sponsorship, funding through the Export Development Corp, and invest- ment from the CPP. 

Barrick was a vocal critic of Bill-C-300. The company argued that the bill would result in reputational damage, reductions in competitive ad- vantage, and incentives for relocation. Lawyers James Peterson and Michael Bourassa repeated such complaints at the Bill C-300 panel discussion held at the Faculty of Law. Both men stressed the economic function which mining plays in Canada and described the bill as “opening the floodgates” to frivolous and damaging complaints. These arguments were answered by Catherine Counmans of Mining Watch Canada, who argued that vexatious complaints would be dismissed and that access to public funding is not a right, but a privilege.

Had Bill C-300 passed, companies whose processes are not aligned with international voluntary standards would have faced initial costs. Within Canada, the playing field would have been leveled. Against global competitors, the bill could have been leveraged as competitive advantage, as foreign officials in many developing countries would have been assured of accountability. Furthermore, companies without substantiated allegations could have attracted investors, free from the worry of valuation fluctuations caused by costly litigations.

However, with the current focus on jobs and the economy, the timing was for Bill C-300 was wrong. As was seen in the US Senate and House elections, voters are willing to punish incumbents that pursue anything other than an economic agenda. Neither Harper nor Ignatieff wants to be perceived as pursuing anything other than policies supporting the economy. As a result, MPs voted 140 to 134 against Bill C-300. The conservatives voted virtually unanimously against the bill; 62 liberals voted for the bill, but 14, including Ignatieff, were absent. Neither party leader wanted to be exposed as potentially sacrificing Canadian jobs in such an important industry.

Although the bill failed, we do still have the Office of the CSR Counselor. Therefore, all is not lost for the impassioned Canadians who wish to see human rights and environmental costs internalised by extractive companies, allowing communities abroad to partake in the benefits that can be derived from resource extraction. “Let’s just cross our fingers and hope for the best,” said Dr. Evans when speaking frankly with the AMCO Working Group about the challenges and the possibilities that exist.

Time will tell whether there is any merit to the complaints process. Perhaps there will still be hope for an alternative bill that is raised in a more appropriate economic climate, or even an alternative to regulation: the development of a business community that proactively leverages the value that can result through awarding sustainability an equal place to the financial bottom line.