Adopt New Mining Guidelines:Report

Canada should adopt guidelines to improve transparency as well as the environmental and human rights practices of Canadian companies involved in extractive industries in the developing world, says a government-appointed advisory group. It says if these measures are adopted, Canada could become a world leader in Corporate Social Responsibility.

Academics and representatives from civil society, extractive industries, labour, and socially- oriented investment firms who made up the Advisory Group to the National Roundtables on Corporate Social Responsibility and the Canadian Extractive Industry in Developing Countries, presented the consensus document March 29, after 10 months of deliberation. Some of their 27 recommendations include mechanisms to strengthen host country institutions and governance; an ombudsman to advise and investigate complaints against companies, a committee to review overall compliance with the norms, and the withholding of diplomatic and other assistance to those who don't comply.

Group member Jim Cooney, a former vice president of Placer Dome Inc., says the rules are needed to reduce uncertainty for companies operating in states with weak judicial systems and government regulations and enforcement, and to avoid complicity in human rights violations. He says following these rules will also allow firms to collaborate with development NGOs and the Canadian International Development Agency, and prevent companies that are "bad apples" from destroying the industry's image.

"In too many cases, there has been no development as a result of mining. Resources have been squandered because of a lack capacity of host governments, and companies who did not take their responsibilities seriously," Mr. Cooney said.

An increase in commodity prices in recent years means Canadian companies are exploring for and exploiting resources in practically every corner of the globe. According to the report, Canadian companies carry out 40 per cent of all mineral exploration in the world and have 8,000 exploration and mining companies in over 100 countries. Overseas mines and metals make up $50 billion or 12 per cent of Canadian direction investment abroad. Meanwhile, 75 oil and gas exploration and production companies hold land in 69 countries and areas (such as Tibet, and disputed offshore zones) in the developing world (as defined by the World Bank).

Many Canadian companies such as Glamis Gold, Encana and Talisman Energy have come under fire in recent years for their operations overseas. And just last month, the UN Committee on the Elimination of Racial Discrimination encouraged Canada to take legal or administrative actions to prevent transnationals registered here from negatively affecting the rights of indigenous peoples outside Canada.

*Applying Standards Will Cost Firms*

A key component of the proposed rules are the 2006 International Finance Corporation's social and environmental standards and its principles on security and human rights.

Advisory group member Karyn Keenan with the Halifax Initiative, a coalition of development and human rights NGOs, says the group's proposals are not comprehensive, so they will be subject to continual improvement.

"Our recommendations are not static. They don't satisfy all of our concerns?there are gaps in the IFC standards, for example, regarding the principle of Free Informed Prior Consent from indigenous peoples where activities could take place in their traditional territory," Ms, Keenan said, adding that some recommendations will require guidance notes to from the Canadian government.

Mr. Cooney says that although becoming familiar with the standards, implementing and reporting on them will entail new costs for companies, the new way of business should be attractive to host countries keen on reaping maximum benefits for their citizens. He said Canadian firms should not fear, for example, Chinese companies that might not play by the same rules.

"If they want to get away from the traditional, exploitative, imperialist way of doing things, they will sign up with the Canadian companies" Mr. Cooney said. "This will put Canada on the map as a global leader, and hopefully other countries will follow suit."

Last week's report follows a 2005 all-party study of the mining industry by the House of Commons Standing Committee on Foreign Affairs and International Trade. In response, the government decided consultations on the extractive industries in general were needed, and it set up a series of roundtables and other mechanisms to hear from interested parties across the country. At the same time, it created the advisory group that drafted last week's report.

A 2005 recommendation that industry executives be held legally responsible for environmental damage and human rights violations overseas was rejected by the government, and although the present report doesn't repeat that request, it asks Canada to look at extra-territorial application of laws already on the books.

During the press conference to launch the report, Gordon Peeling, president-CEO of the Mining Association of Canada, said he hopes the government will soon respond to the report.

"We would hope that the government, since its had a secretariat working with us throughout this process, that it is in a position to respond as quickly as possible because the implementation of the framework and a number of functions are going to take time. There is an educational process that we have to go through in term of the framework and standards that we want industry and the government to take up," said Mr. Peeling.