Canadian mining companies must respect human rights
We need rights-impact assessments for direct investment in foreign countries

JEAN-LOUIS ROY

Wednesday, November 15, 2006

For many developing countries, Canadian mining companies are their first and often only encounter with Canada. As a country with a proud reputation of promoting international human rights, Canada must ensure this heritage is reflected in the activities of its corporate citizens abroad.

This week in Montreal, the National Roundtables on Corporate Social Responsibility will conduct their final consultations with government, industry and human and environmental rights advocates on the operations of Canadian mining companies in developing countries. In response to concerns identified last year by the parliamentary committee on foreign affairs and international trade, these roundtables have travelled Canada examining this key challenge for Canada's foreign policy.

Statistics show the particular challenge that Canada faces in terms of its extractive industries:

60 per cent of the world's mining companies are registered in Canada.

Canadian mining companies operate 3,200 projects in more than 100 countries, including more than 600 projects in Africa.

The investments of Canadian mining companies total upward of $50 billion - with $17 billion in new projects forecast for the coming five years.

According to the UN special representative on human rights and transnational corporations, two-thirds of the cases of serious human rights abuses by such corporations involve companies affiliated with the extractive industry. The need for Canada to address these issues in an urgent, effective and rights-based manner is imperative.

The human rights movement is not against investment. I realize the important potential links between investment and trade in terms of development, poverty alleviation and the realization of economic, social and cultural rights. However, rights activists are against investments that exacerbate conflicts, degrade the environment and undermine human rights.

In this respect, framing the discussion solely in the context of corporate social responsibility would be a mistake.

More often than not, corporate social responsibility is understood by businesses as a series of voluntary measures that a company can take if it wishes to do so and circumstances permit, which they rarely do. Voluntary initiatives and commitments have a bad habit of evaporating during economic downturns or when operating in conflict zones, where no effective authority exists. Government attitudes toward voluntary measures tend to be just as non-committal, resulting in a series of patchwork initiatives rather than comprehensive action.

More voluntary measures are not what is needed. The fundamental premise of international law holds that human rights are not voluntary, but rather entitlements of all people by virtue of the fact that they are human.

Mandatory human rights impact assessments for all foreign direct investment would be an important first step by the federal government, particularly when such investments are facilitated by public funds or services.

There are many ways that human rights impact assessments can be accomplished. They can be integrated into environmental or social-impact assessments. They can be undertaken by local communities where the project takes place or by the corporations themselves.

Canada has an extraordinary opportunity to be an international leader in this field that the UN secretary-general's special representative has identified as one of the strategic directions for the international community's work. Rights and Democracy has been working with partners in developing countries to develop methodology for human- rights impact assessments.

Second, the creation of an ombudsman is an original and interesting avenue that has been debated during the roundtables. However, such a mechanism must be independent, transparent and accessible. It must provide for investigation, redress and compensation for victims of human rights violations. And special procedures need to be developed to ensure this mechanism is culturally sensitive and relevant to people in communities abroad.

Third, in a longer-term perspective, Canada must also realize that the protection of human rights with respect to investment and corporate conduct requires a corresponding emphasis on democratic development.

We are talking about conflict situations and fragile states, where public institutions are non-existent, impotent or corrupt. We are talking about places where there is no effective law enforcement, little tax collection and few social programs. We are talking about countries in which civil society organizations lack capacity and are harassed and brutalized.

Therefore, Canada should focus additional efforts on strengthening democratic institutions in developing countries. By reinforcing legislatures, courts, human-rights institutions and civil-society groups, Canada can help host governments to protect the human-rights and economic interests of their citizens and strengthen the rule of law over corporate behaviour.

Ours is a nation with a proud heritage of promoting international human-rights standards. The outcome of the National Roundtable process gives us an opportunity to position Canada as a leader in business, but also in human rights. Let this be the impression of Canada that we leave in minds across the developing world.

Jean-Louis Roy is president of Montreal-based Rights and Democracy, which promotes democratic practices around the world.