Press Responses: July 11, 2007

Embassy, July 11th, 2007
Chamber says PM Broke Promise at G8

The Canadian Chamber of Commerce is frustrated Stephen Harper mentioned a corporate responsibility report during the G8, but mining groups are pleased their study is being taken seriously.

By Lee Berthiaume

The Canadian Chamber of Commerce says Prime Minister Stephen Harper was premature in promoting a recent report on corporate social responsibility at the Group of Eight nations summit in June.

Germany, as host of this year's meeting of leaders from the world's richest countries, had decided upon an agenda that included corporate social responsibility as a priority.

Months before the G8 meeting, a government-appointed advisory panel comprising civil society representatives and officials from the mining, oil and gas industries, released a report following an extensive series of roundtable discussions that were organized by the Department of Foreign Affairs and International Trade.

The panel made 27 recommendations that included mechanisms to strengthen institutions and governance in developing countries where Canadian companies are operating, 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 companies that don't comply.

But while the majority of the panel's recommendations dealt exclusively with the country's extractive industries, there were others–like new pension fund disclosure rules and responsible investment practices–that could affect many more Canadian firms.

Worried that the government might see it as an opportunity to promote the report and commit to the recommendations, the Canadian Chamber of Commerce sought reassurances that it wouldn't be raised.

When this year's Group of Eight nations summit in Germany ended on June 8, the Prime Minister's Office released a statement outlining the commitments Mr. Harper had made during the high-level meeting.

"Canada has recently completed a nation-wide consultation process involving stakeholders with the Canadian extractive sector (mining, oil and gas) in developing countries," the statement read.

"Implementation of the recommendations from this process will place Canada among the most active G8 countries in advancing international guidelines and principles on Corporate Social Responsibility (CSR) in this sector."

According to Brian Zeiler-Kligman, the Canadian Chamber of Commerce's international policy analyst, government officials had said that the panel's report would not be mentioned as other industries had not been consulted.

"There was a mention of it at the G8 by the prime minister, which we were not so pleased about because we were told it was not going to happen," Mr. Zeiler-Kligman said last week. "It was premature to be making a statement about it, and even make reference to it."

Harper's Mention 'Premature'

An increase in commodity prices in recent years means Canadian companies are searching for and extracting natural resources around the globe.

Canadian firms 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 disputed areas, such as Tibet and disputed offshore zones, in the developing world.

Many Canadian companies have come under fire in recent years for their operations overseas. And several months ago, the UN Committee on the Elimination of Racial Discrimination encouraged Canada to take legal or administrative actions to prevent transnational companies registered here from negatively affecting the rights of indigenous peoples outside Canada.

The advisory panel was born of a 2005 Foreign Affairs committee report on corporate social responsibility and Canadian mining companies, and held roundtable discussions in Vancouver, Calgary, Toronto and Montreal last year before releasing its report at the end of March.

Panelists interviewed last week acknowledged that some of the recommendations extended beyond the extractive industry, and they knew that a broader consultation would likely be needed.

Mr. Zeiler-Kligman said the prime minister indicated at the summit that Canada would move quickly to implement the recommendations, raising concerns that Canada's industry as a whole wouldn't be heard.

He said the government is conducting informal consultations, but those are being held over the summer, and it was agreed the prime minister would highlight other Canadian initiatives instead.

"The Canadian chamber had been indicating to various bureaucrats and politicians, as had other stakeholders, that there was quite a bit that Canada could discuss in the context of CSR that didn't have anything to do with this report, and still make ourselves look extremely virtuous in comparison with other countries," Mr. Zeiler-Kligman said.

"It was premature where there hadn't actually been an opportunity to go through the consultations to get any substantial feedback from the key stakeholders in this process."

G8 Time to Showcase Canada's CSR

Foreign Affairs spokesman Bernard Nguyen said Canada considered Germany's decision to focus attention at the G8 on transparency and responsibility in the extractive sector "an excellent opportunity."

"Canada shared with G8 partners its experience with the national roundtables on corporate social responsibility in the extractive sector and in this way contributed to the work of the G8 on raw materials and corporate social responsibility," he said.

"Canada's objective in engaging G8 partners on this issue included consideration of how corporate social responsibility standards could be more effectively used by companies, and cooperation between G8 members and developing country governments to build their capacity and improve the management of foreign investment in this sector."

However, he could not comment on the apparent agreement between the chamber and government, and officials from the Prime Minister's Office did not return repeated phone calls over the past week.

While officials from the Mining Association of Canada and other sector-related groups sat on the roundtable's advisory panel and worked with members from civil society to develop the report, all panelists served as individuals and were not representing their respective organizations.

As a result, it was only on June 25 that the mining association officially threw its support behind the majority of the panel's recommendations.

Pierre Gratton, MAC's vice-president of sustainable development and public affairs and one of the advisory group panelists, said government officials saw an opportunity at the G8 for the government to "shine" by responding quickly to the roundtable report, "so they were sort of gunning for that."

But it was clear during the roundtable process that some of the issues and recommendations would also affect other industries, and that's why other industry groups had asked the government not to mention it during the summit.

"There were implications, potentially, for [telecommunication] companies, for banks, pension funds," Mr. Gratton said. "We even said this during the roundtable, that there are recommendations that the government will want to consult other sectors with."

While officials from other sectors may be upset with the prime minister's decision to go ahead anyway, Mr. Gratton said those who participated in the roundtable were pleased he did so.

"Most people who were involved in the roundtable were encouraged that he was going to take our report seriously, it wasn't going to be buried," he said. "That's the main thing we took away from his comments."

However, Mr. Gratton didn't believe Mr. Harper locked himself into anything and was confident the government will still consult with industries.

Karyn Keenan, program officer at the Halifax Initiative, a pan-Canadian consortium of non-governmental groups who also participated as a panelist, said the government has a duty to consult other industries if it feels the recommendations could affect them.

But she said the majority of the recommendations are directed towards the extractive industry, and if the MAC and others feel they are good enough for the mining sector, "then I don't know what the Chamber's concerns are."

In addition, many of the more wide-ranging recommendations are aimed at establishing a dialogue, and the prime minister's promotion of the panel report shouldn't be considered a threat.

"I don't think there's anything so earth-shattering in the report that it will have dramatic or drastic implications on industry at large in Canada," she said.