Press Responses: November 22, 2006

Mining Firms, Fearful of Prosecution, Taking Social Responsibility More Seriously

Embassy, November 22nd, 2006
By Lee Berthiaume

A forthcoming UN report says extraction firms are more attentive to human rights and environmental abuses, but some activists say Canadian firms still need reining in.
As the world's mining powerhouse, Canada has a great deal riding on the results of a public consultation reviewing the social responsibilities of the country's mining companies to communities in the developing world.

That was the message John Ruggie, UN special representative of human rights and transnational corporations, brought to the final session of a four-part national roundtable on corporate social responsibility in the mining industry last week.

"Home to more mining companies than any other country, and always a leader in the quest for human rights," Mr. Ruggie told roundtable participants in Montreal last Tuesday night. "It's important the world look to Canada for guidance and leadership in this difficult terrain."

For the past six months, a panel of officials charged by the Standing Committee on Foreign Affairs and International Development to conduct four roundtable discussions has been traveling across the country, soliciting suggestions from industries, civil societies and community leaders on how to ensure Canada's mining industry adheres to strict human rights and environmental rules and regulations when operating abroad.

The panel has heard arguments over mandatory versus voluntary rules, the creation of a mining ombudsman and the need to strengthen weak and corrupt governments in developing countries.

Mr. Ruggie, who is preparing a report to the United Nations on corporate social responsibility due next year, said his team found many of the world's largest companies are taking human rights more seriously, especially as the threat of litigation over war crimes, crimes against humanity and similar offenses against corporations draws closer to reality.

"An international legal environment is slowly emerging that will increase the exposure of companies to liability for international crimes," he said. "They are the result of countries ratifying conventions that establish the international criminal liability of individuals."

Mr. Ruggie dismissed past arguments that countries like Canada can't monitor companies registered within their boundaries but operating abroad because it interferes with the sovereignty of the country in which the company is working.

"Extraterritoriality is a complex subject that needs to be handled with care," Mr. Ruggie said. "But from what we have seen, there is little in international law that prohibits home states from exercising greater oversight...especially if public funds are used to promote the overseas investment."

But Mr. Ruggie said the threat of litigation and accountability alone won't solve the problem.

"One incentive that would yield quick and effective results would be legal provisions recognizing good corporate citizenship even when it breaks down, as all systems occasionally do.

"Even good companies can get into serious trouble in weak governance zones," he added. "In short, the individual responsibility model by itself does not take us far enough; a second layer of shared responsibility needs to be added to the mix."

'People Don't Want to be Victims'
Following a pattern established in previous roundtables held in Toronto, Calgary and Vancouver, civil society groups facilitated presentations from citizens and advocates living in mine-affected communities in developing countries.

Thomas Abakza of the Third World Network said he traveled across the Atlantic to report on two Canadian mining companies that are causing problems in his native Ghana.

"Normally for extractive industries, you cannot expect perfect harmony," Mr. Abakza said. "Sometimes they are caught up in ambivalent environments where the laws are not so clear cut so companies are stuck with choices

"The situation is very difficult. Sometimes you can see a very genuine desire on the part of the company."

But while a South African company operating in Ghana has done just that, Mr. Abakza said, the Canadian companies have not.

Jacques Saramin Boengkih, an indigenous activist in the French-colony of New Caledonia, had similar stories from his country where Falconbridge was a model citizen, having consulted with local communities and building in environmental plans. Falconbridge was recently bought by a Swiss company.

On the other end of the spectrum is nickel giant Inco, which Mr. Boengkih said has ignored the lessons the company learned when dealing with First Nations people in Canada, grabbing traditional land.

"This may create a civil war," Mr. Boengkih said, noting independence movements on the South Pacific island have been active for decades and are gaining strength. "People don't want to be victimized."

Mr. Boengkih said if Canada adopts mandatory laws and regulations for mining companies, "it is an example to other countries."

Inco was purchased by Brazilian iron ore giant CVRD earlier this year. Steve Mitchell, spokesman for Inco CVRD, the Brazilian company's Toronto-based nickel division, described the handling of indigenous rights in New Caledonia as "tricky because France doesn't recognize indigenous rights."
Mr. Mitchell referred to a report published last year by Inco which highlights efforts the company has made to engage the local community and environmental groups, the report states, by hosting meetings, site visits and signing agreements with three provinces to provide them with a financial stake in the project.

"Despite widespread community support, a small group of activists have expressed opposition to the project though blockades and, more recently, vandalism and threats to employees and contractors," the report states, indicating the efforts have not been wholly successful in placating local residents.

Keen For Industry Ombudsman
A final report from the roundtable to the Standing Committee on Foreign Affairs and International Development is expected early next year and Pierre Gratton, vice-president of sustainable development at the Mining Association of Canada, said he expects Canada to sign several conventions aimed at voluntary adherence of human rights and more transparency in the mining industry.

At the same time, he said, both industry and civil society appear keen on establishing a mining ombudsman that will act as a go-between for communities and companies that are at odds with each other.

"This is a chance for industry to clear its name and address the communities' concerns," he said of the roundtable process. "I think we're going to see some early action out of this. I think all of us would be disappointed if we simply walked way."

Catherine Coumans, research co-ordinator at Mining Watch Canada, says there is still a lot of work to do before the final report comes out and that civil society and industry will have to sit down and have serious discussions over the recommendations.

"There's been a lot of avoidance," she says, attributing that to the desire from both sides to continue talking and, as a result, throwing ideas on the table without weighing them as real options. "We're going to have to deal with these roadblocks."