Press Responses: March 29, 2007

Industry, NGOs agree on good practices for Canadian miners abroad

Concluding a 10-month process that saw input from NGOs, mining, oil and gas companies and academia, a report released today outlines a raft of recommendations that aim to address concerns over the social and environmental effects of resource extraction by Canadian companies in the developing world.

The process, which involved roundtables hosted in Vancouver, Calgary, Toronto and Montreal and was overseen by a multi-sector advisory group, was initiated by the federal government's foreign affairs committee to respond to concerns about Canadian extractive industries and a perceived lack of oversight on their operations abroad.

The raft of recommendations - some far-reaching - include the establishment of a Canadian corporate social responsibility (CSR) framework for companies operating in developing countries that would employ Global Reporting Initiative (GRI) standards for increased transparency on social and environmental issues; establishment of an independent ombudsman's office to handle initial CSR complaints about companies; and the establishment of a Compliance Review Committee to deal with cases referred by the ombudsman.

The roundtable process started off in Vancouver long on NGOs and short on miners, says Pierre Gratton, vice-president of sustainable development and public affairs with the Mining Association of Canada (MAC), and a member of the advisory committee.

"There's no question that NGOs were faster out of the starting gate: they were the ones who pushed for this process to begin with," he admits. "But I think in the end, there was a fairly high degree of industry participation as well."

The advisory committee, made up of stakeholders with a history of conflict - mining and oil and gas companies, civil society groups, labour groups and investors - was able to agree on a common framework with its final "groundbreaking" report, Gratton says.

"To achieve a consensus, I think we all feel, is a pretty remarkable thing."

There were some points of contention - specifically disagreement over whether government should legally regulate companies operating overseas - but Gratton says there's lots for miners to like in the report.

"There's no question that compromises were made and there's no question that some of the recommendations are going to be a bit of a stretch for some companies," he says. "But I think we all felt that there is a benefit to the industry to have a framework in place that lays out very clearly what the expectations are, provides tools and access to tools to companies that need support, and that we have a mechanism like an ombudsman."

The recommendation to create an ombudsman's office to deal with complaints is probably the one that will resonate most with mining and exploration companies, Gratton says.

"Right now it falls into a black hole. There's no way of dealing with (accusations) - it's he said, she said, and when it plays out in the media, it invariably hurts the company," Gratton says. "This provides a place for it, a place for it to be looked at independently and responsibly and it provides potentially an opportunity for a company to clear its name."

Gratton notes that none of the recommendations are out of line with commitments MAC members have made under its Toward Sustainable Mining Initiative or the Whitehorse Initiative.

Other recommendations in the report include: refundable tax credits for companies that report using GRI; making reporting for Canadian companies operating overseas a requirement of listing on exchanges; establishing a "Centre of Excellence" for CSR that would provide advice and information to all stakeholders; and the withdrawal of federal government support, including some tax benefits, from companies that are deemed seriously non-compliant with the new rules, when attempts to the bring the companies into compliance have failed.

It also calls for Canada to participate in and work to strengthen UN and other international voluntary regulations.

The advisory board says its now up to the government to decide whether or not to implement the recommendations.