December 20 2007

Mr. John Mihevc
Chair, Halifax Initiative Coalition
153 Chapel Street
Ottawa, ON KIN 1H5

Dear Mr. Mihevc:

Thank you for your correspondence of January 31, 2007 outlining recommendations for our Annual Report to Parliament on Bretton Woods Institutions. Your feedback helps maintain the Department of Finance’s high standard for accountability in managing Canada’s relationship with the International Monetary Fund and the World Bank.

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.

Civil society/Industry make unprecedented joint recommendations on mining, oil and gas
Canada could become a world leader on Corporate Social Responsibility if the federal government and other stakeholders accept and act on the recommendations of a groundbreaking report released on Parliament Hill on Corporate Social Responsibility (CSR) and the Canadian extractive industry in developing countries. The Report outlines a set of consensus-based recommendations for the Government of Canada, core among which is the implementation of a Canadian CSR Framework (see “Just the Facts” below). If implemented, these recommendations would establish Canada as a global leader in CSR. The Report also calls for important reforms at Export Development Canada and the World Bank.

Canadian mining firms agree to clean up global act

For pdf version, click here.

Office of the High Commissioner for Human Rights,
in Cooperation with the Special Representative of the Secretary-General for Human Rights and Transnational Corporations and other Business Enterprises

Consultation on Human Rights and the Financial Sector

February 16, 2007, Geneva

Norway “seeks the truth” on Bank conditionality
The Norwegian government, whose aid money cannot be spent on programs that require trade liberalization and privatization, hosted an inter-governmental meeting in November to assess the extent to which the World Bank and IMF still require developing countries to pursue privatization and liberalization as a condition of support. An independent study commissioned for the meeting, determined that while the World Bank and IMF are still pushing privatization and trade liberalization in their development policy lending, it is less pervasive than in the past. It also concluded that governance conditions are increasingly taking the place of economic policy prescriptions, and that developing government “ownership” over Bank and Fund policies is still weak.

Mali
IAMGOLD Corp.
IFC: owns 6% of the operating company
CPP: $38 million[1]

Two villages were displaced in order to make way for the Sadiola mine.  The vast majority of relocated agriculturalists and pastoralists who did not possess title to their lands have seen their livelihoods diminish.  Replacement lands are less fertile and some are located far from villages.  Water resources are scarce.  Natural areas used by locals have been degraded through deforestation caused by the mine.  Mine workers live in poor conditions and locals report a rise in prostitution, alcoholism, drug use and the spread of HIV/AIDS since the arrival of gold mining.[2]

Kyrgyzstan
Cameco Corp.
EDC: US$50 million political risk insurance [1]
EBRD: US$40 million loan [2]
IFC: US$40 million loan [3]
MIGA: US$45 million political risk insurance [4]
CPP: $35 million [5]

In May 1998, a company truck spilt a load of sodium cyanide, a chemical used to extract gold, into the Barskoun River, raising the cyanide concentration in the water to 50,000 times the permissible level.[6] In the days following the spill, hundreds, possibly thousands of local residents sought medical attention and several deaths were reported. Thousands were evacuated from the spill area.[7] A study published by Natural Resources Canada [8] concluded that few, if any, significant environmental impacts were generated by the spill - conclusions that were questioned by an independent hydrogeologist.[9]

Guatemala
Glamis Gold Ltd.
IFC: US$45 million loan
CPP: $63 million[1]

Marlin, which became operational in 2005, is the first major mining investment in Guatemala in 20 years[2] and is an important test case. In January 2005, the break-up of a 40-day protest by the army resulted in one death.[3] Later that year, indigenous Sipacapan communities affected by the mine overwhelmingly rejected mineral development in a popular referendum.[4] In response to a community complaint, the World Bank’s Compliance Advisor Ombudsman (CAO) investigated the project. While the CAO found that some community concerns, particularly those involving impacts to local water supplies, were unwarranted, the CAO identified some serious shortcomings with project assessment and management. For example, the CAO described the lack of a clear policy on human rights as a “significant oversight” on the part of both Glamis and the IFC.[5]

Bolivia
Orvana Minerals Corp.
IFC: issued loans to and held equity in COMSUR,[1] a Bolivian company that was an Orvana shareholder until 2005[2]

The Don Mario mine is located in the heart of the Chiquitano Dry Forest.[3] This rare, globally significant ecosystem supports the headwaters of the Pantanal wetlands and is home to numerous endemic species.[4]  The Pantanal is one of the world’s largest freshwater ecosystems, recognized by UNESCO and the Ramsar Convention.[5]  The area is also of great cultural, economic and social importance to the Chiquitano indigenous people.[6]  In a complaint filed with the World Bank’s Compliance Advisor Ombudsman, an indigenous organization argued that the mine violates the rights of over 7000 indigenous communities.[7] Among other shortcomings, the ombudsman found that indigenous people were not adequately consulted by the project proponents.[8]