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A Civil Society Analysis of the Government Response to the Standing Committee on Foreign Affairs and International Trade (SCFAIT) 14th report,

MOVING BEYOND VOLUNTARISM - EXECUTIVE SUMMARY

Civil Society Analysis of the Government Response to the Standing Committee on Foreign Affairs and International Trade (SCFAIT) 14th report, on "mining and corporate social responsibility"

November 2005

Introduction: The government's response to a landmark report on mining and corporate social responsibility by the Standing Committee on Foreign Affairs and International Trade (SCFAIT) is weak and inadequate given the severity of the problem and the strength of the SCFAIT's recommendations.

Canada is a leader in the global mining industry, with the almost 60% of the world's exploration and mining companies listed in Canada. As the government's response highlights, "for many communities abroad, these exploration and mining companies are the 'face of Canada.'"

While many Canadian companies contribute positively to communities in which they work, some have been implicated in well-documented cases of human rights violations and environmental abuses ranging from the destruction of protected areas, to death threats and assassinations.

Many of these companies benefit from the Canadian Government's political assistance (e.g. through embassies and trade commissioners) and financial support (e.g. through Export Development Canada's project support and political risk insurance), but the Government does not take effective action to ensure that publicly-supported companies comply with international human rights and environmental standards. This results in public resources being used to support human rights abuses and/or environmental degradation. Moreover, the operations of Canadian companies abroad are not subject to the same laws and regulations as their activities on Canadian soil. When local governments refuse to act, the Canadian government lacks the legal tools to hold companies to account for their actions.

Currently, the Government of Canada relies on voluntary standards to encourage good behaviour by its companies overseas, and lacks the legal and policy tools to enforce human rights and environmental standards. The SCFAIT report outlined a number of well-researched options to move the Government beyond its voluntary approach. In its response, the Government rejects these options, proposing instead a process for further discussion and tentative progress.

The Government's Response: The principle commitment in the government's response is to facilitate five roundtables with stakeholders. While an important step, these multi-stakeholder dialogues will remain public relations exercises until the Government commits to change. For credible roundtables that will deliver effective solutions, the roundtables must be targeted, participatory, transparent and accountable.

The government suggests a need for clarity on CSR norms. In fact, the Committee's report refers to internationally recognized human rights and environmental standards as the appropriate norms. In order to ensure effective implementation of these standards, the Government should put in place an ombudsman with monitoring and investigative powers, and support work underway by a number of organisations to develop human rights impacts assessments of foreign investments.

In the realm of government support for overseas investments, the government commits to identifying, and possibly incorporating, human rights best practices into the policies and practices of Export Development Canada (EDC). This vague commitment for action on the part of the government is inadequate. To date, human rights issues are only incorporated into EDC's political risk assessments, which assess the financial risks posed to a project by the political environment in a country. The government should use new human rights assessment tools, noted above, and existing environmental assessment tools, to condition all public financial and political support, including but not limited to EDC, on human rights and environmental compliance. The Belgian parliament is currently considering legislation linking public support for Belgian companies operating abroad to a set of international standards.

In the case of TVI Pacific's operations in the Philippines, on which the SCFAIT's hearings focused, the government resists the recommendation for an immediate investigation of TVI's activities. Instead, the response refers the case to the widely criticized OECD Guidelines.

The Government should promptly carry out an investigation through consultation with a wide range of concerned and affected authorities, organizations and individuals.

The government also makes a number of vague statements in important areas - including corporate disclosure and transparency, clarification of the mandate of the National Contact Point for the OECD guidelines, and incorporation of human rights standards into the OECD guidelines - statements which, rather than responding to the SCFAIT recommendations, instead indicate a lack of commitment on the part of the government.

Finally, the government commits to support the work of the UN Special Representative on Business and Human Rights, and create CSR toolkits for Canadian companies and trade commissions to help them manage the human rights impacts of their projects - both welcome but insufficient steps.

Missing entirely from the government's response is any commitment to establish clear legal norms in Canada to hold Canadian companies accountable for abuses overseas. Instead, the Government describes the current status of Canadian legal instruments to argue that little can be done to hold Canadian companies to account for activities conducted abroad. The Government must address these barriers in Canadian law.