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Ottawa May Finally Be Getting Serious About Regulating the Mining Industry

After being hit with harsh criticism for failing to fi​ll a pos​ition that was, designed to oversee Canada's misbehaving mining industry, the Harper government has finally re-launched its effort to bring the extractive sector in line.
Justin Ling
Montreal, CA
November 14, 2014, 10:22pm



​After being hit with harsh criticism for failing to fi​ll a pos​ition that was, theoretically, designed to oversee Canada's misbehaving mining industry, the Harper government has finally re-launched its effort to bring the extractive sector in line. Critics still maintain that Ottawa isn't going far enough to ensure that its companies are respecting the rule of law abroad.

Under the unfortunate moniker of: "Doing Business the Canadian Way,"Ottawa has launched a new plan to reign in an industry that has been accused of everything from environmental devastation to fuelling regional conflict and even m​urder.

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VICE reported in ​Au​gust that the government was dragging its feet on filling a position that it had created just a few years earlier—a position that was largely chided as being ineffective astroturfing.

But today, in British Columbia, International Trade Minister Ed Fast unveiled a considerably tougher approach.

The new plan requires companies to undergo a dispute resolution process, and address allegations against them. If the company refuses, Ottawa is threatening to revoke their funding, loans and subsidies.

That's a big deal, seeing as how Canadian mining companies make up the majority of the world's industry (​75 percent of the world's mining companies are headquartered here), valued at some $130 billion.

That idea—pulling funding for rogue mining companies—has long been requested by mining accountability groups.

Catherine Coumans, research coordinator at watchdog group MiningWatch, says the move is "really important."It's something they've endorsed for years.

"If an extractive company refuses to take part in the mechanisms available to resolve a dispute under our strengthened and enhanced CSR [Corporate Social Responsibility] Strategy, or fails to embody CSR best practices, they will no longer benefit from the support of our economic diplomacy and services provided by the Government of Canada and its Trade Commissioner Service,"Fast said in Vancouver.

"If you don't play ball by doing business the Canadian way, then we won't go to bat for you."

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The strategy also warns that there are "jurisdictions where local laws are not aligned with Canadian values,"and that the government encourages Canadian companies operating there to "reflect Canadian values that also respect local laws. If this is not possible, companies may wish to reconsider their investment."

It's not clear if Ottawa would also look to revoke funding to companies operating in states that don't have an adequate rule of law.

Either way, the new policy is a far cry from the government's messaging just a few short years ago, when they argued that any effort to crack down on mining companies could cause them to flee from Canada.

If it sounds like the government took baby steps to arrive at this announcement, it's because they did. One Conservative source told VICE in the run-up to the announcement that the government had a fear of "overreacting,"and scaring-off otherwise-friendly investors.

The source noted, however, that adopting the opposition plan—to create an independent ombudsman to oversee Canada's mining sector, investigate alleged wrong-doing and punish ne'er-do-wells in the extractive sector—wasn't the panaceathat it promised to be. For one, it's virtually impossible to give the Canadian Government some sort of extra-terrestrial investigative power. This hypothetical ombudsman couldn't just hop in the Mystery Machine, the source noted, and head to El Salvador to catch the evil mining company red-handed.

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The government solution announced today appears to be trying to address that very problem, by way of the Canadian National Contact Point (NCP).

The NCP is organized through the Organization for Economic Co-operation and Development (OECD), and has an office in Ottawa. In essence, it's an international body tasked with dealing with complaints where Western companies ignore the rule of law—or exploit the lack of it—in developing countries. It's sort of like the IMF, but in reverse.

What's not clear, however, is if the government plans on putting a little more meat behind the NCP. The guidelines that the multi-national organization has in place aren't exactly the Magna Carta, and the organization in Canada doesn't currently have any mandate to investigate the complaints.

Even the Mining Association of Canada, a group that you would expect to be dead-set against tougher penalties on their members, notes that "the threshold for the NCP to take on a case is limited to those instances where the NCP determines there are 'substantiated' allegations…which implies a higher standard of preparation and documentation (and potential barrier for entry into the process)."

When MiningWatch helped submit a complaint to the NCP on behalf of Ecuadorian farmers who say they were affected by a joint Chinese-Canadian mining project in the Amazon, the NCP declined to look into it, saying that the claim wasn't "substantiated."

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Coumans says she's dealt with complaints that the NCP has turned away. She says lawyers working with MiningWatch have even been surprised at how high the NCP's threshold is to bring forward a complaint.

"For some reason, [the NCP] has found it pertinent to reject complaints,"Coumans says.

She adds that, in many countries, governments have empowered the NCP to do investigations and actually dig into allegations. Canada doesn't appear to be going down that route.

"This is still a huge missing piece,"she says. "There are people who come to us who don't want a mediation or a dialog. They want an investigation."

Take, for example, Angelica Choc, whose husband, a prominent anti-mining activist, was murd​e​red. She says a Canadian mining company ordered his death.

While the NCP has existed in Canada for several years, it was largely un-used, thanks in part to the government's insistence on the CSR Counsellor office—a shop they created in 2009 that has widely been regarded as a failure, given that it had no real resources or power to do anything. The job has been vacant since ex-Counsellor Marketa Evans quietly resigned over a year ago.

This strategy, however, positions the CSR Counsellor to "encourage and help parties to refer issues to the NCP,"suggesting that the office may help complaints meet that threshold.

The Counsellor job will now essentially be an in-take desk —fielding complaints against Canadian mining companies, and trying to resolve them, as well as doing public relations, training and promotion for the strategy. If it can't, they'll be dispatched to the NCP's desk.

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Coumans says the concern would be that the Counsellor may exist, only as an impediment to actually dealing with the matter.

Fast announced on Friday that the job search has begun for Evans's replacement.

"I am announcing that we are launching the process for a new CSR Counsellor and inviting all interested candidates to participate in the selection process,"Fast said.

MiningWatch, arguably the country's foremost NGO on the matter, isn't coming down one way or the other on the new strategy. They say they've got "pros, cons, and concerns."

And, Coumans adds, "the devil's going to be in the details."

​​@justin_ling