Canadian sustainability standards - the idea and the shadow

Thursday, 22 January, 2015

Following our recent piece on Nevsun, guest contributor Joe Kirsch of the Engineering and Mining Journal is back with an update on that sorry situation—and in fact, despite the game-changing new national CSR legislation, a sorry tale of overseas behaviour by Canadian mining companies in general. Not all’s bad, though: other names familiar to these pages appear in a positive light, including Angkor Gold, who spoke to us back in March. As usual we’re grateful to Joe for the article; the original can be found here.

A Clearing in Canada: Ottawa’s New Standards for Sustainability

Written by Joe Kirschke, News Editor-Mining, Engineering and Mining Journal

Human rights monitors and former employees claim workers have endured forced labor at an Eritrean copper project part-owned by Vancouver’s Nevsun Resources Ltd. The Canadian government updated its official CSR standards in Q4 2014.

By Joseph Kirschke, 

For Vancouver-based Nevsun Resources Ltd., the timing could hardly have been worse: Just as Canada issued its latest corporate social responsibility (CSR) standards for extractive companies in November, the Eritrea-focused miner was sued over “forced” labor allegations at its copper-gold project 90 miles east of Asmara, the capital.

The British Columbia Supreme Court filing followed a 2013 Human Rights Watch (HRW) report alleging employment of press-ganged military conscripts at the operation, a 60:40 joint venture (JV) with the “pariah” government. “Based on company-led and third-party audits,” countered CEO Cliff Davis, “the Bisha mine has adhered to international standards of governance, health and safety.”

In any case, Nevsun, pending Bisha’s 90,000 tons of copper output in 2014, isn’t the only Canadian miner in a jam: Indeed, active in more than 4,300 locations in 100 countries representing 37% of global exploration expenditures, Canada’s storied mining industry has long faced withering criticism worldwide.

In October, for instance, the Inter-American Commission on Human Rights (IACHR) heard 30 activist claims that Canada has broadly denied Latin American mining abuse victims justice in its courts. “At least 50 people have been killed and 300 wounded in connection with mining involving Canadian companies in recent years,” Shin Imai, a lawyer with Canada’s Justice and Corporate Accountability Project, told the Washington-based, independent tribunal. “There has been little to no accountability.”

The Q4 changes, announced by the Department of Foreign Affairs, Trade and Development (DFATD), include a more specific role for a current CSR ombudsman, and a larger one for the Organization for Economic Co-operation Development (OECD) National Contact Point (NCP) pending a new strategy. It remains unclear, however, how this “economic diplomacy” will be applied; Canada’s first voluntary CSR extractive sector policy emerged in 2009.

Canada has long allowed the overlap of two offices addressing conflicts between miners and communities: one for the extractive sector, the other for private sector disputes. Now both complement each other: The counsellor will be prevention and early-stage dispute-focused; the NCP assumes all formal mediation.

Yet “this isn’t much different than current practices,” Mining Association of Canada (MAC) President Pierre Gratton told Canadian reporters. However, “this clarifies dispute resolution better.”

Nongovernmental organizations (NGOs) like MiningWatch Canada (MwC) are less charitable, noting neither the CSR counsellor nor the NCP can independently investigate a conflict and make recommendations. “If the counsellor finds someone has been harmed, it doesn’t necessarily say those would be reasons to withdraw support,” said Catherine Coumans, a MwC research coordinator.

Canadian officials, meanwhile, maintain Ottawa has “one of the world’s strongest legal and regulatory frameworks toward its extractives industries.”

Nations and Relations
Positive elements of CSR among Canadian miners, on the other hand, have been informed by their own entrenched geology—and, in particular, tried and tested relations with indigenous communities, noted Dion Jamieson Arnouse, an expert in First Nations industry relations. A top potash, uranium, aluminum, titanium, tungsten and nickel producer, moreover, Canada is also home to more than 630 recognized First Nations governments and some 700,000 people.

The legacy of such experience has been a driving force behind the work of companies like Angkor Gold Corp., an Alberta-based junior with some of Southeast Asia’s most aggressive CSR via Free Prior and Informed Consent (FPIC) and initiatives ranging from comprehensive education to agriculture in Cambodia’s countryside.

In rural Uganda, Rakai Resources, a JV uniting the SeedRock Group, a resource-focused investment firm, and the Salama Shield Foundation, a locally established Canadian NGO, has a similarly CSR-pioneering mandate. The Toronto-headquartered Rakai is applying direct social development principles through education, health, microcredit, and revolving loans along with food security while advancing exploration licenses prospective for gold and other minerals.

But controversies involving other Canadian miners remain depressingly common—especially in Latin America, where investment has soared 300% since 2001. In Q1 2015, for example, a former Tahoe Resources Inc. security manager stands trial for shooting protesters outside Guatemala’s Escobal silver project in Q2 2013; that year, government officials issued a licensing ban over mining abuses.

Foreign plaintiffs have sought remedy in Canada against Cambior Inc. over a tailings dam spill in Guyana, as well as human rights abuses connected to Copper Mesa Mining Corp. in Ecuador. In 2012, litigation was filed against Anvil Mining Ltd. over an alleged massacre by the Democratic Republic of Congo (DRC) military; Toronto-based giant Barrick Gold Corp. has been repeatedly sued over mass rapes by security forces at its vast Porgera project in Papua New Guinea.

Despite “such difficult questions,” Natural Resources Canada, for its part, is cautiously upbeat. “Management, responsiveness to societal pressures, reputation, and the presence or absence of environmental accidents all impact share prices,” it said.

But “although contributing to sustainable development costs the industry,” added the government agency, “it can also be the basis for increased profits.”