Dec '09/Jan '10

Supply Side

Why CSR in the mining industry matters to suppliers

By J. Baird

Corporate Social Responsibility (CSR) is a growing issue in industry in general, but particularly in the mining industry. The trend towards responsibility and sustainability — involving health and safety, the environment, human rights, community relations and other matters — affects mining suppliers just as it affects their clients, the mining companies.

For more than 40 years there has been a global social justice movement that has demanded that corporations conform to CSR principles. In the past, companies rarely thought through their social responsibility in a comprehensive way. But today, corporations that do not meet the CSR challenge risk losing their “social license to operate.”

The mining industry first stepped up to the challenge in a collective way in 2002 with the formation of the International Council on Mining and Metals (ICMM). In addition, over the last several years, both the Mining Association of Canada (MAC) and the Prospectors and Developers Association of Canada (PDAC) have developed programs — namely, Towards Sustainable Mining and e3 Plus, respectively — to help their members improve their practices. 

Concern over certain incidences in developing countries led the federal government to organize four two-day extractive industry CSR roundtables across the country in 2006, bringing together about 200 stakeholders representing all sides of the issue. This resulted in a report to Parliament in 2007, recommending action by the government.

In March 2009, the government responded with a program of action, including an ombudsman-like CSR Counsellor office as well as a Centre for Excellence on CSR, hosted by CIM and supported by the Department of Foreign Affairs and International Trade.

Industry, associations and the government have been taking steps to help our companies operating in Canada and abroad to learn about and meet their modern social responsibilities. Then, along comes Federal Bill C-300, a private member’s initiative that expects the government to define what CSR is and apply sanctions to Canadian companies in the extractive industries working in developing countries. This bill is close to third and final reading in the House of Commons.

While it may sound reasonable at first glance, if this bill were passed into law, the practical result would be destructive for Canadian miners and their suppliers. First of all, while there are many CSR codes in the world, they are largely designed to cover actions of states and involve voluntary compliance. It will not be easy to come up with a legislated code in this complicated, contentious field that is fair to companies and individuals working in complex situations around the world.

Second, virtually anyone can complain. Companies will be accused frivolously and be forced to make major expenditures to defend themselves. Many will be shown to be innocent, but will seriously lose reputation in the process.

Third, the proposed sanctions are heavy – withdrawal of government support through Export Development Canada, investments by the Canada Pension Plan and the services of our diplomatic and trade officials around the world.

There is no doubt that our mineral exploration and mining industry must practice the highest standards in CSR wherever they work. What are needed now, however, are programs like MAC’s Towards Sustainable Mining and PDAC’s e3 Plus: A Framework for Responsible Exploration that will help companies learn and improve.

What is not needed is a Canadian law applied extraterritorially that will negatively affect our companies’ activities around the world without getting at the root of the problem, which largely lies in the fact that many developing countries lack the governance and capacity to regulate a modern mining industry.

Mining suppliers would be affected if projects on which they are working are shut down. They too could be dragged into the Bill C-300 legal process.

Suppliers interested in stopping this misguided, unnecessary and unfair law should consult position statements on the MAC and PDAC websites and contact their local Member of Parliament to voice their objection.

Jon Baird
Jon Baird, managing director of CAMESE and the immediate past president of PDAC, is interested in collective approaches to enhancing the Canadian brand in the world of mining.

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