Dec '09/Jan '10

Strong opinions, hard positions

Debating Canadian mining’s role in CSR

By M. Paduada

The Toronto chapter of the Canadian International Council (CIC), a long-time forum for foreign policy-making, recently hosted a debate on Bill C-300 at the Toronto offices of the law firm McMillan LLP, drawing a diverse audience from across industry, government, academia and civil society organizations. Titled “Setting Guidelines for Corporate Accountability for Mining, Oil and Gas Corporations Abroad,” the evening featured one debate focusing on the practical implications of C-300 and another on the international legal implications.

Bill C-300 is a private member’s bill concerning the corporate accountability of Canadian mining, oil and gas activities in developing countries. If implemented, a Canadian mining company receiving funding from Export Development Canada or the Canadian Pension Plan Investment Board could see that funding withdrawn for non-compliance with certain international guidelines on corporate social responsibility (CSR), based on a complaint and ensuing investigation.

Liberal member of Parliament John McKay, who sponsored the bill, argued practical points in favour of C-300. He stated that current government strategy falls short of the recommendations by the widely inclusive 2007 national roundtable discussions on CSR. In particular, McKay noted, “the CSR counselors cannot start an investigation without the consent of the corporation being investigated.” McKay said that Bill C-300 would define Canada’s treatment of CSR on the international stage, adding, “We could be leaders or we could be laggards.” He also defended the strong provisions of C-300. “I utterly reject that Canadian companies will lose out or that head offices will leave. That is, in my view, a race-to-the-bottom argument.”

Jon Baird, president of the Prospectors and Developers Association of Canada (PDAC), said that C-300 is the wrong approach. Baird argued that the bill is not sophisticated enough to handle the complexities of CSR, which he stated is “poorly understood, very complex and contentious, particularly in the context of worldwide exploration and mining in remote areas.” Citing industry and government initiatives already underway, Baird explained that “improvement to the CSR experiences of Canadian companies working in the developing world will come from learning, encouragement, fact-finding and problem-solving, not from laws and punishment.”

Two such initiatives include the PDAC’s  e3Plus framework for responsible exploration, and the Canadian government’s “Building the Canadian Advantage” extractive sector CSR strategy, which includes the creation of an online CSR Centre for Excellence, being built and hosted by CIM.

Baird also defended the CSR record of the Canadian extractive sector, citing a disproportionately low number of incidents relative to the thousands of Canadian extractive activities abroad. “Every industry has a [CSR] problem. But the problems are a tiny percentage.”

Dr. Sara Seck, a professor in the Faculty of Law at the University of Western Ontario, argued for the legal merits of the bill. She claimed that Bill C-300 is a step in the right direction with respect to three principles for CSR; namely, the state duty to protect rights, the corporate duty to respect rights and the need for greater access to remedies if those rights are violated. She also noted that current strategies fall short, especially on the third principle.

Robert Wisner, a partner at McMillan LLP, argued two legal reasons against the bill. He first remarked that Bill C-300 would lead to second-guessing of the usual diplomatic resolution channels for handling CSR-related complaints. Wisner also stated that the poorly defined terms in the bill would create a dangerous level of legal uncertainty.

An informal poll by the moderator following the debate revealed that no one in the audience had changed their mind, highlighting the challenge either side faces in reaching consensus on the issue. McKay and Baird took the debate to a national audience the next morning on CBC Radio’s The Current. Blog activity also increased in response to both the CIC and CBC debates. Most importantly, the parliamentary debate continues.

According to McKay, all the attention being given to C-300 is a good thing. “I can’t underestimate how important the media is. If the media isn’t talking about it, the bill is dead. I have one and a half people on my staff in Ottawa while the government has 450,000 civil servants.”

Though traditionally private member’s bills are not often made into law, their passage is more common in minority governments. McKay recognizes the bill’s obstacles yet remains optimistic. “If I get Bill C-300 through the committee [House of Commons Standing Committee on Foreign Affairs and International Development], I’ve got a shot at getting it through the House,” he says. “Then it’s in the Senate. Then all bets are off.”

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