Dec '10/Jan '11

MAC Economic Commentary

Corporate social responsibility and Bill C-300 – a post-mortem

By Paul Stothart

Bill C-300, the proposed Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act, was defeated in a House of Commons vote on October 27, 2010, by 140 votes to 134. While this ends the life of Bill C-300, which was originally tabled by Liberal MP John McKay in February 2009, this will not spell the end of private members bills (PMBs) on the general issue of corporate accountability. There are several factors that support a likelihood of future bills on related themes over the coming years.

First, the notion of advancing social and environmental responsibility in Canada and abroad carries the same controversy as supporting apple pie. Politicians, companies, the general public and NGOs are on the same page in this respect and there is no apparent political downside for private members to propose or support legislation toward this end. This was a core reality with respect to Bill C-300, as numerous parliamentarians stated to MAC that they were not willing to be seen as “voting against social progress,” especially on legislation that in their view would not make it through the Senate side of the legislative process in any event. They could therefore please their political constituents, while remaining confident that the flawed legislation would not actually become law.

Second, PMBs do not generally have to withstand the same degree of scrutiny that faces government legislation. As well, by definition, PMBs do not represent a party’s policy, although they can still collect wide political support across opposition members. Where government legislation is drafted by legislative experts, passed through a legal scrubbing and vetted through federal financial gatekeepers, a comparable level of responsibility is not placed upon PMBs. This became a significant consideration on Bill C-300, which by any serious assessment was felt to be unconstitutional and out-of-order for (illegally) placing significant new financial obligations upon the government. Given this low hurdle, the Bill’s disregard for the notion of fairness and due process were not obstacles for Mackay in his design and lobbying efforts.

Third, the political climate in Ottawa, of minority government, combined with the fact that PMBs are largely within the purview of parliamentarians as individuals also serves to enhance the attractiveness of this tool. Individual members can use PMBs to carve out niches for themselves and to build a constituency in popular fields, without being subject to political oversight.

The combination of these three factors means that PMBs are a relatively easy way to score political points and to engender support from social and church groups, among others, without having to withstand legal, constitutional or financial scrutiny.

A further consideration that was critical to the formulation of Bill C-300 was the fact that the federal government took a full two years to respond to a complex set of recommendations in a unanimous report from industry and NGOs on international corporate social responsibility. Given the lengthy delay before the government tabled its strategy, it is not surprising that a number of private bills from opposition parliamentarians, including C-300, were tabled to fill a policy vacuum and spur a government response.

Looking ahead, it is evident that the mining industry will have to continue to improve in its commitment to social responsibility and, above all, in its communication of core messages. The industry will continue to face opposition from environmental and social groups, and from church organizations. These communities themselves are influential — many have broad on-the-ground communications networks and well-coordinated multinational fundraising channels combined with a mastery of social media. Their ownership of the “social responsibility” label serves to further heighten the communications challenge facing the extractive sector.

Toward this end, even if the mining industry was pre-disposed to allocate millions of advertising dollars, it is unlikely that a glossy public marketing campaign would be effective in conveying its core messages. Rather, a lower profile and multi-faceted approach is called for at this time, including:

  • Companies should continuously work to maximize their social, environmental and economic benefits, while minimizing the social and environmental impacts of mining.
  • Companies should continue to highlight their investments in helping pay for schools, roads, hospitals, clinics, community halls, and child health and nutrition programs in developing countries. Along with the core economic benefits (jobs, taxes, exports) that it brings to developing countries, the industry should highlight these social aspects to parliamentarians, journalists and academics.
  • Related to the above point, companies, along with MAC and PDAC, must become more adept at using social media channels to provide facts and convey their perspective.
  • The industry should highlight its critical role as a key ingredient in the emerging clean energy economy. New technologies in wind, solar, geothermal, hybrid engines, batteries and lightweight materials require metals and minerals. Highlighting this argument serves as a consistency check, as NGOs seeking clean-energy technologies should also support global mineral development.
  • The industry should remain engaged in dialogue regarding the national CSR Counsellor office, the OECD guidelines (and national contact point) for multinational enterprises, the evolving UN human rights work of John Ruggie, the Centre for Excellence in Corporate Social Responsibility, and the International Finance Corporation’s social performance standards and complaints mechanism.
  • Finally, the industry should be open to re-examining recommendations that emerged from the 2007 CSR advisory process — should key stakeholders within government and NGOs view this as a desired path forward.

Taken in isolation, these measures will not prevent the emergence of future private members bills on social, environmental and developing country themes. However, taken in combination, and if sustained over time, they will help ensure that the industry is able to convey an accurate and fair message to Canadian decision-makers.

Paul Stothart
Paul Stothart is vice-president, economic affairs, at the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues.

Post a comment


PDF Version