August 2012

CIDA puts plans in motion

Extractive industries institute will focus on policy development

By Alexandra Lopez-Pacheco

Canada’s new International Institute for Extractive Industries and Development is one step closer to realization. In June, the federal government’s Canadian International Development Agency (CIDA) put out a call for proposals from Canadian universities wanting to host the new Institute. Prime Minister Stephen Harper announced the creation of the Institute last fall, stating it “will help developing nations harness their resources to generate sustainable economic growth, thereby reducing poverty.” The Institute will receive $25 million over five years from CIDA for its establishment and initial operating costs.

“Many developing countries face challenges in effectively governing and managing their extractive industries, and they often approach Canada for our expertise in this area,” said Justin Broekema, press secretary for the office of the Minister of International Cooperation, which manages CIDA. “Weak capacity to manage resources, including taxation, inspection and regulation, contract negotiation, revenue collection and distribution, is a significant barrier to ensuring that extractive operations in developing countries maximize positive development results to benefit countries and their people.”

Following a roundtable last December, consultations with a range of stakeholders in the sector took place between April and May 2012, and included CIM, the Canadian Council for International Co-operation (CCIC), the Canadian Chamber of Commerce, Partnership Africa Canada (PAC) and the Mining Association of Canada (MAC).

A common concern emerged from the consultations: the Institute needs to ensure it truly is effective in moving developing nations forward.

PAC pointed out the potential for competing interests. “Given that Canada does have such a prominent extractives sector in developing countries, there may be times when recommendations that should be made to the government are not in the best interest of Canadian companies,” said Kady Seguin, programme analyst for Publish What You Pay Canada, which helped draft the submission of its host organization, PAC. The CCIC also highlighted this issue and urged CIDA to establish clear directives that would address it.

In its submission as part of the consultation process in early May, CIM expressed concern over similarities between the proposed Institute and the existing Centre for Excellence in Corporate Social Responsibility (CfE). The CfE, which was launched in 2009 and for which CIM is the secretariat, is a pillar of the Canadian government’s corporate social responsibility (CSR) policy. Later in May, CIM representatives met with former Minister of International Cooperation Bev Oda to discuss initial perceptions, the mandate and operation of the Institute, and the evolution of the CfE.

One solution to the overlap, offered by a number of participants, including CIM and PAC, is that the Institute commit to a process of collaboration with stakeholders.

“The task of the Institute is to do a gap analysis of where it could potentially benefit and really understand the context in which it is entering,” said Seguin. “As well, there are a lot of multi-stakeholder initiatives already happening. So the Institute needs to ensure it is working within the work that is happening already and incorporating it.”

CIM has also raised concern over the Institute residing in a single institution, because it had proposed to cover a very broad spectrum of issues. However, over time, the Institute’s focus narrowed, and former Minister Oda indicated the key objective would be to provide training and development to representatives of host countries in natural resources legislation and policy development.

An interdisciplinary approach will be vital, said Bernhard Klein, head of University of British Columbia’s department of mining engineering. “It’s really important to pay attention to the countries and what the issues are within those countries,” noted Klein. “But you really need to understand more than policy, you need to understand and have experience in the mining sector and its impact and relationships with local communities.”

The institutional capacity-building will help complement the work being done by operators, said Nathan Stubina, manager of the Barrick Technology Centre. “Canadian mining is very strong in areas, such as technical skills, CSR, safety and maintenance, so we can share that strength as a great vehicle to help countries out of poverty,” he said. “From Barrick’s perspective, many of the countries we operate in don’t have a lot of technical skills, so we provide the training.”

After taking part in three Canadian missions to West Africa, CIM executive director Jean Vavrek said there is both a clear need for governments to develop and retain qualified people, and an important role that Canadian knowledge, practice and culture can play.

“CIM values its relationships with its government partners and the work that is being done,” said Vavrek. “The call for proposals has opened the door for collaboration. The Francophone context of many West African countries certainly needs to be considered in developing collaboration between Anglophone and Francophone bodies as part of the new Institute.”

Three to five Canadian representatives will be selected over the summer by the president of CIDA to make up the Institute’s external advisory panel. Once all the universities’ proposals are submitted by September 6, the advisory panel will assess them, and one proposal will be recommended to the president of CIDA.

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