When mining giants face local opposition around the globe, Harper's team hurries to help. Part one of two.
Up to 80 per cent of global mining equity financing takes place in Canada.
[Editor's note: This is the first of two pieces drawn, with permission, from Chapter 2 of The Ugly Canadian: Stephen Harper's Foreign Policy by Yves Engler, newly published. Engler's next author's event is Nov. 27 at Carleton University, 2:45 p.m., Room A220, Loeb Building, Ottawa.]
Canada is a global mining powerhouse. Nearly 60 per cent of the world's mining companies are listed on this country's stock exchanges and as much as 80 per cent of global mining equity financing takes place in Canada. The industry has grown rapidly over the past decade. Canadian mining companies' overseas investments increased from $30 billion in 2002 to $210 billion in 2011, according to the Canadian Mining Journal. Most of this growth was in Latin America, Asia and Africa where corporations operate under limited oversight.
As a result there have been an astounding number of conflicts at Canadian-run mines. Throughout 2009/10 the Standing Committee on Foreign Affairs and International Development heard accounts about dozens of different mining conflicts. No matter how much Canadians wish we were simply known for hockey or our comedians, the mining industry increasingly represents Canada abroad. Canadian mining corporations operate thousands of projects outside this country and many of these mines have displaced communities, destroyed ecosystems and provoked violence. Pick almost any country in the Global South -- from Papua New Guinea to Ghana, Ecuador and the Philippines -- and you will find a Canadian-run mine that has caused environmental devastation or been the scene of violent confrontations.
There have been so many conflicts that even the industry associations effectively admit the problem. A leaked report commissioned by the Toronto-based Prospectors and Developers Association of Canada found that Canadian companies were responsible for a third of 171 high-profile Corporate Social Responsibility (CSR) violations surveyed by mining companies between 1999 and 2009. The report concluded: "Canadian companies have been the most significant group involved in unfortunate incidents in the developing world. Canadian companies have played a much more major role than their peers from Australia, the United Kingdom and the United States. Canadian companies are more likely to be engaged in community conflict, environmental and unethical behaviour."
This doesn't seem to bother the Harper government, which is close to the most retrograde sectors of the industry. In early 2007 a pan-Canadian roundtable launched by the previous Liberal government crossed the country to interview a wide variety of social actors about Canadian mining. The roundtable put forward 27 recommendations to better address the human rights and environmental effects of Canadian companies operating abroad. Mining Watch explained: "The final CSR package at the core of the 2007 Advisory Group report included comprehensive human rights norms in the standards set, and the possibility of sanction (but not remedy) in the form of withholding of government financial and political support for companies found by the Ombudsman and Compliance Review Committee not to be living up to the adopted standards."
Even though the Mining Association of Canada helped formulate the 27 recommendations -- and tepidly agreed to them -- other powerful forces opposed the plan. Barrick Gold, which operates some of the most controversial mines in the world, the Prospectors and Developers Association of Canada and the Canadian Chamber of Commerce lobbied the Conservatives to reject the roundtable's recommendations. They found a sympathetic ear. After stalling on the issue for two years, in March 2009 former trade minister Stockwell Day rejected the roundtable's proposal to make diplomatic and financial support for resource companies operating overseas contingent upon socially responsible conduct.
Tories to mining corps: 'volunteer' to be responsible
When it became clear the Conservatives would not act on the 2007 roundtable's recommendations, Liberal MP John McKay introduced An Act Respecting Corporate Accountability for the Activities of Mining, Oil or Gas Corporations in Developing
Countries (Bill C300). The bill was designed to codify into law a number of the main recommendations from the 2007 roundtable. Under Bill C300 companies that failed to adhere to (relatively lenient) standards of social responsibility would lose the support of Canadian Embassy officials and taxpayer-funded agencies such as Export Development Canada, a crown corporation that provides billions of dollars of insurance and advice to companies operating
outside of the country.
This private members bill made it to its third, and final, reading before the House of Commons. Once the mining industry realized Bill C300 had a realistic chance of becoming law -- controversial private members bills rarely pass -- they launched a ferocious lobbying campaign. According to CBC.ca, this included nearly 300 visits by registered lobbyists representing Barrick Gold, Vale Canada, IAMGOLD and the Prospectors and Developers Association of Canada. Harper whipped his MPs into opposing the bill, which enabled industry lobbyists to blitz 15 Liberal MPs with a request to abstain on a bill submitted by a member of their party. On Oct. 27, 2010, the House voted 140 to 134 against Bill C300. The voting ran along on party lines with almost every Conservative MP voting against it and the opposition parties voting in favour. But 13 Liberal MPs, four from the NDP and six Bloc members failed to show up for the vote (one independent opposed the bill and another abstained).
In the following election campaign the Liberal, NDP and Green platforms all included plans to strengthen rules to ensure that Canadian mining companies live up to international human
rights and environmental standards. The Conservatives' platform did not. Their position was that voluntary standards, despite countless horror stories suggesting the contrary, were the best way to improve mining companies' social responsibility. When minister Day publicly rejected the roundtable's 27 recommendations he said there was no need for additional measures to control Canadian resource companies operating abroad.
"Most Canadian companies have set standards for social responsibility when they go into another country," Day told reporters. "We want to see best practices highlighted and set out there as the benchmarks that companies should reach for." This was a pointed reversal of the Conservatives domestic law and order agenda. That party always seems to argue that the best way to curtail anti-social behaviour by individuals is to impose stiffer sentences (negative reinforcement), yet here Day argued that the socially destructive practices of corporations could be overcome by highlighting these authoritarian institutions' good works (positive reinforcement).
'Building the Canadian Advantage'
As part of their promotion of voluntary efforts the government launched Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the Canadian International Extractive Sector. In October 2009 they established an Extractive Sector Corporate Social Responsibility Counsellor with a $620,000 budget to probe complaints about abuses committed by Canadian companies in poor countries. But, the Counsellor could not intervene -- let alone take any remedial action -- without agreement from the company accused of abuse.
By late 2011 the Toronto-based CSR Counsellor's office had received only two complaints, noted CBC.ca, "one of which was dropped because the mining corporation chose not to undergo the voluntary investigation."
The person Stockwell Day appointed as the initial CSR Counsellor, Marketa Evans, was the founding director of the University of Toronto's Munk Centre for International Studies.
Established with funding from Peter Munk, chairman and founder of Barrick Gold, the billionaire maintained significant influence over the Centre with its director reporting to a board set up by the Munk family. Munk espoused far-right political views. He defended Chilean dictator Augusto Pinochet and virulently attacked Venezuelan president Hugo Chavez. In a March 2011 Globe and Mail interview he dismissed criticism of Barrick's security force in Papua New Guinea, which led Norway's pension fund to divest from the company, by claiming "gang rape is a cultural habit" in that country.