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The Ugly Canadian Digs In

When mining giants face local opposition around the globe, Harper's team hurries to help. Part one of two.

By Yves Engler 21 Nov 2012 | TheTyee.ca

Vancouver-born Yves Engler is an Ottawa and Montreal based activist and author. He has published seven books: The Ugly Canadian; Lester Pearson's Peacekeeping; Stop Signs: Cars and Capitalism on the Road to Economic, Social and Ecological Decay (with Bianca Mugyenyi); The Black Book of Canadian Foreign Policy (Shortlisted for the Mavis Gallant Prize for Non Fiction in the Quebec Writers' Federation Literary Awards); Playing Left Wing: From Rink Rat to Student Radical and (with Anthony Fenton) Canada in Haiti: Waging War on The Poor Majority and Canada and Israel: Building Apartheid.

[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.

As time passed, the Conservatives' CSR strategy increasingly rested on diverting government funds to promoting mining interests. In 2012, reported the Ottawa Citizen, Foreign Affairs spent hundreds of thousands of dollars to bring journalists from Latin America and Mongolia to the Prospectors and Developers Association of Canada conference and to tour mines in Quebec. The Harper government created the Investment Cooperation (INC), a $20 million program "designed to support responsible business investment in developing countries and thus reduce poverty and promote economic growth." INC was mainly supposed to help companies investigate the likely social consequences of an investment. According to the government, "program applicants and clients must demonstrate adherence to strict international corporate social responsibility (CSR) standards in order to receive funding."

The standards clearly weren't "strict" as INC contributed $270,000 in September 2010 to the controversial operations of Centerra Gold in Mongolia. Centerra was criticized for its mining operations across the border in Kyrgyzstan where a worker was crushed to death and a number of large chemical spills caused 2,500 illnesses and a handful of deaths. In March 2012 a number of Mongolian and international organizations (Mining Watch, the United Mongolian Movement of Rivers and Lakes, Rights and Accountability in Development etc.) complained to Canada's National Contact Point for the OECD Guidelines about Centerra's failure to respect Mongolian laws. (At one point that government suspended the company's license.)

Between 2006 and early 2012 CIDA approved at least $50-million in projects linked to the mining industry, according to a Globe and Mail investigation of the organization's project database. International development minister Bev Oda aggressively defended CIDA's support for mining companies in interviews and at the 2012 Prospectors and Developers Association of Canada conference in Toronto, which was attended by five Conservative ministers. Oda told the mining bigwigs they were "making significant investments in development projects and improving the quality of life for thousands in countries where you work. ... The mining industry is a huge contributor to a nation's wealth and is one of the main building blocks of civilization." She ended her speech by saying: "I look forward to learning from your industry on how to improve the effectiveness of Canada's development work internationally, and to working more closely together to create a better life for those living in poverty."

CIDA as extraction enabler

Through Canada's Corporate Social Responsibility Strategy for the Canadian International Extractive Sector the government put up $27 million in 2011 for projects in Colombia, Peru, Bolivia, Ghana and Burkina Faso. CIDA said its partnership with mining companies was designed to "improv[e] the competitive advantage of Canadian international extractive sector companies by enhancing their ability to manage social and environmental risks." One example of the aid agency's efforts was a $4.5-million grant to Lundin for Africa, the philanthropic arm of mining giant Lundin Group of Companies. Another example was the $20 million Andean Regional Initiative in Peru, Bolivia and Colombia intended to "promote corporate social responsibility through partnership arrangements between extractive sector companies and other stakeholders aimed at socioeconomic development and support to governance."

As part of their Corporate Social Responsibility Strategy for the Canadian International Extractive Sector the government also strengthened the bonds between mining companies and non-governmental organizations (NGOs). In June 2011 CIDA announced $6.7 million in funding for collaborative efforts between three leading mining companies and NGOs. The biggest of the projects was between Plan Canada and IAMGOLD. "In Burkina Faso," according to the government release, "CIDA is supporting Plan Canada, and its partner IAMGOLD, in implementing a job skills training project in 13 communities to meet labour market demands in a variety of sectors, including the mining sector and its sub-sectors." The government put $5.7 million into the project while IAMGOLD invested $1 million and Plan Canada spent $900,000.

The goal of the CIDA-funded project, the head of training programs at Burkina Faso's education ministry told the Globe and Mail in March 2012, was to "respond to the needs of the mining company." Adama Traore added that "a number of graduates are expected to go directly into jobs at the mining company."

The Plan Canada-IAMGOLD training took place in a charged political context. In a perceived attempt to scare its workers, in May 2011 IAMGOLD closed its Essakane mine in Burkina Faso. The company's CEO, Steve Letwin, warned the miners: "I have zero tolerance for strikes that are illegal. And, as they (the workers) will find out, will not tolerate anything that has a negative impact on our stakeholders." In March 2012 Bloomberg reported that 100 people protesting a lack of local employment at the Essakane mine were scattered by the police.

These protests help explain why the company sees the CIDA-funded job training as helpful. The same day Bloomberg reported protests at the mine site Letwin was quoted in the Globe and Mail saying that youth unemployment in the community was a major obstacle for the company as "over the course of time, they're (youth) going to want more of a take", which could mean "increased taxes and royalties" for IAMGOLD.

CIDA's 'ethical stamp of approval' against critics

The two other NGO-mining company projects announced by CIDA in mid-2011 were substantially smaller. The aid agency allocated $500,000 to a project between World University Service of Canada and Rio Tinto ALCAN "to provide direct skills training to 400 young people to help diversify the local economy within mining communities." Together the company and NGO put up another $428,000 for the project. CIDA also invested $500,000 in a World Vision Canada/Barrick Gold project.

"In Peru," noted the aid agency, "CIDA is supporting World Vision Canada, in a program that will increase the income and standard of living of 1,000 families affected by mining operations." World Vision and Barrick combined to match CIDA's donation. In response Miguel Palacin, the head of a Peruvian indigenous organization, sent a letter to World Vision, Barrick and CIDA claiming that "no 'social works' carried out with the mining companies can compensate for the damage done, particularly in the face of rights having been violated."

Writing in Embassy magazine, Rick Arnold, former coordinator for Common Frontiers-Canada, summarized Palacin's criticism: "For this World Vision-led 'development' project to go ahead in the district of Quiruvilca in the face of concerted opposition locally and nationally would be tantamount to running a pacification program, and not a development project, in advance of the eventual destruction of a people's way of life -- all for gold."

CIDA-funded NGO-mining contracts are problematic for a number of reasons. First, taxpayers should not subsidize the social responsibilities of highly profitable mining companies. In addition to this obvious point, such CIDA contracts further weaken NGOs critical of Canadian operations while strengthening those groups willing to defend and work with mining companies. After a debate erupted over CIDA's funding of NGO-mining projects, the three above mentioned NGOs defended their ties to industry in the Globe and Mail. Signed by the heads of World University Service of Canada, Plan Canada and World Vision Canada the opening sentence of the January 2012 op-ed read: "Canadian (mining) companies are major drivers of economic growth in the global South." It went on to note, "These companies are already significant development actors in their own right."

Another downside of this sort of CIDA funding is that it places the moral weight of the aid agency (and NGOs) on the side of the company. Mark Mattner, a PhD candidate at McGill University, wrote: "Operating in partnership with CIDA implies an ethical stamp of approval for particular projects. What could be wrong with an extractive project if the government finances development projects that are associated with it?" This is obviously the case with a specific mine but is also true at a broader political level. Tying Canadian aid funding to mining projects strengthens the political forces in the recipient countries supportive of the extractive industry all the while weakening critical voices.

Tomorrow: Canada's mining industry enjoys the benefits of a globe trotting, high-powered sales team: Prime Minister Stephen Harper and his government.  [Tyee]

Read more: Labour + Industry

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