Commentary: Canada’s new CSR Counsellor not feeling the love

If Marketa Evans thought the mining industry would be her biggest critic, imagine the counsellor’s dismay at her efforts being called “toothless,” a “bogus public relations job” and a “cover for business as usual” by the very type of activists, environmentalists and lawyers who are theoretically working alongside her to help improve Canadian mining companies’ activities abroad.

Hired in 2009 to design and create a first-of-its-kind role, Evans is Canada’s new Corporate Social Responsibility (CSR) Counsellor for the Extractive Sector, whose mandate, broadly speaking, is to help Canadian mining and oil & gas companies meet their social and environmental responsibilities when operating abroad.

Specifically, it tries to bring Canadian companies operating internationally into “constructive dialogue” with discontented “project-affected people,” such as local community members who complain about how the company conducts its business.

Still in its early years of development, the office has been heavily criticized in recent weeks by several different sides of the extractive sector and the media, either for the office’s inability to act on claims of wrongdoing or for appearing to legitimize frivolous claims, all the while adding an extra layer of red tape to an already heavily regulated industry.

Last month, Evans was forced to abandon the office’s first case when the company involved, Excellon Resources, refused to enter into structured dialogue and walked away from the CSR Counsellor’s review process.

A Mexican non-governmental organization (NGO) had originally complained on behalf of some Excellon employees that the company was stopping workers at its La Platosa silver-lead-zinc mine in the state of Durango from unionizing, and that working conditions at the mine were unsafe.

Jeremy Wyeth, Excellon’s president and CEO, told The Northern Miner in a frank telephone interview that he supports the process in principle, but “the way it’s structured at the moment, I don’t think it can add value to us or any other Canadian company.”

Excellon says it spent six months meeting with the CSR office and complainants for trust-building exercises and informal mediation, before backing out altogether.

“It’s costing a huge amount of money and taking up a huge amount of time,” Wyeth states. “What’s being pushed is that we need to get into structured dialogue with a disgruntled, previously dismissed employee, an NGO and a non-representative union . . . if we’d have known up front what we know now, we wouldn’t have gone into the process. We would just have said, ‘You’re actually not able to help us.’ ”

The review process

After receiving input from 300 various organizations and individuals, Evans opened the office in March 2010, complete with a dialogue-based process for dispute resolution. The office can only review cases that originated after the office opened, and requests for review must be made in “good faith” by “bona fide” core constituencies who want to enter mediated dialogue after other resolution attempts have failed.

When the office receives a complaint, Evans and her team will assess its eligibility within 45 days. If it meets their criteria they will ask the company to enter into talks. Should the two parties not reach a timely solution themselves, the office will offer to act as a mediator, or provide access to a formal mediation process. The review process is voluntary, and if the company does not want to enter into discussions it can end the process at any time.

The Excellon case

Evans received her first eligible request for review in April 2011 from Jorge Luis Mora, a former Excellon employee whom the company says was fired around December 2010 for sleeping on a running scooptram underground. The request describes him as the Secretary General for Section 309 of Mexico’s National Mining Union, and lists the Mexican Economic, Social and Cultural Rights NGO that works with the community around the La Platosa mine as another party associated with the request. The National Mining Union signed a co-operation agreement this summer with the North America-based United Steelworkers.

In his request, Mora claims to have been fired for trying to form a union at the La Platosa mine as a new section of Mexico’s National Mining Union, and that other workers suffered harassment due to their involvement in the union. Excellon’s president says he thought discussions about a union began around December 2010 or January 2011.

According to the review documents, Mora claims to have started the new union section because of “ongoing concern about health and safety issues,” such as not having adequate training or equipment, and not having a process by which concerns could be aired to management. There was also an earlier incident at the mine concerning a copper theft, Mora states, whereby the company called the state police to investigate the theft and, while on the company’s premises, the state police subjected several of the workers to physical beatings. The workers were not charged in the theft.

In the CSR Counsellor’s closing report, Evans admits, “Excellon had a markedly different view of the situation than what was presented in the request.” The company is indeed emphatic in its view it has done nothing wrong, with Wyeth arguing that “this is more about the competition for dominance [by two rival Mexican unions] than it is about our company.”

Wyeth says the National Mining Union – Mexico’s largest mining union – and a powerful breakaway faction called the National Union of Mining and Metallurgy, Napoleon Gomez Sada, are in a country-wide battle for dominance over control of Mexico’s mining unions. The names and backgrounds of the unions are complicated, Wyeth acknowledges. The first union is controlled by Napoleon Gomez Urrutia, who is a Mexican union leader living in exile in Vancouver evading alleged fraud charges for embezzled union funds, while the second union takes its name from Urrutia’s father, Napolean Gomez Sada, who is also a former union leader. The second union is now run by a former high-level officer from the first union.

Excellon claims that even before the rival unions began vying for control over its workers, the La Platosa mine already had a union agreement in place that was registered in 2005 and recognized by Durango’s state government. If the workers want to change unions, the company notes, they must lodge a petition with the state government to do so, according to Mexican labour laws. The government will conduct a clandestine vote at the mine and award representation to whichever union has the most votes. Afterwards, the company is allowed to enter into negotiations with the new union.

Excellon insists both unions staged separate demonstrations at the mine to showcase their strength and drum up support, with the bulk of the demonstrators being bused in by the unions from as much as 400 km away. The company complains the CSR Counsellor’s involvement hindered the whole process when it entered into discussions with one of the rival unions, thereby angering the second union and appearing to legitimize the formation of a new union at the mine without going through the proper legal process under Mexican laws. The office completed two site visits to Mexico, Excellon says, including one trip where it chartered a helicopter to travel to the mine site, but it spent most of the time talking with community members and non-stakeholders instead of with mine workers or management.

For its part, the CSR Counsellor’s office claimed in its closing report that “none of the workers we spoke to were aware, prior to the start of this office’s process, of any existing union on the La Platosa site . . . the office learned that such situations are not uncommon in Mexico. Workers may be unaware of unions or collective agreements that affect them.”

As for the safety issues, the CSR office was told that “Excellon has no mechanis
ms in place for a standing, constructive dialogue on issues of concern, nor any way that workers can initiate communication or feedback on areas of concern to them.” Wyeth suggests this is not the case, because the company holds daily shift meetings at the underground mine where safety is one of the discussions. “There were . . . claims that we didn’t issue safety equipment,” a frustrated Wyeth seethes. “We’ve got signatures from every bit of safety equipment people receive. It’s standard operation.”

Mexican officials even completed a surprise inspection of the mine just months earlier, Wyeth insists, with the company “fully compliant with what is required.” He adds the company is recognized as one of the highest paying mining employers in Mexico and has an excellent safety record. Concerning the copper theft and allegations of police brutality, Excellon says it has a contracted private security force in place which is respectful of human rights, and that they were not involved in the incident.

In a closing report on the Excellon case, Evans states that “the Counsellor regrets that, in this case, she was unable to deliver on her mandate of bringing parties together in constructive dialogue . . . the Counsellor believes that all the parties in this request would have benefitted significantly from participation in the structured dialogue, and that there was no substantive reason the Counsellor should not have been successful in fulfilling her mandate.”

A call to Evans seeking an interview was not immediately returned.

In the meantime, operations at La Platosa continue unimpeded, with the rival unions completing the legal processes in Mexico necessary to hold a mine workers’ vote. Excellon processed 15,048 tonnes grading 790 grams silver per tonne, 7.13% lead and 7.89% zinc at the mine during the third quarter, which is slightly more than the 15,000 tonnes it had originally planned.

Evans and the CSR office have since moved on to their second and only other case, involving Africa-focused copper-gold miner First Quantum Minerals and an individual named Maitre Ahmed Mohamed Lemine. The two parties have been in informal mediation since August.