CIM tackles globalization

Montreal, Que. — The 105th annual meeting of the Canadian Institute of Mining, Metallurgy and Petroleum, held in this city’s gargantuan Palais des Congrs, was highlighted by a plenary session titled “The Challenges and Opportunities of Globalization.”

The session was a town-hall style event and featured a panel composed of members from industry, government, labour and the environmental movement. The one point they all agreed on was that globalization is inevitable, though it would seem they have differing ideas about the kind of globalization that is most desirable.

Leo Girard, international president of the United Steelworkers of America, the largest mining union in North America, kicked off the session by declaring that “for the past 20 years there has been a battle going on under the radar between those who make things and those who make money by managing money.”

He said the latter are winning the battle, and the result is a growing gap between rich and poor. This problem is exacerbated by the concentration of power in a few corporations, he added.

Globalization has enhanced the labour movement, Girard said, by allowing instant communication between sympathetic parties around the world. As an example, he pointed out that unionized Inco (N-T) workers in Sudbury now have ongoing discussions with Inco workers in Indonesia.

He said that when there is a conflict between corporations and environmentalists over development of a project, the labour movement can be the industry’s “best ally against environmentalists,” since labour’s approval can determine whether or not a project goes ahead.

Girard cited the Steelworkers’ relationship with Inco, especially over the past 15 years, as an example of labour and industry working closely together. “When I was growing up, you’d say to kids, ‘If you don’t smarten up, you’ll have to go work for Inco.’ Today, you say, ‘If you don’t smarten up, you won’t get to work for Inco.’

“I couldn’t have said this 20 years ago, but Inco’s corporate behaviour in my home town [Sudbury] has been exemplary, and the commitment Inco made to rehabilitate the environment there should be a model to the industry.”

On the other hand, he said Rio Tinto (RTP-N) has behaved irresponsibly toward workers in various parts of the world, including the southwestern U.S., Australia, Mozambique, Zimbabwe and Indonesia.

“We’re going to wage a global campaign against Rio Tinto,” said Girard. “Rio Tinto is going to become the poster child of what’s wrong with the global mining industry, and there’s no reason for that to happen — it will be more costly for them than if they did it right.”

(Indeed, following the convention, the Steelworkers held a rally outside a Tiffany & Co. [TIF-N] store in Chicago, Ill., demanding that the luxury-goods retailer “live up to its pledge to do business with suppliers that share its concern for sustainable development and fair treatment for workers.” Last year, Tiffany signed an agreement with Rio Tinto subsidiary Kennecott Utah Copper whereby Tiffany will buy more than 1 million oz. gold and silver from Kennecott every year.)

Scott Hand, chairman of Inco, said experts tend to focus on the negative aspects of globalization, particularly in regard to mining. He noted that Inco is now the largest mining investor in Canada but that “we will never go where we’re not wanted.”

In the 1960s, the American-born Hand spent two years in the U.S. Peace Corps working in the Horn of Africa, and he said the experience made him want to understand the perspectives and concerns of locals.

Hand recently become a Canadian citizen, and he said that after being a lifelong Democrat he doesn’t know which political party to support in Canada.

George Jones, president of Noranda‘s (NRD-T) zinc division, stressed that “new levels of communications” are possible with globalization, and described how an aboriginal group near a Noranda mineral project in northern Australia had sought advice from Inuit connected with Falconbridge’s Raglan mine in Quebec.

Veteran Peruvian mining executive Augusto Baertl, CEO of Peru’s Gestora de Negocios e Inversiones and past chairman and president of Compania Minera Antamina, said all mineral development must take into account the long-term sustainability of nearby communities.

He stressed that for mining companies to succeed in foreign lands, they must develop local companies and hire as many local managers as possible. He said this integrated approach requires an understanding of the local culture.

Marc Filion, president and chief operating officer of Quebec-government-owned SGF Minerals, which invests in fledgling mineral projects in the province, said innovation and specialization are essential in a globalized business environment. “The jack-of-all-trades model will fail,” he said. “We need to focus on core areas where we can survive the pressures of the global marketplace.”

He hailed Quebec’s global leadership in the fields of mining and processing of light metals but cautioned that “we can’t rest on our laurels; we must push forward.”

Andrew Deutz, head of the World Conservation Union of Canada, drew on the knowledge he gained at a recent conference on mining and the environment held in Johannesburg. With respect to environmental sustainability, he said “private industry is far ahead of governments in what they’re doing.”

As an example, he said environmental sensitivity on the part of some large banks has led to stricter lending covenants, and that these in turn have greatly affected how mining projects are developed.

However, he expressed concern about a growing trend whereby governmental responsibility to the mining industry is being delegated to increasingly lower levels of government, where technical and financial resources are lacking. On the other hand, this trend is making it easier for local voices to be heard.