PDAC Says Bill C-300 Is A ‘Disservice’ To Mining

The Prospectors and Developers Association of Canada (PDAC) has dug in its heels and labelled a private member’s bill aimed at corporate accountability for mining in developing countries “a disservice” to developing countries and the Canadian mining industry as a whole.

“Bill C-300 is naive and misguided grandstanding that would be a disservice to the developing countries it aims to help as well as to Canada’s mineral industry, which is recognized around the world as a welcome participant in advancing economic development,” said PDAC executive director Tony Andrews.

“Improving social and environmental responsibility is a goal we share with the committee and with other Canadians, but if our politicians decide to insert themselves uninvited into the internal affairs of developing countries, Canada will do more harm than good.”

The PDAC says the bill, which was proposed by Liberal MP John McKay, representing the riding of Scarborough-Guildwood, takes a punitive approach to corporate social responsibility (CSR) standards for human rights, by allowing “unfounded allegations of wrongdoing that can damage the reputations of companies” and forces mining companies to incur significant costs to defend themselves.

The bill has fostered two one-hour debates in the House of Commons and has been referred to the Standing Committee on Foreign Affairs and International Trade, which has applied for a 30-day extension to allow a wide range of witnesses to review the bill and state their case.

The PDAC, which has established its own e3 Plus framework for corporate responsibility, called on the standing committee to recognize the already ethical and responsible nature of Canada’s mineral industry.

“Canada can be proud of its world leadership in the mineral industry but unfortunately some of our elected officials are heedlessly ignoring the economic and ethical advances Canadian companies contribute in the countries in which they operate,” Robert Wisner, the PDAC’s international law adviser, told the committee during the debate.

The following are excerpts from the PDAC’s Bill C-300 Position Statement, available on the website www.pdac.ca.

• Canadian exploration and mining companies have a strong presence worldwide, with projects located in many different cultural, social and geographic settings, some of which are highly complex and difficult environments in which to operate. The application of CSR is complex by nature and characterized by a significant degree of unpredictability and random events, many of which are outside the control of exploration and mining companies.

• The proponents of Bill C-300 allege that there are numerous Canadian companies involved in human rights abuses in developing countries. These allegations do not derive from objective sources of information and indeed, many are frivolous. The companies involved have strongly countered these claims and openly discussed their CSR activities.

• Most Canadian companies conducting exploration and development projects around the world are engaged in some form of CSR, tailored to the circumstances in which they find themselves and geared to the scope of the project and their internal capacity to deliver. In this way, many tangible benefits are being delivered to local communities and host governments in the form of employment, infrastructure, health, nutrition, education, infrastructure, technology and economy.

• It is the sovereign right and responsibility of host country governments to manage development of their resources and to hold exploration and mining companies accountable on the basis of their laws and regulations. However, many countries lack the governance and institutional capacity to enforce legislation and to ensure a stable regulatory regime. This results in external realities outside of the control of companies, including bribery and corruption, lack of transparency, unfair distribution of wealth, lack of benefits to local societies and in some cases, civil conflict.

• The most effective way to counter the challenges arising from weak host-country governance is to address the problem directly; that is, through programs designed to assist host countries to strengthen institutional capacity. The government of Canada has programs in place designed for this purpose, as do other Northern Hemisphere countries; however, these programs are currently given only limited support. The PDAC calls on the federal government to strengthen these programs and increase their effectiveness, efficiency and delivery on the ground.

• The PDAC supported in principle the recommendation by the CSR Roundtable Advisory Group for the creation of an extractive sector Ombudsman function. The potential benefits we saw were the creation of a mechanism for dispute resolution and mediation services, and the provision of expert, constructive advice to companies in need of assistance. Also important to us was the intended mandate of the ombudsman to receive complaints from all parties, including companies, the latter in recognition of the reputational harm that frivolous or unfounded allegations from anti-mining interests can cause.

• Bill C-300 is not in keeping with the spirit and intent of the CSR Roundtable recommendation. The Roundtable recommendation was based on a policy framework designed to improve industry performance as opposed to a punitive, legislative approach. In addition, the Roundtable agreed to a collaborative process involving input from all key stakeholders in the process of determining how the ombudsman recommendation could be taken from a concept to reality. While a small group of civil society organizations were involved in the drafting of the bill, our industry and other key stakeholders were excluded from the process and not consulted on the approach taken, thereby calling into question the objectivity and genuine interest of the organizations involved.

• Bill C-300 was not developed on the basis of careful consideration and exacting research, aspects that are widely acknowledged as critical in the development of the complex and sensitive nature of an ombudsman function. The bill, unfortunately, takes a punitive approach and risks politicizing the issue of social responsibility without offering a clear process for resolution. Good progress over the past few years that was realized through the collaborative work of the Roundtable, the development of good practice guidance for the industry (PDAC’s e3 Plus and the Mining Association of Canada’s Toward Sustainable Mining) and the government’s CSR strategy, could be replaced by a politically charged process where allegations can be made in bad faith, without merit and with no meaningful remedy for the targeted company. This is not an approach that contributes to sharing good practices and improving performance. We have little doubt that implementation of the bill will be a net negative to those countries that most need the benefits of CSR as practised by the Canadian mining industry now and in the future.