Holding mining companies to account

by Jennifer Wiebe, director of MCC Canada’s Ottawa office

The Marlin Mine in Guatemala is owned by Canadian company Goldcorp.  MCC photo/Melissa EngleWiebe, director of MCC’s Ottawa Office

Rumour has it that Canada’s federal budget may come down sooner rather than later. Civil society organizations are hoping to see some positive policy signals when the budget is tabled—from more money committed to international development, to the establishment of a federal ombudsperson for the extractives sector (the minerals, oil and gas industry).

Establishing an ombudsperson with the power to investigate Canadian mining companies implicated in wrongdoing abroad is something experts have urged the government to implement since 2007.

Liberals supported the idea of an ombudsperson while they were in Opposition (in fact, four of the five political parties have supported it), and there has been chatter around Ottawa for the last few months that they’ve been “seriously reviewing” the creation of such a position.

This is welcome news.

Home to the majority of the world’s mining companies, Canada is a superpower in the global extractives industry, with thousands of active projects in more than 100 countries.

Unfortunately, Canadian mining companies have a mixed record. While mining has the potential to bring socioeconomic benefits to a host country, jobs are often short-lived, financial benefits to the economy meager (particularly in mining-rich areas), and communities not consulted. As our partners have told us, mining often displaces communities, destroys agricultural land, contaminates water, exacerbates social tensions, and leaves long-term ecological damage in its wake. What’s more, people who defend their rights often lack protection and are even targeted by threats of violence.

To promote the industry, the Canadian government provides strong diplomatic and financial support to mining companies in a variety of ways. And although the government has now implemented mandatory revenue disclosure requirements for mining, oil, and gas companies—something MCC actively supported—most of the accountability mechanisms in Canada are entirely voluntary in nature.

For this reason, Canada’s Corporate Social Responsibility strategy has been widely critiqued by civil society actors (and the UN) as falling short of what is needed to hold mining companies accountable to human rights, labour, and environmental standards.

A mural portraying the destruction caused by the GoldCorp (goes by Montana in Guatemala) mine in San Miguel. (MCC Photo/Melissa Engle)

How do people harmed by the overseas operations of Canadian extractive companies seek redress?

Currently, communities outside Canada can access two mechanisms to register their complaints about Canadian companies—the Corporate Social Responsibility Counsellor (2009), and the OECD National Contact Point (2000).

From the outset, these mechanisms have been widely criticized as being toothless—lacking in independence, investigatory powers, and the ability to recommend sanctions for non-compliance. And, given that neither mechanism can obligate companies to participate (a rather significant problem!), they have not proven effective in resolving cases or curbing corruption.

Enter the Open for Justice Campaign—an initiative of the Canadian Network on Corporate Accountability (CNCA), KAIROS, Development and Peace, and others. This campaign calls for the establishment of an independent extractives-sector ombudsperson, as well as legislated access to Canadian courts for people seriously harmed by overseas mining operations (which is really gaining steam, thanks to recent high-profile court decisions).

Last spring, over 50 Canadian civil society organizations, including MCC Canada, became signatories to a public statement that echoed these calls.

An effective ombudsperson—operating at arms’ length from the government—would have the power to investigate complaints, recommend the suspension of government support to companies found in non-compliance, and be mandated to perform these functions regardless of a company’s willingness to participate.

In the fall, the CNCA even launched model legislation—the Global Leadership in Business and Human Rights Act—to provide the blueprint for creating such a non-judicial grievance mechanism.

Not only would this provide access-to-remedy for affected communities, but it could benefit companies in the long-run (we’ve even seen some pro-ombudsperson commentary from industry!). When extractive projects generate conflict, unless community grievances are effectively resolved, companies risk operating delays and negative publicity.

Through this, and other effective mechanisms that put human rights at the center of the government’s approach, Canada can help facilitate an operating environment where responsible business practices are recognized and rewarded.

Of course, a more comprehensive review of the government’s CSR strategy would be welcomed. Given Canada’s status as a global mining power, such a strategy ought to be part of a rigorous foreign policy debate.

Jennifer Wiebe, director of MCC Canada’s Ottawa office.

The Marlin Mine in Guatemala is owned by Canadian company Goldcorp.  MCC photo/Melissa Engle

A mural portrays the destruction caused by the Marlin Mine (known as Montana in Guatemala). MCC photo/Melissa Engle