John McKay, The Hill Times, October 4, 2010
CCCE president John Manley should read the 17 months of testimony from the House Foreign Affairs Committee before commenting on the issue.
I was disappointed to read John Manley’s recent critique of my Private Member’s Bill, C-300 (The Responsible Mining Bill) published in the Hill Times. While I am happy to debate the issue, it was clear after reading his article that he was simply repeating the shibboleths of the mining industry, adding no new arguments to the debate.
I would urge Mr. Manley to read through some of the testimony from the Foreign Affairs and International Development Committee (FAAE), which studied this bill for 17 months. Not only will he see that many of the arguments which he puts forward have already been addressed, he will also see that his core argument, that Canadian companies are doing very well, operate with integrity, and are much better than other nation’s companies, has been strongly challenged. Possibly he wouldn’t have been so confident in his premise had he read the testimony from witnesses documenting stories from Mexico, Guatemala, Honduras, El Salvador, Argentina, the Congo, Papua New Guinea, and many more. The evidence before the Committee and elsewhere paints a very different picture.
It shows Canadian companies involved in egregious human rights violations (see the testimony of Tyler Giannini of Harvard Law School and Sarah Knuckey, Director of the Project on Extrajudicial Executions at New York University). It shows how Canadian companies are facing serious conflict with local and national authorities over environmental degradation (see the cases of Argentina & Guatemala). It also demonstrates how Canadian companies have put Canadians at personal risk (see the testimony containing the accounts of Steven Schnoor’s experience in Guatemala and Honduras).
You can, if you wish, put a happy face on all of these conflicts and rationalize them away as localized conflicts in areas where the rule of law is limited, and violence is endemic. Or you can say these are serious allegations, and that the activities of some mining companies add to the destabilization and violence.
As long as the opponents of C-300 are not prepared to acknowledge dramatic and incontrovertible evidence of serious abuses of human rights and environmental degradation, then the need for legislative intervention becomes compelling. The companies would like us to believe that these incidents are localized and of not very great importance. However hundreds of thousands of Canadians and others from around the world beg to differ.
Mr. Manly also puts forward an objection to the sanctions, particularly the financial sanctions involving Export Development Canada (EDC) and the Canada Pension Plan (CPP). The CPP sanction has been amended in order to avoid the necessity of obtaining provincial consent, and therefore is less robust than it could have been. EDC on the other hand, is still a significant sanction. The financial supports provided by EDC are supported by hard-working Canadian taxpayers who are fed up and frustrated with their tax money being used to support activities which they regard, for good reason, as quite problematic.
It’s galling to hear evidence of serious abuses of human rights and environmental degradation, and know that your tax dollars are going to support these complex financing facilities, and that you the taxpayer can do nothing about it. C-300 proposes to do something about it, and if passed the financing mechanisms will adjust because the money is available nowhere else. It will also have the happy side effect of forcing the junior companies to be more scrupulous about their activities if they wish to be bought out by a larger entity.
The influence of a large project on the governance of a small nation with weak democratic principles cannot be overstated. A company proposing economic development in a country that has little or none acquires disproportionate influence, and with it disproportionate responsibility. On the evidence we heard in the FAAE committee, the two aren’t always on par. When our companies are operating in remote regions of a country with weak governance, and frequently on indigenous lands, there is a burden on the company to be scrupulous. Frequently that burden is not discharged (Guatemala, Honduras, El Salvador, Argentina to name only a few). Not all development is good development.
Mr. Manley’s argument about a national disadvantage is also a weak one. It’s true other countries don’t have anything quite like C-300. More often than not, their legislation is far more robust. The United States has the Alien Torts Act which permits aggrieved persons in other countries to sue American and foreign companies in the United States. It’s probably one of the reasons that Canadian mining companies show no great enthusiasm for moving south of the border. The United States also has the Lugar-Cardin Transparency Amendment which requires companies that wish to trade on the New York Stock Exchange to disclose to the State Department all payments made to foreign governments and foreign nationals. If you don’t meet the State Department’s disclosure requirement you don’t get to list your shares on the New York Stock Exchange. This initiative was recently highlighted by President Obama in his speech before the United Nations when he urged other G-20 nations to pass similar legislation. However, the Canadian government has shown no interest in similar legislation.
In December 2009, Congress also passed an amendment to their Overseas Private Investment Corporation Act (OPIC) which governs the agency tasked with promoting economic development in emerging markets. This amendment now requires the agency to formulate new stricter environmental and social guidelines which must be agreed to prior to OPIC providing a loan or insurance to a corporation. This legislation is strikingly similar to Bill C-300’s EDC sanction, however in some ways the U.S. legislation is more stringent as it applies to all industries, not just the extractive industry.
Therefore, it is not likely that a Canadian company is going to decamp to the United States because of its fear and loathing of C-300.
The United Kingdom also has a government that is serious about corporate social responsibility. Its legislation will be far more aggressive than C-300 could ever be.
The European Union’s tolerance for abusive behaviour in developing nations is at a far lower threshold than here.
Canadian mining companies aren’t going anywhere. They’re far more likely to take their chances with this modest legislative effort to reign in some of their more egregious behaviour as highlighted in the Foreign Affairs Committee in 2005, 2009 and 2010. Had the Government and the industry implemented the recommendations in the 2007 Roundtable Report instead of stonewalling, Bill C-300 would have never have seen the light of day. Having agreed to a better process as envisioned in the Roundtable Report, the industry and its advocates like the Chamber of Commerce and the Council of Chief Executives cannot in good faith oppose a weaker process.
The process of adjudication and sanction application are all contemplated in the 2007 Roundtable report. Bill C-300 adopts 4 of the 6 recommendations and would have incorporated all 6 but for the limitations of a Private Members’ Bill. The position advocated by Mr. Manley is disingenuous at best or else speaks to the real agenda, which is that the industry wants no regulatory framework of any kind. Indeed, one can hardly call this legislation regulatory; it simply gives taxpayers modest prerogative over their country’s investment decisions through their Ministerial representatives.
The final argument is regarding ‘Canada’s Brand.’ Mr. Manley knows a thing or two about Canada’s brand because he was a lead Minister on the issue when he was in government. Just as a good reputation is hard to acquire, so also is a good brand, and both are easy to lose. Nike got caught up in some labour issues in a developing nation and seriously jeopardized its brand. So too, Canada has a good brand. Our companies and our citizens enhance Canada’s ‘brand’ around the world. It is a hard-earned reputation for integrity and respect for others. Our brand, however, takes a serious beating when our own Governor General is surrounded by protesting Mexican citizens outraged over violence in a Canadian mining project. Our brand is at risk when after being mistaken for a mining supporter and being chased by a mob in Guatemala a Canadian citizen deemed it prudent to black out the Canadian flag on his ball cap for safety. It’s a bad day for our ‘brand’ when a Canadian tourist travelling in a Central American country is advised to introduce herself as an American.
Bill C-300 is a modest attempt to restore Canada’s increasingly tarnished reputation by letting the world know that we stand behind Canadian companies when they comply with good corporate social responsibility and environmental standards, and we sanction those who do not. We have a good brand—let’s not lose it.