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Canada Gets Cuddly with Mining Companies

February 7, 2011

Canada Gets Cuddly with Mining Companies

Unconditional love for extractive industry costs taxpayers, say C-300 supporters

by Justin Ling

Critics are asking whether, with the defeat of Bill C-300, the Canadian government is getting too comfortable with the country's mining, gas and oil companies. Image by Caitlin Crawshaw.

HALIFAX—Despite the death of Bill C-300, which would have introduced accountability for Canadian mining, oil or gas corporations operating in developing countries, watchdog groups are sounding the alarm louder than ever over what they see as a conflict of interest in the government. Not only is there a refusal to regulate these industries, they say, but government agencies are providing direct and indirect support for their practices.

“They are aiding and abetting, essentially,” said Catherine Coumans.

Coumans is the research coordinator for MiningWatch Canada. The group's raison d'etre is to be a watchdog in the extractive sector, drawing attention to human rights and environmental abuses perpetrated by Canadian companies. MiningWatch also lobbies MPs to promote sustainable mining practices and policies, such as Bill C-300, which would have disqualified any corporation implicated in unethical operations from receiving government funds.

In a report commissioned by the Prospectors and Developers Association of Canada in 2007, Canadian companies were singled out as perpetrating almost half of documented misconduct around the world, including causing community conflict, engaging in environmentally unsound practices and violating human rights. The report went unreleased until it was leaked by MiningWatch in 2010.

Bill C-300 gained broad support—from a coalition of NGOs and activists to the Globe & Mail and the Toronto Star,—yet was defeated by six votes in its final reading in the House of Commons. Despite their initial support for the bill, the Bloc Quebecois, Liberals and NDP were instrumental in its defeat, as a handful of their members missed the vote, including Liberal leader Michael Ignatieff.

Mining companies and the Conservative government vehemently opposed the bill. They argued that if regulations were imposed on the industry, companies would pack up shop and find headquarters outside Canada. They also said it jeopardizes development projects in the countries of the Global South, as well as jobs in Canada. Industry lobbyists, including former Liberal cabinet minister Don Boudria, met with MPs on the issue nearly 100 times in October 2010 alone.

These corporate interests can't be allowed to trump human rights, says Ian Thomson, Program Coordinator for Corporate Accountability with ecumenical justice group KAIROS.

“Whenever we went to Guatemala, we met with Canadian officials in the embassies and it's very obvious where their loyalties lay,” said Linda Scherzinger, a volunteer with KAIROS. The group is committed to advocating and acting on issues of climate and social justice in Canada and overseas.

The Harper government committed in 2009 to re-focus its aid to Latin America, adding five countries from the region to its list of 20 countries targeted by a $1.5 billion bilateral aid fund. The list included mineral-rich countries such as Colombia, Bolivia and Peru.

In November 2009, CIDA unexpectedly announced that KAIROS would no longer receive funding from the public agency. The sudden move raised eyebrows, especially after freelancer Kim Mackrael obtained through a freedom of information request the department memo responding to KAIROS's funding proposal, and published the story with Canadian Press. The memo read, “RECOMMENDATION—That you sign below to indicate you (not) approve a contribution of $7,098,758 over four years...” The word “not” was hand written above by an unknown person and was signed by International Co-operation Minister Bev Oda. Oda denied altering the application in front of a parliamentary committee, but has since admitted she edited the document.

In La Libertad, Peru, CIDA is spearheading a $500,000 reforestation project. Coumans says the project sounds good, but if this project is reforesting its mine site, that should be the responsibility of Barrick Gold. Coumans argues that Canadian taxpayers should not be footing the bill to fix Barrick's environmental impact, especially not under the auspices of “development.”

The La Libertad project is essentially a facade, says Emilie Lemieux, winner of the 2009 Gordon Global Fellowship, an annual award given to a progressive Canadian committed to sustainable international development. In a scathing report based on her experience in the region, she writes, “This project seems to fulfill the basic social needs the company is looking to address, as well as the Canadian embassy’s interest to work in [Corporate Social Responsibility], rather than the needs of the local population.” She goes on to say that CIDA's involvement exists simply to put a good face on Barrick's work, and that locals had no engagement in the projects.

In rhetoric and in cash, the Canadian Department of Foreign Affairs and International Trade (DFAIT) also backs the Canadian extractive sector abroad. Centerra Gold, a Toronto-based company that operates the Boroo mine in Mongolia, received $270,000 in funding this September as part of a direct investment program that totals $601 million. The company's mine had lain dormant, as months earlier workers picketed the site, demanding higher wages and severance pay. The Mongolian government had also suspended the mine's license, citing, among other things, improper operating procedures.

Centerra also operates the Kumtor mine across the border in Kyrgyzstan. The operation was sharply criticized for being a dangerous work environment after one worker was crushed by a pit wall in 2002. Before that, the mine had been the site of two large chemical spills—the first in 1998 and the second in 2000—that caused four deaths and 2,500 illnesses. In 1998, the company failed to notify residents until a Russian border guard discovered the spill; in 2000 they improved their record and only waited a day to make public the news that 1.5 tonnes of explosive material had spilled near the town.

The Kumtor mine is also the recipient of $35 million from the Canadian Pension Plan investment board and $50 million in political risk insurance from Export Development Canada (EDC). Political risk insurance covers 90 per cent of a company's investment in a “developing” country against events such as government nationalization or political turmoil. The stipulations for receiving the insurance revolve around EDC's corporate social responsibility policies. According to one representative for EDC, “We're not going to support something that the Canadian government doesn't support.”

EDC's support is worth a lot. The Financial Post has estimated that the crown corporation gives the extractive industry $20 billion in subsidies and insurance, including $1.3 billion in political risk insurance.

Despite DFAIT's role in lending support to these companies, it also houses the offices that purport to keep them in check. The office of Corporate Social Responsibility Counsellor, headed by commissioner Marketa Evans, was created in 2009 to create a partnership between the Canadian extractive industry and those who reside near their projects overseas. The move has been largely panned by watchdog groups as being an ineffective half-measure that does more to serve mining companies than impacted communities. The office has an “avenue of recourse for mining, oil and gas companies who feel they've been unfairly targeted,” said Erica Bach, senior adviser in the office of Corporate Social Responsibility, who lauded the mechanism as being unique worldwide. The office's CSR strategy revolves around encouraging dialogue rather than regulating or imposing sanctions against companies who have been the subjects of complaints. To date, the office has not received any requests to review allegations against any Canadian mining companies.

Even CIDA's Indigenous Peoples Partnership Program (IPPP) is little more than a $10 million, taxpayer-funded lobby group for the mining industry, according to one source who spoke on the condition of anonymity. The agency employs Indigenous representatives such as Chief Glenn Nolan and Chief Jerry Asp.

Nolan serves as first vice president of the Prospectors and Developers Association of Canada and on the board of Noront Resources Ltd. Asp is vice president of the Canadian Aboriginal Minerals Association, and made news in 2005 after 35 elders occupied his office in protest of his involvement with the mining companies. The elders demanded that Asp step down, saying he was in a conflict of interest, having simultaneously acted as Indian Act chief and Chief Operations Officer of the Tahltan Nation Development Corporation, which is responsible for bidding on mining contracts for companies such as NovaGold, which operates one of the world's largest gold mines in Alaska with partner company Barrick Gold.

According to CIDA, IPPP exists to encourage the “sustainable development of Indigenous peoples in the [Latin American and Caribbean] region through an exchange of knowledge, experience, expertise, and existing models.” Those Indigenous people who met with Nolan and Asp were not informed of their mining connections, the source said, and were outraged when they learned of their involvement in the sector.

While Bill C-300 may be dead, an alternative bill is lying stagnant on the floor of the House of Commons. Bill C-354 would empower non-Canadian citizens who claim to be affected by Canadian mining companies to sue those companies. While opinion on the bill is mixed, those who supported C-300 are desperate for federal regulation of Canadian-owned mines.

Justin Ling is an activist and a journalist based in Halifax.

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Comments

great article!

just yesterday i'd been wondering what happened to c-300. it's nice to read concrete examples about cida as well; it often feels like they operate under a shroud of secrecy.

Good article. But I have one

Good article. But I have one correction: Bill C300 wouldn't really have introduced 'accountability'. Accountability would be legal mechanisms for compensation and criminal prosecution. Bill C300 was a bare minimum for investigation, government divestment lack on consular support- that's would have been a step in the right direction, but that's not accountability.

inaccuracies in article - Canada Gets Cuddly with Mining Compani

I was surprised and somewhat concerned about the article by Justin Ling "Canada Gets Cuddly with Mining Companies". I am commenting on the inaccuracies Mr. Ling wrote about in his reference about my travels to Latin America and my role as a champion of the mining industry. Why is it that the community leaders and members have invited me back to their communities so they can understand an industry that can and will provide greater opportunity for the communities to raise above the poverty that infects they today. In the article Mr. Ling specifically sates "Those Indigenous people who met with Nolan and Asp were not informed of their mining connections, the source said, and were outraged when they learned of their involvement in the sector". It is an interesting statement that a "source said....". WHen I have meet with community leaders throughout Latin America, I have never hidden the fact that I am a supporter of those companies who are doing the correct thing by engaging communities early, providing an open and transparent process of sharing information and in sharing opportunities and benefits directly with the communities.

The challenges in ensuring that communities are involved in the decision making process is evolving and changing from the way development happened in the past. All of us should be encouraging companies, who are not already doing so, to follow the lead of companies who are doing the right thing in community engagement, environmental protection and open and transparent operations in their projects. This will go further to effecting positive change then brow beating the industry in general.

If Mr. Ling wanted information that would provide a balanced story he would have contacted me and Chief Asp. Mr. Ling would have had factual information as opposed to rhetoric that supports a lopsided perspective.

I have returned to a number of communities in various Latin American countries at the invitation of the leaders. I just returned from one such trip, where the community is actively seeking a Canadian company who is "doing the right thing" to form a partnership to explore on their traditional lands for mineral deposits. Angry indeed. They were so angry they shared their food, their homes and their knowledge. Of course I am being sarcastic incase this is taken out of context.

Ironically, I want to share a fact about the openness of the organization of Mining Watch. They removed me from their email list a couple years ago because I suggested that all information needed to be shared with the communities - not just the anti mining message.

Indigenous people across the Americas need to have access to all information - let's do just that.

I will continue to share the information I have at my finger tips and the values I hold as a former leader of my community, as an Indigenous person who continues to hold the land as a sacred place and as a person who values participating in the development of the resources at our feet in a sustainable manner. Indigenous people will never overcome the mountain of poverty that buries most communities unless they join in as knowledgable partners in the development of natural resources on their traditional lands.

Let's get the facts straight and let's talk.

Chi-meegwetch

Chief (Retired) Glenn Nolan

Unconditional love?

Hello everyone,

My name is Phil Taylor, and as an employee of EDC I'd like to bring some factual clarity to the comments made about EDC in this article.

The National Post did not report that EDC "lends 20 million to the extractive industry." An opinion piece by Patricia Adams, executive director of the Toronto-based environmental group, Probe International, was published in the Post. That op-ed estimated the level of support provided by EDC to the extractive sector based on a 20-plus year review of all transactions.

As you might imagine, a 20-year span provides for a big number, albeit a misleading one. In fact, EDC's current level financing exposure for the extractive sector is $4.2 billion. When compared to EDC’s more than $80 billion in total annual business volume that amounts to five per cent of our total business.

When you consider the relative weight of the extractive sector to Canada's GDP, EDC is a minor player in the sector. Hardly what can be described as a “cuddly relationship”.

The reason? EDC's CSR commitments: both its own and the international standards to which it is a signatory, including IFC, World Bank, and Equator Principles. These commitments are not those of DFAIT, as stated in the article, but EDC's own policies. These commitments mean only projects that will meet international standards come to EDC for consideration. In fact, EDC is the only export credit agency in the world that has a legal requirement to consider the environmental impacts of the transactions it considers.

Hardly what one would describe as “unconditional love”.

Good CSR practices are embedded in all of the day to day operations at EDC. To include EDC in the same article that supposes that business interests trump CSR commitments among Canadian agencies is a gross misrepresentation. Your readers should have access to these current and relevant facts.

Sincerely,

Phil Taylor

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