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Bill C-300: A road to redemption for mining companies

Human Rights . . . Here & There
|Written By Lucie Lamarche
Bill C-300: A road to redemption for mining companies

Bill C-300, “an act respecting corporate accountability for the activities of mining, oil or gas in developing countries,” has generated heated public debate, as well as strong opposition from the Canadian mining sector.

It seeks to impose accountability on mining, oil, or gas companies that are found to be complicit in violations of human rights or environmental standards. If passed, the act would provide the Canadian government with long overdue regulatory powers over Canadian corporate activity abroad.

It would impose human rights and other standards on Canadian extractive companies operating in developing countries, and allow the investigation of allegations of non-compliance. In cases of non-compliance, it would require the Canada Pension Plan to divest its interest, Export Development Canada to withdraw financial support, and Canadian trade commissions and embassies to cease their support and promotion of the company’s activities.

With the prorogation of Parliament, all government bills currently before the House effectively die. However, private members’ bills do not suffer the same fate. Bill C-300 was in its second reading when Parliament was prorogued and will be deemed to be referred back to the standing committee on foreign affairs and international development when the next session begins in March of this year.

The mining industry had called in its top guns to testify against the bill before the standing committee. Among other things, industry representatives and their lawyers argued the bill is flawed and unnecessary, and it would undermine the global competitiveness of Canadian extractive companies operating in developing countries.

Gordon Peeling, president and CEO of the Mining Association of Canada, stated in his testimony that there already exist “a wide range of international guidelines and standards that provide appropriate reference points for CSR-related processes and issues.”

The director of government relations for Kinross Gold Corp., Mac Penney, testified that “mining companies operate under a very high level of scrutiny and accountability . . . both in the developed and the developing world.”

Yet when Canadian companies operate outside Canada, they do so with little legal liability for activities that may violate international human rights norms.

International law, with the exception of international criminal law, does not impose human rights obligations directly on corporations. Under international human rights law, states themselves have international legal duties to protect the human rights of individuals subject to their jurisdiction.

However, for a number of reasons host states may be unable or unwilling to regulate the conduct of foreign companies, even where such conduct violates the host state’s international human rights obligations.

Home states, like Canada, are not required by international human rights law to regulate corporate activity outside their jurisdiction. There are no effective domestic legal mechanisms in place that require the assessment of the human rights impact of proposed investments in host states, to prevent such activity where it is clear there will be a negative human rights impact, or to monitor or sanction corporate conduct to ensure that Canadian investment abroad does not contribute to, or profit from, violations of human rights.

The patchwork of domestic laws and mechanisms that do exist, such as corporate and securities disclosure laws, shareholder proposals, and class action lawsuits, for example, have not been sufficient to ensure Canadian corporations do not become involved in violations of human rights.

Bill C-300 would help to address this regulatory void.

Other countries, such as Australia, the United Kingdom, and the United States, have considered domestic legislation to regulate the extraterritorial human rights conduct of companies. But so far, none of these bills has passed into law.

Should Canada be the first country to enact specific legislation to address corporate complicity in human rights abuses that do not occur on Canadian soil? There are strong arguments in favour of doing so.

Canada is home to over 75 per cent of the world’s largest exploration and mining companies, and the Canadian extractive industry has a huge presence abroad. A significant number of these companies operate in developing countries. Government estimates put Canadian extractive investment in these countries at $60 billion.

These companies are able to raise millions of dollars on the Vancouver and Toronto stock exchanges, which, according to the federal government, are “the world’s largest source of equity capital for mining companies undertaking exploration and development.”

Serious allegations have been made against some of Canada’s largest and most profitable extractive companies.

The most notorious example is Talisman Energy Inc.’s controversial investment in southern Sudan between 1998 and 2003 in the context of a long-running civil war. Talisman was implicated in egregious violations of human rights, including the intentional targeting and terrorizing of civilian populations by government of Sudan forces for the purpose of protecting the oilfields and oil infrastructure.

A class action lawsuit against Talisman under the U.S. Alien Tort Claims Act was dismissed in October 2009.  However, human rights fact-finding missions, such as the 1999 Canadian Assessment Mission to Sudan (Harker Mission) and the 2001 Gagnon/Ryle mission found, among other things, clear evidence the infrastructure of the oil consortium (in which Talisman held a 25-per-cent interest) had been used for bombing and helicopter gunship attacks on villages in the oil exploration and development areas.

Since that time, and despite a growing number of allegations of corporate complicity in human rights and environmental abuses, the Canadian government has done little to address this problem.

In 2005, the foreign affairs and international trade committee called on the federal government to initiate a multi-stakeholder process with the goal of both strengthening existing corporate social responsibility programs and policies and developing new ones for Canadian extractive industries operating in developing countries.

The government responded by initiating a series of national roundtables on CSR and the Canadian extractive industry in developing countries. These consultations concluded in November 2006 and the roundtables advisory group — composed of members from industry, academia, and NGOs — produced a consensus report released in March 2007.

The report recommended the Canadian government create a comprehensive CSR framework with mechanisms to ensure accountability for companies that fail to comply with the required human rights standards.

The government’s response to the report — which came a full two years later — failed to adopt the most important of the advisory group’s recommendations. Instead, it promotes voluntary self-regulation by Canadian companies, with no reporting requirements or sanctions, and has created a complaints mechanism which allows for the investigation into allegations of human rights abuses by a Canadian company only in cases where the company consents.

Bill C-300 would provide the government with the ability to investigate and sanction corporate violations of specified international human rights standards. It would therefore implement the advisory group’s remaining core recommendations, to which industry agreed.

Testimony on the bill before the standing committee wrapped up in early December. Before prorogation, it only had two sessions remaining in which to consider amendments. Once the committee is reconstituted in the 41st session of Parliament, it will have 60 more days to consider the bill.

It has the discretion to deem the testimony that has already been heard as heard in the new session, and move on. If the government doesn’t push for more witnesses to testify, this would leave significant time for considering the bill clause by clause in committee before it is due to report to Parliament.

It is likely that certain amendments will be presented. The bill, as currently drafted, does not provide a grace period to allow a company to take steps to comply with the prescribed human rights and other standards before sanctions are imposed. Nor does it establish a review mechanism allowing for the withdrawal of sanctions where a company comes back into compliance. Industry has been calling for these procedural safeguards.

Whether or not bill C-300 reaches a third reading, it is significant that it has moved this far through the parliamentary process.

If it eventually comes into law, it will be a historic moment and a chance for Canada to begin to retrieve its international reputation as a leading proponent for the promotion and protection of international human rights. Until that time, however, it will be business as usual.

Lucie Lamarche is the Gordon F. Henderson Research Chair in Human Rights and director of research of the Human Rights Research and Education Centre at the University of Ottawa. This is the first of a monthly column on current domestic and international human rights issues that will feature contributions from the centre’s research associates, partners, faculty collaborators, and students. You can visit the HRREC web site at month’s article was contributed by Penelope Simons, associate professor, Faculty of Law (Common Law) and research associate with the centre, with assistance from Sonya Nigam, the centre’s executive director.

  • Third World countries need this legislation

    Ariel Fornari
    I witnessed through media an incident involving Barrick Gold Corp., in the Dominican Republic months ago. I was apalled in the way BG acted and later reacted to the incident. But if that were not enough, the national government seemed unable to cope with the situation, and it has been the civil sector which is voicing its serious concerns. Strangely enough, only now are we becoming aware of Bill C-300 in the Dominican Republic, in spite the fact of its first hearing in February 2009. We're barely scratching the surface here with this issue here, but as awareness of Bill C-300 grows no doubt the civil sector will realize its importance, and surely it will support it.