Secret Report Criticizes Canadian Mining Companies’ International Practices

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According to the Toronto Star, a global study says that Canadian mining companies are far and away the worst offenders in environmental, human rights and other abuses around the world. The study was conducted by the Canadian Centre for the Study of Resource Conflict on behalf of and paid for by the Prospectors and Developers Association of Canada (PDAC). It was finished in October 2009 but wasn’t released publicly.

Study’s Findings

“Canadian companies have been the most significant group involved in unfortunate incidents in the developing world,” concludes the report obtained by the Toronto Star. “Canadian companies have played a much more major role than their peers from Australia, the United Kingdom and the United States” in these incidents. For example, the study says that  “of the 171 companies identified in incidents involving mining and exploration companies over the past 10 years, 34 per cent are Canadian.” Of course, this high percentage may partially reflect the Canadian industry’s dominant position in global mining and exploration.

The problems involving Canada’s mining and exploration corporations go far beyond workplace issues. “Canadian companies are more likely to be engaged in community conflict, environmental and unethical behaviour, and are less likely to be involved in incidents related to occupational concerns,” claims the study.

According to the study, the leading causes of incidents involving Canadian mining companies were:

  • Community conflict, including “significant negative cultural and economic disruption to a host community, as well as significant protests and physical violence”
  • Environmental degradation
  • Unethical behaviour, which the Centre defines as operating in a state that’s under embargo or careless disregard for human rights or local laws.

Of the incidents reported, gold, copper and coal mining were most often involved. The four “hot spot” countries with the most incidents were:

  • India
  • Indonesia
  • the Philippines
  • the Democratic Republic of Congo.

Regionally, however, Latin America had the most incidents, followed by sub-Saharan Africa and Southeast Asia.

The Centre said that information on most of the incidents came from reports by non-governmental organizations (NGOs). Many in the Canadian mining industry accuse some NGOs of harbouring an anti-mining bias that has led to exaggerated and unsubstantiated allegations against Canada’s companies operating in developing countries.

The report does note that the Canadian government and the industry have devoted considerable time and money to instilling principles of corporate social responsibility in the mining sector.

Bill C-300

The study was leaked as a bill designed to tighten federal government scrutiny of Canadian mining operations abroad comes to a vote. Bill C-300, a private member’s bill put forward by Toronto Liberal MP John McKay in May 2009, will be voted on in the Commons on Oct. 27. The study was commissioned as part of the mining industry’s research in response to the bill.

The bill’s supporters argue that it’s needed to curb a long history of abuses in the developing world involving Canadian mining companies. But the industry objects to the law, arguing that it would damage its commercial interests, subject it to unfair accusations and attempt to enforce Canadian policy in sovereign nations.

PDAC Response

In response to the leaking of the study, the PDAC issued a press release stating, “The study was for internal industry deliberation to inform its ongoing thinking on CSR [corporate social responsibility]. The study deals with unproven allegations, not proven violations.” The release went on to say:

“While the internal study did provide some useful information on the public’s perception on the industry’s CSR record, the PDAC believes that many of the sources relied upon in the study were not balanced.

The PDAC is concerned that this study will lead to incorrect conclusions regarding the truth and substance of the allegations contained in it. Recent media reports have demonstrated that the full and complete story on the industry’s commitment to CSR – including building schools, housing, roads, clean water, sanitation, and local jobs in the communities in which they work – is not getting out.

Unfortunately, factual inaccuracies seem to be driving the debate around this issue and C300, a Private Members’ Bill that will have a significant negative impact on Canadian mining companies and the jobs that they support in Canada and in the countries in which they operate. In addition to the international standards Canadian mining companies follow, Canada has put a CSR regime in place, with an independent CSR Counsellor, and the industry looks forward to continuing to work with the Office of the Counsellor on furthering Canada’s CSR regime.”