Canada gets Cuddly with Mining Companies

Date of publication: 
7 February 2011

Critics are asking whether, with the defeat of Bill C-300, whether 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.

Opposition to Bill C-300, and to regulations it would have imposed, extends abroad.

In Peru, the Canadian International Development Agency (CIDA) is working on projects that do not “have the interests of…people at heart…but corporations,” according to 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 its very obvious where their loyalties lay,” said Linda Scherzinger, who works with KAIROS. The group is committed to advocating and acting on issues of climate and social justice in Canada and overseas, with a focus in Latin America.

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 additions to the list included mineral-rich countries such as Colombia, Bolivia and Peru.

Despite this commitment, CIDA unexpectedly announced that KAIROS would no longer receive funding through 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 written above with a pen and was signed by International Co-operation Minister Bev Oda.

In La Libertad, Peru, CIDA is spearheading a $500,000 reforestation project. Coumans says the project sounds good, but reforesting its mine site should be the responsibility of Barrick Gold. Coumans argues that Canadian taxpayers should not be footing the bill to fix Barrick’s reckless environmental practices, 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 DFAIT’s voluntary principals of corporate social responsibility. 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 lends $20 billion to the Canadian extractive industry, mostly 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, 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 and engaging government 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.