Proposed Canadian law would police miners abroad


Cameron French, Reuters

Date of publication: 
26 November 2009

TORONTO – Canada’s top mining companies have lined up against a proposed law that would withhold federal investment dollars from companies found in violation of social responsibility standards in foreign countries.

The private-member’s bill, brought forward by opposition Liberal lawmaker John McKay in response to criticism of the behavior of Canadian miners abroad, received preliminary approval in the House of Commons in April.

It has been in committee hearings this month, ahead of a final vote that could come early next year, though as non-government legislation, its chances of being passed by Parliament are low.

In a joint statement on Thursday, Barrick Gold (ABX.TO: Quote), Kinross Gold (K.TO: Quote), and Goldcorp called the bill “unnecessary and damaging to Canadian business”.

“The hearings have amply demonstrated how Bill C-300 has become a magnet for false and unsubstantiated allegations from individuals anywhere in the world and do nothing but unduly harm the Canadian mining industry,” Vince Borg, a spokesman for top gold miner Barrick, said in the statement.

Barrick has been a lightning rod for critics of mining practices. Protesters flock to Toronto each year for the company’s annual meeting, while websites criticize its environmental record and report accusations of shootings and rapes at its mines.

The company typically says such allegations are unfounded.

McKay said such accusations against Canadian miners — many of which revolve around the use of armed guards at mines where there are land disputes with locals — prompted him to draft the bill.

“Sometimes where there’s smoke, there’s fire,” he told Reuters in a interview.

“The reality in places like Guatemala, Colombia, Honduras, Chile, is that the reputation of Canada is under siege.”

Criticism of Canadian companies has gone beyond protest groups. Last year, Norway’s oil fund sold its stake in Barrick due to concerns over the environmental impact of its Porgera mine in Papua New Guinea.

Last week, Mexican authorities suspended the environmental permit for Vancouver-based New Gold’s Cerro San Pedro mine, which has been a frequent target of protests.


Under the bill, companies found not to be in compliance with standards would be excluded from investment by the Canada Pension Plan and Export Development Canada, a federal agency that makes loans to domestic companies, including miners.

Critics of the bill say it would force the miners into expensive defenses of unfounded accusations, which would be difficult to investigate in foreign countries.

“The problem with bill C-300 is it’s a very quick on/off switch … you’re in compliance or you’re out of compliance,” said Gordon Peeling, who as chief executive of the Mining Association of Canada has been a leading opponent of the bill.

“There are automatic consequences that that take no account about whether you’re willing and working toward better outcomes,” he said, adding that the mining companies already adhere to strict standards of corporate responsibility.

He and others also say the bill would drive investment out of the nation’s mining sector and would deter Canadian firms from operating in developing countries.

Canada’s mining companies account for a huge chunk of global exploration, and more than half of the world’s publicly traded miners are listed on Canadian stock exchanges.

While he’s upbeat about the legislation, McKay admits the chances of his private-member’s bill becoming law are not high. The minority Conservative government is not supporting it, and he notes the mining industry’s powerful lobby and deep pockets are lined up against it. “What the issue is here, I think, is good corporate social responsibility is good for business and good business is good corporate social responsibility,” McKay said.

(Additional reporting by Randall Palmer in Ottawa; editing by Rob Wilson)