Are some of the heated discussions around the Canadian Bill C-300 designed to regulate the CSR performance of Canadian extractive companies operating abroad a storm in the tea cup?
As summarized on a UBC blog by Sheila Ballantyne “Bill C-300 was introduced to the Canadian House of Commons in February of 2009 by Liberal Member of Parliament, John McKay. The bill is intended to regulate Canadian mining companies operating in developing countries by creating a guideline for accountability to which companies must comply. The bill will also create a system by which complaints against companies can be filed and brought to the attention of Canada’s Ministry of Foreign Affairs and International Trade.”
Perhaps not surprisingly, this proposed bill has been supported by some NGO/advocacy groups, such as Mining Watch Canada, and opposed by major mining companies, such as Barrick, Kinross and Goldcorp – and various mining industry associations and commentators.
In terms of the Export Development Canada (EDC), which has already adopted the Equator Principles (based on the IFC Performance Standards, currently being reviewed), poor CSR performance, ranging from environmental damage to human rights abuses, would already create major barriers to EDC’s involvement and/or trigger contractual clauses for divestment if they are already involved in related project finance activities. EDC’s loan, subscription and political risk insurance agreements (at least the more recent ones) should already contain provisions for CSR-related performance reporting, be subject to EDC’s due diligence and include independent engineer reviews to help verify performance.
The need for more effective recourse mechanisms and grievance procedures is a real issue and already high on the agenda of the newly appointed CSR Councellor and there are some good and not so good models out there. So there is perhaps no need to re-invent the wheel again. But the remaining interesting thing is probably the issue of 'lifting the corporate veil' and allowing individuals/organizations to 'go after' Canadian listed companies for poor CSR performance of their subsidiaries in other host countries. And this topic is already at the heart of an initiative spearheaded by Professor John Ruggie, the Special Representative of the United Nations Secretary-General, which is looking at human rights in the context of business enterprises and other actors.
Rights Action, an NGO, has also raised concerns that Bill C-300 is limited in terms of its application only to Canadian government supported extractive projects (= the minority of projects abroad). They also note that, unlike the US Alien Tort Act, the focus of Bill C-300 would be on an administrative process and not a judicial process.
Are some of the discussions around Bill C-300 a storm in the tea cup? Are there perhaps other ways to more effectively address desirable CSR performance improvements and provide for better accountability mechanism of the extractive sector in emerging markets?