Wives are afraid that their husbands won’t come back home

The government office designed to hold Canadian mining companies accountable for their actions abroad has fallen at the first hurdle to protect the rights of indigenous communities.

In October 2009, the federal government appointed Marketa Evans as the first corporate social responsibility (CSR) counsellor for the extractive sector. The mandate of Evans’ office is to act as an impartial mediator and facilitator in bringing Canadian mining companies and community members together to resolve any alleged grievances or human rights abuses.

The office oversees a five-step process that includes eligibility assessment, trust-building and several informal dialogue stages.

With over 75 per cent of the world’s mining enterprises there is a need to ensure Canada, one of the world’s great mining superpowers, and its companies are closely monitored.

But in late September Toronto-based Excellon Resources walked away without consequence from the first arbitration process the office had overseen since its inception. Excellon is just one of 204 Canadian companies operating in Mexico, where investment in the sector in recent years has rocketed to over $5.5 billion.

ProDESC, a non-governmental organization representing the workers, said that Excellon is guilty of human rights abuse.

“Wives are afraid that their husbands won’t come back home some days because the mine is flooded and because there are electrical cables dangling above their heads,” said ProDESC’s Valeria Scorza in a phone interview.

Scorza said that many of the workers cannot swim and that there aren’t enough life vests for all of them.

“The wives of the miners ask me what will happen to them if their husbands die in the mine,” Scorza said. “The conditions in the mines aren’t just affecting the worker but the livelihoods of their entire families.”

ProDESC contacted Evans’ office in April 2011 on behalf of the workers from the company’s La Platosa mine in the northeastern state of Durango. Excellon acquired the silver and zinc-rich property in 1996, and production began in 2005.

The miners from the La Platosa site complained that, in addition to poor working conditions, Excellon had threatened them when they had attempted to organize a union.

Scorza said that Excellon refused to recognize this new union because under Mexican labour laws there can only be one union per company.

“But until that point the workers didn’t even know that Excellon had a union,” said Scorza. “There were never any union meetings and the miners were never charged union dues.”

Scorza claimed that Excellon has diverted attention away from the real issues by portraying the conflict as a battle for dominance between two warring unions.

Marketa Evans travelled to the La Platosa mine in May and July of this year. She met with 48 of the 102 workers.

In her closing report on the case in October 2011, Evans said that these workers “did not feel adequately trained…and that we heard of significant problems with statutory pay increases and overtime pay.”

In the report Evans claimed that her office made two dozen separate requests to meet with company representatives upon her return in July, but that “Excellon did not make itself available to meet with the Counsellor to formally discuss the results of the [July] site visit and next steps for moving forward.”

Excellon formally withdrew from the review process in early October

Joanne Jobin, the investment relations manager for the Canadian company, said that the process of the CSR office is flawed. An October press release claimed that Evans’ office had been manipulated by foreign entities to circumvent Mexican labour laws.

“This whole process actually started because an employee was fired because he fell asleep on a scooptram,” said Jobin in a phone interview. “And then that escalated into complaints to the CSR office that there were human rights violations which were proven false.”

“Excellon left the dialogue process as we felt that the original issue of the fired employee had been resolved,” said Jobin. “There was nothing more to say.”

Scorza said the fact that Excellon was able to ignore this complaint highlights the one crucial flaw in a well-intentioned mediatory mechanism: the process is entirely voluntary and reliant on good faith of the parties involved.

Jen Moore, the Latin America Program coordinator for Mining Watch Canada agreed with Scorza.

“Once one of the parties walks away from the table, she [Evans] has nothing else to offer,” said Moore. “There’s no sanctions or any punitive measures. There’s nothing she can do unless there’s consensual agreement from both parties.”

Moore commended the individual efforts of Evans to visit the Excellon site and engage with the impacted stakeholders. But she was more critical of the poisoned chalice handed to her by the federal government.

“She doesn’t have the power to make recommendations to the government,” said Moore. “She has no power to investigate or adjudicate whether a company is abiding by the guidelines she’s working by, nor can she make any policy or legislative recommendations to the Government of Canada.”

A year ago Liberal MP John McKay’s private member’s bill was narrowly defeated in Parliament by just six votes after a strong lobbying effort by the mining industry. The official lobbyist registry illustrates lobbyists met with cabinet ministers and MPs on approximately 300 occasions before the final vote in October 2010.

Bill C-300 sought to sanction punitive financial measures for any CSR violations by Canadian mining companies abroad.

The Prospectors and Developers Association of Canada (PDAC), the national association that represents the interests of the mining industry, argued the bill assumed guilt, was draconian and encouraged businesses to leave Canada. At the time PDAC said that Evans’ new office would also render the bill obsolete, as it would have been a duplication of functionality.

One simply has to look at the proposed Keystone XL pipeline to see that mining and natural resource development are big business for the Canadian government. Critics of the CSR office argue that the federal government will never implement punitive measures that would alienate the extractive sector.

“The results [of the Evans’ office] have been entirely and completely predictable,” said McKay. “I predicted this failure two years ago and it sounds arrogant to say ‘I told you so’, but I told you so.”

But like Moore, McKay also expressed sympathy for Evans who he said has been handed a flawed mandate by the Ministry of Trade.

“She is handcuffed, she is hog-tied, she is gagged,” said McKay.

The MP added that the annual budget of the office is $650,000 and that, considering the office has only adjudicated one case in two years, the Canadian taxpayer isn’t getting a fair bang for their buck.

“It [the CSR office] was designed to fail,” said McKay. “It was designed as a glorified press release so that this government can always say that ‘we have a CSR counsellor, look at us doing really good things’.”

But Dr. Kernaghan Webb, the director of the Ryerson Institute for the Study of CSR, said that criticism of Evans’ office is unfair.

“It’s like complaining that a bicycle doesn’t go 150 miles per hour and hold four people on it,” said Webb. “It just wasn’t designed for that.”

And so Webb said that you cannot damn the CSR office’s voluntary mechanism in cases where one party won’t cooperate. He stated that it actually behooves the company to cooperate because a voluntary process is cheaper than dragging the matter through court.

Webb stressed that Canada’s CSR office is just one entity in a spectrum of institutions designed to keep the extractive sector in check abroad.

He added that Canada must also be respectful to indigenous organizations and legal frameworks.

“I think it’s a bit premature to make assessment that if it doesn’t work, get rid of it,” said Webb. “It’s premature to arrange for the funeral procession after just one case.”

But how many cases would it take to adequately judge the track record of Evans’ office before a hearse is called?

McKay is critical of the wait-and-see attitude.

“Members of mining community have stressed again and again the need to let the counsellor’s office have time to succeed,” said McKay. “Well fine, how much time do you need? One decade? Two? Four decades?”

Moore said that an alternative would be to have Canada’s National Contact Point (NCP) review alleged cases of abuse by mining companies overseas.

Each member of the Organization for Economic Cooperation and Development, an international body that assists governments in tackling the economic challenges of a globalized economy, has an NCP. Each NCP can receive complaints about companies based in their country.

“We’d prefer to work through the NCP where the process is determined by an international body…as opposed to a politically-created body in Canada where we have very little opportunity to affect change in how it’s carried out,” said Moore.

Evans’ office is currently reviewing its second case – a complaint submitted in August 2011 against Vancouver-based First Quantum Minerals.

NDP MP Peter Julian, former party critic on international trade, recently launched another private member’s bill to tackle this issue head-on.

Bill C-323, introduced by Julian in October 2011, would amend the Federal Courts Act to permit a non-citizen plaintiff to challenge any body, including a Canadian company, in our federal court system.

But unlike McKay’s bill or Evans’ CSR office, C-323’s legal nature would hold companies more accountable.

“It’s curious to see the diff in how the harper govt treats corporate criminals abroad and how the government seems to want to look at arbitration or voluntary guidelines as an approach when we’re talking about criminal actions,” said Julian.

“But meanwhile in Canada the Harper government goes over the top looking to put in please prison terms for virtually any action,” said Julian. “But it seems that at the moment you incorporate, you can commit any crime abroad and there’s no sanctions.”

C-323 would knock down a main defence used by many corporations called forum non conveniens. This doctrine allows courts to refuse to take jurisdiction over a case if there is a more convenient and appropriate forum for the case to take place.

As a result, Canadian companies can claim that the case should be held in the country of the alleged abuse, knowing that they’d likely escape redress.

Surprisingly Julian says that the initial reaction from the mining sector, while not supportive, hasn’t been as vitriolic as that to McKay’s bill C-300.

“They at least appreciate that it’d be a legal process as opposed to a process that is done through the government,” said Julian.

The Excellon case has set a bad precedent for the CSR office despite its best intentions. Not only did the company leave the dialogue process prematurely, but it did so without any repercussions. What good is a watchdog that doesn’t have teeth?

“Law suits don’t help build trust in relationships,” said Marketa Evans in a phone interview this week.

Evans finally granted an interview after five weeks of persistent emails and phone calls. But she refused to answer any questions on the mandate of her office, and past and current cases.

Like Professor Webb, Evans emphasized that the office was there to merely engage two parties in dialogue and that it doesn’t pretend to be anything more than that.

“The office is meant to resolve conflict in a constructive manner that allows both sides to build the kind of trust that is needed when working together for the next 20 years,” said Evans.

But what about the Excellon case? Where does Evans go from here? How will she approach the current First Quantum case?

“This is the first office of its kind in the world, so I certainly do not pretend to have everything figured out,” said Evans. “You can’t anticipate everything, but we are reflecting on things that we can do better next time.”

Scorza says that ultimately Evans’s office needs more credibility, and more power. In the meantime she said that the La Platosa miners will continue their fight against Excellon.

“It’s not they want Excellon to go away,” she said. “The miners just don’t want to be at risk any more.”

Scorza says that mining superpowers like Canada are like colonialists of old.

“These Canadian companies act one way in Canada, and another abroad.”

Such continuing behavior abroad by a dominant Canadian extractive sector would suggest the need to rewrite the age-old edict.

Namely, that with great power comes the need for great corporate social responsibility.