6 June 2017

Published in The Hill Times, June 5, 2016

Following recent allegations of police brutality and a fatal shooting by guards at Barrick Gold’s Porgera mine in Papua New Guinea, the debate over creating an ombudsman to investigate reports of Canadian extractive firms’ involvement in abuses abroad is sure to heat up.

Industry spokespersons argue the ombudsman should be limited to facilitating joint fact-finding processes, agreed upon voluntarily by companies and complainants. In other words, the government would continue to rely solely on confidential, dialogue-based processes to address claims of abuse—as it has for years, through the review processes of its two existing dispute resolution offices.

Not all grievances can be resolved through dialogue. Even when mediation does lead to agreement, the results may be far from just. Years ago, Canada’s National Contact Point (NCP) oversaw mediationbetween Barrick Gold and groups in Porgera complaining of harmful mining practices and systemic violence by security forces. The company agreed in 2013 to a confidential list of action items. According to the complainants, it has only taken action on two of the items.[1]

“[O]ur people are very much weaker than the company,” one of the complainant groups wrote in a letter to our prime minister in March. “[W]e cannot have effective and fair dialogue under those circumstances.” The reply from the Prime Minister’s Office indicates that “he will leave the matter to be considered by Minister Champagne.”

Nor have changes made in 2014 to the government’s strategy made any documented difference to companies’ willingness to participate in mediation.

Recent developments suggest that the government’s policy of withholding support from companies that won’t engage in dialogue through the NCP or the CSR Counsellor is not being consistently applied. Last October, the NCP determined that a complaint concerning Ottawa-based Sakto Group was “material” and “substantiated,” offering the parties “dialogue facilitation.” Then in March, the NCP declared that it will not to offer its offices for mediation after all, giving no reason for this decision. Its draft final statement makes no mention of the earlier offer, Sakto’s response, or any penalty being applied to the company for refusal to participate.

The penalty has been applied once, two years ago, when the NCP declared that China Gold’s refusal of mediation will be “taken into consideration” if it applies for government support. The company has still not come to the table for dialogue.

Note that the penalty is applied solely for declining mediation. The complaint against China Gold asserts that the company’s practices contributed to the death of 83 workers. To regain eligibility for public support, the company need not demonstrate that the claim is untrue. It needn’t bring its operations into compliance with OECD standards. All that’s required is dialogue.

As for the CSR Counsellor, the office focuses primarily on educating and advising companies. Its latest annual report describes the counsellor “screening situations” and responding to “requests for assistance,” but details about the process and results of such interventions are so scarce, it’s impossible for the public to tell what is being achieved.

While Canada may be the only country to impose a penalty on companies that don’t engage in dialogue, other countries are introducing penalties for companies that cause harm. Norway’s public pension fund will not invest in corporations involved in serious violations of environmental standards, human rights, or other ethical norms. (Its exclusion list includes at least two Canadian firms.) In France, large companies will soon be required, under a new law, to publish and implement plans to stamp out risk of human rights abuse throughout their operations and supply chains. Under the law, a company can be held liable for harms caused abroad that could have been avoided had the company implemented such a plan.

For years, the Canadian government has spoken of its “expectation” that Canadian companies will meet the “highest ethical standards” when operating abroad. It’s time to create a mechanism capable of finding out if this expectation is in fact being met, in a sector where significant risk of human rights abuse is well documented.