Canada’s Parliament Buckles under Weight of Mining Industry

By Paul Weinberg

IPS

The corporate clout of the mining industry trumped political ideology in Canada when members of all political parties helped to narrowly defeat a bill late last month that would have imposed standards on Canadian mining companies operating in developing countries.

“We had an opportunity and we blew it,” said the bill’s architect, John McKay. He faced 13 no-shows from colleagues in his own party, the Liberals, the largest of the opposition parties in the House of Commons. In the end, the Oct. 27 vote resulted in 140 against to 134 in favour.

“Both domestically and internationally, there is a huge amount of disappointment in the Parliament of Canada,” McKay told Canadian reporters.

The opposition from the ruling free market-oriented Conservative minority government was not surprising. What caught the eye of some observers was the number of centrist and centre-left politicians – a total of 22 – who stayed away from the vote or voted against the bill.

Michael Ignatieff, the leader of the centrist Liberals, the largest of the opposition parties, did not show up for the vote. While he failed to explain his decision publicly, another senior Liberal MP, Martha Hall Findlay, complained about the lack of a financial mechanism to back up the mining reform bill. “C-300 was seriously flawed,” she told the Ottawa-based Embassy Magazine.

At the heart of C300 was a provision that government assistance would be withdrawn from Canadian companies that failed to adhere to certain standards of behaviour.

Canadians are involved in three-quarters of the mining operations outside Canada, according to the Toronto-based Prospectors and Developers Association of Canada (PDAC).

Canadian companies make up a third of the 171 mining and exploration companies where there have been reports of conflicts with local communities in developing countries, environmental degradation and unethical behaviour, stated a fall 2009 independent report commissioned by the PDAC and leaked to the media.

Community conflict included “significant negative cultural and economic disruption to a host community, as well as significant protests and physical violence,” the report said.

Typically, “the hot spots” where Canadian companies figure prominently involve gold, copper and coal operations in countries such as India, Indonesia, the Philippines, and the Democratic Republic of Congo. Latin America provided the largest number of complaints in terms of region.

“You can literally do a world tour on issues involving Canadian mining companies which do not reflect well not only on the industry but what I worry about as much as anything, our own country [Canada],” McKay told IPS.

However, Dennis Jones, chair of corporate responsibility panel for PDAC, downplayed the leaked report.

“We recognise that we need to improve [corporate social responsibility] performance in the industry and that is what we are trying to. What we don’t agree with the NGOs is the extent to which Canadian mining companies are involved, in these incidents,” he said.

Jones also told IPS that the bill’s provisions, in which foreign complaints would be lodged in Ottawa during a time- consuming quasi-judicial process, would be detrimental to the reputation of both the firm targeted and the Canadian industry as a whole.

But Catherine Coumans, research coordinator with Mining Watch Canada, countered that the Canadian mining industry is already receiving a black eye from a number of lawsuits launched against individual corporate players.

“What people need to understand is that this bill was not just about corporate accountability, it was about government accountability. It was about making sure that the Canadian government is not shoveling tax dollars to mining companies that are facing serious allegations of human rights and environmental abuses without being able to assure accountability and transparency about these operations to Canadian taxpayers,” she told IPS.

Figures on how much money is forked over to the companies by various Canadian government agencies, including the Canada Pension Plan and Canadian International Development Agency, are not publicly available, she says.

The Financial Post recently estimated that the Canadian government’s Export Development Corporation alone provides Canadian mining companies more than $20 billion in subsidised financing and political risk insurance.

Mining is a big deal in the resource-oriented Canadian economy, and the industry’s overseas activity is backed by large Canadian banks, says Yves Engler, the author of the “Black Book of Canadian Foreign Policy”.

About 10 of the world’s largest mining companies are based on capital raised on the Toronto Stock Exchange, he said, adding, “There is no other example of an economic sector where Canada is dominant.”

The result is a great deal of influence in Canadian politics. Engler cited the example of how the Canadian government successfully lobbied the support of G20 countries in an official statement at the Toronto summit this summer to apply the lever of debt relief to pressure the Democratic Republic of Congo – saddled with enormous debts incurred by the notorious dictator Joseph Desire Mobutu. The DRC had drawn Ottawa’s ire for withdrawing a controversial 1997 mining concession granted to a Vancouver mining company during a vicious civil war, he told IPS.

“The fact that [this company] was able to get the Conservative government to help them [shows] that the Canadian mining industry has immense influence,” Engler said.

Both the mining and the business community ramped up their opposition in the days leading up to the vote on John McKay’s mining reform.

“If passed, Bill C-300 will undermine the competitive position of Canadian companies. It could cause an exodus of mining companies from Canada,” Michael Bourassa, a partner and co-coordinator of the global mining group in the law firm of Fasken, Martineau, DuMoulin, warned in the Financial Post.

Catherine Coumans says what might have rattled Canadian politicians was the mining lobbyists’ new emphasis on the potential impact of the bill’s passage on the domestic operations of Canadian mining industry.

“The mining industry likely felt they weren’t getting enough traction with their campaign, arguing that they would be less competitive abroad if they had to live up to international environmental and human rights standards. So, they started to target members of parliament in Canada in ridings with mining constituencies in Canada and argued that the bill is going to kill mining jobs in Canada,” she told IPS.