Mining boom shines spotlight on CSR — again

New Horizons

Competition for commodities is driving Canadian mining companies into high-risk areas, making corporate responsibility, accountability, and transparency even more important issues, participants in a panel discussion on Canada’s responsibility abroad said in Toronto recently.

Recommendations in a report released earlier this year calling for a Canadian corporate social responsibility (CSR) framework for companies operating in developing countries “will reduce risk, but it won’t guarantee risk-free projects,” declared Tony Andrews, executive director of the Prospectors and Developers Association of Canada.

And with an estimated $17 billion pouring into mining over the next five years, the industry must ask itself how it can do better, said Marketa Evans, executive director of the Munk Centre for International Studies at the University of Toronto.

“The terrain we’re working in is increasingly challenging, literally and figuratively,” she said. “Natural resources do not respect political boundaries. Mining companies operate in some of the most challenging social and political environments in the world.”

Trust in non-governmental organizations (NGOs) and social groups is higher than in global companies, she added, so industry must be part of the solution. “There’s much work to be done, so we must get on with it,” she told the standing-room-only crowd in the heart of Toronto’s financial district in early September.

Andrews noted that while there are a handful of mining companies operating irresponsibly, “the majority are trying to meet CSR requirements.” He decried NGOs that focus on the worst cases and asked whether an independent ombudsman would be an effective strategy to handle CSR complaints.

“NGOs have put pressure on industry to increase accountability and transparency, but they now have to turn the spotlight on themselves,” he said.

Evans said it was possible to find common ground with NGOs — citing the landmark Kimberley Process. The agreement in the diamond industry suppressed the conflict-diamond trade from western and central Africa. Major diamond producers, governments and NGOs developed the Kimberley Process to cut off the trade.

“The Kimberley Process on diamonds tackled a strategic problem,” Evans said. “It was a positive collaboration. We need to drive more crossover collaboration.”

The panel also heard from Peter Sinclair, Barrick Gold’s director of corporate responsibility. Sinclair called community development part of Barrick’s core business and noted that Barrick has a longstanding policy of investing at least 1% of its previous year’s pre-tax income in community development and philanthropic programs.

Sinclair, who, before joining Barrick worked for a number of NGOs in Rwanda, Congo, Ghana and Chechnya, noted that the industry is changing and that “community issues are increasingly important and make up a new paradigm in the mining industry.”

He said Barrick engineers design more community friendly mines, “train locals as opposed to bringing in people from the outside,” and “provide a generation or two of sustainable income.”

In terms of community development, Barrick’s mine at Bulyanhulu in Tanzania, for instance, has built a comprehensive health program for its employees and has supported off-site community health programs. It has contributed equipment and renovation donations to support nearby government facilities such as a medical dispensary, health centre and hospital.

Fresh water from Lake Victoria is supplied to local communities through a storage and pipeline system. In addition, Barrick covers the cost of anti-retroviral therapy for any of its employees living with HIV/AIDS.

When asked whether it was right for companies to be mining in countries where governments or militia groups were conducting gross human rights abuses, Sinclair said that it was up to each company to conduct its own human rights assessments. But he said that Barrick operated neither in Sudan nor the Democratic Republic of the Congo where civil war has killed an estimated 4 million people.

Evans agreed, but offered another perspective. Talisman Energy’s dramatic withdrawal from a controversial oil project in Sudan in 2003 “was seminal in driving debate,” she said, “but the question is, what happened when Talisman left?”

The remaining partners, India’s national oil company ONGC Videsh, Malaysia’s state oil firm Petronas, China National Petroleum Corp., and Sudan’s Sudapet don’t “adhere to CSR standards,” she said.

“Is there more leverage when a Canadian company is on the ground than another company from another country?” she asked.