The PDAC’s E3 Plus And Bill C-300

The following is an edited excerpt of a recent speech made by Jon Baird, president of the Prospectors and Developers Association of Canada, to the Economic Club of Canada in Toronto.

The Prospectors and Developers Association of Canada is introducing our new corporate social responsibility initiative, named e3 Plus: A Framework for Responsible Exploration.

E3 Plus is the first comprehensive set of guidelines in the world designed to help mineral exploration companies excel at their environmental, social, health and safety responsibilities.

Exploration companies are the ambassadors for mining around the world and we must help them meet their responsibilities and perform to the highest standards.

They take 21st-century knowledge and technology to remote, isolated communities living in environments that are much less advanced. As the first mining representative at a site, the practices of explorers can make the difference between local residents welcoming a mineral discovery or being wary about what a mine development might do to their way of life.

Done properly, mineral exploration itself leaves a light environmental footprint. The remnants of activity usually disappear within a few years.

But weak first impressions can leave long-lasting effects.

The origins of the PDAC’s e3 Plus initiative go back to 1999 when a group of industry professionals met to set standards for good environmental practice.

The PDAC quickly recognized the need to be a leader in educating and helping small exploration companies to do a better job.

The first version of our social responsibility initiative, introduced in 2003, was called e3, Environmental Excellence in Exploration. It was a comprehensive tool that offered guidance and examples of environmental stewardship.

It was based on the Internet, so that companies could access full information on it from any location in the world, free of charge, whether they were PDAC members or not.

We continued refining and upgrading e3 for the next three years. Three thousand companies and individuals are now registered to use it around the world. And it’s been translated into at least seven languages that we know about.

Nevertheless, we came to realize that reports of controversies and conflicts continued. We knew that any industry might have a few bad apples, but we were concerned to see companies that we knew to be responsible getting caught up, too.

In preparation for the PDAC’s participation in the federal government’s roundtable on mining and social responsibility in 2006, we commissioned research into problems that took place at sites in developing countries.

The research findings were revealing. Among other things, it identified that problems arise from two types of drivers.

There were those particular to the political, social and environmental settings of each project. These were beyond the control of the company, and included: the existence of civil conflict or lack of accountability of police or army officials; the presence of artisanal miners and indigent workers who carried out primitive and sometimes hazardous subsistence-level mining; and campaigns by NGOs that in the worst cases escalated conflicts, spread misinformation and were used to raise money for NGOs.

Company practices that created problems included such things as insufficient stakeholder involvement, lack of respect for indigenous people’s rights, and inadequate environmental practices.

The research found that problems tended to escalate as a result of interplay between community and company drivers. Companies that had firmly established good practices and followed them carefully were often able to avoid serious problems. Good CSR practices were no guarantee that problems wouldn’t arise. But it did reduce the impact.

By 2006, most of the larger companies had implemented some form of CSR. But since there was no single source of comprehensive guidelines, each company had to figure out for itself what needed to be done and how to do it most effectively.

Some companies tended to believe that acting in good faith and relying on “common sense” solutions was enough.

This led to outcomes that varied in quality and effectiveness and increased the possibility of mistakes and misunderstandings that could damage reputations.

With the research in hand, the PDAC went on to participate in the federal government’s roundtables in 2006. That process improved the PDAC’s understanding of CSR and helped crystallize our thinking on the concept and structure of e3 Plus.

Another critical discovery was that many errors were caused by poor communication with local residents.

Improving communications may sound like a quick and easy solution. But it’s not necessarily part of the training of company managers and geologists.

I take the point of one of the earth science students who participated in a workshop the PDAC offers to top students from across the country each spring. She observed that: “Sometimes geologists are so concerned about what lies beneath the earth’s surface that we forget about the stuff on top.”

Whatever the reason, open, frequent and honest communication with local communities — or “community engagement” in CSR jargon — is an area where companies can greatly improve their chances of success.

The roundtable turned its recommendations over to the federal Department of Foreign Affairs and International Trade in March 2007. And the PDAC’s CSR committee under its respected chair Dennis Jones, who had just retired as head of exploration at Iamgold, got down to work on e3 Plus.

The development process took two years and involved more than 300 participants from across the country, including representatives from industry, governments, aboriginal groups, NGOs, academics and the financial community.

We introduced e3 Plus at the PDAC convention this March.

Its goal is simple: to help companies to achieve excellence in each of those areas.

Six of the eight principles on which e3 Plus is based deal with the delicate and complex matters of society and social engagement.

Take, for example the third principle: “Respect human rights.” Sounds simple. Easy to remember. But what actions are required to fulfill “respect” and what “human rights” are involved? Are they ones defined by Canada? Or by the host country?

E3 Plus explains the “respect human rights” principle as: “To promote the principles of the United Nations Universal Declaration of Human Rights by incorporating them into policies and operational procedures for exploration.”

Having defined the principles, the next step was to build three toolkits with a total of more than 2,000 pages of information. The toolkits, available at www.pdac.ca,provide detailed guidance to help companies manage each principle and, when complete, include hundreds of examples of both good and bad practices.

Right now, we’re creating performance objectives and reporting criteria that will help companies make their performance public in a clear and transparent way.

When that’s finished next year, the next step is to determine the appropriate process for verifying reported performance.

E3 Plus has been well received by our members, who have pressed ahead with its introduction despite the severe economic downturn.

For now, e3 Plus is a voluntary initiative. The PDAC’s experience with the environmental guidelines is that adoption spreads as companies become familiar with the obligations and as the suggested approaches prove successful.

In March 2009, in a document entitled The Canadian Advantage, the federal government responded to the recommendations proposed by the CSR roundtables. While the PDAC has offered suggestions regarding implementation of this initiative, it moves the CSR yardsticks in the right direction.

Shortly after the government’
s response was issued, Bill C-300, a private member’s bill, was introduced in the House of Commons. By a margin of only four votes it was sent to committee, where it will remain until the fall.

If this bill were passed, it would attempt to enforce the CSR practices of Canadian exploration and mining firms in their activities throughout the developing world.

The bill invites complaints and then requires the federal government to be the judge and jury on complex activities taking place in foreign lands. Sanctions would be imposed on firms judged to be acting inappropriately.

The overall objective of the bill, however, is similar to the goals of e3 Plus and the government’s Canadian Advantage proposal. They all aim to encourage environmental best practices and uphold human rights standards. But the bill approaches it from the opposite direction.

I can’t tell you that good people head every Canadian mineral exploration company. But I do know that good people vastly outnumber the bad.

Canadians have been leading by example in mining around the world for many years, with e3 Plus being the latest chapter in that long and excellent history.

Bill C-300, on the other hand, is an unfortunate example of a well-meant but totally impractical solution that will do little to generate real progress. It would also greatly disadvantage Canadian exploration, mining and mining supply companies.

E3 Plus can’t eliminate every problem or pluck every bad apple, but it sets an example that we believe Canadian companies will be willing and able to follow.

— As well as being PDAC president, Jon Baird is managing director of the Canadian Association of Mining Equipment and Services for Export (which supports the export of mining equipment and services abroad. www.camese.ca),