TORONTO (miningweekly.com) – Mining companies that flout voluntary corporate social responsibility (CSR) standards and recognised best practices could lose the support and advocacy of the Canadian government, Trade Commissioner Service-Operations and Trade Strategy Bureau director-general Duane McMullen told an audience at the Prospectors and Developers Association of Canada conference on Monday.
In the federal government’s 2014 review of the national CSR strategy, it was noted that Canada’s extractive companies were doing a good job, successfully implementing and maintaining voluntary best practices. “[But] there were a small number of firms whose behaviour risked spoiling it for everybody else, harming Canada’s reputation as well as harming the reputation of the industry,” McMullen stated.
Companies that failed to reflect Canadian values and undertake meaningful engagement if a problem arose could risk losing the support and advocacy of Canada’s foreign services. This assistance could include the engagement of national or local officials from the host nation on a company’s behalf.
“Advocacy for Canadian companies abroad is considered extremely valuable,” McMullen noted, adding that government could take that away from them.
Continued abrogation of best practises would risk further escalation in the Canadian government’s response, one that might jeopardise a company’s eligibility to obtain financing from Export Development Canada or from other multilateral financial institutions that used the International Finance Corporation standards.
In the meantime, the Canadian government had continued to fine-tune the national CSR strategy it introduced in 2009. This included an enhanced update that was unveiled in November 2014. “In doing our review we learned that, while Canada is far from perfect in CSR, we are really good if you compare ourselves with other countries. Indeed, you can make a strong case for us being a world leader,” McMullen highlighted.
The enhanced review involved consultation with industry, host governments, nongovernment organisations, communities and other stakeholders. The Canadian government determined that the CSR strategy had been working well, although many more opportunities had been identified to ensure greater success.
The CSR strategy’s effectiveness was considerably improved by catching potential problems early on, making it easier to engage with disaffected stakeholders. It also meant that the risk of harm was significantly reduced. “So patching up problems early is really important and that’s an area of our enhanced strategy where we aim to do a significantly better job,” McMullen said.
It was also noted that more needed to be done to assist, support and advise host governments to manage and effectively regulate their extractive sectors. Progress here would relive much of the burden on mining companies.
However, many of these problems stemmed from a lack of bureaucratic capacity and resource expertise among host nations. For some countries, this lack of capacity had stymied the growth of their extractive sector, despite the mining industry being identified as essential for spurring development.
“So everybody recognises the importance of help here. However, it can’t be one-size-fits-all [solution] because each situation is unique with many different aspects,” McMullen said. Assistance in this would be a priority and lasting success “the ultimate win”.