PDAC and Bill C-300: a bit of disinformation

26 11 2009

The Prospectors and Developers Association of Canada has recently reiterated its position against Bill C-300, a private member bill aiming at ensuring the corporate accountability of mining as well as oil and gas companies in developing countries. The association has dismissed the bill as being “naïve and misguided grandstanding” from government. While this accusation is perhaps a sign of the selective acceptance of reality by the mining industry (more on that in a subsequent entry) it is even more an indicator that the industry has yet to move beyond blunt lobby practices. PDAC is fighting Bill C-300 like terrorism but the bill is in fact just a big softie.

PDAC’s position

PDAC’s lobbying strategy built in response to Bill C-300 has been based on a complete dismissal of the Bill’s intent and spirit. Let’s have a look at how PDAC is using its engagement strategy to damage its own reputation.

PDAC is attacking the Bill on many fronts. Ultimately, the Association blames the bill for requiring companies to comply with corporate social responsibility standards that will make its member companies uncompetitive as a result of compliance with an increased amount of red tape.

The Bill apparently does not take in account efforts taken by the industry to develop its own standards and best practices in the realm of CSR. The industry claims it has made very important progress in the last five years with regards to corporate social responsibility through initiatives such as the Roundtable for Corporate Social Responsibility and Canadian Extractive Industries in Developing Countries. Building on those initiatives would allow the industry to “get there faster and in a more substantial way”, PDAC argues. As Bill C-300 is not the product of consultation it should be dismissed entirely.

While PDAC champions industry initiatives it is still fairly open to admit that industry is unsure about the course of action that it should take with regards to corporate social responsibility. While recognizing that companies are required to comply with rising expectations concerning their corporate behaviour, PDAC admitted that corporate social responsibility remained an ill defined concept that would gain from further clarification. The industry even indicates that it would benefit from having practicable and accessible assistance in improving its understanding of CSR than more regulation.

PDAC claims that the bill is apparently a disservice to developing countries. As the Bill does nothing to improve institutional capacity and strengthening the governance of developing countries, its usefulness is harshly questioned as according to PDAC these are the sole variables having an impact on firm behaviour. PDAC also took out the big guns and in a bid to reach out to the Canadian public and governments it stressed that Bill C-300 would prevent the spread of Canadian values abroad by interfering in the jurisdiction of developing countries (it is unclear whether PDAC is referring to state sovereignty or to Canada’s residual normative power).

One valid concern of the industry is the fear that the bill be hijacked by anti-mining protest groups. Claims without substance about specific companies could trigger a media backlash that would damage the reputation of its members. This claim is legitimate but PDAC has pushed a the rhetoric as far as saying that the proponents of the bill by championing this initiative are making accusations that are not derived from reliable and objective sources. Somewhere a lobbyist is taking cues from the Republican Party…

In sum PDAC sees the Bill as burdensome red tape, that won’t fulfill its objectives. It is built on the wrong premises and is thus unamendable. PDAC’s critique of Bill C-300 can be found here. Below is a summary of what Bill C-300 is promoting.

Bill C-300: just a big softie?

Let’s go through the main highlights of Bill C-300 to answer this burning question: has PDAC really read the Bill? In a nutshell, the bill’s purpose is to ensure that corporations engaged in mining, oil and gas activities and receiving support from the Government of Canada through its financing institutions act in a manner consistent with international environmental best practices and to international human rights conventions of which Canada is party to. To ensure this, the Bill puts under the responsibility of the Department of Foreign Affairs and International Trade to develop in consultation with stakeholders guidelines for companies operating in developing countries. Once those are developed the department will be in measure to investigate complaints on the behaviour of companies made by Canadians and citizens of developing countries. Complaints with not lead to legal action being taken against companies however a notice will be published in the Canada Gazette when investigations are concluded.

Contrary to what PDAC claims, the guidelines are not being established in the bill. The bill is meant to allow their development based on international efforts made to date in this field. These include the International Finance Corporation’s (an institution associated with the World Bank) Policy on Social and Environmental Sustainability, Performance Standards on Social and & Environmental Sustainability (and guidance notes to those standards) as well as Environmental Health and Safety General Guidelines. The Voluntary Principles on Security and Human Rights are also included. The remainder of guidelines on human rights are to be developed within Canada through consultations to which stakeholders like PDAC will be part of. In sum the bull is just merely giving the mandate to develop guidelines and provides for plenty of room for industry stakeholders to promote their views and initiatives.

By relying on international standards, the Bill minimizes the risks of rendering the industry uncompetitive as these will be shared by competitors. Also these are often the result of international consensus which is often achieved by watering down initiatives to the lowest common denominator.

While the bill is judged punitive by PDAC, it gives the government no leverage to enforce compliance with the guidelines. The provisions of the bill are in practical terms only requiring due diligence from its government agencies and financing institutions. If these provide financial support for oil and gas as well as mining companies they should ensure that the companies supported are not breaching the guidelines. In sum, the government is just ensuring that it does not indirectly take part in controversial operations in developing countries. Should investigations highlight a company’s non-compliance with the guidelines, nothing outside of public shaming and stocks generally taking a beating should take place.

This bill is turning out to be just a softie and may give politically appointed staff sufficient power in the process for it to be lobbied as needed by businesses. The bill’s aspirations are however to be praised and if PDAC would acknowledge this it would perhaps recognized that the uptake of the guidelines that it hopes to establish would give its members a clear picture of what is expected from them on the CSR front. Provided that the industry can promote its views and its achievements to date in the consultation process leading to the development of guidelines, I think that it would be a win-win situation. That is if PDAC recognize the opportunities provided by the Bill.




2 responses

8 01 2010
Mehrdad Nazari

yes, it seems to me that Bill C-300 is perhaps like the proverbial storm in the tea cup as also argued on my blog: http://www.prizmablog.com.

11 01 2010
Martha Black

Thanks for sharing your entry Mehrdad. It gives a pretty good picture of what are already EDC’s guidelines for CSR performance.

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