Memo #16
By: Robert Hanlon
On September 20, 2010, Canada’s House of Commons will give third reading to the Private Members Bill, C-300. If passed, it will have significant implications for the Canadian extractive industry’s nearly $9 billion worth of mining assets throughout the Asia-Pacific region. It is expected to draw fierce opposition from the Conservative side of the House. Although the proposed law has sparked a much-needed debate on mining and human rights, it is deeply flawed.
First introduced by Liberal MP John McKay under the official title an ‘Act Respecting Corporate Accountability for the Activities of Mining, Oil and Gas Corporations in Developing Countries’, the Responsible Mining Bill demands that Canadian extractive firms be in full compliance with two key international corporate social responsibility (CSR) mechanisms: (1) the International Financial Corporation’s Policy and Performance Standards on Social & Environmental Sustainability, and (2) the Voluntary Principles on Security and Human Rights.
The Bill is generating controversy because of its attempt to legally bind Canadian extractive firms to legally non-binding international principles. But it remains unlikely that the proposed law can have any meaningful impact. Although businesses can be complicit in abuse, governments remain the only actor held accountable under international law for human rights abuses. It is also unclear how the government can enforce such a law with virtually no mechanism to provide objective monitoring.
What does this mean for Canadian business in Asia?
With Canadian mining firms controlling roughly 11% of the Asia-Pacific market, there is a real risk that Canadian industry will become less competitive. This is especially true because far less socially responsible companies from China, India, and Malaysia are competing for projects with Canadian companies out of the running because of the consequences of the proposed legislation. China alone is expected to invest billions in the region over the next decade; they recently announced a possible US $25 billion venture into the Indonesian extractive sector.
The mining industry lags in effective support for human rights and Bill C-300 offers one well-intentioned approach to an endemic problem. But if Canadian lawmakers want to make a positive difference in corporate behaviour abroad they should reconsider Bill C-300 and instead focus on how industry undermines the rule of law in developing nations through bribery. Enforcing our country’s already well-established anti-corruption laws would be a better entry point.
About the Author:
Robert Hanlon is a Postdoctoral Research Fellow at the Institute of Asian Research, The University of British Columbia. He teaches human security at Simon Fraser University and is an Associate Faculty member at Royal Roads University.
Links:
- Website of the Honorable John McKay, September 2010
- International Finance Corporation’s Principles on Social and Environmental Performance, September 2010
- The Voluntary Principles on Security and Human Rights, September 2010
- Bill C-300, Parliament of Canada, September 2010
- Website for the Prospectors and Developers Association of Canada, September 2010
Related Memos:
- See Robert Hanlon’s other Memos, Corporate Social Responsibility in Asia and the Sidelining of Corruption and Human Rights Issues (Memo #26) & Hu Jintao’s Promise to Business: Can He Deliver? (Memo #53)
- Our other Memos about Canada