"Mining for human rights in Latin America"

August-31-11

By Jim Creskey, Editor of Embassy Magazine, Canada's International Affairs Newpaper

In the last session of Parliament, Liberal MP John McKay introduced a bill that would have offered some regulation of Canadian mining corporations operating overseas. The bill, C-300, was defeated in its third reading but it seems it's far from dead—outside Parliament in the court of public opinion.

"C-300 was a glorious failure," Mr. McKay said last week in an interview.

What he means by a "glorious failure" is that the bill caught the imagination of lots of people—opinion leaders like George Soros, U2 rights activist Bono and numerous people in government circles from Washington to Europe.

He says he's done over 50 interviews about C-300, extraordinary for a rather obscure piece of regulatory legislation.

Mr. McKay is one of those MPs who can be found putting his ideals and his evangelical spirituality on the line when it comes to crafting legislation, even if the result doesn't win the support of his own party. (His bill might have been law today if a handful of Liberals, including former leader Michael Ignatieff, had shown up to vote.) Prophets, we know, are rarely respected in their own houses.

But the question now is, will some kind of mining regulation gain traction again when Mr. McKay and the other MPs return to the House on Sept. 19 for the start of this Conservative majority Parliament?

I wouldn't bet on it, but never say never. Governments around the world are coming to the realization that extraction industries must become a lot more transparent than they have been in the past.

In Washington, the bi-partisan Cardin-Lugar provision, from the Dodd-Frank financial reform bill, was passed into law a year ago July. The law requires energy and mining companies registered with the US Securities and Exchange Commission to report payments made to foreign governments for the extraction of oil, gas, and minerals. The law lays significant liability on companies that are not transparent about the money they pay to foreign governments by refusing to file or filing inaccurate information.

So far the SEC has moved at a snail's pace to put the provision into practice but it has promised it will do so before the year is over.

The United States Agency for International Development recently encouraged the SEC to push ahead with the broadest interpretation of the law, covering exploration, extracting and export.

A letter, published on the comment section of the SEC's website, from USAID Assistant Administrator Eric Postel to the SEC called for full disclosure of "the full breadth of oil, gas and mining activities without exemption for scope, size or ownership".

At the same time extraction industry executives and their legal council were expressing their unease about disclosing their dealings with nervously opaque foreign governments who might see transparency and disclosure of fees paid as a deal-breaker. But these are precisely those countries where transparency is most necessary so that extraction profits flow to the people instead of a select few.

In Canada, this kind of scrutiny of energy and mining industries' international activities behavior may be nearing a crossroads with the Harper government's stated priority interest in Latin America.

Latin America is on fire these days, a kind of economic eruption. The vast and rich continent, held back for ages by dull and dangerous dictatorships and equally reckless experiments in free market capitalism, is finally starting to find a third way—market economies, tempered by adequate state control, and clearly-defined anti-poverty programs that seek to be free of corruption.

Prime Minister Stephen Harper's discovery of Latin America four years ago was widely assumed to be more or less a business venture, especially for the benefit of Canadian extraction companies, despite his stated intention to make human rights and democracy Canada's first goal in the South.

In a visit to Chile in 2007 the prime minister told former Chilean president Michelle Bachelet that the Conservative government's first objective was "to strengthen and promote Canada's foundational values of freedom, democracy, human rights and the rule of law."

It might have appeared condescending, talking about human rights to a national leader who had personally suffered imprisonment and torture for her democratic values. But Dr. Bachelet (she is a pediatrician) took no noticeable offense. Four years later, Canada's commitments to human rights in Latin America are still not much more than words with little concrete expression.

But it's not too late for the PM to begin. Talk about rights and democracy in Latin America could become genuine in the one area where Canadian corporations have a major impact on the South.

Canada is the planet's number one mining country at a time when gold, silver and minerals of various kinds continue to soar in value. Latin America, it turns out, has a great deal of these precious minerals. Latin America is also the epicenter of blossoming indigenous rights activity, which also has lot to do with extraction industries. New precious metal and energy discoveries are often made on indigenous land that was previously thought to be marginal.

The result is an increasing tendency for Latin American civil society to press their governments to ask for a fairer share of a mine's profits, along with a strengthened resolve to enforce stronger environmental regulations.

The mining companies find themselves in a peculiar place. Back in Toronto they burst forth on their websites with promises of great profits, quickly arising from not-too-great cash investments—in the hope that investors will buy their stock.

But back in the hills of Latin America—where people also read websites these days—the story reads differently. Local communities are getting smarter. In some cases they want bigger shares of the profits from their unsustainable resource along with pollution controls and clean-up guarantees. In others, they simply do not want a mine dug under any circumstances.

Changes are in the air for the extraction industries and Canada finds itself right in the middle of things. The new SEC regulations alone are about to change the playing field since many Canadian companies are actually cross-listed on both US and Canadian exchanges.

This has opportunity written all over it for the Harper government. Bringing back a strong Canadian international mining regulation bill would be a great way to prove "Canada's foundational human rights" aren't just an empty talking point. Mr. Harper could do much worse than consult with Mr. McKay over a new version of his Bill C-300.

Jim Creskey, Embassy Magazine