Monthly Archives: January 2016

Risks and challenges around human rights and conflict

Multinationals in conflict-affected areas

This paper highlights some of the risks and challenges associated with multinational corporations operating in fragile and conflict-affected areas, including human rights abuses; the lack of corporate accountability in such situations; and the risk of sparking or intensifying conflict. The paper aims to contribute to ongoing discussions about the harmful impacts of multinational corporations in fragile environments, and on how the private sector can contribute to peaceful economic development instead of conflict. To this end, a number of recommendations to improve corporate accountability and decrease the risk of business-related human rights violations in fragile and conflict-affected areas are presented.

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Risks and challenges around human rights and conflict.pdf (Size 577Kb)

Canada: Time to Axe the Conservative Government’s Ineffective CSR Counsellor Office

News Release
22 January 2016, 3.34pm
EST

(Ottawa) Civil society groups are calling on the new Liberal federal government to use the upcoming budget to do away with the ineffective and embarrassing Office of the Extractive Sector Corporate Social Responsibility (CSR) Counsellor. The Office was created in 2009 by the Conservative government of the day in response to growing public pressure to make Canadian mining and extractive sector companies accountable for serious and extensive human rights abuses associated with their international operations.

The CSR Counsellor was supposed to mediate solutions for people claiming they had been harmed by the activities of Canadian mining companies operating overseas. The office did not manage to mediate a single resolution in any of the six cases brought before it. Then in October, 2013, CSR Counsellor Marketa Evans quietly walked away from the job, leaving the Office without a Counsellor for 16 months. In 2014 alone, the inactive and Counsellor-less office cost Canadian taxpayers $181,600.

In March, 2015, the Harper government appointed a new CSR Counsellor, mining professor and former mining company executive Jeffrey Davidson, but Davidson has yet to receive an official Order in Council mandate.

As the new government sets out to review various Conservative institutions and appointments, critics say this one deserves to simply be closed to make way for a more effective approach to corporate accountability.

“The Office of the CSR Counsellor was always a deeply flawed response to calls on the Government of Canada to create an effective Ombudsman’s office that would be able to address the very serious complaints coming from people harmed by the operations of Canadian mining companies overseas,” says Catherine Coumans of MiningWatch Canada.

Coumans does not put the blame on Davidson, who has had no opportunity to prove his abilities, but says the institution itself has proven unable to field the complaints. “Rather than provide Davidson with a mandate to keep this ineffective office open, it is time to close this office down and put the resources into the creation of an effective Ombudsman’s office,” Coumans adds.

“The upcoming federal budget provides the ideal opportunity to cut the Counsellor’s office and set that money aside for a real Ombudsman, one with real powers and responsibilities.”

MiningWatch Canada supports the Canadian Network on Corporate Accountability’s call for the creation of such an extractives Ombudsman office, as well as for access to Canadian courts for people alleging harm by Canadian companies operating overseas.

For more information: Catherine Coumans, catherine@miningwatch.ca, (613) 569-3439

Background:

The Office of the CSR Counsellor was the Harper government’s response to one of the key recommendations in the final report (2007) of national consultations called the National Roundtables on CSR and the Canadian Extractive Industry in Developing Countries (CSR Roundtables), held in 2006. The recommendation, which called for the creation of a mining Ombudsman, was based on consensus between civil society and industry members of an Advisory Group to the CSR Roundtables. The recommendation called for an office that can receive complaints from people affected by the operations of Canadian extractive companies operating overseas; is empowered to investigate these complaints and report publicly on the findings of investigations; and, if necessary, may recommend that the Government of Canada withhold financial and political support to the company in question.

In 2009, Liberal Member of Parliament John McKay put forward private member’s bill C-300, which was eventually voted down in October, 2010. It would have created a more effective complaints mechanism, excluding companies from receiving political and financial support from the government if they were found to have violated international human rights standards. Liberal MPs also voted unanimously – along with NDP MPs – in favour of a 2014 private member’s bill by NDP MP Ève Péclet (C-584) that sought to create an Ombudsman office to investigate complaints regarding the activities of Canada’s extractive sector companies operating overseas.

See also: MiningWatch Canada, 2014. Submission to the Government of Canada’s Review of Corporate Social Responsibility Strategy for the Canadian Extractive Sector.

Related

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News Tahoe Resources’ Former Security Manager Turns Fugitive 01.12.2015

News No Full Disclosure for New Mining Transparency Act in Quebec 22.10.2015

News Barrick Gold urged to come clean on rape victims’ compensation 29.09.2015

News Barrick Settlement on Rapes and Killings in Papua New Guinea Proof that Victims Need Independent Legal Counsel 03.04.2015

SOURCE: http://miningwatch.ca/news/2016/1/22/time-axe-conservative-government-s-ineffective-csr-counsellor-office

Ethiopia: Growth By Extraction

18th January 2016

ANALYSIS

Throughout the price boom of the 2000s, extractive resources (mining, oil and gas) were seen as assets that African governments needed to leverage more effectively for development outcomes. This view has persisted even through the current price slump that began in 2011. Often, however, this concern is seen as a national issue – mineral assets are held by governments on behalf of their citizens.

Is there a regional dimension to exploitation of extractive resources? What is the role of regional economic blocs in the extractive industries, and what are the rewards for integration and coordination in the sector?

I would argue that there is plenty of room for regional coordination, and Regional Economic Communities (RECs) are beginning to notice.

A first strand of integration at the regional level is taking place in the policy and legislative space. One approach is to work towards harmonising legislation to regulate most aspects of natural resource exploitation. The Economic Community of West Africa (ECOWAS) has recently embarked on a process that should culminate in the adoption of a single mining code across the region. In southern Africa, the Southern Africa Development Community (SADC), is taking more gradual steps towards legal harmonisation in the mining sector by adopting common standards (but not necessarily common legislation) to govern the sector.

Should African countries strive for uniform legislation, or for a looser model of common principles and standards?

The rationale for regulatory harmonisation rests on the importance of a transparent and level playing field across countries – a level playing field that will help avoid a regulatory “race to the bottom” and that will encourage cross-border investment. The more uniform the legislative framework, up to the extreme spectrum of a sole mining code, the lower the cross-border costs of doing business. But there is a case for maintaining flexibility while agreeing on common or minimum standards: some of the regulatory differences reflect diversity across countries in perceived risk, geologic endowment and infrastructure development.

In other words, when legal frameworks do not capture country and project level differences, it becomes necessary to adapt them through ad-hoc negotiations of extraction leases and contracts. But project-level negotiations lead to less harmonisation, because some legal provisions are modified in an ad-hoc manner in bilateral deals between governments and companies.

Another important dimension is to use regional integration as an enabler for natural resources to create a platform for industrialisation. The success of extractive policies is seen as the ability of countries to climb the value chain of the extractive industries by increasing their “local content”, either by developing a local industry supplying the extraction process (upstream or side-stream linkages), or by encouraging more processing of resources to be done locally (beneficiation). The challenge in developing local content in the extractive industry is one of building enough technological capacity, economies of scale and skills to enter what are very complex supply chains. So far, although total spending on goods, services, and equipment constitutes a significant share of petroleum and mining project costs, only limited local supply chains have developed in petroleum and mineral-rich developing countries.

What is the role of regional economic communities (RECs) here?

RECs, particularly in regions where there are extractive industries in specific commodities in two or more countries, offer an opportunity to provide larger markets to local suppliers, allowing them to successfully anchor themselves to the extractive industries. Crucially, a definition of local content at the REC level is needed.

Under such an arrangement, services from a certain REC supplier would count against local content targets (whether in full or by a scaling factor) in any member of the same REC. This would be a significant step to promote regional “champions”. Ultimately, this coordinated approach would benefit regional economies by allowing more scale to value creation.

However, it would require policymakers to undertake a significant shift in approach – away from “local-local” and “national” views of local content, which are sometimes seen as expedient to provide quick, visible benefits to citizens to justify extraction of natural resources, rather than as a long term strategy for industrialisation. To make this step, policymakers need to be given evidence-based arguments, and crucially, incentives, which lie in reciprocity. This is why a regional local content policy cannot be undertaken bilaterally: it needs RECs to act as brokers and leaders for this agenda.

RECs have also an important role in ensuring that local content provisions are consistent with international trade commitments. By restricting the choice of suppliers to the extractive industries, local content provisions could be open to legal challenge under trade and bilateral investment frameworks. However, developing countries often can benefit from waivers to trade rules when linked to development goals, and when a strong case is made.

There is a clear opportunity for African RECs to play a role in promoting the interests of their member states in trade discussions, to increase individual states’ collective bargaining power and ensure that trade agreements support the development objectives underpinned in local content policies.

The extractive sector also has significant potential to generate skills transfers. Africa suffers from relatively low skills levels, so, when not readily available at country level, it is important to have a pool of competencies that can move across borders to fill the gap. Here, RECs have a significant role promoting the harmonisation of training curricula and of certification across the region; estimating timing and nature of demand for skills at a regional level; and facilitating labour mobility. Investment in research and development (R&D) can also be pooled, with the creation of regional research and technology centres. An over-arching REC-level education and training protocol would be useful to move this agenda forward.

Infrastructure also has a strong regional dimension and significant development gains if well harnessed. In a number of African resource-rich countries, the infrastructure built by resource companies constitutes a significant share of total infrastructure investment. This infrastructure can be built and designed for “dual use” – that is, allowing access to users other than the extractive companies. Typically, agriculture can greatly benefit from dual use infrastructures anchored to the extractive sector.

In general, regional integration is an essential element for Africa to fully leverage extractive resources as a platform for development, as comprehensively argued by the African Mining Vision (AMV). The link can also go the other way: extractive resources can in themselves be a powerful driver of integration, by creating common interests within the continent and offering the rewards to policymakers to overcome narrow national concerns.

Pietro Toigo a Macroeconomist At the African Natural Resource Center (ANRC).

SOURCE: http://allafrica.com/stories/201601191373.html

Romanian village blocks Canadian firm from mining for gold

Rosia Montana declared site of historical interest, granting it protection from Gabriel Resources, which has tried for 15 years to extract 300 tonnes of gold

AFP in Bucharest
Thursday 14, January 2016, 17.25 GMT

A Romanian village where a Canadian firm is planning a controversial open-cast goldmine has been declared a site of historical interest, granting it protection from mining activity.

“Rosia Montana village has been designated a place of historic site of national interest which has a radius of two kilometres [just over a mile],” said Adrian Balteanu, the Romanian culture ministry’s adviser on cultural heritage.

“At such a site, all mining activity is prohibited,” he said on Thursday.

The step is a new blow for Canada’s Gabriel Resources which has been trying for 15 years to get an environment ministry permit to extract 300 tonnes of gold from the picturesque village in a project it claims would create hundreds of jobs and boost Romania’s economy.

But experts say the project, which would use thousands of tonnes of cyanide, would pose a pollution risk, level four mountains in a historic area of western Transylvania and would also damage Roman-era mining shafts.

The plans have sparked widespread anger, bringing tens of thousands of people on to the streets in a scale of protest not seen in Romania since the 1990s.

Activists hailed the decision to declare the village a protected area.

“The culture ministry has finally decided to protect our cultural heritage,” said history professor Ioan Piso, one of the main opponents of the project.

“If this mine opens, Romania would lose both a historic monument unique for the gold it contains while the site would have turned into a moonscape,” he said.

“This is an important step, we must now make sure this classification is respected,” said Eugen David, head of the Alburnus Maior Association which has been fighting the project for years.

Gabriel Resources, which holds an 80% stake in the Rosia Montana Gold Corporation, declined to comment on the move.

Last July, the company filed a request for international arbitration to obtain compensation from Bucharest over the delays to the project.

Initially in favour of the mine, Romania’s former leftwing government abruptly changed its position in 2013 following a wave of unprecedented protest across the country.

SOURCE:
http://www.theguardian.com/world/2016/jan/14/romanian-village-blocks-canadian-firm-mining-for-gold

Canadian mining company suspends work at Greek site, lays off 600 after spat with government

By DEREK GATOPOULOS, Associated Press

ATHENS, Greece (AP) — Canadian mining company Eldorado Gold said Tuesday it is suspending work at a site in Greece and laying off 600 workers following protests by local residents and a spat with the country’s leftwing government.

The Vancouver, Canada-based company said it was halting operations at a gold mine at Skouries, on the Halkidiki peninsula, one of four major Greek sites where the company is involved.

CEO Paul Wright said a further 500 jobs were also likely to be cut later in the year.

Wright accused the government of holding up permits and using the mining project as a “political toy” but insisted the company had no plans to pull out of Greece and hoped to restart work at Skouries at a later date.

“It’s not dissimilar to building a kitchen and putting in the floor and furniture but not being allowed to put in a wall and roof over it. It’s a bit silly,” Wright told a news conference in Athens.

Wright said his company had invested $700 million (645 million euros) and created 2,000 jobs, but added that it was willing to negotiate royalty payments for gold being extracted that were not included in the original agreements made with the Greek state.

Elected a year ago, the leftwing government has expressed support for protest groups near Skouries who oppose the project on environmental grounds and fear it will hurt tourism. The protests included road blockades, violent confrontations with police and a 2013 arson attack on Eldorado facilities at Skouries.

Environment Minister Panos Skoutletis said Wright had made the announcement after rescheduling meetings with the government for later in the week.

“The Canadian company is trying to change facts on the ground — that is provocative behavior,” he said.

“The government will not be blackmailed. The decisions it takes will be based on public interest, environmental protection, and will be taken after studying all the facts.”

Later Tuesday, the environment ministry said it was imposing a total 1.7 million euros ($1.84 million) in fines on Hellas Gold, a Greek subsidiary of the company, for a total 21 alleged breaches of environmental safety regulations.

It said the alleged breaches were committed between 2012 and mid-2014.

SOURCE:
http://www.usnews.com/news/business/articles/2016-01-12/canada-mining-company-halts-some-works-cuts-jobs-in-greece