Academic journal article McGill Journal of Sustainable Development Law

An Act Respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries (Bill C-300): Anatomy of a Failed Initiative

Academic journal article McGill Journal of Sustainable Development Law

An Act Respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries (Bill C-300): Anatomy of a Failed Initiative

Article excerpt

An Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries (Bill C-300) was not doomed to failure, but by galvanizing corporate resistance its adoption became a David vs. Goliath affair, and the result was not biblical. The purpose of this Note is to recount the failure of this legislative initiative, which had a modest but significant objective. Bill C-300 aimed to render Canadian extractive sector corporations operating in developing countries and benefiting from the financial support of the Canadian federal government, subject to withdrawal of funding if their environmental and human rights performance abroad violated international standards. The proposed legislation was a Private Member's bill put forward by Liberal MP John McKay. It was defeated by 140 to 134 because although it had the support in principle of three parties with a majority of votes--the Liberals, NDP and Bloc Quebecois--twenty-five members of those parties, including Liberal leader Michael Ignatieff, chose not to attend the vote after a monumental business lobbying effort. (1)

The Note is divided into three parts. The first part gives some background to Bill C-300. The second part discusses the arguments that were successful in defeating the legislation. The third part reflects on why it is so difficult to put accountability mechanisms into place for international corporate activity.

1. BACKGROUND

Bill C-300 was introduced following a period in which the Canadian extractive sector came under considerable scrutiny with regard to how it had been addressing the environmental and social impacts of its activities in developing countries. (2) In June 2005 the Standing Committee on Foreign Affairs and International Trade (SCFAIT) issued a report entitled Mining in Developing Countries and Corporate Social Responsibility, calling on the federal government to institute measures to ensure that Canadian mining companies conduct their operations abroad in a socially and environmentally responsible manner. (3) The Government of Canada responded the following year by organizing a series of "National Roundtables on Corporate Social Responsibility and the Canadian Extractive Sector in Developing Countries" (the "National Roundtables") in order to examine measures that could be taken to position Canadian extractive sector companies operating in developing countries to meet or exceed leading international corporate social responsibility (CSR) standards and best practices. (4)

Roundtables were held in Vancouver, Toronto, Calgary, and Montreal in the summer and fall of 2006. An Advisory Group, consisting of representatives from the extractive industry, civil society, academics, and labour groups, was established to report on the Roundtables and draft recommendations for adoption by the Government of Canada. The Advisory Group submitted its final report to the Canadian Government in March 2007. (5) The central recommendation in the Advisory Group's report concerned the development of a "Canadian CSR Framework" consisting of six major components:

* Canadian CSR Standards, for initial application, based on existing international standards that are supported by ongoing multi-stakeholder and multilateral dialogue.

* CSR reporting obligations based on the Global Reporting Initiative, or its equivalent during an initial phase-in period, at a level that reflects the size of the operation. The Global Reporting Initiative relies on an international multi-stakeholder process for its development and continued improvement and applies universally applicable reporting principles, guidance and indicators for organizations of all sizes and sectors.

* An independent ombudsman office to provide advisory services, fact finding and reporting regarding complaints with respect to the operations of Canadian extractive companies in developing countries.

* A tripartite Compliance Review Committee to determine the nature and degree of company non-compliance with the Canadian CSR Standards, based upon findings of the ombudsman with respect to complaints, and to make recommendations regarding appropriate responses in such cases. …

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