When Bill McGuinty was vice-president of exploration at Intrepid Mines, the TSX-listed company was accused of dumping cyanide in the river near its discovery in El Salvador. Now, more than a decade later, he still questions whether an investigation by an independent third party would have been useful.

The veteran miner, who has experience dealing with local communities across Latin America, tried everything to facilitate a direct relationship to resolve their issues on his own. He tracked down the people he believed were local leaders, liaised through the church and appeared frequently on the local radio.

Despite his efforts, the dispute escalated. Eventually the El Salvadoran government clamped down on its mining policies and Intrepid Mines pulled out of the country.

McGuinty wonders whether an impartial ombudsperson may have been able to investigate the community’s claims and clear the company of some of the environmental crimes for which they stood accused — perhaps it would have been able to offer a solution that worked for both sides. But, then again he asks, would any resolution stick?

“As an explorer with limited time and finances, I’m still standing there looking at these other people across a gulf with whatever that decision was, saying: ‘how do we go forward?”

More than a decade later, Canadian civil society groups feel their push for the Canadian government to create an ombudsperson — capable of investigating such allegations and recommending remedies — is close to success.

MiningWatch Canada and the Canadian Network on Corporate Accountability, expect a reference, if not explicitly to an ombudsperson, at least to enhanced, independent investigation and dispute resolution in the upcoming budget, expected in March.

Emily Dwyer, coordinator of the Canadian Network on Corporate Accountability, believes several recent Canadian court cases could have been avoided if an ombudsman had been created when it was first being considered.

These include a lawsuit against Nevsun Resources over slave labour at a mine in Eritrea, against HudBay Minerals Inc. for allegations in Guatemala including rape and murder and against Tahoe Resources Inc. for alleged injuries suffered when security opened fire at its Escobal mine in Guatemala. 

Other Canadian companies have been dogged by conflicts over natural resources because their actions were perceived to harm the environment or local communities. In 2011, Vancouver-based Bear Creek Mining Corp.’s permit in Peru was revoked after demonstrations over pollution concerns turned violent and the government determined it failed to adequately consult local communities. Meanwhile, Gabriel Resources Ltd. spent 15 years trying to build a gold mine in Romania amid protests over environmental risks and political corruption only to see the government declare the site of historical interest in 2016. Both companies launched lawsuits against their host countries.

An ombudsperson would offer something “fundamentally different,” with the potential to resolve cases before they escalate to courts, said Dwyer.  

But the Prospectors and Developers Association of Canada is reluctant to endorse an ombudsperson without further study.

It questions whether the office is necessary given there are three resolution mechanisms already in place — the courts and two informal, voluntary offices — and whether adding another process would create anti-competitive burdens for Canadian companies.

“We’re not seeing a lot of evidence that are negative impacts out there, so the policy rationale for enhancing or changing the institutions for remedy at this point doesn’t seem to be very strong,” said Nadim Kara, senior director of policy and programs at PDAC. 

He believes further analysis of whether all three institutions together fail to address community concerns is needed before the government proceeds —if only to save taxpayers’ money.

 

Handout/ Nevsun Resources.
Handout/ Nevsun Resources.Copper Phase Development at Nevsun Resources' central Bisha Pit, April 2012.

 

The Liberal government promised the creation of an ombuds office as part of its election campaign. The office of International Trade Minister François-Philippe Champagne said it has since met with civil society groups and companies on the proposal, but a spokesperson would not confirm whether the government plans to go ahead with it.

“Our government is currently assessing Canada’s Corporate Social Responsibility (CSR) approach and identifying ways to strengthen it,” press secretary Chantal Gagnon said in an email.

The idea was first raised in a 2005 standing committee report on Canadian mining in developing countries after several high profile reports of conflict.

Canada established a corporate social responsibility counsellor for the extractive sector in 2009, in what civil society groups call a watered down and ineffective answer to the calls for an ombudsperson.

Its role was amended in 2014 (the same year Conservative MPs voted down a bill that would create an ombudsman) to facilitate informal co-operation between companies and local communities, but participation is voluntary and there are no sanctions issued if wrongdoing is determined. If a Canadian company refuses to co-operate, the government could cut off support, such as letters of support and advocacy in foreign companies.

The Canadian National Contact Point established in 2000 under the Organisation for Economic Co-operation and Development (OECD) guidelines for multinational business, under which the onus to provide evidence is on the complainant. It doesn’t rule on whether guidelines were breached or issue recommendations for remedy.

Unlike the existing mechanisms, the ombudsperson Dwyer envisions would be independent of government or business, have the power to investigate and compel parties to produce documents and publicly report the findings and make recommendations to government and companies.

“The orientation of the office is to protect human rights and correct the power imbalance between communities and companies,” she said, adding that in many cases brought before the voluntary bodies, the companies simply refuse to participate.

Such conflicts often end up in court because even when a company agrees to sit at the negotiation table, the community will decline, due either to a lack of money to proceed or trust in the process, said MiningWatch Canada’s research coordinator Catherine Coumans.

“We’re talking about really, really ugly situations, sometimes it’s rape cases or other things like that, so it’s not always realistic or reasonable to expect people who have been harmed by a company to sit down with that company to try and hammer out a deal.”

But Nadim Kara at PDAC said the question is not whether Canadian mining companies, recognized as leaders in responsible mining around the world, oppose an ombudsperson, but whether the office is an effective and necessary measure.

Even if the existing voluntary mechanisms fail to resolve disputes, communities have access to the Canadian court system, he said.

“The ombudsperson is the solution to a problem that hasn’t actually been discussed or identified,” he said.

“If we agree that an ombudsperson is the right mechanism to fill a gap, we want to make sure that the ombudsperson is designed in such a way that it has the right balance between supporting access to remedy and maintaining the competitiveness of responsible Canadian companies.”

sfreeman@postmedia.com