Bill C-300, a private member’s bill which introduces corporate accountability for Canadian companies in the mining, oil or gas industries with activities in developing countries, was introduced in Parliament in February, 2009. On December 30, 2009, the Governor General of Canada prorogued the Second Session of the 40th Parliament of Canada, which ended the parliamentary session. Many people believe that, as a result of the prorogation, all bills before the House of Commons and on the list of active bills (the Order Paper) cease. However, private members’ bills that were listed on the Order Paper prior to prorogation are deemed to remain in their order of precedence on the Order Paper (including having been referred to standing committee) following the reopening of Parliament.1 This result could have a dramatic impact on Canadian corporations in the mining, oil and gas industries which operate in developing countries.
Bill C-300, An Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas Corporations in Developing Countries, was presented to the House of Commons on February 9, 2009, as a private members’ bill by Member of Parliament John McKay. The bill seeks to impose corporate social responsibility (CSR) obligations on Canadian corporations in the extractive sector operating in developing countries and which receive support from the Canadian government. The bill requires the federal government to issue guidelines concerning CSR standards for Canadian companies subject to the bill and would introduce a complaint process which would result in allegations of a company’s violation of the guidelines being investigated. If the complaint was upheld, there would be a number of serious consequences for the company, including: (i) having details of the investigation published in the Canada Gazette; (ii) Export Development Canada being prohibited from entering into, continuing or renewing transactions with the corporation; (iii) the Minister of Foreign Affairs and International Trade being prohibited from providing services and support to the corporation; and (iv) the Canada Pension Plan Investment Board being prohibited from investing funds in the corporation.
Prior to prorogation, Bill C-300 had passed second reading and was referred to the Standing Committee on Foreign Affairs and International Development for further study. In accordance with the House of Commons Standing Orders, once the House resumes sitting in March, 2010, Bill C-300 will be deemed to have passed first and second reading and will be returned to the Standing Committee for further review.
At the Standing Committee hearings prior to the House being prorogued, a number of witnesses attended to express their dissatisfaction with the current draft of Bill C-300, which could potentially put Canadian miners at a competitive disadvantage relative to their global peers. Export Development Canada, which provides financing, insurance and risk management to help Canadian exporters and investors, stated that the bill would significantly disadvantage Canadian companies subject to it. Based on the negative tone of many witnesses at the committee, it is unclear whether, when Parliament reconvenes, the bill will proceed in its current form or be amended to take into consideration the potential adverse impact on affected Canadian companies.
Canadian Government Approach to CSR
In 2005, the Canadian government initiated a series of roundtable discussions on CSR and the Canadian extractive industry in developing countries. As a result of the roundtables, an advisory group established by the government prepared and delivered a consensus report to the government in March 2007 calling on the government to create a comprehensive framework on CSR. The Canadian government’s response to the report was the publication, in March 2009, of the government’s CSR Strategy for the International Extractive Sector, promoting voluntary self-regulation by corporations in the extractive sector operating internationally.
As a next step, in early January of this year the federal government announced the launch of a website to help mining, oil and gas companies based in Canada and operating abroad meet their social and environmental responsibilities. The website, The Centre for Excellence for CSR, provides information on corporate social responsibility rules, laws and best practices . It is hosted by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), which developed it in partnership with the federal government and other stakeholders.