The legal and governance framework of the Office of the Extractive Sector Corporate Social Responsibility Counsellor ("CSR Counsellor") is taking shape. As a first step in building the mandate of the CSR Counsellor, draft rules of procedure (the "Draft Rules") for complaints against Canadian mining and oil & gas companies operating abroad have been developed and issued in anticipation of consultations taking place in the summer of 2010.
The CSR Counsellor's mandate extends to all Canadian (incorporated or head office in Canada) mining and oil & gas companies with operations outside of Canada. This role was defined by a Parliamentary Order in Council, whereby the CSR Counsellor was appointed as an advisor to the Minister of International Trade. The first appointee to the role is Marketa Evans.
The role was established in 2009 as part of the Government of Canada's CSR Strategy for the International Extractive Sector. Broadly speaking, the strategy is designed to help Canadian mining, oil & gas companies meet their social and environmental responsibilities when operating abroad.
The Draft Rules are part of the "dispute resolution mechanism" offered by the CSR Counsellor. It is essentially an "ombudsperson" role, although it appears to be more procedurally formalized. The process remains "voluntary" but as noted in the Draft Rules themselves, the process can have significant reputational impacts, particularly since public reporting is included in the process.
The Draft Rules are based upon international best practices in non-judicial grievance mechanisms and draws upon the findings of the "BASESwiki", an online consultation process developed in consultation with civil society organizations in association with the office of John Ruggie, Special Representative to the Secretary General of the United Nations on Business and Human Rights.
The Draft Rules refer to the use of international standards such as the International Finance Corporation Environmental and Social Standards as part of the standards against which behaviour will be assessed (along with the Voluntary Principles on Human Rights and Security and the Global Reporting Initiative). However, according to the draft rules, complaints may be made without direct reference to the international standards against which the complaint will be assessed. It appears as though such standards will serve as the benchmark for appropriate behaviour and therefore guide the deliberations of the Counsellor's office in the fulfillment of their mandate.
A prima facie dismissal mechanism is provided for complaints that are "frivolous, malicious, trivial or generated to gain competitive advantage". As well as, procurement disputes, matters involving allegations of crime or corruption, projects that are completed or two years old, fraud, personnel matters,, other issues that are outside of the mandate of the Counsellor, or for which legal proceedings have already been commenced.
Following intake, an "informal mediation and fact finding" will occur, which may involve information gathering, research, site visits, and the engagement of experts. At the end of this intake process, a "letter of intent" may be generated that will govern the process going forward. The process may be ended at the discretion of the Counsellor at this stage "if no path forward appears possible". Public reports will also be issued at this stage. Such reports will be shared with the Minister of Natural Resources as well as with the Minister of International Cooperation if it is relevant to that office.
Following the initial intake process, the Draft Rules contemplate a process of structured mediation to develop acceptable outcomes for the parties involved. Outcomes could include recommendations for improvement and provision of formal mediation or mediated outcomes. A monitoring framework may be implemented to "ensure parties respect the outcomes" that come from the process.
The Draft Rules contemplate a very unique process that would be among the first of its kind promulgated directly by a State, government. In this respect, it is distinct from private processes established by industries or multinational companies, or multinational processes such as those of the Organization for Economic Cooperation and Development or the World Bank.
The framework of the Draft Rules suggests that the process will be rather formalized and managed similarly to an administrative law process, analogous to a formal mediation. This feature ought to make the CSR Counsellor and the Draft Rules of particular interest to in-house legal counsel within the extractive sector.