With Parliament back in session, Bill C-300 is back in Committee hearings before being returned to the House of Commons for third reading. Unlike Government Bills, which ceased to exist when the Government prorogued Parliament in December, Bill C-300 survived because it was a Private Members’ Bill.
Bill C-300 is the federal Bill that seeks to establish prescriptive CSR (corporate social responsibility) guidelines that would be binding on Canadian mining companies operating in developing countries. It would punish companies found to be operating “inconsistently” with these CSR guidelines by removing any political or financial support provided by the federal Departments of Foreign Affairs and International Trade, Economic Development Canada, and the Canadian Pension Plan Investment Board.
Few Bills have received as much public debate and media coverage in recent years. Environmental groups have argued that media coverage in recent years alleging human rights abuses and poor environmental practices by Canadian companies operating in poorer countries make Bill C-300 necessary. The arguments against Bill C-300 are numerous, including: (a) Canadian mining companies are good corporate actors abroad, so Bill C-300 is unnecessary; (b) applying Canadian environmental and human rights standards in developing countries violates international law (which recognizes the exclusive jurisdiction of every country to regulate within its own borders); and (c) making Canadian companies adhere to standards that are more stringent than those established by the host country would put Canadian mining companies at a competitive disadvantage.
Apart from these critiques, there has been little consideration of how Bill C-300 would work in practice. It is here that Bill C-300 has some real problems, largely because of the imprecise nature of the CSR guidelines and legal processes established by Bill C-300:
- First, the Bill allows for any person (Canadian or foreign) to file a complaint alleging that a Canadian company’s conduct is inconsistent with the CSR guidelines. So there is no “barrier to entry” to triggering the Canadian complaint and investigation process.
- Second, the CSR guidelines to be developed by Bill C-300 will most certainly be imprecise (i.e., qualitative in nature) as opposed to measurable, quantitative standards. CSR standards do not typically take the form of quantitative standards, because such standards need to be adapted for different circumstances.
- Third, the Ministers evaluating the complaints are directed to determine whether the conduct being complained of is “inconsistent” with the CSR guidelines. There is no distinction between minor, technical inconsistencies (despite diligence and best efforts on the part of the company) and intentional misconduct with severe consequences.
- Fourth, there is a “one size fits all” penalty in Bill C-300 – termination of Canadian government support (financial or otherwise).
None of these four factors on their own would render a piece of legislation ineffective. However, taken together, they will undoubtedly establish an administrative structure that will be characterized by numerous complaints, a poorly understood and discretionary decision-making process, and a single severe form of penalty.
While Governments like to boast about having significant statutory penalties when it comes to regulating corporate conduct, they rarely if ever impose stringent penalties. Modern day environmental regulation is characterized by a practice of governments working with companies (rather than levying huge fines) to get them to comply. A Canadian Government would find it very difficult to pull its support for a Canadian mining company on the basis of an “inconsistency” with CSR guidelines, except in the most egregious circumstances. If that’s the case, Bill C-300 will operate to no one’s benefit. The public and environmental groups will become disillusioned with a process that never condemns corporate conduct, and Canadian mining companies will spend significant time and money dealing with a paper tiger process.