Please find below an article by Rich Westhead published in The Toronto Star published January 31, 2013 regarding Plan Canada and how it is considering abandoning a development project funded by the federal government and a Canadian mining company because of pressure from donors.


A leading Canadian charity says it is considering abandoning a controversial development project funded by the federal government and a Canadian mining company because of pressure from its donors.

Plan Canada, one of three NGOs involved in a Canadian International Development Agency project that pairs NGOs and the government with mining companies, says the mining sector’s poor image threatens to tarnish its own reputation. Some donors have complained the mining companies have enough money to fund their own social programs and that Plan shouldn’t be partnering with them.  

With great fanfare, CIDA announced the development program in September 2011. It’s designed to help mining companies improve relations with local communities and to help foster sustainable economic growth. 

The $26-million program is part of CIDA’s reorientation away from the traditional delivery of foreign aid. But donor resistance is a dealbreaker for charities. “Would we try it again? Probably not,” Rosemary McCarney, Plan’s president, said in an interview with the Toronto Star. “It’s upsetting to donors. People are mad. The reality is that working with any mining company is going to be a problem. There are going to be (employee) strikes and spills. Is it worth the headache? Probably not.”  

Canadian mining companies operating overseas are perceived as running dirty businesses, which the industry itself acknowledges. It makes headlines for leaky tailings ponds, cyanide spills, and other environmental debacles. According to a report commissioned in 2009 by the Prospectors and Developers Association of Canada, Canadian mining companies had been involved in 171 incidents since 1999 involving human rights abuses, unethical practices, or environmental degradation in a developing country.  

CIDA is giving Plan $5.6 million over five years to run an educational program in Burkina Faso. Iamgold, which operates a gold mine in the West African country, pledged another $1 million per year to the project. Plan has also committed $1 million.  

Iamgold senior vice-president of corporate relations Ben Little declined to comment, referring questions to the company’s media relations officer Laura Young, who did not return phone calls or reply to emails. The CIDA-led trilateral mining-sector projects have turned into perhaps the most divisive issue in Canada’s non-profit sector. Critics say they may cloud the judgment of NGO executives who become reliant on payouts from the private sector. Samantha Nutt, the founder of War Child, a non-profit that operates vocational training programs in countries such as Afghanistan, said that by touting the project as one that helps Canadian private investment, CIDA is losing sight of its mandate of poverty reduction.  

“It has the potential to put NGOs in a conflict of interest position,” Nutt said. “Nobody bites the hand that feeds.” On the other hand, the project’s supporters argue foreign aid throughout the world is decreasing. Major donors’ aid to developing countries fell by nearly 3 per cent in 2011, according to the Organization for Economic Co-operation and Development, and Canada, too, is cutting its aid budget.  

CIDA minister Julian Fantino said in November that funding development projects alongside extractives does not represent a partnership. “This is trying to help the needy countries . . . so that we don’t have to continually bail them out with their food issues, their education, their health issues and on it goes,” Fantino said during a conference call with reporters.   A CIDA spokesperson said, “The projects are rolling out as planned and each one is being monitored for what can be learned to apply to future programming . . . CIDA is pleased that these projects mobilized additional support from private sector companies.”  

McCarney said Plan deliberated over the partnership with Iamgold for three or four years before deciding to proceed. “The debate is whether we should stand on the sidelines and critique or try this out and see what happens . . . It could be a colossal disaster,” she said. Plan Canada’s project offers jobskills training for 6,400 children, focusing on regions of the country 500 km away from Iamgold’s mine.  

“There’s been a lot of misinformation,” McCarney said. “I think this program is good for children.” Still, the partnership has upset some donors, who have told Plan that, while they didn’t mind the organization accepting $1.12 million a year from CIDA, they were bothered by Plan accepting any sum — $250,000 a year in this case — from a mining company. “It’s really a trivial amount of money,” she said. “We generate $140 million a year and we’re talking about $250,000. We won’t compromise here. It’s not like we’re not going to say anything (critical of Iamgold) because we’ve taken that money.” McCarney said she wasn’t sure how many individual donors have quit their monthly donations to Plan. “A lot of people have given us the benefit of the doubt,” she said. “Four out of five who have called us have said, ‘OK, be careful.’ The other says sorry and cancels.” McCarney said Plan’s executive vice president of marketing Paula Roberts handled the disgruntled donors. A Plan spokesperson said Roberts wasn’t available to comment. For the moment, Plan seems to be the only non-profit contemplating ending its mining-sector tie. Chris Eaton, the chief executive of the World University Service of Canada, said he wasn’t willing to discuss his Ghana partnership, which sees WUSC receive $214,000 from Rio Tinto Alcan and $928,000 from CIDA over three years. “I have to be careful,” he said, declining to elaborate. Dave Toycen, chief executive of World Vision, said he’s been pleased with his development partnership in Peru with Barrick Gold Corp. Barrick and CIDA are each contributing $500,000 over three years. “We’ve had very few donor cancellations, fewer than 10,” Toycen said.  

It’s still early in CIDA’s partnership to determine whether its efforts can create sustainable change. One issue will be timing.  

Tony Breuer, a former executive with the Canadian Hunger Foundation, told a conference in Ottawa last year about his NGO’s partnership with gold company Placer Dome. The agreement died because Placer had unrealistic expectations about how fast the program in Papua, New Guinea, might bear fruit,

Breuer told the conference, according to three people who heard him speak.   Breuer explained his NGO had a five- to 10-year plan for development in a part of the island nation still unconnected by road to the capital Port Moresby. Placer, on the other hand, wanted results in 18 to 24 months, said Breuer, who declined to comment to the Star.  

Partnerships between mining companies and NGOs are nothing new. Care Canada, for instance, has worked alongside Barrick for years.

“I think the mining companies feel misunderstood,” said Care chief executive Kevin McCort. “They went into this partnership with expectations of good development and came out of it with bad press.”