A landmark ruling last week by a British Columbia Supreme Court has shaken the very bedrock on which much of Canada’s extractive industry is based. In a civil lawsuit accusing Vancouver-based mining company Nevsun Resources of “cruel, inhuman and degrading treatment as well as harsh working conditions including long hours, malnutrition and forced confinement for little pay” a judge ruled that the case should be adjudicated in a Canadian court, rather than abdicating responsibility to Eritrea’s justice system where the alleged violation took place.
This precedent-setting judgment marks the first time that the Canadian judicial system has employed extraterritorial jurisdiction to hold an extractive corporation liable for human rights violations it has committed outside of Canada. In effect, the ruling communicates that Canada is beginning to re-examine its role as a haven for the world’s mining companies: 75% of which are headquartered in the country. According to a leaked report from the Prospectors and Developers Association of Canada, Canadian mining companies, like Nevsun Resources, are industry leaders for all the wrong reasons: committing human rights and environmental violations at a rate four times higher than mining companies from any other country.
To combat such crimes, Canada needs harsher legislation inclusive of punitive mechanisms to ensure the promotion and enforcement of corporate accountability abroad. Such measures must include the ability to impose a moratorium on the activities of a company accused of human rights abuses until a decision is reached by Canada’s legal system, or the possibility to bring criminal charges against corporate employees who are negligent in their duty to enforce due diligence requirements.
This legislation must also ensure that the onus is on the Canadian judiciary system to prosecute corporations guilty of human rights abuses rather than place responsibility on the victims of these crimes to begin the costly, time-consuming and often complicated process of bringing their case in front of Canada’s judicial system.
Historically mining companies have used this to their own benefit and the case involving Nevsun Resources is no exception. Nevsun was successful in getting the court to overrule the representative action claim (similar to a class-action lawsuit) brought forward by the six Eritrean plaintiffs, in effect splitting the case into six separate lawsuits which in turn increased the costs and complexity of the case. It hardly seems fair that that victims of human rights violations, in most cases from economically disadvantaged indigenous communities, are expected to shell out personal funds for their case considering who they’re up against: a legal team with the financial backing of an entire gold mining company.
Critics of enacting stronger corporate social responsibility guidelines include Canada’s former Trade Minister Peter Van Loan, who following the defeat of Bill C-300, an act which intended to promote responsible mining practices abroad, stated that the bill would have achieved “nothing except (to) put world class Canadian companies at a competitive disadvantage.” The logical reasoning of this argument inevitably implies that the competitive advantage of extractive companies based in Canada is predicated solely on the absence of strong corporate social responsibility guidelines and this is the truth. In other words, the benefits of being located in Canada is that corporations who commit, are complicit in or who ignore human rights abuses can rest easy knowing that Canada is the best place to be based in order to evade prosecution, if and when, such crimes occur.
With that said, it is imperative that Canada enacts stronger corporate accountability enforcement mechanisms within Canada’s extractive sector. The risks of not doing so are extensive and wide-ranging. Most importantly they include reputational risks to the Canadian government as more and more organizations such as the United Nation’s Human Rights Council, Amnesty International and Human Rights Watch publicly criticize the lack of action on the part of the Canadian government in terms of dealing with human rights violations committed by Canada’s extractive sector.
On the other hand, the adoption of legislation aimed at enforcing due diligence by these corporations has numerous benefits. By enforcing corporate social responsibility within Canadian mining industries, the likelihood of advancing sustainable socio-economic development in communities neighboring mining operations is increased greatly as corporations, out of fear of being prosecuted back in Canada, have a greater incentive to comply with international environmental and human rights standards.
Canadian mining corporations have, for far too long, been able to act with impunity: using distance as a safeguard for gross violations of human rights. The establishment of legislation that one, places the burden on the Canadian government to enforce corporate accountability abroad and prosecute companies who fail to comply and two, is inclusive of punitive mechanism offers Canada an opportunity to transform itself from a country widely regarded as a safe haven for much of the world’s extractive sector to one where Canadian corporations respect human, environmental and labor standards, nationally as well as internationally. The risk of not enacting such legislation, is one the Canadian government can’t afford to take.