Op Ed: Mining group tells government to stand on wrong end of elephant

14 June 2017

Opinion piece by Kirsten Genevose, Senior researcher at Centre for Research on Multinational Corporations (SOMO), published in The Hill Times

The Mining Association of Canada is pushing joint fact-finding as a tool to help solve disputes involving Canadian mining companies overseas. But that’s not always the best option.

The Mining Association of Canada is apparently concerned that the Canadian government may be ready to introduce a human rights ombudsperson for the extractive industries that is actually effective. Model legislation proposed by the Canadian Network on Corporate Accountability late last year would give such an ombudsperson the mandate to carry out independent investigations in addition to dispute resolution.

In an op-ed in these pages earlier this spring, MAC suggested that communities harmed through the operations of Canadian mining companies overseas would be better served by an ombudsperson restricted to just one tool: joint fact-finding. MAC held up the dispute resolution function of the compliance adviser/ombudsman (CAO) – the grievance mechanism of the World Bank’s International Finance Corporation (IFC) – as a model, claiming that joint fact-finding is a defining feature of the CAO.

Reading MAC’s flawed description of the CAO, I’m reminded of the fable of the blind men and the elephant. MAC has got ahold of the elephant’s tail, but thinks it’s a rope.

The CAO, as its name suggests, has three functions: dispute resolution, compliance investigation, and an advisory role.

Even within the CAO’s dispute resolution function, joint fact-finding is only one of several approaches that the CAO uses. Its other tools include facilitation and information sharing; dialogue and negotiation; and mediation and conciliation. Joint fact-finding by itself is a bit like a mango fork, which is extremely useful when you have a mango, but useless and somewhat dangerous when you don’t.

Where it’s appropriate, of course, it can work well. In one Nicaraguan community whose complaint I supported, joint fact-finding was used as one part of the dispute resolution process to answer a question that the CAO would not have been able to answer on its own, and for which millions of dollars (provided by the CAO, company, and the Nicaraguan National Committee of Sugar Producers) were required to research. Critically, both the community and the company agreed on that approach.

But because every complaint is unique, the CAO needs as many tools at its disposal as possible so that it can select the right one for the job. Not every complaint to the CAO results in dispute resolution, with fewer resolved through the joint fact-finding approach. In 2016, while 23 per cent of the CAO’s cases were undergoing dispute resolution, 31 per cent were subject to compliance investigations.

In cases where dispute resolution is not appropriate—where, for example, the interests of the parties do not overlap or where the complainants fear retaliation—the necessary tool is an objective, independent investigation of compliance with the relevant standards. In such cases, the subject of that investigation never participates in investigating itself.

Further, whereas MAC asserted that “experience has shown that unilateral investigative processes are ineffective in a non-judicial context,” the facts with respect to the CAO demonstrate quite the opposite.

An independent investigation into IFC’s investment in Wilmar, a palm oil company, found that IFC’s actions “were counterproductive to its mission and mandate and to its commitment to sustainable development.” In response to the report (and pressure from civil society), the World Bank Group suspended its investments in palm oil until it had revised its investment strategy for that sector.

In fact, in 2012 the CAO removed its requirement that dispute resolution be tried first before a complaint could go to compliance investigation. Since that change, the number of compliance investigations has greatly increased.

But while the CAO has a lot more to it than just a tail, there is one thing it doesn’t have.

Like Canada’s two existing mechanisms, it doesn’t have teeth.

The review of the CAO’s first 10 years (2000-2011) cited by MAC found that “imbalances of power often lay at the heart of the problem.” This is the real elephant in the room.

A CAO compliance investigation may deliver a substantiated and well-reasoned report, but the CAO doesn’t have the authority to require IFC or its client to act. So complainants have to rely on the willingness of the IFC—the same people who failed to follow the IFC’s policies—to remedy the harm. Many communities are left waiting for a remedy that never comes.

In order to begin to level the playing field, Canada needs an independent, well-resourced, robust non-judicial grievance mechanism with all of the necessary tools at its disposal, including independent investigation and a process to promote implementation of recommendations.

I’m hoping Canada will take on the whole elephant, and not just a part of the beast.

Kristen Genovese is a senior researcher at the Centre for Research on Multinational Corporations (SOMO). Based in the Netherlands, SOMO is a critical, independent, not-for-profit knowledge centre on multinationals. She specializes in supporting communities and workers who are seeking remedy through non-judicial grievance mechanisms for corporate-related human rights abuses.

The Hill Times