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Mining: High stakes for Canada-Mexico relations

Christine Fréchette and Daviken Studnicki-Gizbert

An opponent to the Blackfire Exploration mining project in Chiapas, Mexico was assassinated on Nov. 27, 2009. The activist had requested police protection after he claimed he had received threats from individuals linked to the Canadian mining company. Though no one has suggested that the company was involved in the assassination, it nonetheless triggered a general outcry and several demonstrations in front of the Canadian Embassy in Mexico, thus casting a shadow over Governor General Michaëlle Jean’s official visit to the country in December.

Canada’s image took a hit, as the country is usually perceived as an example with respect to human rights and a champion of relatively fair or acceptable business practices. In fact, Mexicans were shocked as events unfolded, especially since they were related to the exploitation of their natural resources —a true symbol of national independence— by foreign interests.

The Canadian Embassy found itself in a very uncomfortable position since, as expected, it must preserve Canada’s image, reflect Canadian values and provide Canadian companies the support they need. However, these objectives conflict in cases where a Canadian company is accused of adopting unethical conduct. One cannot support a company that violates human rights, for instance, while at the same time claiming to reflect Canadian values. Furthermore, Canada’s reliance on national authorities that are often ineffective amounts to an abdication of any responsibility for the entire matter.

The stakes are high given that the mining sector in Mexico is as much Canadian as it is Mexican. In fact, Canadian mining companies are heavily invested in Mexico as there are no less than 519 Canadian mining projects underway in the country, or three quarters of all the mining projects, according to data collated by the McGill Research Group for the Investigation of Canadian Mining in Latin America (MICLA).

The conflicts that have recently surfaced between Canadian mining companies and local communities in Mexico have also raised questions regarding the role of the Canadian government in such situations.
It is important to note that mining projects in Mexico are usually developed in populated areas, often in indigenous communities where residents live off of farming or depend on natural resources. As a result, the risk of friction with local communities is high.

However, it is incorrect to infer that many Canadian mining projects are a source of conflict. According to MICLA, only 13 of the 519 Canadian-led projects would have generated open conflicts in recent years, though their impact has tarnished the entire industry. In most cases, conflict was mitigated through a negotiated solution. However, in some cases, people resorted to violence as an immediate answer, alongside blockades and acts of aggression.

Last January, the Canadian government responded to the events of last fall by launching a website that offered Canadian mining companies advice and information to help them adopt ethical business practices. Though the objective may be commendable, it must be noted that this medium is unlikely to lead them to alter their behaviour.

For its part, Foreign Affairs and International Trade Canada plans to hold a half-day workshop this February to present indigenous representatives and other communities in Mexico with a ‘toolbox’ highlighting the mining practices of Canadian companies, Canada’s expectations with respect to corporate social responsibility (CSR) and the conflict resolution mechanisms proposed by the government and judicial system of Mexico.

Yet, only measures designed to put pressure on mining companies will force them to comply with ethical standards of practice. Hence the need for the development of a mechanism that will allow Canadian authorities to determine whether to maintain, suspend or withdraw political or financial assistance for a company that violates internationally-recognized CSR standards. This mechanism is all the more needed since foreign activities of Canadian mining entities often occur in countries with inadequate judicial systems.

Bill C-300, which the House of Commons Standing Committee on Foreign Affairs and International Trade has already examined, is a step in the right direction if adopted. According to MiningWatch Canada, it will impose internationally-recognized standards governing human rights, labour and environmental rights; institute a mechanism that will allow Canadians and affected communities to sue companies that violate these standards; and impose sanctions (loss of government political and financial assistance) on companies found guilty of such violations.

Naturally, the prorogation of Parliament will delay progress on this bill which, if ever passed in the House of Commons, would most probably die in the Senate. Whatever happens to Bill C-300, one thing is clear: the enforcement of CSR standards on mining companies operating in foreign countries could have the same impact as environmental consciousness discussions had a few years ago in business circles. In other words, companies that lead this trend may stand out as good corporate citizens and acquire much sought-after, value-added expertise.

Therefore, Canada has political and economic interest in adopting an effective and constructive approach to CSR when dealing with mining companies operating abroad. Such an approach would not only help deserving companies maintain government support, it would also make Canadian investments more attractive to foreign countries.blue square

Christine Fréchette is the Coordinator of the Chair in Contemporary Mexico Studies at the Université de Montréal. Daviken Studnicki-Gizbert is the coordinator of the McGill Research Group for the Investigation of Canadian Mining in Latin America (MICLA) and an associate professor at the Department of History at McGill University.

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