1. Corporate Social Responsibility AND natural RESOURCE DEVELOPMENT: the Good, the Bad and the Ugly
Presented by Frank Sur, Partner, Gowling WLG (Canada) LLP
IAKL – September 21, 2019

2. Introduction
Canada has a unique system of developing natural resources compared to the rest of the world
This presentation will focus on
Canada’s approach to corporate social responsibility (CSR) in natural resource development
The “good, the bad and the ugly” case study of CSR practices

3. Overview of Corporate Social Responsibility Practices in Canada
Canadian Government defines CSR as voluntary activities that go beyond legal requirements
In November 2014, Canadian Government announced CSR Strategy “Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad” (the “2014 CSR Strategy”)
2014 CSR Strategy
Promotes Canadian values and ethical standards for all Canadian companies abroad
Primary audience is oil and gas, minerals and other natural resource extraction

4. CSR Mechanisms Tools provided by Canada in Connection with CSR
Provides diplomatic support for CSR initiatives to Canadian Companies operating abroad
Appointment of CSR Counsellors who act provide support and guidance on CSR issues
Access to Canada’s National Contact Point for dispute resolutions
Rewards companies that adhere to CSR Guidelines through diplomatic support and penalizes companies that violate CSR Guidelines by withdrawing diplomatic support
Creation of CORE, the Canadian Ombudsperson for Responsible Enterprise, tasked with investing allegations of human rights abuses involving Canadian companies operating outside the country

5. CASE STUDIES
The Good
Canada has stringent assessment and permitting procedures for natural resource extraction
Many Canadian companies have internal policies and guidelines to address social and environmental issues abroad and at home
Canadian government maintains public list of companies that responded to 2014 CSR Strategy

6. The Bad – Nevsun and Tahoe Resources
Earlier this year, Supreme Court of Canada heard arguments for whether a Canadian mining company can be sued in Canada for alleged human rights abuses abroad
Nevsun Resources
Canadian Company called Nevsun Resources operating Bisha mine in Eritrea
Refugees allege they were conscripted into mandatory military service to work for state controlled entities under contract with Nevsun to build gold, copper and zinc mine under inhumane conditions
Issue whether Canada would be proper forum to hear the case

7. The Bad – Nevsun and Tahoe Resources
Trial courts were unwilling to hear the case stating claim should be brought where alleged breaches occurred
British Columbia Supreme Court rejected Nevsun’s calls to dismiss because there was real risk the refugees would not get fair trial in Eritrea
Decision appealed to Supreme Court of Canada
Since then, 80 more plaintiffs have joined with similar allegations
The case is still being considered

8. The Bad – Nevsun and Tahoe Resources
Prior to Nevsun, decision dismissing a claim by seven Guatemalan men alleging they were injured by security forces hired by Tahoe Resources, a British Columbia company, was overturned by the British Columbia Court of Appeal citing unfairness to the plaintiffs on getting fair trial in Guatemala
Supreme Court of Canada refused to hear Tahoe Resources’ appeal
Earlier this year, American Silver (which acquired Tahoe Resources) settled with the plaintiffs and publicly apologized to victims and community

9. The Ugly – Hudbay Minerals
Eleven Guatemalan women were allegedly gang raped by security personnel hired by Hudbay Minerals at nickel mining project in El Estor
Maya Q’egchi community had opposed project from the beginning, arguing the concessions granted violated rights over ancestral land
Lawsuit has been ongoing since 2007
Forum issue resolved with Hudbay withdrawing motion to have lawsuit heard in Guatemala
Landmark case – first time Canadian court allowed foreign plaintiff to seek justice in Canada for incidents alleged to have occurred abroad

10. LESSONS Cases demonstrate fundamental flaw in 2014 CSR strategy
Even with guidelines, proper mechanism to monitor still required
Reporting, monitoring and accountability are key
Proper forum for complaints to be heard still missing
In January 2018, Canadian government announced $6.8 million over six year to create CORE (the Canadian Ombudsperson for Responsible Enterprise)