OHS Canada Magazine

Feature

Digging in Foreign Lands

Canada’s mining industry accounts for nearly half of the world’s mining and mineral-exploration activity. But who holds Canadian operations abroad accountable when workplace-safety violations occur, and what standards are they required to live up to? Claims of Canadian companies disregarding the rights of foreign workers and changes to Canada’s corporate social responsibility strategy are throwing a spotlight on the way our extractive sector does business abroad.


Picture a mining operation in which employees work in temperatures as high as 50 degrees Celsius. The six-day work week consists of 13-hour shifts, beginning at 6 a.m. with only a two-hour break. Sometimes, employees work until midnight. Workers who are considered disobedient are threatened with imprisonment, tied up and left in the sun for an hour or ordered to roll in hot sand, while being beaten with sticks until they lose consciousness. Adverse work conditions have even led to one worker dying of dehydration.

These are the gruelling conditions that three workers allegedly endured at the Canadian-owned Bisha Mine in Eritrea before fleeing the country, according to a statement of claim in a lawsuit filed last November. The mine is operated by Vancouver-based Nevsun Resources Inc.

Eritrean plaintiffs Gize Yebeyo Araya, Kesete Tekle Fshazion and Mihretab Yemane Tekle are seeking damages for forced labour, slavery, torture, degrading treatment and crimes against humanity. The case, which is being brought under international law and British Columbia common law, could be the first to be heard in Canadian courts involving alleged labour abuses by a Canadian operation located abroad. In the past, a handful of cases have been brought against Canadian companies operating on foreign soil for human-rights violations, but no such cases have ever gone to trial.

“Litigation in Canadian courts is not easy. It is a very long process, it can be very difficult for victims and there is certainly no guarantee of a victory at the end of the day,” says Matt Eisenbrandt, a lawyer representing the plaintiffs in the Nevsun suit and a legal director at the Canadian Centre of International Justice in Vancouver. The fees associated with international cases can also be phenomenal. “There is a need for better remedies and for people to be able to have access to not just Canadian courts, but to other avenues,” he adds.

Nevsun denies all allegations. “We are confident that the allegations are unfounded,” Cliff Davis, the company’s president and chief executive officer, says in a statement issued on November 21, 2014. “Based on various company-led and third-party audits, the Bisha Mine has adhered at all times to international standards of governance, workplace conditions and health and safety. We are committed to ensuring that the Bisha Mine is managed in a safe and responsible manner that respects the interests of the local communities, workers, national governance, stakeholders and the natural environment.”

 

Justice Across Borders

According to Eisenbrandt, foreign nationals who have suffered abuses at the hands of Canadian corporations are increasingly seeking remedy through Canadian courts, as existing regulations in this country are ineffective. He points to four other active lawsuits involving the operations of Canadian companies overseas.

“One of the problems that we have in Canada currently is that there is no real regulation of the operations of Canadian companies abroad,” Eisenbrandt says. “The system set up in Canada right now and put forward by the Canadian government is one of voluntary practices and voluntary principles of the companies. And so, as a result, there just isn’t a set system to provide any kind of remedy at all to people abroad who might have been through labour abuses.”

Workplace injuries and fatalities at mining operations internationally remain issues of concern, as can be seen from information gathered by the International Council on Mining and Metals (ICMM), a London, United Kingdom-based lobbying organization for the mining and metals industry. Among the 20 ICMM member companies that provided workplace statistics, 90 fatalities were reported in 2012 and 91 in 2013. Meanwhile, 13,873 injuries were recorded in 2013, compared to 11,604 the previous year.

To date, efforts by the federal government to hold Canadian mining companies abroad accountable for labour and human-rights abuses have been in vain. In 2009, Liberal Member of Parliament John McKay proposed the Act Respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries, or Bill C-300, as a private member’s bill, which would have given the Minister of Foreign Affairs and Minister of International Trade the power to issue guidelines on corporate accountability for mining, oil or gas activities. The government could also pull financial support if companies failed to comply.

The bill never passed, but in March 2009, the Conservative government announced its corporate social responsibility (CSR) strategy for the Canadian international extractive sector. In October of that same year, the federal government appointed Marketa Evans as the first extractive sector CSR counsellor. This position was intended to help Canadian companies meet social and environmental responsibilities abroad through an advisory and dispute resolution role, based on international performance standards.

It is not immediately apparent how CSR rules relate to occupational health and safety standards from the information provided on the Office’s website. But its endorsed standards — such as the Performance Standards on Environmental and Social Sustainability from the International Finance Corporation, a global development institution based in Washington, D.C. — includes Performance Standard 2 on labour and working conditions that speaks to workplace-safety standards.

Another endorsed standard, the Guidelines for Multinational Enterprises from the Organization for Economic Co-operation and Development (OECD), has a section relating to employment and industrial relations, which states that enterprises should not discriminate against employees, should respect the rights of workers to form trade unions of their own choosing and ensure occupational safety in their operations.

Through the CSR counsellor’s dispute-resolution mechanism, workers or community members who have been negatively affected by Canadian companies abroad may submit complaints and engage in a mediation process. But critics point out that compliance with these standards is completely voluntary; either side could withdraw from the process at any point. And up until recently, there would be no repercussions for doing so.

“It has always been legislation that has driven better corporate behaviour, so requirements in Canada under the Occupational Health and Safety Acts are the major drivers. Likewise for overseas, [legislation] is the main driver,” says Toronto-based Doug Olthuis, department leader on global affairs and workplace issues for United Steelworkers and a steering committee member of the Canadian Network on Corporate Accountability.

 

Case Closed?

A good example of what critics say is wrong with the process is the complaint filed against Excellon Resources Inc. in 2010. It was brought to the Office of the CSR by workers at the company’s La Platosa Mine in Durango, Mexico, the National Union of Mine and Metal Workers of the Mexican Republic and ProDESC — a Mexican non-governmental organization that advocates for the economic, social and cultural rights of workers and community members. They claimed that workers were beaten by police after the company called authorities to investigate a theft at the mine, although the workers were ultimately not charged for the theft.

According to the complaint, around the time that one worker died in an incident at the mine, employees attempted to unionize under the national miners’ union due to health and safety concerns, which included not being provided adequate safety training, equipment and discussion of safety protocols. The complainants alleged that workers suffered harassment for their efforts to unionize.

Excellon responded at the time that there were no health and safety issues, nor a strain on labour relations, and that the national mining union was “illegal”. The company withdrew from the process, leaving the CSR counsellor with no choice but to close the case. Evans noted in her closing report that all of Excellon’s concerns had been met, the complaints against them were credible and the office did not find that the union was illegal. According to the report, the miners were unaware of the existence of a joint health and safety committee, or that they were even represented by a union when Evans visited Mexico in 2011.

Brendan Cahill, president and chief executive officer of the company in Toronto, claims that the national mining union is “corrupt”, ProDESC is “not telling the truth” and that the organization misled Evans, who did not have all the facts. The workers at the mine “are entirely supportive of our operations,” Cahill alleges.

Given the discrepancies in the accounts furnished by the two sides, it is not hard to see why Evans wanted to address what she called in her closing report the “disconnects on worker/management relationships and health and safety issues” back in 2011.

In February, United Steelworkers and MiningWatch Canada said they had obtained internal documents from Canada’s Department of Foreign Affairs, Trade and Development (DFATD), which provide evidence that the Canadian Embassy in Mexico assisted Excellon in suppressing labour protests at the mine by providing information to the company.

 

Global Outlook

In many areas of the Global South, governments do not effectively regulate workplace safety. As a result, businesses operating in these countries can easily abuse their powers.

Joe Drexler, head of strategic campaigns at the United Steelworkers and steering committee member of the Initiative for Responsible Mining Assurance in Toronto, thinks that effective government regulation is unlikely to become a reality any time soon in many parts of the world. “Part of it has to do with the particular conditions of the country, the political situation. But part of it has to do also with the ability to have the resources to effectively regulate.”

Beyond labour abuses, targeted murders of union leaders and anti-mining activists, gang rapes of community members and unlawful seizure of the lands of farmers and indigenous groups are just a few of the claims against mining operations in the Global South.

“In countries like Honduras and Guatemala, we don’t even get a chance to get to the mining workers’ violations and harms, because the broader issues of violence, repression, forced eviction, contamination are just so overwhelming,” says Grahame Russell, director at Rights Action, a Toronto-based charity that funds community-controlled development, environmental, human-rights and emergency-relief projects in Central America and Mexico.

Although health and safety violations, such as the reported $3.2 million penalty for breaching health and safety standards at Vancouver-based Goldcorp’s Cerro Negro mine in Argentina in 2013, often go unreported in Canada, Russell says he has heard many stories of miners getting sick, hurt or killed in connection with their work in Guatemala. But the workers themselves would not come out publicly in these cases, because the company would pay them off. “This is like shut-up money, and it has a bit of a threat behind it,” Russell suggests.

In some cases, the workers employed by Canadian mining companies are the ones carrying out these human-rights abuses. For example, three workers who reportedly had links to Calgary-based Blackfire Exploration Ltd., including one who was employed by the company at the time, were charged for killing an anti-mining activist in Mexico in 2009.

 

Domino Effect

However, Olthuis thinks that the communities surrounding mines and the mining employees locked in battles against each other may actually have common interests.

“In our experience in Canadian history, when you clean up the operations of a mining company in terms of environmental discharge, that has impacts both inside and outside the workplace,” he illustrates. “So when you make the environment better for the town, invariably, it improves the technology, improves the working conditions. And likewise, when you improve the working conditions inside the mine, it most often also has a beneficial impact outside.”

There is also an economic impetus for mining companies to adopt high standards of corporate social responsibility and health and safety. Protests from surrounding communities can halt projects, and a bad corporate reputation can drive down shares. “When we started our campaign [against Excellon] four years ago, the share price went from the equivalent of about seven dollars a share to below a dollar today,” Olthuis claims.

For Drexler, voluntary standards are critical in the absence of effective regulations. As a steering committee member of the Initiative for Responsible Mining Assurance, he is helping develop two standards — one on fair labour and work conditions and another on occupational health and safety that is based on the International Labour Organization’s Convention 176 on safety and health in mines. The project, which seeks to bring together mining companies, labour unions, non-governmental organizations and community groups, plans to send auditors to sites across Canada and anywhere in the world where they operate.

The Conference Board of Canada has also granted $390,000 to the United Steelworkers Humanity Fund to train joint health and safety representatives and union leaders in Peru and provide hands-on training to Peruvian mine inspectors in Canada, Olthuis reports. “The history of the trade movement in Canada has given us some important expertise that may be applicable to other countries if we can find ways to kind of promote capacity building like this,” he says.

From an industry perspective, the Mining Association of Canada (MAC) is trying to support other countries in building safer workplace cultures, says Ben Chalmers, the association’s vice-president of sustainable development in Ottawa. The president of the MAC spoke at a safety conference in Turkey last December at the request of Canadian companies operating there, he reports. There have been two major accidents at Turkish mines over the last couple of years. Neither occurred at Canadian-owned operations, although Canadian companies offered assistance, Chalmers adds.

 

Saving Face

When the federal government reviewed its CSR strategy last year, the MAC provided recommendations, many of which were incorporated into Canada’s Enhanced CSR Strategy, announced last November.

Chalmers says the new strategy sends an important message that the Canadian government will continue to promote and support its mining industry abroad, but has established expectations on how the industry should operate and conduct its business. “[It] has mechanisms in place now to address where the companies don’t meet those expectations.”

With these changes, it appears that the federal government sees a greater interest in improving its public image. “Responsible resource development with our partners at home and abroad is a priority of the Harper government to create jobs and opportunities,” Minister of International Trade Ed Fast noted in a statement when the strategy was announced.

The key aspects of the new strategy include referring disputes requiring formal mediation to the OECD’s Canadian National Contact Point (NCP), making Canada’s economic diplomacy conditional on a company’s alignment with the CSR guidelines by withdrawing support in foreign markets if a company chooses not to participate in dispute-resolution mechanisms, and increasing support and training for CSR initiatives and services at Canadian missions abroad.

In line with the government’s “economic diplomacy” approach, Nicolas Doire, media relations officer with DFATD in Ottawa, says that services provided by the federal government include issuing letters of support, advocacy efforts in foreign markets and participating in government trade missions. Canadian companies that do not embody CSR best practices and refuse to participate in dispute-resolution processes contained in the CSR Strategy will no longer benefit from economic diplomacy of this nature.

“While participation in these mechanisms remains voluntary, a decision by either party not to participate in Canada’s National Contact Point or the CSR Counsellor’s review processes will be made public,” Doire adds.

Introducing similar consequences for companies with questionable practices was a major component of Bill C-300 when it was first proposed in 2009. The government also announced the appointment of a new counsellor, Jeffrey Davidson, on March 1; the position had been empty since Evans resigned in October 2013.

 

No Teeth

So does this mean that mining companies will have to meet higher performance standards from now on? “The devil is in the details,” says Shin Imai, counsel to the Justice and Corporate Accountability Project and associate professor at Osgoode Hall Law School in Toronto. Imai adds that it is good “in theory” that Canada is indicating that it will pull support from companies not following CSR guidelines, but he wonders how such decisions will be made.

“If somebody in government is going to tell the trade mission or embassy in Mexico to withdraw support for a company, who is that individual? What kind of guidelines is that individual going to follow? What kind of investigation will there be to determine whether the company has violated these international CSR standards?” he questions.

The inclusion of the NCP in the new strategy “doesn’t change anything,” Imai says, pointing out that even before the enhanced CSR strategy, one could always make a complaint to the NCP under the OECD guidelines.

For example, in 2012, a second complaint was submitted to Canada’s OECD NCP about ongoing conflicts between workers associated with the national mining union and Excellon, following the failed attempt at resolution with the CSR counsellor. The complainants believed that the union representing the workers was beholden to the company’s management and that intimidation tactics were used against those attempting to unionize under the national miners’ union. Additionally, there were claims of bad faith from the local community from which the company had rented land. However, this complaint was passed on to the NCP in Mexico, who rejected it, and the matter is now before a Mexican agrarian tribunal.

Olthuis stresses that it is necessary that claims be fully investigated and for judgements and recommendations to be issued following those investigations. “The CSR counsellor is essentially powerless,” he says. “The main thing that he or she can do is some kind of informal mediation. But mediation in these circumstances is usually very difficult, because by that time, you have got a company with a lot of resources and a lot of economic and political power in a mediation process with either workers or communities that have very few tools in which to balance the power of the company.”

 

Safety in the Pits

Since the complaint against Excellon Resources Inc. was filed in 2010, labour allegations against the company have continued. Dante Lopez, coordinator of organizing processes at ProDESC, says that in the last four years there have been three worker deaths at the company’s La Platosa Mine in Mexico.

Most recently, in January 2014, electrical supervisor Evaristo Nova Soto, 31, and general serviceman Jorge Carillo Rivera, 25, died from electrocution while working on a pump. Following the fatalities, safety inspectors visited the mine site nearly every month, according to Brendan Cahill, president and chief executive officer of the company in Toronto. “No significant kind of major issues were identified on our end regarding the accident,” he claims.

Lopez says during one of those inspections, a worker who pointed out to the inspector that a piece of equipment needed replacing was later threatened by the manager. “It is the federal labour ministry that is responsible for carrying out these inspections, but the results are not made public, so that is a major issue,” he says from Mexico through a Spanish interpreter. Lopez suggests that this opens the door to the possibility of corruption.

Despite this perceived lack of transparency, Excellon has no apparent plans to make the results of the workplace investigation public. “I am sure the results will be available through the STPS [Mexican Secretariat of Labor and Social Welfare],” Cahill says. He adds that one of three workers injured in the 2014 incident is now on the health and safety team and the mine’s first-aid team recently won a safety competition.

“If more workers had been trained in first aid and if this team was properly organized, perhaps there could have been a timely reaction so as to save the lives of these workers. Furthermore, if the workers themselves had been properly trained, the accident could have been avoided,” Lopez counters. He adds that health and safety training is not exhaustive and workers do not know how to use the machinery properly.

A worker who operates machinery at the mine, and who did not want to be identified for fear of reprisal, confirms these claims. The Excellon worker is also concerned about the lack of life insurance. Another issue he cites is poor ventilation, explaining that workers were over-exposed to carbon monoxide on one occasion last year.

According to Lopez, workers expressed their anger following last year’s fatalities, and Excellon responded by promising life insurance to all employees. They have yet to deliver on that promise, which Cahill says he cannot do until the union has been certified. Following the two deaths in 2014, there have not been any changes to health and safety processes or infrastructure in the mine, according to Lopez and the Excellon worker. “So it is as if nothing had happened,” Lopez says.

 

Carmelle Wolfson is assistant editor of OHS CANADA.

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