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You might think that embracing Corporate Social Responsibility is a matter of public relations, but there are practical legal reasons for mining companies to have a CSR strategy in place.
Delivering on a promised CSR strategy may provide a defence to one of the growing number of lawsuits in which foreign plaintiffs are targeting Canadian parent companies for the actions of their overseas subsidiaries or contractors. But there’s also a fresh development to consider. The Canadian government says that if companies don’t play by the standards outlined in a November CSR strategy, they could lose the diplomatic support of the federal government.
“CSR doesn’t get the credit it deserves,” says Michael Torrance, a lawyer with Norton Rose Fulbright Canada LLP in Toronto. “Reputation is an asset.”
On Nov. 14, Minister of International Trade Ed Fast unveiled an “enhanced” strategy to advance the use of CSR by Canadian mining and energy companies. “Enhanced” refers to some changes that result from a five-year review of an earlier strategy released in 2009.
These changes are pretty serious. Where some critics might have thought the 2009 policy was too light, the new strategy takes a carrot-and-stick approach. The government is offering companies support and training in CSR, but it’s also warning companies that access to its “economic diplomacy” and other forms of federal support are conditional on their participation in the strategy.
“It hits many of the right buttons that were not covered in the past,” says Kevin O’Callaghan, co-chair of the CSR practice group at Fasken Martineau DuMoulin LLP.
At first blush, the new strategy sounds a lot like Bill C-300, a private member’s bill introduced to Parliament in 2009 that didn’t become law. The bill would have denied Export Development Canada and Canada Pension Plan funding to companies found to be “non-compliant” with CSR standards.
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