Commentary: The shifting liability landscape for Canadian miners abroad – by Young Park and Rick Moscone (Northern Miner – April 29, 2015)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Two recent lawsuits brought in British Columbia by foreign plaintiffs against two Canadian mining companies for alleged human rights abuses abroad have raised the stakes for mining projects in foreign jurisdictions.

On June 18, 2014, seven Guatemalan men sued Tahoe Resources Inc. alleging that private security forces hired by Tahoe’s Guatemalan subsidiary opened fire on them in San Rafael Los Flores. On Nov. 20, 2014, three Eritrean refugees sued Nevsun Resources Ltd. Alleging they were forced to work at a mine in Eritrea under threat of torture by Eritrea’s ruling party.

These lawsuits appear to be inspired by the decision of the Ontario Superior Court of Justice on July 22, 2013 in Choc v Hudbay Minerals Inc, the first case against a Canadian mining company over alleged human rights abuse abroad that was permitted to go to trial in Canada. In light of this recent litigation, it may be worthwhile for Canadian mining companies to revisit Hudbay, to understand how plaintiffs are now using Hudbay to frame their claims and to consider a risk management plan to mitigate the risks raised by Hudbay and the litigation it has spawned.

Three related actions were brought by thirteen Guatemalan Mayan Q’eqchi’ plaintiffs against Hudbay in Ontario for human rights abuses allegedly committed by private security forces working for Hudbay’s Guatemalan subsidiary, CGN. The events arose in the context of a land dispute between Hudbay, which at the relevant time owned a proposed open-pit copper mine near El Estor, Guatemala, and indigenous Mayan Q’eqchi’ farmers, who claimed that part of the mining property fell on their ancestral lands.

Hudbay brought a procedural motion to strike the claims as disclosing no reasonable cause of action. Hudbay argued that it could not be liable to the plaintiffs in negligence as there is no recognized duty of care owed by a parent to ensure that its foreign subsidiary does not harm the plaintiffs. This argument was rejected.

The test on this procedural motion was whether it was plain and obvious that the plaintiffs’ allegations, if accepted as true, would fail. The court ruled that it was not “plain and obvious that no duty of care can be recognized”.

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