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Abstract
Canadian mining companies regularly face allegations of human rights abuses related to their global operations. This paper considers the human rights implications of responses by Canadian Socially Responsible Investment (SRI) firms to allegations of human rights abuses against mining companies whose shares they own, assess or recommend to clients. Shareholder resolutions are analysed in the light of recent opposition to implications of this corporate social responsibility vehicle by mining affected communities. The paper also explores consequences for community agency in defence of social and environmental values as a result of relationships that evolve between SRI firms and mining companies through collaborative undertakings. These issues are examined in the context of Goldcorp's Marlin mine in Guatemala. The paper concludes that a relationship Goldcorp entered into with SRI firms through a shareholder resolution led to a flawed human rights impact assessment process that was protective of the company's interests but harmed the ability of affected communities to defend their interests.
Notes
Earlier versions of this paper were presented at a meeting of the Canadian Business Ethics Research Network (CBERN) on Responsible Investment, Ethics and the Global Financial Crisis in May 2009, at the Expert Meeting on Corporate Law and Human Rights held in conjunction with the work of the Special Representative of the UN Secretary-General on Business and Human Rights, John Ruggie, in November 5–6, 2009, at CBERN's Human Rights and Business Symposium in February 2010, and at a symposium on Socially Responsible Investment and Canadian Extractive Industries hosted by the University of British Columbia's Faculty of Law, in September 2011. The author thanks the participants of these symposiums for their feedback, in particular Wes Cragg, Aaron Dhir (Citation2012), and Sara Seck, as well as colleague Jennifer Moore for her careful read of the Goldcorp case study.
The SRI group was composed of The Public Service Alliance of Canada Staff Pension Fund (an institutional investor), the Ethical Funds Company (now Northwest and Ethical Investments L.P. (NEI)) (a Socially Responsible Investment firm that sells screened mutual funds and engages the companies it holds regarding their social, environmental and governance risks); the First Swedish National Pension Fund and the Fourth Swedish National Pension Fund; Shareholder Association for Research and Education (SHARE) (an organization that consults and advises shareholders on responsible investing and corporate engagement); GES Investment Services (an organization that consults and advises shareholders on responsible investing and corporate engagement).
‘Investors Spur Goldcorp to address human rights in Guatemala’ News Release 24 April 2008. http://hria-guatemala.com/en/docs/Shareholders/Joint_Release_on_Goldcorp_080423.pdf.
‘Statement from the Public Service Alliance of Canada on the Human Rights Impact Assessment with Goldcorp’, 18 March 2009.
HRIA Steering Committee Update May 2009. http://hria-guatemala.com/en/docs/Impact%20Assessment/Steering_Committee_Update_May_2009_05_27_09.pdf.
See update on HRIA process at http://www.hria-guatemala.com/en/docs/Impact%20Assessment/Steering_Committee_Update_May_2009_05_27_09.pdf.
HRIA Implementation Initiated, 2 December 2008. http://www.hria-guatemala.com/en/docs/Steering%20Committee/Steering_Committee_Release_12_02_08.pdf.
For the purposes of this paper, ‘SRI firms’ are companies that sell investment products screened on the basis of environmental social, and governance (ESG) criteria and engage companies they hold on this basis (such as the Ethical Funds Company), as well as firms that provide research, advice, and proxy voting services (such as SHARE), and firms that provide research and advice based on ESG evaluations of companies (such as JantziSustainalytics).
The single most significant public recognition by the global mining industry of the social challenges it faces came through the 2-year international industry-led Mining Minerals and Sustainable Development process that culminated in a final report (Citation2002).
For information on the Ok Tedi case of Papua New Guinea villagers against BHP see Kirsch (Citation1997). For information on the case of the Philippine Island of Marinduque against Barrick Gold see www.diamondmccarthy.com. For information on the case of Ecuadorian villagers against Copper Mesa see www.ramirezversuscoppermesa.com.
For more information on the U.N. Norms see http://www.unhcr.ch/huridocda/huridoca.nsf/%28symbol%29?E.CN.4.Sub.2.2003.12.Rev.2.En.
Positions taken against regulation and against legal reform by mining industry associations during the National CSR Roundtables, and in response to Bill C-300, support this line of argument.
The author recognizes that corporations still have the obligation to adhere to existing laws in the jurisdictions in which they operate, but agrees with Ruggie that this obligation does not sufficiently curtail abuses in weak governance zones.
For an important recent publication that starts to address this issue see Welker (Citation2009).
This case study is by no means comprehensive. For more detailed accounts the reader is directed to source materials for this section, particularly: Specific Instance Complaint Submitted to the Canadian National Contact Point Pursuant to the OECD Guidelines for Multinational Enterprises Concerning: The Operations of Goldcorp Inc. at the Marlin Mine in the Indigenous Community of San Miguel Ixtahuacán, Guatemala, 9 December 2009, Submitted by Frente de Defensa San Miguelense (FREDEMI, The Front in Defense of San Miguel Ixtahuacán) http://www.ciel.org/Publications/FREDEMI_SpecificInstanceComplaint_December%202009.pdf (OECD Request for Review Citation2009); Goldcorp Analysis. September 2007. MiningWatch Canada. http://www.miningwatch.ca/sites/miningwatch.ca/files/Goldcorp_Analysis_Sept_2007.pdf; Breaching Indigenous Law: Canadian Mining in Guatemala. Shin Imai, Ladan Mehranvar and Jennifer Sander. 2007. Indigenous Law Journal/Volume 6/Issue 1.; Compliance Advisor Ombudsmen (‘CAO’), Assessment of a Complaint Submitted to CAO in Relation to the Marlin Mining Project in Guatemala (7 September 2005) [online]: CAO http://www.cao-ombudsman.org/pdfs/CAO-Marlin-assessment-English-7Sep05.pdf [CAO Report (Citation2005)]. See also Stevens (Citation2002).
In 2008, the United Nations signed an agreement with the Government of Guatemala to create the International Commission Against Impunity in Guatemala to assist in the investigation and prosecution of organized crime that is tied to the failure of the justice system to enforce the rule of law and protect the rights of its citizens, especially as it relates to human rights defenders (OECD Request for Review Citation2009). In June 2010 the first head of the Commission, Carlos Castresana, quit citing lack of adoption of the Commission's recommendations by the Colom administration and the appointment of an attorney general with alleged ties to organized crime.
A newly released report on the economic benefits and environmental costs of the Marlin mine concludes that ‘when juxtaposed against the long-term and uncertain environmental risk, the economic benefits of the mine to Guatemala and especially to local communities under a business-as-usual scenario are meager and short-lived’ (Zarsky and Stanley Citation2011). An important master's thesis by Pedersen (Citation2011) discusses the Marlin mine struggle in the context of an examination of Mayan perspectives of development.
The Marlin Project received a $45 million dollar International Finance Corporation (‘IFC’) loan from the World Bank in 2004.
See also a communication from Guatemalan civil society organization Colectivo Madre Selva to the President of the World Bank, 28 January 2009.
The question put out to the communities was ‘Are you in favour of mining on the territory of the Sipakapense people?’ (Imai, Mehranvar, and Sander Citation2007, 113).
See in particular ILO 169 articles 6, 15, 17, 22, 27, 28 on the right to be ‘consulted’; Article 7 on the right of indigenous peoples to ‘decide their own priorities’; Article 6 on the obligation to seek ‘agreement or consent’ from indigenous peoples; Article 16 on the obligation to seek ‘free and informed consent’ from indigenous people.
The number of people who participated in the referendum was 2502. In total, 2426 persons voted against mining, 35 persons voting for mining, 8 ballots were illegible, 1 was blank and 32 abstained (Imai Mehranvar, and Sander Citation2007, 114).
FREDEMI is a coalition of four community organizations in the municipality of San Miguel Ixtahuacan. The OECD Request for Review was prepared on behalf of FREDEMI by the Center for International Environmental Law in Washington, DC. For a copy of the complaint see http://www.ciel.org/Publications/FREDEMI_SpecificInstanceComplaint_December%202009.pdf.
On 3 May 2011 the Canadian National Contact Point (NCP) issued a final statement and closed the file, which did not progress past the Initial Assessment phase. For the NCP's final statement see http://www.miningwatch.ca/sites/miningwatch.ca/files/Canadian%20NCP%20Final%20Statement,%20May%202011.pdf.
International Labour Conference, 99th Session, Citation2010 Report of the Committee of Experts on the Application of Conventions and Recommendations (http://www.ilo.org/public/libdoc/ilo/P/09661/09661%282010-99-1A%29.pdf) p. 770.
The IACHR noted that the petitioners had raised the fact that the mine was granted a concession and mining rights without the ‘prior, complete, free and informed consultation’ of the affected communities and ‘has produced grave consequences for the life, personal integrity, environment, and property of the affected indigenous people… .’ Inter-American Commission on Human Rights, Precautionary Measures Granted by the Commission. during 2010 – PM 260-07 Communities of the Maya People (Sipakenpense and Mam) of the Sipacapa and San Miguel Ixtahuacan Municipalities in the Department of San Marcos, Guatemala (http://www.cidh.oas.org/medidas/2010.eng.htm).
A scientific study by Physicians for Human Rights (Citation2010) found elevated levels of metals in water, soil and humans in the area affected by the mine and recommended a ‘rigorous human epidemiological study’ for the populations near the mine.
For more info see http://www.miningwatch.ca/article/what-you-may-not-know-about-goldcorps-marlin-mine-guatemala and http://www.ilo.org/public/libdoc/ilo/P/09661/09661%282010-99-1A%29.pdf.
One such scientist is Robert Moran (Citation2004) who specialises in issues related to environmental assessment and impacts on water from mining.
International Cyanide Management Code; Voluntary Principles on Security and Human Rights (Goldcorp is not a member); and Global Reporting Initiative.
The members of this delegation included the following shareholders: The Ethical Funds Company; Public Service Alliance of Canada (PSAC) Staff Pension Fund; and Swedish National Pension System's Ethical Council. The delegation also included shareholder representatives and research firms: SHARE; Jantzi Research (now Jantzi Sustainalytics); GES Investment Services (Sweden) and PSAC Humanity Fund.
Ethical Funds merged with Northwest Funds to create Northwest and Ethical Investments LP (NEI) on 26 October 2009.
A copy of the shareholder resolution used to be available on the Ethical Funds web site but following merger with the NEI Investments’ web site (22 November 2010) past resolutions appear to no longer be available. The resolution is also not available on the web site of the HRIA – http://www.hria-guatemala.com/en/default.htm.
Corporations prefer not to circulate shareholder resolutions that call attention to shortcomings in their operations as these affect corporate reputation and may signal risk to investors, analysts and brokers.
Ibid.
Ibid. In 2010 this shareholder again asked the company to ‘create and adopt … a corporate policy on the right to free, prior and informed consent (FPIC) for its operations impacting indigenous communities and all communities dependent on natural resources for survival’. See Maritimes-Guatemala Breaking the Silence Network http://arsncanada.blogspot.com/2010/03/resolution-submitted-to-goldcorps.html. Following sustained protest, the resolution was circulated in 2010, albeit without the ‘whereas’ statement that provided the rationale for the resolution. The resolution won 10% of the vote.
Ibid.
For more detail regarding the concerns MiningWatch Canada raised at this meeting, see Mining Watch's subsequent letters to the SRI group of 4 December 2008, and 16 March 2009, http://www.miningwatch.ca/letter-shareholder-group-re-human-rights-impact-assessment-goldcorps-guatemala-mine.
In March 2009 the MOU was revised to better reflect the objective of the HRIA as a means to determine human rights impacts of the Marlin mine and on the basis of findings of the HRIA to provide recommendations to Goldcorp. See http://hria-guatemala.com/en/docs/Impact%20Assessment/Revision_to_RFP_objectives.pdf.
The Guatemalan representative was Manfredo Marroquin, Executive Director of Accion Ciudadana.
4 September 2008, San Miguel Ixtahuacán, San Marcos, Guatemala. Community Response to the ‘Human Rights Impact Assessment’ of Goldcorp Inc's Marlin Mine Project in San Miguel Ixtahuacan, Guatemala By ADISMI, Parroquía de San Miguel Ixtahuacán, the Alcaldía del Pueblo and the Mam Maya communities in resistance (Ágel, San José Ixcaniche, Salitre). Translation by Rosalind Gill.
The HRIA web site states that PSAC ‘did not discuss with the Steering Committee any matter regarding the Assessment prior to the PSAC making its decision’ http://www.hria-guatemala.com/en/docs/Impact%20Assessment/Steering_Committee_Update_May_2009_05_27_09.pdf. The author is of the view, based on her personal involvement in this case, that this statement is inaccurate.
For press release see http://www.miningwatch.ca/news/shareholders-announce-resolution-suspend-controversial-goldcorp-mine-guatemala. For resolution see http://www.miningwatch.ca/article/goldcorp-shareholder-resolution-asks-suspension-marlin-mine-guatemala.
The requests of the 2011 shareholder resolution were: Pursuant to Goldcorp's own HRA, the company halt all land acquisitions, exploration activities, mine expansion projects, or conversion of exploration to exploitation licenses, until it complies with international law; the Board of Directors require that Goldcorp's Human Rights Assessment be made easily available on Goldcorp's main web site; the Board of Directors announce its commitment to voluntarily implement recommendations of international human rights bodies; the company suspend operations at the Marlin mine in accordance with the recommendations of the Inter-American Commission on Human Rights. The resolution received approximately 6% of the shareholder vote.
In April 2011, Goldcorp's Board of Directors approved new Human Rights and Corporate Social Responsibility policies. For a critique of these policies by the International Human Rights Program of the Faculty of Law at the University of Toronto see (Mandane 2011) at http://www.utorontoihrp.com/index.php/resources/reports.
For Goldcorp's advise to shareholders see: http://www.goldcorp.com/_resources/financials/circular-apr-11.pdf.
See http://www.neiinvestments.com/Pages/ESGServices/EngagingCompanies/ProxyVoting.aspx. Also, e-mail from Jennifer Coulson of NEI to sio-professionals list serve of 19 May 2011.
Ibid.
Ibid.
Ibid.
Author's notes based on communications with community members affected by the Marlin mine.
A Summary of Issues Relevant to the Human Rights Impact Assessment (HRIA) of Marlin Mine, Guatemala (February 2009, p. 6), http://cule.ca/wp-content/uploads/2009/02/hitting-back-feb-09-revised-pdf.pdf.
A ‘significant’ number of votes are usually considered to be 20% or more, as it is thought that this level of shareholder support will put enough pressure on a company to assure further dialogue on the investors concerns.
Ethical Funds merged with Northwest Funds to create NEI Investments on 26 October 2009. Quotes in this paper from the Ethical Funds website were accessed before the site was taken down on 22 November 2010.
See The Ethical Funds Company, http://www.ethicalfunds.com/en/Investor/ChangingTheWorld/HowWeWork/EngagingCompanies/Pages/ShareholderActionProgram.aspx.
See 2006 shareholder resolutions on Alcan and Barrick at https://www.ethicalfunds.com/en/Investor/ChangingTheWorld/DifferencesWeMake/.
NEI has prepared a Code of Conduct for its engagement with external parties. See http://www.neiinvestments.com/NEIFiles/PDFs/5.1.2%20Accountability/3%20SI_Program_Code_of_Conduct%203.pdf. While undated, the file name would suggest it was developed in 2009, as critiques over the Goldcorp HRIA were being publicized and raised with the SRI group by, among others, the author of this paper. This Code of Conduct addresses key concerns raised with the SRI group and highlighted in this paper. However, the code is drafted in such a way that it would not require that NEI withdraw from or abandon activities that ‘may be in direct conflict’ with the ‘objectives’ of ‘those affected’ by their ‘Program Implementation,’ only that NEI ‘will ‘remain open to a dialogue to determine if or how our strategies may be reconciled’. The Code did not cause NEI to withdraw from further involvement in the HRIA.
By the end of 2008, responsible investments in Canada had grown to over CAN$609 billion (Sosa Citation2011).
NEI has endorsed FPIC as a principal to be followed by extractive companies, see http://www.neiinvestments.com/neifiles/PDFs/5.4%20Research/FPIC.pdf. This paper argues that FPIC should also apply to SRI firms.