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Second Case Before Canada's CSR Counsellor is Closed, Recommending Existing On-The-Ground Dispute Resolution

Fasken
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Corporate Social Responsibility Bulletin

The Office of the Extractive Sector Corporate Social Responsibility (CSR) Counsellor has now released the "Closing Report Request for Review File Number 2011-02-MAU" (the "Report") dated February 2012. This ends the second case, or Request, that has been brought before the CSR Counsellor. The Request was brought regarding First Quantum Minerals Ltd.'s Guelb Moghrein copper-gold mine in Mauritania.

In this case, the CSR Counsellor ended the process herself, stating that incomplete information "at least in part … lay at the root of the request" and finding that the company had a locally available dispute resolution process that had not yet been accessed. The Report concluded that "[t]he initial place to begin a resolution was through a closer-to-the-ground process."

The CSR Counsellor was complimentary of First Quantum's approach to the Request, stating that "[o]ver the course of this request for review, the company has consistently demonstrated its good faith efforts to deal with the issues and to share information."

Kevin O'Callaghan and Claudia Feldkamp, co-Chairs of Fasken Martineau's International CSR Law Practice Group, represented First Quantum Minerals regarding this Request.

Background on the CSR Counsellor's Office

The Office of the Extractive Sector CSR Counsellor is part of the Government of Canada's CSR Strategy for the Canadian International Extractive Sector, announced in March 2009.  The role of the Office is to promote responsible practices for Canadian companies abroad and to resolve corporate/community disputes in a manner consistent with severally internationally recognized CSR performance standards. As a part of this role, the Counsellor was to create and manage a dispute resolution process accessible to communities in locations outside Canada where Canadian extractive companies were operating. The goal was to have the Office act as an impartial advisor and facilitator in the mediation of a dispute. The Extractive Sector CSR Counsellor, Marketa Evans, was appointed in October 2009 and the Office was opened in Toronto in March 2010.

After consultation with civil society, communities overseas, and Canadian companies, the Office established the review mechanism, a dispute resolution process, in October 2010. Cases brought before the Counsellor are called 'Requests' and follow a staged process: Initial Assessment; Informal Mediation; Fact-finding; Access to Formal Mediation; and Reporting.  The types of disputes that the Counsellor is able to review are those related to widely-recognized international CSR performance standards, specifically:

  1. The International Finance Corporation Performance Standards on Social & Environmental Sustainability for extractive projects with potential adverse social or environmental impacts
  2. The Voluntary Principles on Security and Human Rights for projects involving private or public security forces
  3. The Global Reporting Initiative for CSR reporting by the extractive sector to enhance transparency and encourage market-based rewards for good CSR performance
  4. The OECD Guidelines for Multinational Enterprises

In its role as facilitator and mediator, the Counsellor is not a judge or an arbitrator and should not pronounce on the merits of substantive points of disagreement between the parties. As a result, the Counsellor's Report only repeats the views and opinions of the parties, without any evaluation. In communicating its approach, the Office is clear that it is not intended to be a "first resort" mechanism.  This approach is intended to foster more systematic use of site level grievance mechanisms, in accordance with the newly endorsed UN Guiding Principles on Business and Human Rights.

Background on Mauritania Copper Mines

Canadian companies, like First Quantum, invest a significant amount in the Mauritanian mining sector. First Quantum holds a 100% interest in the Guelb Moghrein copper-gold mine through its subsidiary, Mauritania Copper Mines (MCM).

The Guelb Moghrein mine is located 250 kilometres northeast of Nouakchott, the nation's capital, near the town of Akjoujt, a town of approximately 11,000 people. Guelb Moghrein consists of an open pit copper and gold deposit located 141 metres above sea level. The mine achieved commercial production in October 2006.

The Request

The Office received a Request from Maître Ahmed Mohamed Lemine who provided sufficient substantiation for the Office to accept that he was authorized to bring the Request on behalf of members of a project-affected community near the Guelb Moghrein mine. 

The original Request included issues that the Report describes as "possibly outside of the mandate of the Office".  However, through "extensive consultations with the requesters, the Office clarified the core issues of the request, issues related to the voluntary standards that fall within the Counsellor's mandate."  As a result, the Request moved past 'Initial Assessment' and on to the next stage: 'Informal Mediation'.

The main issues of concern in the Request were environmental issues, labour issues and stakeholder engagement.  The Counsellor acknowledged that these issues were "multifaceted and complex", but emphasized that "over the course of discussions with the parties it became clear that the parties were not all working with the same level and amount of information."  The Counsellor concluded that the Requestor's lack of knowledge regarding aspects of the mine's operations (specifically environmental issues and a local dispute resolution process) may have lead to the Request, stating "it became clear that in some measure at least, requesters' concerns were possibly related to low levels of information." As a result, the Office was able to share this information with the Requesters and was of the view that the information "would both serve to address some of their existing concerns and provide a potential constructive and easy-to-access path forward for the requesters".

The Counsellor lauded First Quantum's co-operation, stating: "Throughout this process, the company repeatedly demonstrated its good faith and interest in working through the issues."

The Report summarized the information received from the company regarding the issues raised in the Request:

"Grievance mechanism: The company advised the Office that a grievance mechanism is available through the MCM liaison office in Akjoujt, which is 3.9km from the mine site. The company told the Office that this grievance mechanism is in line with International Finance Corporation best practice guidelines and has already been used to settle other complaints. The company noted that this grievance mechanism has been externally reviewed. The company told the Office that the project grievance mechanism is available to receive all complaints and concerns of the local population.

Environment: The company pointed to two environmental and social impact assessments conducted to date, one by Scott Wilson in 2005 and another by BURGEAP in 2009. The company also advised that, in 2011, the Mauritanian Government commissioned BRGM to conduct an audit of MCM's environmental performance. The company reported that water testing is conducted on a regular basis, and results are sent in quarterly to the relevant government ministries. The Office was told that such testing has been going on for some years, and most recently in September 2011.

Community relations: The company advised the Office that management and company representatives are ready and willing to sit and meet in discussion with communities, and that there are site level community relations representatives currently engaging with the community. They can be reached through the MCM liaison office based in Akjoujt.  The company provided information about ongoing public consultations meetings. According to the company, the site is committed to further implementing a stakeholder engagement plan which includes newsletters and meetings and other outreach activities."

The Counsellor emphasised that the Office was not a "first resort mechanism" and concluded that there was no information to indicate any reason why, in the first instance, the use of the company's grievance mechanism would not be a suitable. The Counsellor therefore concluded that the file should be closed and encouraged the Requesters to use the company's grievance mechanism first. The Counsellor concluded that: "[i]n this case, an operational level mechanism does exist and we have encouraged the requesters to access that first."

The Counsellor also complimented First Quantum on two commitments made during the Informal Mediation process:

"Although outreach efforts have already been undertaken in a variety of forms and forums, the company will additionally consider hiring an independent local convener with knowledge of locally appropriate methodologies, to further raise awareness of the site level grievance process. This would be carried out with a view to ensuring that any difficult to reach groups are identified, prioritized and accommodated in outreach. The company has further committed to support the Canadian mining industry's collective re-evaluation of best practices for dispute resolution processes in light of the newly established UN Guiding Principles on Business and Human Rights."

Conclusion

The CSR Counsellor's general rule that site level grievance mechanisms be used in the first instance is an important aspect of the Request process for a number of reasons.  First, it reassures companies that the processes set up to deal with disputes are being respected and are being used to resolve disputes before those disputes are elevated.  This was emphasised during early stakeholder consultations by the Office: "[the process should] support, and not to undermine, any nascent local mechanisms". Additionally, such site level mechanisms are an important part of the dispute resolution matrix that is described in the recently endorsed UN Guiding Principles on Business and Human Rights. The Counsellor recognized the importance of this in the Report, stating: "Global research has also indicated that closer-to-the ground processes offer good opportunities to resolve issues." Importantly, the Counsellor acknowledged that while there may be instances where the facts of a Request indicate that the local mechanism would not be useful (or even potentially risky), in most cases the best practice is to encourage the use of site level dispute resolution processes in the first instance.

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