PSCI 3801A- Environmental PoliticsPolicy Research Essay (Part II) – 2016/03/29

Ludovica Chiappini #101028674Word-Count: 3197 (references excluded)

Building a Corporate Social Responsibility in the Canadian extractive sector: the anatomy of a neoliberal art of governing

Introduction

Bill C-300 was released as a reaction to the shared negligence demonstrated by the Canadian

Conservative government and mining industries pertaining social and environmental

accountability of Canada’s extractive companies operating overseas. Mandatory policies were

recommended by the House of Commons Standing Committee on Foreign Affairs and

International Trade in 2005 (Patry, 2005) and by the 2007 Advisory Group Report drafted after

the liberal government-sponsored National Roundtables on Corporate Social Responsibility

(Advisory Group Report, March 2007). Nonetheless, these measures that would have held

Canadian mining companies accountable and in line with the sustainable development discourse

were rejected by the Conservative government in power in 2008. Hence, in February 2009, the

opponent Liberal Party leader, MP John Mckay proposed the aforementioned private member’s

Bill attempting to reintegrate the “regulatory teeth” necessary to enforce Corporate Social

Responsibility (CSR) in the Canadian extractive sector.

During autumn 2009, the “fight” around the Bill C-300 started. On the one side, the key sponsors

involved in the process were the Liberal party, the New Liberal Party and the Bloc Québécois.

Moreover, society, academics, environmental and human rights organizations, both national and

international, generally emphasized the need of mandatory provisions of the Bill in order to

allow Canada to become a leader in Corporate Social Responsibility and having what it takes to

respect the environment and human rights (Tahir, 2012). Firstly, the hearings in the Standing

Committee on Foreign Affairs and International Trade began in October 2009 and twenty-five

witnesses spoke in favor of the Bill (MiningWatch Canada, 2010 November 15). Namely,

MiningWatch Canada and eight other representative members of the Canadian Network on

Corporate Accountability (CNCA) based their testimonies on detailed reports (Janda, 2009).

Also, some international government’s figures stood out for the Bill: Romina Picolotti, the

former Environment Minister from Argentina accused publicly the Canada’s Barrick’s Gold

Corporation for having threatened her during the ministerial activity. Furthermore, citizens and

global civil society organizations used the strategy of direct letters to Members of Parliament’s

offices to express their hope for the success of the Bill. Finally, media coverage and panel

discussions held across Canada tried to enhance public and policy-makers’ awareness on the

issue.

On the other side, the Conservative Government led by Stephen Harper, the members of Mining

Association of Canada and the Prospectors and Developers Association of Canada (PDAC) were

undoubtedly the enemies of the Bill C-300. Their general arguments were that the Bill C-300

would have produced capital mobility from Canada due to its stringent provisions; also,

Canadian companies would have been at a competitive disadvantage in the international market

through different CSR standards and the severe sanctions related to the withdrawal of

institutional funding in case of noncompliance with the established standards (Janda, 2010).

Essentially, the Bill would have led relevant economic threats for Government and mining

industries, affecting all Canada. One month later the introduction of the private Bill, the federal

Government launched its counterpoint releasing the 2009 CSR strategy for the international

extractive sector (Foreign Affairs and International Trade Canada, 2009). In contrast to Bill C-

300, the Government stance to build the Canadian Corporate Social Responsibility was

extremely moderate and leaned on neoliberal tendencies. Several testimonies were unleashed in

the House of Commons to prove evidence of negative impacts of Bill C-300 (McArdle, 2009).

Also, the industries started to lobby after the draft legislation passed in the second reading. The

possibility of lacking public financial support for their projects encouraged the Mining

Association of Canada and PDAC to actively react against the obligatory provisions of the Bill

and exercise their privileged political power to influence the decision through private lobbying

pressure on the Members of the Parliament.

Bill C-300 brought on the table serious threats for the corporations’ sustenance thus, they could

not be accommodating as they were in the release of the Advisory Group Report in 2007 (Mining

Association of Canada, 2007 March 29). In addition, the Mining Association of Canada and the

PDAC testified against the Bill during the parliamentary committee of Foreign Affairs and

International Development in October 2009 and they also made public statements (Prospectors

and Developers Association of Canada; Barrick Gold Corporation, Kinross Gold Corporation, &

Goldcorp Inc., 2009). The campaign became fierce in spring 2010. PDAC and Mining

Association revealed their efforts against the Bill through public lobbying strategies during the

annual International Mining Convention held in Toronto stating that they were opposing the Bill

and not the voluntary CSR strategies promoted by the Government. PDAC handed out anti Bill-

C300 posters, organized a panel on the Bill, released a press conference and launched a website

to spread its message. These public strategies were not decisive to win the battle however, the

mining sector used them to gain environmental legitimacy. Specifying their adverse stance on the

Bill but not on the overall concept of Corporate Social Responsibility, they were rhetorically

embracing the sustainable development discourse in order to protect their corporate image

(Macdonald, 2007:123-126). On October 27, 2010, Bill C-300 was definitely defeated by 140 to

134 votes in the House of Commons. The Conservative party whipped its MPs to oppose the Bill

and twenty-five members of the sponsor parties did not attend the vote. Moreover, the 2009

voluntary-based Government’s CSR strategy became the official guideline to develop Corporate

Social Responsibility in the Canadian extractive sector.

The “face-off” between the Bill C-300 and the 2009 contrasting strategy of the Government was

nothing but a dispute to establish regulatory or voluntary CSR measures. Although Canada was

one of the international players in supporting the sustainable development discourse in the field

of environmental policy, the failure of Bill C-300 was the mirror of neoliberal tendencies

towards self-responsible measures and restricted intervention of the State. The specific policy

outcome draws a veil of suspicion on the integration of sustainable development in the Canadian

environmental policy-making process. Indeed, it stimulates the perception of an “integrity gap”

(Haque, 1999) between the conceptualization of Corporate Social Responsibility around the

sustainable development discourse and the concrete approach embraced by the institutions.

Behind the mask, what is the real face of Corporate Social Responsibility in Canada?

Purpose of the paper

The essay aims to explore the theoretical discourse behind the Canadian engagement with

Corporate Social Responsibility in the extractive sector. To this end, it lies on the table the

ensuing questions: considering the regulatory rollback inherent in the failure of Bill C-300 and

the adoption of the 2009 CSR strategy, is it reasonable to assume that the real face of Corporate

Social Responsibility in Canada reflected the neo-liberal model of governance rather than the

sustainable development discourse? Furthermore, evaluating the 2014 Canada’s enhanced CSR

strategy, does the political initiative provide evidence of a different path? Answering these

inquiries is an attempt to cut the fog surrounding the nature of Corporate Social Responsibility in

Canada. Unmasking the ideas that drive the building of the Canadian Corporate Social

Responsibility sheds some light on the future directions of CSR. Also, it helps to understand if a

change of route is required to enforce mining sector acting ethically in full compliance with the

environment and societies.

Despite the broad interpretations around the issue, the essay’s statement is distinct: the launch of

the 2009 voluntary-based CSR strategy, the arguments against the Bill C-300 concerning the

competitive disadvantage that the Canadian mining corporations would have faced in the

international trade, the idea that less regulatory measures would have been more effective and,

finally, the failure of the Bill show that the sustainable development discourse was integrated

only in a symbolic manner and that neoliberalism was the real face of the Canadian Corporate

Social Responsibility that impacted government regulatory actions in 2009. In addition,

evaluating the 2014 CSR enhanced strategy, the political initiative does not provide evidence of

relevant transformations. Yet again, Canadian Corporate Social Responsibility can be understood

in the neoliberal art of governing in the sense that the practices in the field reflect the neoliberal

ideas.

Organization of the paper

The first section of the paper introduces the key theoretical concepts that will be used to frame

the dynamics surrounding the Bill C-300 and the current Canadian CSR strategy. In particular,

the significance of Corporate Social Responsibility, Sustainable Development and Neoliberal

discourse will be brought up. The second section reads into the failure of the Bill C-300 and

assumes that the political outcome is the evidence of the neoliberal discourse. Successively, the

third part focuses on the 2014 CSR enhanced strategy. It unearths the absence of any essential

change and demonstrates the enduring impact of the neoliberal art of governing on the Corporate

Social Responsibility in the Canadian extractive sector. Finally, conclusions will be drawn in the

last section.

1. Corporate Social Responsibility, Sustainable Development and Neoliberalism: meaning

and significance

The concept of Corporate Social Responsibility is highly controversial and a consensus on how

CSR should be defined has not yet been found. The rationale of this concept is that companies

should be responsible for their behavior while performing their activities. Corporate Social

Responsibility is connected to moral codes and as any ethical matter, it is an empty vessel that

can be filled with whatever one likes (Bodružić, 2012). Indeed, CSR contains ideational elements

that are influenced by a specific political and cultural landscape. For instance, what CSR means

and how it is implemented will differ significantly depending on the cultural roots and the basic

moral belief (Blowfield and Frynas, 2005: 504). Assuming that institutions and individuals can

change their interpretation of CSR in response to changing circumstances, the evaluation of

Canadian political decisions on CSR in the extractive sector is essential to comprehend which

theoretical framework Canada embraces to deal with CSR and the structure of relations between

the Government and mining companies. In particular, the Canadian government refers to CSR as

the voluntary activities undertaken by a company to operate in an economic, social and

environmentally sustainable manner (Global Affairs of Canada, n.d.). It conceptualizes CSR

strategies in the field of the sustainable development discourse attempting to guide the economic

growth of Canadian extractive companies operating overseas in compliance with the

environment and the communities.

In fact, the sustainable development discourse is a doctrine that believes in both the economic

and environmental values. Without going into the issues of various interpretations, it has been

increasingly recognized that a comprehensive approach to sustainable development should

encompass economic, environmental, and social sustainability meaning the promotion of

economic growth in ways that are both environmentally benign and socially just (highlighting

the need for citizens’ participation in environmental governance). Sustainable development

involves a rhetoric of reassurance: “We can have it all” however, the economic growth should be

guided. It recalls the cooperation of many agents at a different level, transnational, national and

local ranging from environmentalists, civil societies, state and non-state actors. In essence, a

regulated economic growth where the state has its role in the game (Dryzek, 2005:145-161).

Differently, neoliberalism is an ideological discourse based on maximizing the role of the market

and minimizing the intervention of the state. These anti-state and pro-market positions encourage

the deregulation of state control and the privatization of state enterprises, liberalization of trade,

elimination of import restrictions, foreign investment and reduction of welfare programs. Also,

the policies are often advocated in the name of efficiency, competitiveness, innovation,

individual freedom and revenue generation (Harvey, 2005). To conclude, starting from the

premises that the Corporate Social Responsibility has a neutral connotation and the cultural and

political framework has a pivotal role in define how it should be implemented, the essay analyzes

the traits of CSR in the Canadian extractive sector; in particular, the failure of the Bill C-300 and

the current CSR strategies. Considering the aforementioned theoretical discourses how the action

of the Canadian government can be framed?

2.The failure of the Bill C-300: the influence of neoliberal art of governing

The Bill C-300 proposed accountable guidelines for Canadian mining companies in developing

countries. It provided for mechanisms to receive and solve complaints about the Canadian

extractive sector from individuals damaged by its activities. The Ministers of Foreign Affairs

and International Trade would have been in charge of the entire process. In particular, the pivotal

provision was that financing supports for Canadian extractive companies through Export

development of Canada - an arm’s length government agency that helps Canadian companies

financing their international business opportunities - would have been highly dependent on the

attitude of mining industries to be in compliance with the proposed standards (Bill C-300, 2009).

The rationale of the Bill C-300 was a pro-state intervention. A “regulated” economic growth in

ways that were environmentally and socially accountable. The provision of the funding’s

withdrawal was a call for a major control of the State. In essence, Bill C-300 symbolized the

anti-neoliberal ideas of governing and it was close to the slogan of sustainable development “we

can have it all”: the economic growth, environmental protection and social justice. Furthermore,

the Bill was built on the premises of the 2007 Advisory Group formed by the representatives of

the industry, civil societies and academics and drafted after multi-stakeholders’ consultations.

This was in line with one of the assumptions of sustainable development to achieve the social

justice: the participation of citizens in the environmental politics. Thus, the approval of the Bill

would have reflected the tangible adoption of the sustainable development discourse in the

Canadian environmental regulation (Macdonald, 2007:123-126). Nonetheless, the 2009 CSR

Government strategy (Foreign Affairs and International Trade Canada, 2009) - launched as a

counterpoint to the Bill – prevailed. In contrast to Bill C-300, parties subjected to the complaint

could have decided not to cooperate without consequences to the violation of the guidelines and

the withdrawal of government financing was not part of the discussion. The compliance of

companies was based on voluntary measures and the scope was the self-regulation and autonomy

of business. The Government stance to build the Canadian Corporate Social Responsibility was

extremely light compared to the provisions of the Bill and reflected the rationale of

neoliberalism: voluntary measures, maximization of business’ role and minimum interference of

the State.

To conclude, the failure of Bill C-300 symbolized the victory of the neoliberal art of governing.

The position of the 2009 CSR strategy, the predominance of voluntary-based measures and the

arguments used against the Bill concerning the competitive disadvantages that Canadian mining

corporations would have faced in the international trade suggest the feeble will of the

Government to lead the economic growth of the Canadian extractive sector in ways that were

environmentally and socially accountable. While taking advantage of the rhetoric of sustainable

development to gain legitimacy in front of the public opinion, the neoliberal model of

governance was embraced to define the guidelines of the Canadian Corporate Social

Responsibility (Kurtcu, 2014).

3.The 2014 CSR enhanced strategy: neoliberal tendencies, yet again!

Five years after the failure of the Bill C-300 and the launch of the 2009 initial CSR strategy, the

Government of Canada released its revised Corporate Social Responsibility strategy in

November 2014. The updated policy leans on an enhanced involvement of the State mimicking

the previous provisions of Bill C-300. In fact, it claims the power of the Government to withdraw

the substantial support that it provides to mining companies in order to make them accountable.

Although these renewed measures appear a step forward to ensure major State’s control and the

end of the rhetorical sustainable practices, the Canadian Government sounds not to apply its

power in a meaningful way. In fact, it still says that it “expects” Canadian companies operating

overseas to respect human rights, the environment and the international standards for responsible

business practices as well as the Canadian values. Also, the revised strategy claims the

Government’s authority to withhold relevant services for Canadian extractive companies that

rely on its financial support. However, the only specific threat is that these services will be

withdrawn if companies do not participate in “the dialogue facilitation processes” for the

implementation of enterprises’ international guidelines (Foreign Affairs and International Trade

Canada, 2014). Hence, the traits of voluntary-based measures and weak regulatory pressures

endure.

Furthermore, MiningWatch Canada and the Canadian Network on Corporate Accountability, the

key sponsors of the Bill C-300, have called for the creation of an ombudsman with the power to

respond to complaints by conducting an independent investigation of a company’s behavior and

reporting on the findings. The ombudsman would also have had the power to recommend

remedies in cases where it has been found that companies have violated the guidelines and

caused harm to complainants, as well as recommending that Canadian government financial and

political support be withheld. Thus, the CSR would have been implemented in a substantial way.

However, the Government did not answer the call. This is a further demonstration of its less

regulatory tendency and the preponderance of private “self-control” measures carried out by

Canadian mining industries (MiningWatch Canada, 2014).

Finally, the Government’s argument to justify the adoption of the 2014 CSR enhance strategy is

that the Canadian extractive companies should understand that incorporating CSR practices into

their operations contributes to their success. By doing so, companies would manage social risks

more efficiently and effectively; encourage positive relations with investors, employees and

communities; increase access to capital and improve their reputation. Managing social risks is

important to companies’ success abroad (Foreign Affairs and International Trade Canada, 2014).

This reveals the predominance of the economic objectives rather than environmental and social

sustainability goals to promote and protect the interest of Canadian extractive companies abroad.

Although the 2014 CSR strategy is labeled as an enhancement, the only aspect that improved is

its rhetorical reassurance. The entirely voluntary nature of the measures, the weak threats for the

withdrawal of financial support in case of noncompliance and the revenue-bearing significance

of CSR practices prove the lack of any ideological change compared to the 2009. CSR is still

regarded as a “strategic advantage” that contributes to economic growth and competitiveness

rather than focuses on social and environmental issues. In other words, the Government

promotes CSR by pushing the profit motive, not by restraining it, and this is indicative of neo-

liberal tendencies in the governmental approaches to CSR (Vallentin; Murillo 2009: 4).

Conclusions

Given the many allegations facing the Canadian mining companies operating overseas, the need

to improve accountability and transparency in the mining sector is one of the tough knots in the

Canadian environmental politics that is far to be untied. National and international civil societies,

non-governmental organizations, academics, the opposition and third parties strongly endorsed

regulatory interventions to address the problem of impunity. However, the defeat of political

initiatives such as the Bill C-300 and the current nature of the 2014 CSR strategies provide

evidence that the Canadian Government has curtailed policies and legislations that would have

held Canadian mining companies accountable and in line with the sustainable development

discourse. The Canadian Government still assumes the role of “an enabling and empowering

facilitator of CSR, not a regulatory enforcer” (Vallentin; Murillo 2009).

Through the examination of the Bill C-300’s failure and the implementation of the 2009

Government’s CSR strategy, the essay has aimed to demonstrate how Canada promoted CSR

embracing the neoliberal discourse. Successively, evaluating the 2014 enhanced strategy in order

to discover evolutionary paths, the paper has also revealed the enduring neoliberal trait in

Canadian Corporate Social Responsibility. Despite the articulation of sustainable development as

a developmental ideal, the realization of this discourse in Canada is still a mere rhetoric and it is

used as a strategy to gain the image of an environmental and social accountable State with

respect to its mining companies operating abroad.

To conclude, the essay unmasked the real nature of Corporate Social Responsibility in Canada:

The neoliberal face appears behind the mask of the sustainable development discourse. The

message in Canadian CSR policies is that the primary Government’s role is to support and

encourage corporations. However, conceptualizing Corporate Social Responsibility in this way

results in an inefficiency. Canadian mining industries operating abroad have still the liberty to

act irresponsibly. The obvious method to enforce them to behave in an environmental and

socially responsible manner is to introduce mandatory measures. Nevertheless, as long as Canada

embraces the neoliberal art of governing, tangible changes will not occur (Wudrick, 2009).

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