Developing a principled position on the mining issue

The impacts the mining sector has on developing countries should interest all Canadians. In some Southern communities when residents hear of Canada they think of the mining company operating nearby rather than the country. As a Canadian development organization named Engineers Without Borders, we should especially be concerned with this issue. We should develop a principled position on the mining question, and organize public outreach and political advocacy campaigns around it. EWB, with its large member-base and outreach capacity, has the ability to significantly affect the shape this issue takes.

More than 60 percent of publicly traded mining companies are based in Canada. While most of these companies are small exploration outfits, many of the largest extraction companies in the world also call Canada their home. The conduct of many of these companies routinely comes under scrutiny.

Large-scale mining has the tendency to be tremendously damaging to the environment, and if proper precautions are not taken this damage can translate into health problems for people in nearby communities. Many social problems have also been connected to the sector. While mining companies create jobs, and pay royalties and taxes, the benefits provided by these often bypass poor host communities and are captured by elites who are politically connected. Contamination of drinking water, displacement of communities, heightened risk of conflict, and increased political corruption are some of the various problems that find themselves attached to the mining sector.

Dubbing themselves “socially responsible”, Canadian mining companies tell us that regulation which restricts them from carrying out activities that harm vulnerable communities in developing countries is not required. They say that they can abide by high enough ethical and environmental standards without being regulated. There is plenty of evidence, however, to suggest that this is not the case.

Although there is a considerable amount of interest in this issue within EWB, the organization does not have an officially articulated position on it. There does exist something of a tacit position, however, which is tied to EWB’s advocacy of “global engineering”. We see our role as promoting good behaviour within the mining sector by encouraging people who work within it to be conscious actors.

We seem to have the idea that decisions made by employees of mining companies are a matter of lifestyle choice, rather than being overwhelmingly determined by institutional forces. We presume that if employees of mining companies can be convinced to not make decisions that harm communities in the developing world, then the problems associated with the sector will be a good way along in getting handled.

Unfortunately, people’s “goodness” is not something we can rely on to make sure vulnerable communities are not harmed and/or unfairly taken advantage of. There are institutional forces which allow even “good” people working in the sector to contribute to bad conduct. The first of these forces is competition. It drives companies to cut costs wherever they can to maximize profit margins and stay ahead of other firms. Cutting costs can lead to the thinning of safety and environmental standards, along with providing incentive to engage in corruption.

Secondly, there is regulation. Regulation, primarily when it is enforced, acts as an oppositional force. Currently, however, regulation in this sector tends to be very weak. Hence, it does not stop companies from cutting costs to such a degree that their operations cause harm to poor communities.

Finally, there are the specialization and hierarchy that exist within companies. Employees generally work on component parts of large projects and are often not aware of the full impact their work has. However, even in a case where an employee is aware of impacts which she is not entirely pleased with, it will be easy for her to justify doing her work. In her mind she will shift responsibility of the negative impacts onto those above her who have assigned her the work. She will likely also note the fact that if she was not doing the work someone else would do it. One or both of these two justifications will work through the minds of all the individuals who are not wholly satisfied with foreseeable negative impacts, and the project will go on.

Along with all this, we must remember that proximity breeds loyalty, which can often be blinding. Those who work in the mining sector may become conditioned in such a way that they are not able to see its faults; just as Canadians can come to easily overlook their country’s faults.

Even those who have “global engineering values” instilled within them, hence, will likely not be able to affect the course of actions taken by the companies they work for. A more effective approach is to realign the institutional forces pressing on the actors in the sector. Regulation should be enacted which requires companies to implement certain levels of environmental and safety standards, and prohibits them from taking part in, or allowing their work to facilitate, corrupt and criminal behaviour.

There are some that take the view that although regulation and enforcement will ultimately have to be relied upon to make sure mining activity does not harm poor communities, these may take a long time to implement and in the meantime it may also be worthwhile to promote the adoption of voluntary good conduct among mining companies. Framing the approach that seeks to bring about the enactment of regulation as “working from the outside”, we are told that some should also “work on the inside” to create change. Following this line of argument, we are told that EWB’s “inside” global engineering approach is complementary to the approach taken by organizations “working from the outside”.

While it may be well-meaning, promoting the idea that companies can unilaterally improve their behaviour gets in the way of getting regulation in place. In order to stall the enactment of regulation, mining companies themselves argue that they can voluntarily abide by high ethical standards. Not only are there, as demonstrated earlier, severe limitations in trying to promote behaviour change within the mining sector’s existing institutional structure, trying to do so impedes progress by creating barriers for those “working from the outside”. The “inside” and “outside” approaches, in this case, conflict with each other. It is also worth noting that the “outside” approach seeks to make systemic change, which is, especially recently, EWB’s avowed method of solving problems.

It is surprising that an issue of such importance, and one which would easily align with the values and work of the organization is officially avoided. It is often stated that EWB is a “ground-up” organization; ideas and issues which concern general members make their way up to become official policy, rather than the other way around. Bearing in mind claims of this nature and the fact that so many members are interested in this issue, it becomes even more difficult to understand why it has not become a part of what the organization focuses on.

Perhaps more effort needs to be exerted to move it up from the ground. University chapters across the country should adopt this issue as a focus in their activities; conduct research, and develop content for internal learning and external outreach. Along with this we should lobby for the development of a principled official position on the issue at the national level. Hopefully a sustained effort of this kind can finally make this issue a proper part of EWB’s official agenda.

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4 responses to “Developing a principled position on the mining issue

  • Wayne

    Yo Umair! Nice post. I’m just curious to go deeper in it with you. What do you see as the elements of the political agenda to be pushed (whether by EWB or any other organization)? For instance, with Canada’s ODA, previously it was about changing tied aid to (more or less) untied aid. And more recently it was about integrating more transparency and creativity in Canada’s foreign aid.
    What are the shifts in business practices and corporate regulation you would like to see? Is it that Canadian mining companies should just divest completely? Is it that Canadian mining companies should increase their royalties to local communities? Is it that the royalties currently paid out should have a greater percentage to local communities? Is it that corporate regulation must have a carrot and stick for such changes? I’m not suggesting these necessarily, just providing examples of what I’m asking for.
    Secondly, what do you see as the role of consumers in all of this? Is it a technology demand problem, we need to shift consumer values? I’m thinking about problems like coltane (in which case shifting consumer values is difficult). Is it a matter of investing in alternative technology searches, and that should be public policy (in which case, that may drive divestment from these local communities)?

    • Umair

      Thanks for the questions, Wayne.

      As you’ve stated there are a number of specific areas of concern that exist within this issue. They all deserve attention as far as understanding the nature of the issue goes. When they’re analyzed with reference to EWB’s place in things, we’ll be able to see where and how the organization can affect change.

      For example, while I think higher royalties are needed, this is something that local governments would have to legislate into place. As far as I can tell, EWB is not positioned in such a way that it could influence the policy of governments in the developing world. EWB is in a position, however, to influence the Canadian government. In relation to this specific concern, the Canadian government can’t get mining companies to pay higher royalties or taxes, but our government can put in place policy which monitors the finances of mining companies to make sure they don’t engage in tax evasion; they should at the very least pay the small amount that they currently owe to poor countries.

      In the same vein, I don’t think EWB is in a position to advocate for the search of alternative technology, even if that was a desirable thing to do, which it probably would not be.

      In general, EWB is well-positioned to lobby the Canadian government to adopt regulation that would disallow companies from harming the health and social livelihoods of nearby communities, as well making sure they don’t engage in corrupt and criminal behavior.

      To answer your question about what shifts in business practices and corporate regulation I would like to see: I’d like to see many things, but only a handful of those are things EWB can affect. Regardless, what EWB can affect is not insignificant in this case. In light of this, I would like to see EWB work to make change where it can.

      As a specific example of what we can do, there exists a very good place to start. CIDA is funding development projects in partnership with mining companies: http://bit.ly/y7qdFs. Canadian tax payers are in effect subsidizing the PR campaigns of extremely profitable corporations. We can create a public outreach campaign to educate the public about this, and lobby the government to stop with the nonsense.

      Specific campaigns of this kind have to be part of a long-term vision, so that when more opportunities arise we can build on what we’ve already done/accomplished. For the long-term, as I pointed out in the post, it makes sense for EWB to take the so-called “outside” approach.

      As for the role of consumers, personally, I don’t think focusing on changing the habits of consumers is a good kind of activism. In fact, that was the topic of the post I wrote before this one: http://bit.ly/w3pMzI. It could be done well, I suppose. But it would have to be done in a way that doesn’t make ethical consumer choices the sole focus. It’s not a place to start, in any case.

  • Wayne

    Awesome I picked up some ideas there:

    1. Policy measures to monitor tax evasion: I’m not well versed in this, but I’ve heard this is a big problem, so if it’s solved in a replicable fashion, I’d agree this would be huge man! It might be useful to talk to finance people, maybe CMAs or CA friends. I’m curious what they would say is possible. I think the devil is in the details. For instance, I’ve heard of funny accounting practices where they hire consultants (who are actually in-house staff) and charge them inflated rates to lower their bottom line (this wouldn’t necessarily show up in public financial statements). I mean I don’t know too much about this, but the example just serves as how the nuance in this situation could enable the government to say yes or no to regulation. Though regardless, we’ll likely have to wait post-PC before more regulation is even considered. Actually you may wish to think of linguistic tricks: rename this idea and position it away the negative connotations that come with regulation. And CIDA may have limited power over this, but the CRA maybe, in which case EWB isn’t so well positioned, but I bet other organizations are.

    2. Higher royalties: One counter-argument I anticipate you may face for higher royalties is that the percentage of current royalties paid out and that actually meets local community members’ hands is very small. So directly increasing royalties could directly fuel corruption. The higher leverage change to impact communities would be to increase that percentage.

    3. CIDA-Mining Corporation partnerships: I bet for CIDA this is framed under the current development trend of PPPs (Public-Private Partnerships). There seems to be a lot behind the PPP concept. It may be useful to go with the grain on this one, but guide it positively. Just thinking out-loud: what if CIDA plays its classic institutional building role to ensure local communities see higher value back from royalties. So they’re not necessarily investing in PR, but they’re trying to make the broken royalty system work a little better. Or maybe they’re building local capacity in the private sector to take over the mining developments, but CIDA isn’t so great at private sector development. Anyhow, regardless, I think it’s possible to get creative here.

  • Kyla

    Hi Umair,

    I just wanted to say thank you for bringing up this issue. I think this is an important discussion for EWB to have. It seems to me that your argument applies to other sectors as well. For example, a large portion of manufacturing for international corporations takes place in developing countries and some have a very poor record on social and environmental issues. What do you think?

    I’m also very curious about the change-from-within tactic you mentioned. This does seem to be promoted within EWB but without a lot of analysis and understanding as to it’s effectiveness. I bet a lot of EWBers would be interested in delving into this some more. As a new engineering grad I’m wondering why I haven’t considered this more fully. I wonder if we could connect with some past EWBers or others working in these areas to get their opinions?

    Do you have any next steps planned? Keep me in the loop.

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