Bill C-300 – A National Law with International Ramifications

Scarborough-Guildwood Liberal MP John McKay has introduced a private members bill to Parliament that has been stirring up controversy in the global mining and natural resource sector. Bill C-300 asks mining companies that seek financing from Canadian markets to disclose to Export Development Canada (EDC) a wide array of information having to do with their human rights practices, labour standards, and environmental policies. If they fail to meet this requirement, or if their standards do not conform with pre-established norms, these companies will not be eligible to receive public pension plan investment dollars and other public monies from EDC. Perhaps this does not sound like a major deal, but 85% of international extractive projects seek financing at the Vancouver and Toronto stock exchanges. This is a case where a domestic law could have a very international reach.

McKay has brought the bill forward in the hopes that it will alter what he sees as an inexcusable state of affairs concerning the global mining industry’s effects on the populations of developing nations.[1] Detractors of the bill note that the extractive sector of Canada has already enacted very stringent Corporate Social Responsibility (CSR) guidelines after the National Roundtables on Corporate Social Responsibility of 2006. For them, more regulation simply re-invents the wheel.[2]

Bill C-300 takes both a ‘reflexive’ and ‘de-centred’ approach to international law. David Doorey describes the role of reflexive law:

“The theory is that a state can influence through indirect means the practices of multinational private actors beyond the borders of the regulating state. The principal regulatory tool to accomplish this task is mandatory disclosure of information about the foreign practices of the multinational actor. … This has implications for the multinational actor, which must reflect upon how the information will be received by actors across the planet and how it may be used by antagonistic forces to harm or impede its own internal goals and objectives. In theory, requiring transparency about global labour practices could contribute to a climate in which the worst employers are punished, and the best rewarded.”[3]

Reflexive law also exists in other regions of Canadian legislation. While it is not entirely similar, the new Crimes Against Humanity and War Crimes Act allowed a Canadian criminal court to try and convict Désiré Munyaneza, a foreign national, for crimes committed overseas. In that vein, our national criminal code has ripple effects overseas. A national law has a foreign deterrent effect.

Doorey goes on to describe the role of de-centred industry regulation:

“The notion of a decentred state supports a pluralist vision of regulation. Regulation that is decentred, or responsive, or reflexive, perceives for the state an indirect role in the governance of complex social and economic matters, a role as facilitator and motivator of the norm-producing potential of non-state actors. Decentred law involves, then, the regulation of the “contextual conditions” of self-regulation, or the “regulation of self-regulation,” but with the instrumental intent of achieving state objectives.”[4]

This type of “de-centred” regulation is far from new in Canadian lawmaking. For example, the Canadian Radio-television Telecommunications Commission has a quasi-appellate oversight power over the Canadian Broadcast Standards Council, which is a privately operated group who supervise and self-impose content regulations on the vast majority of private broadcasters in Canada. Mining companies have begun to collectively self-regulate since the National Roundtables on CSR, but without the government oversight mechanisms Bill C-300 requires.

At its heart, this type of law is not at all ‘international’ in scope. This law would never apply in any international court setting, or affect private arbitration efforts. Yet, all companies drawing finance from Canadian institutions must submit the information requested. In the information age, this could lead to global consequences for companies and the populations they influence and employ. Human rights campaigners often engage in the “politics of shame” to mobilize public sentiment and drive international law forward, and shame actors into more acceptable boundaries of public opinion (and in some cases the law, although the two are not always synonymous). It seems that, in a way, similar motives are behind this piece of legislation.

John McKay noted that Bill C-300 would put only a “teeny-tiny little break” on “some mining companies” in what is undoubtedly a hugely profitable sector. Robert Wisner, a partner at the McMillan law firm in Toronto with a practice in mining and natural resource law, thinks otherwise. He believes that the law would interfere with the jurisdictions of foreign countries. He also believes the bill would regulate extra-territorial affairs, and affects companies disproportionately to their potential relationship with Canadian markets and Canadian pension plan dollars. The bill would make even “good companies” re-think investing in developing countries, something that would hurt their economies through job losses, lack of infrastructure development, and other mining related activities. Wisner contends that this law would function in a punitive fashion for companies, and would not allow foreign legal jurisdictions the time and power they need to develop their own mechanisms for coping with extraction sector malfeasance.  David Doorey agrees with this final sentiment, when he explains that “the most effective way to improve labour practices is to empower local workers and local states to build countervailing powers to that of global and domestic capital … [one must] measure the potential contribution of disclosure regulation by its ability to advance this agenda.”[5]

According to John McKay, this bill will have a very hard time emerging from committee, and even then it stands to have a very difficult time passing through both the floor of the House and the Senate. Professor Richard Janda of the McGill University Faculty of Law, believes that if passed, the law will “send a clear signal that CSR is not simply in the domain of public relations or corporate largesse, but it is in fact part of the framework of norms and rules that can reinforce the social license to operate on which our companies rely, particularly as they operate abroad.”[6]

Policymakers must ask themselves, are they happy with the status quo? If not, such reflexive law might provide a unilateral and domestic avenue for affecting the global operations of mining companies. This non-spending private members bill also allows the opposition parties great say in an international CSR matter without having control over the various ministries involved in its implementation. However, the potential negative impacts are many and must be weighed accordingly. Allowing mining businesses to totally self-regulate does not seem like a feasible way to monitor the concerns of those negatively affected by mining activities in developing nations, or the minders of Canadian public pension dollars. Yet, the law could potentially be stymied by a less-than-enthusiastic Conservative Party administration, and might become the mere window-dressing it claims to be able to replace. In any case, reflexive and de-centred law serve as examples of innovative Canadian legal structures that if properly implemented can add to our rich sense of legal pluralism in Canada.

[Disclosure: As a research assistant for Professor Richard Janda (Faculty of Law, McGill University), the author is a collaborator with the Ecology of Collapse Working Group, an interdisciplinary team of researchers seeking policy solutions to current economic, social, and environmental issues. Professor Janda submitted a brief and testified in support of Bill C-300 to the Parliamentary Standing Committee on Foreign Affairs and International Development on 8 October 2009.]

[2] Interview of Robert Wisner [Partner, McMillan Toronto] by Philip Duguay (5 November 2009) at CKUT 90.3FM studios, Montreal.

[3] David J. Doorey, “Who Made That?: Influencing Foreign Labour Practices through Reflexive Domestic Disclosure Regulation” 43 OSGHLG 353 at 357-8.

[4] Ibid at 366.

[5] Ibid at 400.

[6] Brief submitted by Richard Janda to the House of Commons Standing Committee on Foreign Affairs and International Development (8 October 2009) on behalf of the Canadian Network on Corporate Accountability. For a copy of this brief contact Richard Janda.

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