Canadian interests and values are aligned

I am delighted to begin a new “Corporate Social Responsibility and Mining” column for Canadian Mining Journal.

Over the coming months, you can expect this column to explore some key issues in the rapidly evolving CSR landscape.

Let’s start with a little recent history. When I first wrote a guest column for this magazine in April 2007, I saw a significant opportunity for the Canadian mining industry to drive a leadership position on social issues in emerging markets.

The industry, I argued then, “will be judged on its ability to manage social issues” in countries where “domestic regulation and accountability” may be weak. The good news, I said then, and still believe, is that on issues of CSR and mining, Canadian interests and Canadian values are aligned.

A number of key trends were identified in that 2007 article: the exploding ability of social media and the internet to communicate stories from overseas; the growth of NGOs in both number and influence; the industry’s escalating reputational challenges around benefits sharing and environmental stewardship; growing recognition of the importance of the private sector to poverty reduction; and the critical role of cross-sector partnerships.

Those key trends, coupled with rising stakeholder expectations and the rapid expansion of Canadian companies abroad, set the stage for the industry’s 21^st century business opportunities and challenges.

So what’s happened since 2007? All of these trends have accelerated. Research conducted by Natural Resources Canada tells a fascinating story: cumulative investment by the Canadian mining industry overseas mushroomed from $30 billion in 2002 to $110 billion today.

Interestingly, investment in Australia and the US was flat over that period – but in Latin America and Africa, investment increased seven-fold. And the potential benefits of extractive industries to economic development are increasingly acknowledged.

Looking again at Africa, $40 billion in annual official development assistance is overshadowed by the roughly $400 billion in export revenue generated by mining, oil and gas industries.

Globally, the number of mining dependent countries, defined by the United Nations (UNCTAD) as states where mining represents more than 25% of total exports, is on the rise, increasing from 33 mining dependent countries to 41 in recent years. These changes bring significant and complex risks as well as opportunities.

Canadians have long played a leadership role in advancing both the policy and the practice of CSR. And we have definitely not stood still as these trends have accelerated.

The job I hold today, for instance, did not even exist when I wrote that 2007 article. It was created as a result of the Government of Canada’s 2009 CSR Strategy for the International Extractive Sector, which will be the subject of next month’s column.

Path-breaking ideas incubated by the Whitehorse Mining Initiative, the Kimberley Process, or by the National Roundtables on CSR and the Canadian Extractive Industry, for example, are today reflected in the CSR Centre for Excellence, the Devonshire Initiative, or in the Community of Interest Advisory Panel of the Mining Association of Canada.

The PDAC (Prospectors and Developers Association of Canada) has pioneered CSR standards suitable for exploration companies, called E3Plus. Five years ago, executive level CSR positions would have been rare; today they are increasingly the norm even for mid-tier players. The next trend appears to be board-level CSR leads.

In 2011, Canada’s largest industry gatherings – PDAC and CIM – both built dedicated CSR streams. These and other undertakings demonstrate an industry commitment that goes well beyond symbolic gestures.

We’ve come far, therefore, but at the same time, new challenges have appeared. Global attention to the business and human rights agenda and rising levels of conflict are but two of the issues top-of-mind.

Global stakeholder expectations continue to point upward. If reputation is now a critical success factor, trust and solid relationships form the bedrock for reputational resilience. It will be necessary for Canadian industry, now a truly global player, to go even further. But the good news is that we have built a solid multi-stakeholder foundation for future leadership. I’m looking forward to engaging with you on these issues over coming months. Let me know what you think. Feel free to contact me at csr-counsellor@international.gc.ca.