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Tibet mine probe bans Vancouver-based firm from export help

May 4, 2015

By Sneh Duggal

Embassy News, April 29, 2015 - A Vancouver-based mining company with ties to the Chinese government will no longer have access to Canadian government support in markets abroad after it refused to participate in a Canadian government committee’s review of complaints made against its operations.


The consequences the company is facing are a result of the Canadian government’s revised
corporate social responsibility strategy, which was released last November and includes provisions for non-participation in such reviews.

But this case is also raising questions as to where the provinces stand with regards to the federal CSR strategy, after the company in question partook in a provincial government trade mission to Asia during the review.

Government committee cites non-participation

The Canada Tibet Committee, a non-governmental organization based in Montreal that promotes human rights in Tibet, submitted a request for review of China Gold International Resources Corp. Ltd.’s operations in Tibet’s Gyama Valley to Canada’s so-called National Contact Point in January 2014.

The NCP is a committee made up of representatives from seven government departments including the Department of Foreign Affairs, Trade and Development, Environment Canada and Industry Canada, with its secretariat being housed within DFATD. All countries, such as Canada, that adhere to the Organisation for Economic Co-Operation and Development’s guidelines for multinational enterprises are required to have an NCP to promote the guidelines or help create a dialogue between parties to help resolve issues. China is not listed as a country that adheres to these guidelines.

The company in question is a gold and copper producer with operations in Inner Mongolia and Tibet. It is listed on both the Hong Kong and Toronto stock exchanges. The company’s website says it is the “flagship and the only overseas listing vehicle” of China National Gold Group Corporation, a stateowned gold producer.

The Canada Tibet Committee applied for a review after a 2013 landslide in Gyama Valley killed more than 80 workers at a mining camp. The committee claimed that this was a “manmade disaster related to mining operations.”

While this was the immediate impetus for the review, the committee’s executive director, Carole Samdup, alleged there were other problems associated to the mining operations including evictions and pollution. She said that normally such a case would be brought forward by community members themselves; however, those in Tibet would have a difficult time doing this, so the committee decided to represent the community.

The NCP statement indicated that it made several attempts to obtain feedback from the company, but the company stated “they would not engage or provide information.”

The company and the Chinese Embassy could not provide any comments to Embassy before press time.

China Gold faces government backlash

The federal government released a revised corporate social responsibility strategy in November 2014. The updated strategy noted that there would be a withdrawal of Canadian government support in foreign markets if a company did not participate in the dispute resolution processes through either the CSR counsellor’s office or the NCP.

It also said that while a company could decide whether to participate in such review processes, a decision not to participate could mean a “withdrawal of [Trade Commissioner Service] and other Government of Canada advocacy support abroad.”

 It noted that companies would “no longer benefit” from government of Canada services including “the issuance of letters of support, advocacy efforts in foreign markets and participation in government of Canada trade missions,” and that non-participation could also have an impact on a company’s access to Export Development Canada financial support.

The NCP’s statement said that China Gold’s non-participation “will be taken into consideration

in any applications by the company for such services, should they be made.” It also said if the company wants to access this support in the future, it would need to submit a request for review or show “good-faith dialogue” with the Canada Tibet Committee.

“As a result of the company’s refusal, and in line with Canada’s enhanced CSR strategy, the company will no longer qualify for government of Canada support in foreign markets,” a DFATD spokesperson wrote in an April 28 email.

“We were very pleased with the statement,” said Ms. Samdup. “It’s the first time that these sanctions have been applied to any company, so we’ll see how it plays out in the future, but for us, it’s definitely a significant step forward.”

But she said that while the NCP did what it could, she felt they were somewhat limited in that they could not go and investigate specific allegations and they were unable to force the company to participate.

Kernaghan Webb, an associate professor with Ryerson University’s law and business department, said that some have been calling for a mandatory adjudication process for Canadian companies operating abroad, but this case speaks to the issue of the delicate nature of having one government making assessments about companies and their operations in another government’s territory.

He said systems like Social Accountability 8000, a set of workplace and socially responsible standards, can be used to nudge China to be a better player on labour and human rights issues as those doing business with Chinese companies can insist of having these standards met.

“It’s not an intrusion of national sovereignty,” he said.

Questions raised on provincial policies

British Columbia’s trade minister, Teresa Wat, led a trade mission to China and Indonesia from March 27-April 9. China Gold International Resources Corp. Ltd. was one of the companies included in the delegation. The company participated in a seminar called Destination Canada on April 2 and attended a dinner reception that evening.

Ms. Samdup said the fact that the company was on a trade mission during the review raises the question of whether Canada’s CSR strategy applies to the provinces.

However, the BC government says it was not aware that such a review was going on at the time of their trade mission and that the results of the review were released towards the conclusion of the mission.

Ms. Samdup countered that the province should have known the review was underway. “A simple Internet search would have told me that there was an NCP review underway and knowing that the government of Canada had recently adopted a new CSR strategy, putting two and two together might have raised some red flags.”

Mr. Webb said the BC government has not done anything wrong and that they were innocent of knowing of any particular conclusion to the review.

“The thing that is most disturbing from the point of [British Columbia] helping to showcase China Gold is China Gold’s refusal even to involve itself with the NCP,” said Richard Janda, a professor with McGill University’s law faculty.

Mr. Webb said that when Canada purports to take a position with respect to another country, it’s very important for them to have, where possible, a united front, and to have the provinces on side.

It seems like the Canadian government has received such support, at least from BC.

While the BC government said the province doesn’t directly fall under the federal CSR strategy, an official did say they expect companies operating at home and abroad to respect all aspects of it.

The official added that the province would “follow the federal government’s lead in suspending any further trade support to the company.”

Going forward, the Canada Tibet Committee plans to reach out to the provinces to see what their policies are on the federal government’s CSR strategy.

Ms. Samdup said they would also monitor the application of the sanctions on the company, track what is going on in Tibet with the mining project and continue to reach out to the company.

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