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McEwen Slams Canadian Extractive Sector Ombudsman and Discredits Local Stakeholders
November 26, 2012 – Toronto Canada.
The Office of the Extractive Sector Corporate Social Responsibility Counsellor of the Government of Canada, pre-released a report this weekend to parties under dispute over the glacier impacts of the Los Azules mining project operated by McEwen Mining in San Juan Argentina. A complaint had been filed by two local environmental groups (CEDHA and FuCI) in July of this year, presenting extensive evidence including satellite imagery, showing that McEwen is impacting glaciers and permafrost areas in their copper exploration project in San Juan Argentina. This says the complainants, is a violation of Argentina’s National Glacier Law. The company doesn’t even have a glacier protection policy in place, say CEDHA and FuCI, which is one of the requests made to the Counsellor’s office, that McEwen establish a clear policy to protect glacier resources. The company denies that any “ice glaciers” exist at all at the project site.
Satellite Image shows how exploratory mining roads dissect active glaciers at Los Azules
The Extractive Sector Counsellor’s report notes that CEDHA and FuCI acted in good faith and are legitimate stakeholders. Following extensive back and forth consultation by the Counsellor with the complainants and with the company, the Canadian government considered that there was “a potential opportunity for a constructive dialogue between the parties on issues related to the Counsellor’s mandate”. The Extractive Sector Counsellor’s office, is part of the Canadian government’s CSR Strategy for the extractive sector, and was established in 2010 to promote responsible practice for Canadian extractive companies operating abroad. The complainants approached the Counsellor’s office hoping to avoid a legal dispute and instead get McEwen to take voluntary steps and due diligence measures to protect glacier resources.
Following a detailed intake screening, the Counsellor decided to admit the complaint presented by environmental groups against McEwen, which while not a pre-judgment against McEwen, does indicate that the issues presented merit consideration. After reviewing the evidence submitted against McEwen, and considering the office’s mandate to review corporate due diligence for best international practice, including due diligence compliance expectations by the Canadian government for mining companies of normative frameworks such as IFC’s Performance Standards, OECD Guidelines for Multinational Enterprise, the Global Reporting Initiative, and Voluntary Principles on Security and Human Rights, the Counsellor “uncovered that two major areas” which could be addressed in mediation regard “transparency and information” as well as “stakeholder engagement”. This reflects closely the complainants insistence that McEwen has been unwilling to engage or provide information about or even comments to evidence of glacier impacts from exploratory drilling and activity.
The report issued indicates that “the Government of Canada encourages and expects all Canadian companies working around the world to respect all applicable laws and international standards, to operate transparently, and in consultation with host government and local communities, and to conduct their activities in a socially and environmentally responsible manner.”
McEwen, says the Counsellor’s report, rejected the organizations as stakeholders of the project, and indicated that there is minimal impact at Los Azules. McEwen also indicated that “the issues raised in the request are primarily connected with domestic laws in Argentina, either federal or provincial. … [and that] “there is a robust legal framework in Argentina to address stakeholder concerns and this should be the primary place for concerns to be addressed.”
While McEwen insisted on the legal implications of the issues raised by the complainants, and oddly encouraged that complaints should be channeled through the Argentine legal system, the Counsellor very specifically recognized in the closing report that “Legal or regulatory processes alone do not necessarily identify and mitigate all material social risks”.
McEwen also admitted, says the Counsellor, that “glaciologists are at work on the project and scientific data is being gathered”, a point the complainants say contradict the company’s website statements which indicate that “there are no ice glaciers present” at Los Azules.
Most surprising however, is the indication in the report that McEwen Mining considers “the value of the Office’s process is not sufficiently high”, seemingly indicating that the Canadian Government’s commitment to carrying out mediation in extractive sector conflict is insufficient. The complainants, on the contrary, says the Counsellor, “see value in the in the dispute resolution process with the Counsellor as a neutral third party, to build constructive working relationships with the company”.
While the case before the Counsellor was closed due to McEwen’s unwillingness to engage, the Extractive Sector Counsellor set significant precedent for future cases, firmly establishing that practices by companies that may be legally constituted in third countries (McEwen is registered in the US) but which have main headquarter operations in Canada could be reviewed by the office. They also accepted CEDHA and FuCI as legitimate stakeholders despite that they are not located at the project site. In this case, no communities live near to the mining operation as it takes place in high mountain environments were there are no human settlements.
With McEwen’s withdrawal from the friendly settlement mediation process offered by the Extractive Sector Counsellor’s Office, the complainants have already contacted the company indicating that they are studying legal action against McEwen and the Los Azules projects in Argentina and/or in Canada, for violations to Argentina’s National Glacier Protection Law.
For more information:
Jorge Daniel Taillant
+54 9 351 507 8376
Original press release by complainants when the case was admitted by the Counsellor:
Complaint presented by CEDHA and FuCI:
Report of Glacier Impacts at Los Azules: