Mining News

More transparency coming to Canadian mining

Posted by Alana Wilson on 6/7/2013 10:20:35 AM

By Alana Wilson

According to a recent article in the Globe and Mail, the Mining Association of Canada, the Prospectors and Developers Association (PDAC) of Canada, Revenue Watch International, and Publish What You Pay Canada are partnering to lobby for mandatory “publish what you pay” rules in Canada. Later this month they will release “a detailed proposal for provincial securities regulators in Canada to enforce transparency provisions for the mining sector, including project-by-project payments to all governments, whether domestic or foreign.”

Although Canadian miners operate in over 100 countries around the world, Canadian reporting regulations are weaker than those of the USA and European Union which have both adopted mandatory disclosure regulations. The federal government is now supporting the adoption of mandatory reporting although Natural Resources Minister Joe Oliver cautioned that any regulations would need the collaboration of the provinces, which have jurisdictions over resource royalties and securities law.

Many Canadian mining companies already disclose payments made to governments abroad through the Extractive Industries Transparency Initiative (EITI). The EITI is a multi-stakeholder coalition of governments, companies, investors, civil society organizations, and partnering organizations which was formed to counter the lack of transparency around government revenues received from natural resources. The formation of EITI was driven by concerns over the 'resource curse'; where high revenues from natural resource extraction could permit corruption, inefficient governments, and suppression of political rights in countries with poor institutions and limited accountability and transparency. Although Canada is a supporter of the EITI, it has not implemented it, meaning that companies operating in Canada do not currently have to disclose publicly payments made to the government.

One possible issue noted in the Globe and Mail article is the extension of mandatory reporting to First Nations. Currently, many impact benefit agreements between mining companies and bands are confidential, and regarded as commercial contracts. However, Mining Association of Canada president Pierre Gratton is optimistic that a process of buy-in and support for greater disclosure will eventually occur.

Of course, as with any public policy, there are pros and cons. Some in the industry worry about compliance costs:

In Canada, oil industry officials say they support the principle of transparency, but worry about the burden it may impose. “The concern is that the level of disclosure will be very onerous on companies because they may have dozens of projects in any given jurisdiction,” said Scott Meakin, manager for corporate responsibility for the Canadian Association of Petroleum Producers.




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