Good afternoon. Thank you, Madam Chair and members of the standing committee, for this opportunity to speak with you.
It is without doubt that mining is an important business for Canada; however, some Canadian mining companies doing business abroad have come under global scrutiny for the way they operate outside Canada.
There are key priorities for the extractive sectors from the UN Global Compact business and human rights navigator program, which aims to guide companies in understanding and addressing the impact of their operations and supply chains on human rights. I would like to highlight a few of them.
One of the critical priorities that need to be addressed from the mining sector relates to indigenous rights violations. The sector has been linked to the use of lethal force or targeted violence of indigenous climate and human rights defenders; the forced displacement of local communities; improper management or disposal of mining waste, including environmental degradation and damage; the indiscriminate use of water required for mining operations, leading to water shortages; and the use of public or private security, leading to increased violence against indigenous communities.
Another key priority is gender equity. Mining is a male-dominated industry, and women account for less than 15% of mining leadership positions globally. Recent studies show that in Canada less than one-quarter of board members in mining companies are women. Women who do work in mining are generally lower paid and occupy less valued roles. In some places there are limited grievance mechanisms in place, or they need to be filed by a male family member.
There are also global concerns relating to children in poverty working in dangerous mining operations, and issues related to workers' health and safety.
All these have reputational and other tangible risks for companies, for the industry and for Canada.
The growing competition and identified challenges present an opportunity to focus on how Canadian mining companies can respond to these challenges and move forward to succeed in this turbulent and hyper-competitive global environment. It is no longer enough to be reactive and enter the crisis in damage control mode. Businesses can no longer expect sustained competitive advantage by focusing on financial performance only.
Canadian mining companies must be proactive in ensuring their ESG strategy is integrated in all their operations across the world. This must be authentic. Anything less will likely signal greenwashing.
Mining companies are no longer able to claim ignorance or say that they are not responsible for the actions of contractors or their supply chains. Parent companies are increasingly being held accountable. Canadian mining companies abroad must pay attention to their global supply chain and conduct due diligence on who they do business with.
There have been reports of under-reporting and an absence of investigations on human rights violations. Disclosure and transparency will increase trust and confidence. Canadian mining companies should be required to report not just on financial and environmental dimensions, but also on human rights and social issues. The Canadian mining industry must operate abroad in the same way and under the same regulatory scrutiny and laws as it does in Canada.
Competition in the global extractive industry has become ferocious. Simultaneously, the scrutiny for human rights violations, action on climate crisis, the rights of indigenous people, diversity, transparency and reporting have become a priority for many investors.
There are tangible consequences for Canadian mining companies abroad that are not able to form strong relationships and collaborations with local communities. There is a growing trend in mining-rich jurisdictions where Canadian mining companies have interests for increases in royalties, taxes and larger ownership stakes in the mines. Global lawsuits for human rights violations are seeking large companies that are perceived to have gotten away with bad behaviour and making them exemplars.
ESG investing is on the rise, and investors will not ignore any unethical and irresponsible behaviour of mining companies. It is no longer enough to operate with judicial and administrative permits.
The Global Compact Network Canada can be an important resource for Canadian companies. We currently have a few companies from the mining sector that have joined the network and benefit from the resources.
Lawsuits for human rights violations and accusations of slavery and malicious treatment of protesters put the global spotlight on Canada and have negative implications for the Canadian mining sector. Failure to respond effectively can give advantage to Canada's competitors.
While Canada continues to occupy a strong place in the sector, investment can be mobile. Investments now come with the strong desire for business sustainability considerations. The question to ask is this: How do we benefit from this new environment, and how do we gain sustained competitive advantage?
Thank you for the opportunity to speak with you.