Holding Canadian Mining Corporations Accountable – Nevsun Resources Ltd v Araya.

While public and private business enterprises hold widespread conversations about their social and environmental responsibilities, they remain voluntary, making application optional. Corporate social responsibility (CSR)is a form of norms and actions companies can adopt to shape their business around ethical concerns like human rights, the environment, and corruption. For example, mining corporations with transnational operations voluntarily integrate the CSR framework to satisfy business responsibly. Canadian mining companies are also beginning to face pressures from a rise in the legalization of CSR principles, as exemplified in recent case law. Nevsun Resources Ltd v Araya is a landmark Supreme Court of Canada case because it established that victims from foreign countries can request a trial in the company’s host countries. The ability for malpractice victims to seek legal recourse sets a precedent for future cases. As a result, Canadian Mining Transnational Corporations (TNCs) can expect greater accountability for malfeasance abroad. 

Legal scholars have recently reviewed essential trends and changes in the Canadian legal landscape. One article, “Reflections on the Corporation Social Responsibility Landscape for Canadian Mining Transnational Corporations in the Aftermath of Nevsun Resources Ltd v Araya,” examined a case brought forth by three Eritrean workers with allegations against Nevsun Resources Limited (Nevsun). The plaintiffs argued that Nevsun forced them into working in one of the company’s mines and, in so doing, violated their human rights. Knowing their rights, the complainants argued for damages under international and common torts law. The Supreme Court of Canada decided the case could be trialed in the province of British Columbia, so Nevsun settled outside of court. The authors discuss the significance of the Canadian Supreme Court of Justice’s decision, its relevance to the current industry, and how it may shape Canadian mining TNCs’ decision-making in the future. They contended that the case answered several questions about how the dynamics between CSR and jurisprudence processes have shifted. What is the current relevance of CSR? Does increased legal action suggest that laws will supplant the voluntary framework?  

To address this question, the article contextualizes CSR in current events. They do this by revisiting historical applications of CSR in Canada’s mining industry in the early 1900s. Catalytic to the broader acceptance of this framework is the Mining Association of Canada (MAC). Their multi-stakeholder analysis process identified nine issues important to mining corporations that require significant attention: land access, in-migration, community health, safety and security, the environment, cultural heritage, local employment, local procurement, community investments, and community relationship management. These features were taken into consideration when developing CSR initiatives and frameworks. While the authors report that the government contributed notable input to CSR standards, the input did not prevent malfeasance and the cases that arose against mining TNCs. 

Corporations faced internal and external pressures to implement ethical mining practices without sustained government regulation and support. Furthermore, there was also a “rise of legal responsibility.” Parliament passed the Corruption of Foreign Public Officials Act (CFPOA) in 1998, which held Canada as an OECD member to its original treaty obligations. More recent examples of federal action include enacting the Extractive Sector Transparency Measures Act (ESTMA), which requires disclosing any payments made to domestic and foreign governments from oil, gas, and mineral firms. However, the authors state clear limitations to ESTMA. They highlight how the narrow definitions of mandated reporters allow for accountability loopholes. Even so, ESTMA is another signifier of a growing regulatory landscape around CSR. 

The decision on the case built upon both a growing body of privately driven CSR set of standards and practices and slowly developing legal mechanisms to enforce CSR. The authors used the case to retrace the history of CSR development through voluntary practices and legal tools. The scholars attempted to understand if the latter matured to supplant the CSR system set in place by the private sector.  Ultimately, while the legal framework is emerging and norms are forming, the earlier corporate-led CSR framework will remain important in accomplishing a broad range of social and environmental goals. 

The presence of Canadian mining corporations abroad is profound. With over 1000 companies in more than 100 countries, it’s critical to develop a CSR system where victims of TNC-related human rights crimes from foreign countries have a means of redress in Canadian courts. The Nevun case demonstrates that there are legal remedies and accountability metrics that can be held and enforced when plaintiffs present their cases. Extraterritorial litigation cannot fix all that is contentious with CSR but is an additional legal tool to employ where crime and transgressions occur. Upon reflecting on the evolution and legalization of CSR, the authors conclude that while there is increased legal oversight, as with Nevsun Resources Ltd v Araya, CSR remains a critical framework.