Pushing the Debate

The Toronto Stock Exchange (TSX) attracts half of the total investments made by mining companies worldwide and is lauded by financial papers around the globe for its favourable 'business climate.'

In Canada, our savings, RRSPs, pension plans and other investments are calibrated to financial flows, particularly to those of the TSX.

But what is the real cost of a share listed on the Toronto Stock Exchange? What is the ecological, political and human cost that allows the balance sheet of mining companies listed on the TSX to satisfy their institutional investors, to whom we entrust our savings?

We wrote Noir Canada to highlight a number of troubling cases of exploitation in Africa by Canadian mining companies, and to probe the stories around influence peddling, arms trafficking, fiscal evasion, organized pillaging and environmental destruction. The book is based in part on reports published by a wide range of groups - from the UN Security Council to international NGOs - which are as methodologically credible in their research as they are damning. Noir Canada explores the key roles Canadian mining and oil companies have played in multiple conflicts that, between 1998 and 2003, have left more than four million victims in the African Great Lakes region.

Canadian companies active in Africa and elsewhere are not required to divulge information related to their exploration methods, except where it is in the shareholders' interest to do so. Ontario’s financial regulators have not mandated the TSX to implement rules that would require strict reporting requirements for exploration companies. Popular uprisings, armed conflicts, looting of resources and acts of environmental destruction currently fall neatly under the moniker of “external risks.”

Responding to public pressure, the Canadian government organized the “National Roundtables on Corporate Social Responsibility (CSR) and the Canadian Extractive Industry Operating in Developing Countries,” initiating a series of consultations held across Canada in 2006. The consensus report that came out of the Roundtables, signed by experts, mining industry representatives and members of civil society, had some interesting recommendations (companies working overseas should comply with Canadian standards, for example), but they remain voluntary and not legally binding. The main watchdog within Canada was to be an “ombudsman,” who would gather data and information about complaints from communities around the world affected by Canadian mining companies. These minimal recommendations have yet to be adopted by the government of Canada.

This incentive-based approach gives special status to private companies, registered with or listed on the TSX, that operate overseas. Rather than demanding the companies follow laws as they do in Canada, they are cajoled, through subsidies and other advantages, to respect certain social, political and environmental practices, however minor. Canadian companies need not fear legal action for crimes committed overseas, particularly in dictatorships that are without functioning legal systems and are supported by Canada and other western powers.

Canada is a judicial paradise for the world’s mining and oil companies. Listing on the Toronto Stock Exchange is a way of seeking shelter in one of the more permissive stock exchanges in the world, while taking advantage of the reputation of the rule of law in Canada, all the while knowing that one is outside of state control and regulation when operating overseas.

This is how Canada subtly integrates itself into the global map of offshore banking, financial havens, free ports, and free-trade zones. Most of the world's mining companies keep their dollars in offshore accounts and take advantage of a legal framework in Canada that allows them to work all around the world under the Canadian flag without ever having to explain their actions to anybody.

The absolute necessity of public debate that the book Noir Canada raised this spring has resulted in the book becoming the object of two legal challenges for "defamation": a $6-million lawsuit launched by Barrick Gold in the Supreme Court of Quebec, and another by Banro, in Ontario, for $5 million. These Strategic Lawsuits Against Public Participation (SLAPP) attempt to make critical questioning illegal, while violating the principles of free expression and the public right to information.

By the very questions that it asks, Noir Canada is testing Canadian democracy.

Alain Deneault is a member of the Collectif Ressources d’Afrique and co-author, along with Delphine Abadie and William Sacher, of Noir Canada, Pillage, corruption et criminalité en Afrique, Écosociété, 2008.

Translated by Dawn Paley.

To read comments posted by Patrick J. Garver (Executive Vice President and General Counsel of Barrick Gold Corp) and Alain Deneault, click here: