I attended the Prospectors and Developers Association of Canada (PDAC) conference this week. It is a huge conference that takes place every year in Toronto, Canada, a trade show for the exploration and development sector of the mining industry. Corporate Social Responsibility (CSR) issues abounded throughout the conference, with interesting discussion of PDAC's E3 Plus Framework.
One session involved a talk by the Export Development Bank of Canada on how CSR and sustainability issues are used to evaluate projects in financing decisions. Another session was a tutorial on the E3 Plus Framework created by PDAC. The purpose of this article is to give a brief overview of the E3 Plus Framework and how they should be understood from a legal perspective.
E3 Plus provides first principles, guidance, and detailed toolkits related to three areas: (1) Environmental Stewardship; (2) Social Responsibility; (3) Health and Safety. The toolkits provided for each of the three areas are in the form of best practices. They are quite detailed, covering a broad range of subtopics within the above noted categories. They are not meant to be exhaustive, but can get into considerable detail regarding the practices an exploration company should adopt in respect of CSR. For example, it was mentioned that the health and safety toolkit includes information on topics such as specific as "working on ice". There are also toolkits regarding community and stakeholder engagement, including with respect to aboriginal communities. The system is still under development. My sense is that at some point it will aim to be a "pre-assembled" CSR strategy for mineral exploration.There is even talk about creating an "accreditation" or "certification" for companies that sufficiently adopt the framework. This would involve an auditing and verification process, something that even the ISO 26000 standard does not contemplate.
The toolkits are hundreds of pages long. Some concern was expressed amongst participants that it may be too complicated. Clearly PDAC walks a fine line. On the one hand if it is too detailed it may be overly cumbersome. If not detailed enough it may make the topic of CSR seem misleadingly simple. The system is intended to exist alongside other standards and best practices, including those of the ISO 26000 standard (forthcoming).
In my view, E3 Plus is a valiant and extremely useful assemblage of topics that are relevant for a CSR program. E3 Plus makes clear that its framework is meant to be overlaid on legal and regulatory compliance, which it attempts to go beyond into the realm of best practice. While that may be the case, my own opinion is that it could be somewhat risky for companies to take the framework and implement it without expert assistance. Essential in that regard is legal counsel, to ensure that business practices in terms of employment, health and safety, and environment meet legal and regulatory requirements. Legal counsel familiar with E3 Plus and CSR best practice generally can also facilitate the integration of legal compliance and the movement towards best practice. It is imperative that working with the framework does not lead companies into a false sense of security. Many if not all of these issues have legal implications, and will be implemented in the "shadow of the state", with the potential for real sanctions for mismanagement.
Best practices in CSR will mean integrating these practices throughout the organization, at both a strategic and operational level. That concept is what E3 Plus conveys very well. It also provides a very useful summary of many of the issues that exploration companies should consider in managing CSR practices. I highly recommend it as a good CSR primer for this reason, with the strong caveats mentioned.