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Friday, August 27, 2010

CSR Counsellor Releases Draft Rules of Procedure

The legal and governance framework for the Government of Canada's CSR Counsellor for the Extractive Sector is taking shape, with the release of draft rules of procedure for the intake and administration of complaints. 

The CSR Counsellor's mandate is being developed with Bill C-300 (which would create a binding adjudicative regime, as opposed to an ombuds office) in the background, and as such these draft rules have a particularly "administrative law" flavour that may reflect an intention to make the complaints process as formalized as possible - possibly to compete with the mechanism proposed in Bill C-300.  The Counsellor's mandate extends to all Canadian (incorporated or head office in Canada) mining and oil and gas companies with operations outside of Canada.  This role was defined by a Parliamentary Order in Council, whereby the CSR Counsellor (Marketa Evans) was appointed advisor to the Minister of International Trade.

The draft rules are expressly said to be part of a "dispute resolution mechanism" which remains "voluntary" but can have "signficant reputational impacts, particularly when public reporting is included in the process".  The draft rules are based upon international best practice in non-judicial grievance mechanisms and draw upon the findings of the "BASESwiki" which has been developed by the Business and Human Rights Resource Centre in consultation with civil society organizations and which is associated with the office of John Ruggie, Special Representative to the Secretary General of the United Nations.

The draft rules refer to the use of international standards including the International Finance Corporation Environmental and Social Standards as part of the standards against which behaviour will be assessed (along with the Voluntary Principles on Human Rights and Security and the Global Reporting Initiative). However, according to the draft rules, complaints may be made without direct reference to the international standards against which the complaint will be assessed.  It will be interesting to see how these rules are applied in the dispute resolution process. It appears as though such standards will serve as the benchmark for appropriate behaviour and therefore guide the deliberations of the Counsellor's office in the fulfillment of their mandate.

A prima facie dismissal mechanism is provided for complaints that are "frivolous, malicious, trivial or generated to gain competitive advantage".  As well, procurement disputes, matters involving allegations of crime or corruption, projects that are completed or two years old, fraud, personnel matters, or other issues that are outside of the mandate of the Counsellor, or for which legal proceedings have already been commenced.

Following intake, an "informal mediation and fact finding" will occur, which may involve information gathering, research, site visits, and the engagement of experts.  At the end, a "letter of intent" may be generated that will govern the process going forward.  The process may be ended at the discretion of the Counsellor at this stage "if no path forward appears possible".  Public reports will be issued at this stage. Such reports will be shared with the Minister of Natural Resources as well as with the Minister of International Cooperation if it is relevant to that office.  Public statements will be issued after each review and in the form of an annual report.

Outcomes could include recommendations for improvement and provision of formal mediation or mediated outcomes.  A monitoring framework may be implemented to "ensure parties respect the outcomes". 

In all, the draft rules suggest a very unique process that would be among the first of its kind promulgated directly by a State, rather than as a private process, or a multinational process such as that offered by the OECD or the World Bank.  The draft rules also suggest that the process will be managed similarly to an administrative law process of adjudication.  This will make it of particular interest to in house legal counsel within the extractive sector.

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