Escalating Social Risk for Mining Sector

Canada's CSR Counsellor for the Extractive Sector, Marketa Evans, writes in the Canadian Mining Journal about social risks affecting the mining industry globally.  In the management of social risk, including the risks of community conflicts and social opposition, Ms. Evans states that the industry has so far taken more limited measures than have been taken for environmental risks, even though increasing evidence suggests that social risk constitutes a material risk to mining operations. Full article can be read here.

New Case May Affect Whether Equator Principles Adoption Creates a Global Duty of Care on Canadian Banks

The recently revised Equator Principles (EP), whose third iteration (“EP III”) took effect on June 4th, 2013, appears to have caused little stir in the Canadian banking legal counsel community. Many legal counsel have never even heard of the EP, even those who structure the deals that the EP apply to. The muted reaction might lead one to believe that the new EP or its predecessors present no significant legal risks for the industry. Alternatively, it may suggest that many of the risks inherent to the EP are poorly understood and risk becoming the next “black swan” that catches legal counsel flat-footed. A case currently being considered in an Ontario court, Choc v. Hudbay 2013 ONSC 1414 could have bearing on those questions and affect the potential legal risks of EPFI and is worth monitoring by banks and their counsel.

Corporate liability for human rights violations in Canada?

Can a Canadian parent company with a subsidiary operating in a foreign jurisdiction be liable for human rights violations in the foreign jurisdiction that occur at the level of the subsidiary? Janne Duncan, Michael Torrance and Janet Howard discuss a recent decision in which a Canadian court has allowed this issue to proceed to trial. Whatever the outcome at trial where issues of liability will ultimately be determined, one thing is clear: international public expectations are changing, and directors and officers of Canadian companies need to be aware of the potential risk of claims by foreign plaintiffs seeking redress for alleged harm committed beyond Canada’s borders.

Equator Principles Banks: The New Global Regulators of Environmental and Social Performance

So, you are confident you can make a business case to your financier as to why they ought to invest in your mining project. You are also sure your project will meet regulatory requirements of local governments. It is a good start, but thanks to a paradigm shift in global regulation of mining activity, it is probably not enough. To get a project off the ground, many mining proponents will also need to demonstrate compliance with the environmental and social regulations of their financiers in accordance with the Equator Principles (EP).