Time for Canada to rein in our global mining firms, including Ivanhoe

Time for Canada to rein in our global mining firms, including Ivanhoe

Canadian Friends of Burma – Oct. 26, 2010

"[m]ining companies are registered in Canada like ships are registered in Liberia" - Ivanhoe Mines Chairman Robert Friedland

Ottawa - This Wednesday (Oct. 27, 2010) the House of Commons will take the final vote on a private members bill that if passed will establish basic guidelines for Canadian extractive companies that operate overseas. Canadian firms would have to follow these guidelines in order to receive support from Export Development Canada (EDC) and the Department of Foreign Affairs and International Trade (DFAIT).

Bill C-300 sponsored by Liberal MP John McKay includes guidelines based on Canada’s international human rights obligations that would compel the government to avoid supporting mining firms whose overseas operations do not live up to a minimum level of corporate social responsibility.

Predictably Canada's mining industry and their well funded lobbyists strongly oppose bill C-300.  The mining industry claims that the guidelines would unfairly punish Canadian firms and cost Canadians jobs.  The industry also claims such regulation is unnecessary because Canadian firms operating overseas follow the best practices.

Contrary to the mining industry's claims however numerous Canadian firms are involved in some of the developing world's most controversial mines which have been linked to massive environmental destruction and serious human rights violations.  These mines located in some of the world's most impoverished and troubled nations.  Guatemala, Papua New Guinea, Niger and the war torn Congo are all home to extremely problematic mines run by Canadian firms.

At present there is little to no oversight of Canadian firms operating overseas and many ostensibly Canadian firms are structured in such a way using offshore subsidiaries that they pay little if any tax.  It’s a massive regulator black whole.

Vancouver based Ivanhoe Mines is one of the firms set to loose out if Bill C 300 is passed.  The firm led by notorious chairman Robert Friedland is seeking crucial financial support from Export Development Canada (EDC) to assist with a massive copper and gold project in Mongolia.  If Bill C-300 is passed, EDC's proposed $500 million dollar loan to Ivanhoe would be in jeopardy due to unresolved issues involving the firm's mining operations in Burma.

In February 2007, Ivanhoe Mines announced that it had transferred its 50% stake in the Myanmar Ivanhoe Copper Company operator of Burma's largest mine to an "independent third party trust" in return for a guarantee that when the trust sold the stake Ivanhoe would then be paid.  As part of the trust deal Ivanhoe continued to receive royalties from the mine and by way of the trust remained owners of half of MICCL.  Later that year Ivanhoe, citing a lack of knowledge about what was occurring at MICCL's Monywa copper mine, claimed that it was "prudent to record a $134.3 million write-down" in the value of their 50% holding in the Burmese joint venture thus reducing its value to zero.

Ivanhoe has to date maintained that the "independent trust" has not sold its stake but the firm refuses to say who runs the "independent trust".  

EDC's apparent willingness to support Ivanhoe comes despite the fact that there is mounting evidence that the so called "trust" sold Ivanhoe's stake to junta cronies who then resold it to Chinese weapon's firm Norinco and another Chinese firm Chinalco.  Burma's state-controlled English-language business weekly the Myanmar Times reported on August 16, 2010 that Norinco would spend US$997 million to develop Monywa’s Letpadaung deposit, an area that Ivanhoe's previous annual filings show was controlled by its joint venture MICCL.

Shortly after Ivanhoe opened a massive heap leach pit at Monywa, farmers with land near the mine found that increased acidity in the soil prevented them growing anything.  The farmers have now been driven into poverty and are forced to earn a living combing through left over mining waste produced by the mine's operations.

Ivanhoe's claim that it created good jobs for people in Burma is also highly questionable.  In 2004 a Burmese court sentenced a driver employed by Ivanhoe named Ko Htet Lwin to seven years in prison because his boss Ivanhoe's Burma exploration manager Andrew Mitchell demanded to be driven to Aung San Suu Kyi's house, a restricted military zone.  Mitchell was under the impression that as a Westerner working for Ivanhoe he could do as he pleased. 

Soldiers acting as the Nobel Peace prize winner's jailers stopped Mitchell's car as it approached Aung San Suu Kyi's home.  Mitchell was eventually allowed to go free, his driver however wasn't so lucky.  The Burmese military charged that the Ko Thet Lwin had kidnapped his boss while under the influence of drugs, a claim that the driver's family said was a total fabrication.   Ko Thet Lwin's last known location was Burma's Insein prison.  CFOB has not been able to verify whether or not Ko Thet Lwin survived a May 2008 massacre that occurred when guards shot and killed dozens of prisoners.

Despite repeated requests the Canadian government has yet to investigate what happened to Ko Thet Lwin or the present status of Ivanhoe's stake in the Monywa mine which if sold to junta's cronies would violate Canadian sanctions.

CFOB supports Liberal MP John McKay's private members bill and we are pleased that the NDP and Bloc Qubecois will be voting for it on Wednesday.  We urge both Liberal and Conservative MPs to support bill C-300.  We encourage our friends in Canada to contact their MP to tell them to support bill C-300.

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The Canadian Friends of Burma (CFOB) is federally incorporated, national non-governmental organization working for democracy and human rights in Burma. Contact: Suite 206, 145 Spruce St., Ottawa, K1R 6P1; Tel: 613.237.8056; Email: cfob@cfob.org; Web: www.cfob.org