The Canadian Parliament Standing Committee on Foreign Affairs and International Development is currently debating Bill C-300 (the “Bill”). The Bill was sponsored by Liberal MP Hon. John McKay PC on February 9, 2009. On April 22, 2009, the Bill passed second reading narrowly (137-133) in the House of Commons.
As described on the Parliament of Canada’s website, the purpose of Bill C-300 is to promote environmental best practices and to ensure the protection and promotion of international human rights standards with respect to the mining, oil or gas activities of Canadian corporations in developing countries. The Bill proposes the adoption of the Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act (the “Act”). It also proposes related amendments to the Export Development Act, the Department of Foreign Affairs and International Trade Act, the Canada Pension Plan (CPP) Investment Board Act and the Special Economic Measures Act (collectively, the “Amended Acts”).
The Act, if adopted, will affect all Canadian corporations engaged in “mining, oil or gas activities” in developing countries or offshore and receiving support from the Government of Canada. “Mining, oil or gas activities” are broadly defined as the exploration and drilling for, and the production, conservation, processing or transportation of, mineral resources, oil or gas in the territory of a developing country or on the high seas where such activities are controlled directly or indirectly by a Canadian corporation.
Should the Act come into force, within the 12 months thereafter, the Minister of Foreign Affairs and the Minister of International Trade of Canada (collectively, the “Ministers”) will issue guidelines that “articulate corporate accountability standards for mining, oil or gas activities”.
The Bill proposes a regime whereby any Canadian citizen or permanent resident, or any resident or citizen of a developing country in which mining, oil or gas activities are conducted by a Canadian corporation, may send written complaints against such corporation’s alleged contravention of the guidelines directly to the Ministers. The Ministers may also examine any Canadian corporation, if they have reason to believe that it has contravened the guidelines. In the event a conclusion is reached that a corporation has contravened the guidelines, the Act may be used to cut off Export Development Canada funding for, and CPP Investments in that corporation. The Ministers will also publish in the Canada Gazette the results of any examination undertaken pursuant to the Act.
Notably, the Act in its current proposed form does not stipulate a mechanism under which a corporation may seek redress in the event a complaint turns out to be without merit. The publicity that may be garnered against a corporation due to a written complaint, or during an investigation based on such complaint, for which the Act allows a broad range of individuals to file may also materially and irreparably impact that corporation’s future ability to raise funds in the public markets.
Bill C-300 has not yet received Royal Assent as at the date of this publication.
Bill C-300 can be accessed online at the following web address: http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3658424&Language=e&Mode=1
If you have any questions on Bill C-300, contact any member of Clark Wilson LLP’s Corporate Finance & Securities Group.