Monday, May 21, 2018
Last updated: 3 years ago
February 5, 2014, 3:35am PDT

Occupational Hazard

By Arno Rosenfeld
UBC’s new mining institute is federally funded and industrially inclined — can it really maintain academic independence?Illustration Indiana Joel / The Ubyssey

UBC’s new mining institute is federally funded and industrially inclined — can it really maintain academic independence?Illustration Indiana Joel / The Ubyssey

► What our investigation found:
◦ The federal government is spending $25 million of money meant for international aid to fund the mining institute for five years

◦ Ottawa has recently decided to only spend international aid in cases where it will benefit Canadian corporations

◦ Documents reviewed by The Ubyssey show that the institute and university are expecting to receive millions in corporate donations to the institute and to UBC itself

◦ Several institute directors have been employed by, or worked on research for, mining companies with spotty human rights records

The new international mining institute at UBC is bankrolled by a Canadian government eager to promote its trade policy overseas, and both the institute and university expect donations to pour in from mining companies.

Despite critics who assail the Canadian International Institute for Extractive Industries and Development (CIIEID) as a tool of Canadian companies, institute director Bern Klein and others involved in the project insist that while they may be receiving funds from a government and industry that wants to buy influence, they are going to proceed independently whether their backers like it or not.

The institute officially opened its Agronomy Road headquarters on Wednesday. It was conceived by the federal government, which has funded it with a $25 million contribution to be spent over five years. Its official mandate is to improve the governance of extractive sectors in developing countries. Klein, the CIIEID interim executive director, said that means helping various levels of governments in foreign countries understand best practices for drafting regulations on how mining companies can operate.

But, Klein said, the true mission of the CIIEID is poverty reduction among local populations in developing countries. As for whether it is a conflict of interest for an educational institute to receive government funding or work in an industry with spotty human rights and environmental records, Klein is not worried.

“I don’t see it as an issue at all,” Klein said. “There’s no strings attached to it — and there could not be, that wouldn’t even be allowed in the university system here at UBC.”

However, a Ubyssey investigation has revealed deep ties between the CIIEID and the Canadian extractive resources industry, as well as tens of millions of dollars coming from the federal government earmarked for aiding Canada’s economic interests overseas.

"There’s no strings attached to [the funding] — and there could not be, that wouldn’t even be allowed in the university system here at UBC."
— Bern Klein, CIIEID interim director

At least three institute directors, including Klein, have extensive experience working for private mining companies and have been the recipients of millions of dollars in research grants.

Additionally, though the CIIEID describes its mission as improving “governance of extractive sectors in developing countries” with an eye toward ending issues such as “conflict and corruption,” the core of the institute’s funding comes from government dollars aimed at improving Canada’s economic interests abroad.

Aid agency or chamber of commerce?

Photo courtesy Goldcorp.

Photo courtesy Goldcorp.

UBC’s joint bid with SFU and École Polytechnique de Montréal, the three partner universities that now make up the CIIEID, came after the Canadian government solicited ideas for an international mining institute. The agency overseeing the bids was the Canadian International Development Agency (CIDA), which has also agreed to provide $24.6 million in funding over five years.

While UBC has contributed $6.69 million in cash and in-kind services over five years, the CIDA funds make up the bulk of the institute’s budget, and the CIIEID would not exist without the federal government conceiving of it and providing the financial backing. Given the federal government’s recent pivot toward using international aid to developing countries as a strategic foreign policy tool, some have questioned what the true mission of the institute is.

Since its founding in 1968, CIDA worked to administer Canadian foreign aid to developing countries. However, under Stephen Harper’s Conservative government, the agency — which was folded into the Department of Foreign Affairs, Trade and Development (DFATD) over the summer — turned its eye toward furthering Canadian economic interests abroad.

Nipa Banerjee — who worked for CIDA for 35 years, including as the agency’s mission leader in Afghanistan — was surprised the government had put its development funds toward an academic mining institute.

“My God, I mean, $25 million is substantial,” Banerjee said, calling from the University of Ottawa where she is a professor focusing on international aid and development.

During her time with the agency, she said, there was no conception of its work as blatantly promoting the country’s strategic interests.

“It was Canadian values and it was the benefit that Canada gains from a peaceful and developed world,” she explained. “But certainly it was not directly and clearly mentioned that it would focus on Canada’s economic interest.”

While CIDA was not shuttered until last June, when international aid moved into DFATD’s portfolio, there is clear evidence the agency had already shifted its focus to promoting Canadian corporate interests abroad. In a confidential CIDA report compiled last spring, before the agency’s folding into DFATD, the factors deciding whether Canada should continue delivering foreign aid to various developing countries were laid out in stark terms.

"The work that this institute is going to do will follow industry and government money. Based on previous experience that we’ve observed of CIDA investment … it’s really been devastating."
— Jennifer Moore, MiningWatch

The number one factor determining if CIDA should continue spending money in a country was whether a country benefited Canada’s “commercial” interests.

“This indicator is … to determine which developing countries would offer Canada the greatest potential for trade expansion,” a section of the report read. Commercial factors were followed second by “security” and finally “values,” which included “human rights” interests.

The report, obtained by The Globe and Mail through an access-to-information request and shared with The Ubyssey, highlights the potential for expanded mining opportunity as a reason to continue administering aid on par with severe humanitarian need.

“Bolivia is the poorest country in South America, with some of the worst maternal and child mortality rates in the Americas,” the entry on that country reads. “Bolivia also has mineral resources.”

The use of humanitarian assistance to open markets to Canadian mining companies is also on display in the Bolivia assessment.

Writing that Canadian mining companies could operate in the country “should the regulatory context improve,” the report adds, “Canadian technical assistance also supports the improvement of Bolivia’s regularity environment of the extractive sector.”

“The main critique I have is that it’s really not humanitarian assistance anymore, it is directly linked with Canada’s economic interests,” Banerjee said.

DFATD spokesperson Charleen Bortot said the government simply realized the private sector had a role to play in administering international aid, and the government was responding accordingly.

“Canada has been increasing its effort to work with the private sector, including the extractive sector, to help improve the lives of people living in poverty. Supporting responsible extractive sector development can reduce poverty and create sustainable economic benefits for developing countries,” Bortot wrote in an email.

An ambassador for industry?

The new mining institute is housed on campus in the Technology Enterprise Building. Photo Danielle Tan / The Ubyssey

The new mining institute is housed on campus in the Technology Enterprise Building. Photo Danielle Tan / The Ubyssey

Speaking at a June meeting of the Mining Association of Canada, the federal international cooperation minister told mining company representatives that the CIIEID “will be your biggest and best ambassador.”

“Your industry is a leader, internationally, and we want to help you succeed,” the minister, Julian Fantino, said.

Indeed, despite his adamance regarding the institute’s independence, Klein recognizes that CIDA probably funded the CIIEID because it believed that would help the interests of Canadian industry.

Government has “been very clear that they’re trying to link … trade to development,” Klein acknowledged. “So that’s their goal. From the point of the institute, we are not influenced by their agenda, by their goals.”

Malcolm Scoble, director of advisory services for the CIIEID and former head of UBC’s mining department, seemed more open to the possibility that the institute’s financial backing could lead to problems.

“We recognize the fact that in five years’ time, the federal government money ceases to be flowing into this institute to support it, so we have to … look to that future,” Scoble said. “Our plans for sustainability at this point in time are not really shaped in any sense of form to deal with that, but we’re consciously aware of that.”

Scoble said it was likely the institute could reapply to DFATD for more federal dollars after the CIDA money runs out, which means balancing the maintenance of academic integrity while keeping the future financial health of the CIIEID in mind.

“It’s a question of compromise between ensuring that we really get to launch some high quality projects and interactions, but at the same time, keep in mind developing the capacity so that eventually this is something that is sustainable without, if you like, giving up [the CIIEID’s] central objective and, in a sense, its independence,” Scoble said. “As you can see, that’s fraught with some contradictions along the way that we’re going to have to negotiate.”

Some outside the institute, such as Jennifer Moore of the Canadian NGO MiningWatch, are skeptical that the institute will be able to effectively manage that tricky situation.

“The work that this institute is going to do will follow industry and government money,” Moore said. “Based on previous experience that we’ve observed of CIDA investment in policy and institutional change in foreign countries, it’s really been devastating.”

Moore specifically referred to what she said was the work of CIDA and the Canadian diplomatic mission in Honduras to sideline the country’s civil society activists and rewrite Honduran mining laws in the aftermath of a government takeover by the military in 2009.

But Klein dismissed all such concerns, saying the institute is independent of government interests and would only provide information to governments — from the national level down to individual communities — if asked, and would not make proactive policy recommendations.

“It’s about informed decisions, and if a country decides that it’s not in its best interest to have extractive activities, that’s completely up to them,” he said. “But if they want to find out what are the opportunities and benefits that would come from that, as well as what are the negative impacts, we can provide that information.”

Waiting for industry dollars

While questions over CIDA funding for the CIIEID revolve around the federal government’s desire to use its international aid budget to promote Canadian trade, mining corporations themselves are expected to fund the institute and pour money into the coffers of UBC.

An April 2013 report given to UBC’s Board of Governors described three potential sources of future funding for the institute: fundraising “primarily from mining, oil and gas industries,” charitable grants and fees charged for services.

“Right now we actually don’t have funding from industry, so we are hoping in the years to come that we will be able to access their funding,” Klein said, clarifying that it would be made clear to any potential donors that the CIIEID had a clear mission and would not deviate from it due to financial contributions.

Accessing those funds will be important for the university, which along with SFU has committed to supporting the institute for 10 years even though CIDA money will last for only five. UBC seems abundantly confident, though, that mining companies will be eager to donate not only to the institute but to the university as well, as the CIIEID boosts UBC’s image as a centre for mining-related academia.

“Reputational benefits will lead to new development and fundraising opportunities from industry (mining, oil and gas) for the institute, but also more broadly for UBC,” the BoG report read.

The institute has tens of “institutional partners,” including NGOs, foreign governments and mining companies. Seven mining corporations, such as Vancouver’s Goldcorp, will be offering “knowledge sharing and collaboration on specific objectives” of the institute, according to the CIIEID’s contribution agreement with CIDA.

UBC was not oblivious of the fact the CIIEID might taint the university’s reputation. The institute’s work being “perceived to primarily respond to Canadian industry needs vs. developing countries” was listed as a potential risk if the board approved the institute.

Moore, of MiningWatch, said concern was well-founded — while the federal government and corporations may view an independent academic institute as lending legitimacy to their economic goals, the institute itself could well come under fire for accepting contributions from those entities.

“Direct government support is facing some issues in terms of credibility and legitimacy,” Moore said. “I think the academic institute, by virtue of latching itself to those interests, will also carry with it some credibility issues.”

Klein said that so long as the institute prioritized transparency, which he says it will, observers are free to come to their own conclusions.

“Anybody can look at us and criticize us for anything that we’re doing in light of that potential conflict of interest,” Klein said. “That doesn’t mean that you don’t proceed, it just means that you acknowledge it and make sure you have transparency.”

No strangers to the private sector

Photo courtesy GoldCorp

Photo courtesy Goldcorp

In addition to federal and potential industry funding for the institute, several CIIEID directors have extensive private sector experience.

Klein’s official CIIEID biography mentions that he “spent eight years as a consulting process metallurgist” and touts his work with the United Nations Industrial Development Organization helping limit the impact of the use of mercury in artisanal mining. A more detailed history of Klein’s work was on display in a copy of his CV on file with the university, obtained by The Ubyssey through an access-to-information request. The document shows that since 1998, Klein has been party to approximately $6.5 million in grants from private corporations — often through the federal government’s NSERC program, which partners industry with academic experts.

The corporations funding Klein’s research, the subject of which was redacted on the documents, include companies with spotty environmental and human rights records such as Placer Dome, Teck Resources and Vale.

Vancouver-based Teck was sued in 2002 after a group of Eskimo villagers in Alaska claimed water from Teck’s Red Dog mine was poisoning their drinking water. Teck was found liable for 824 violations of the U.S. Clean Water Act in a pretrial ruling before the company reached a settlement with the villagers in 2008, agreeing to spend $120 million to build a 52-mile pipeline to divert waste from the mine. The Alaska Dispatch reported that as of 2014, Teck had yet to build the pipeline and was once again dumping pollutants into a local creek after receiving state approval.

In 2004, the company was sued by the Colville Confederated Tribes and the U.S. Environmental Protection Agency for intentionally polluting the Columbia River as far back as 1896. Teck would eventually admit to dumping millions of tons of mining waste into the river. Additionally, last Tuesday Teck spilled between 12,000 and 25,000 litres of sodium hydroxide into a sewage line near Trail, B.C., the company said.

The company has spent $1 billion mitigating pollution and improving the environmental conditions of its Teck mine, a CBC report last week said.

David Parker, senior adviser to the CIIEID, worked at Teck for 21 years, according to his institute biography. Parker served as VP sustainability for Teck from 2008 to 2012.
Placer Dome, which was headquartered in Vancouver but acquired by Toronto’s Barrick Gold in 2006, has a raft of alleged human rights violations.

At Barrick’s Poregera gold mine in Papau New Guinea, a 2011 Human Rights Watch report described “a pattern of violent abuses, including horrifying gang rape … carried out by members of the mine’s private security force.

“For years, local activists have alleged that mine security personnel carry out extrajudicial killings and other violent abuses against illegal miners and other local residents,” the report read. “The mine has also been widely condemned for discharging six million tons of liquid tailings (mine waste) into the nearby Porgera River.”

"Anybody can look at us and criticize us for anything that we’re doing in light of that potential conflict of interest. That doesn’t mean you don’t proceed, it just means that you acknowledge it and make sure you have transparency."
— Bern Klein, CIIEID interim director

HRW also credits Barrick with taking “some meaningful steps” to address issues raised in the report. Prior to Barrick’s takeover of the mine in 2006, however, the security force was even less disciplined and had not joined onto agreements like the Voluntary Principles on Security and Human Rights.

In 2004, Klein received a $45,000 grant from Placer Dome for unspecified research.

According to another HRW report, titled “‘What Is a House Without Food?’: Mozambique’s Coal Mining Boom and Resettlements,” coal mines operated by Vale and Rio Tinto have displaced local residents and forced them into new villages where they “have faced significant and sustained disruptions in accessing food, water and work.”

In 2006, Vale — whose corporate operations are based in the Cayman Islands, a notorious tax haven — acquired Inco, then Canada’s second-largest mining company. Klein recorded $322,592 in grants from Inco from 2007 to 2008, following its acquisition by Vale.

In 2012, Vale received the Public Eye award for being the company with the most “contempt for the environment and human rights” in the world.

Marcello Veiga, another faculty member at the institute, consulted for Placer Dome from 1999 to 2000 and previously worked for Vale studying “new opportunities for the mining and chemical sector,” and “ideas to expand markets of the CVRD [Vale] group.”

Klein defended his and his colleagues’ industry-commissioned research, saying it was essential to helping mining companies improve their operations. Noting that all the research was publicly available and did not exclusively benefit the supporting corporation, Klein said his research specifically focused on how companies could become more environmentally friendly through improved waste management and the use of green energy.

“We are the group of people, the universities are, that can conduct that work in Canada,” Klein said. “Partnering with industry, if you’re going to have impact, is critical. I couldn’t do this work without partnering with industry and then [hoping] they would adopt the technologies that we’re working on.”

When it comes to working with companies with especially bad environmental or human rights track records, Klein made the comparison to the CIIEID operating in a corrupt country, and said that was all the more reason to get involved.

“We wouldn’t want to work in a country unless we thought we could have an impact,” Klein said. “A lot of our work will reflect onto the private sector and it will influence them to change.”

Klein also noted that in the past 15 years, mining companies have begun focusing on improving their environmental records, meaning that much of the research he and other faculty at the institute participated in was aiding in that mission.

Place Dome, Klein said, was the first mining company to produce a sustainability report, now standard practice across the industry.

Still, critics point out that Canada’s mining industry has a uniquely bad record when it comes to human rights. A 2009 report on the impact of Canadian mining companies in the developing world by the Canadian Centre for the Study of Resource Conflict was suppressed by its industry funders, but later leaked and published. The report found 171 incidents from 1999 through 2009 where Canadian extractive industry companies were involved in “community conflict, human rights abuses, unlawful or unethical practices, or environmental degradation in a developing country.”

“In comparison to their closest peers, Australia and the United Kingdom, Canadians were involved in more than four times as many incidents,” the report found.

Potential for good

Despite ties to industry, which are to an extent inevitable when working in the world of extractive industry research, the CIIEID has impressive goals. These include aiding disadvantaged groups in developing countries, including women and aboriginals; assessing the needs of local populations where extractive resources are located and training government officials; and graduate students from the developing countries where the CIIEID will be active.

CIIEID spokesperson Sara McIntyre pointed to a program for artisanal miners in Ecuador as an example of the institute’s work on poverty alleviation. CIIEID is assisting independent, small-scale miners stabilize their livelihoods and training them in proper environmental practices, how to effectively negotiate with large mining corporations and how to turn their operations into functioning companies.

Scoble, the director of advisory services at CIIEID, said the line the institute was walking between cooperating with and perhaps aiding industry and working toward the more benevolent goal of poverty alleviation was similar to the mission of UBC’s mining department.

“We graduate people who are going to enter the mining engineering industry, but as a consequence of what we hope their educational experience will be, we’re hoping they’re going to contribute to positive industry practices,” Scoble said.

Scoble added that while Canadian government-funded efforts to affect the governance of extractive resource industries in foreign countries have been criticized in the past, the CIIEID is uniquely situated due to its interdisciplinary nature. Bringing together SFU’s Beedie School of Business and UBC and EPM’s diverse engineering and education experience will allow the institute to approach difficult situations in innovative ways.

“We’ve got an inherent belief in the nature of this kind of assistance to the developing world and we want to try and make it succeed,” Scobel said.

Klein demurred when asked if the federal government would be pleased with CIIEID’s work.

“In their request for the proposal, there [were] specific goals that the institute needs to address,” Klein said of the three universities’ original pitch to CIDA. “If we’re able to achieve those goals and demonstrate poverty reduction, they should be satisfied that we’ve done what we’ve been asked to do.”