In Papua New Guinea we are only too aware of the social and environmental problems that foreign owned mining companies can cause. Ok Tedi, Panguna, Porgera, Tolukuma, Misima and now Hidden Valley have all come with an enormous cost that is paid by local people while the mining company and their shareholders earn massive profits. How can mining companies be made more responsible when they operate in countries like Papua New Guinea?

The two articles below discuss this issue. In the first Responsible Mining: Companies Can't Go it Alone, Chris Albin-Lackey from Human Rights Watch argues that the companies need help - and it should come from governments in their home countries. But Brian MacLeod, in Mining Firms Must Fix Their Own Reputation, argues against further oversight by highlighting the problems it might cause for the government's in the mining companies home country, but he doesn't seem to have a better solution to offer.

What is clear from our experience in Papua New Guinea is that we cannot trust the mining companies to do the right thing and we cannot trust our government or the public service to provide proper oversight.

A new and different way of regulating foreign mining companies is clearly needed - ideas anyone?

Responsible Mining: Companies Can't Go it Alone

International mining firms operating in troubled and poorly-governed countries encounter problems far too complex to resolve by themselves.

Human Rights Watch recently released a report that details brutal gang rapes and other abuses allegedly carried out by employees of Barrick Gold in Papua New Guinea. Barrick, a Canadian firm, is the world's largest gold producer and Porgera is one of the world's largest gold mines. Now the company is scrambling to put things right, investing in new mechanisms for oversight and accountability and firing some of its private security personnel while others are being hauled away by the police.

No one wanted development of the mine to be marred by such appalling abuses, least of all Barrick. When we told them about the allegations months ago, they responded quickly. But the genuine shock of company officials who belatedly realized the gravity of the problems is no consolation to rape survivors whose lives have been devastated. I interviewed one woman who said that a Barrick guard kicked her in the face and shattered ten of her teeth before he and several of his colleagues gang raped her. Another said her husband had divorced her when he heard she had been raped.

This is not the first time a respected international mining firm has been caught up in allegations of serious human rights abuses. But Barrick is one of the world's most sophisticated and well-resourced mining companies. It is also a company that publicly affirms a commitment to human rights principles. So why did Barrick fail so badly to avoid such negative repercussions for the local community, and what is the lesson for the industry?

The answer is fairly straightforward--companies, especially in the extractives sector, need help to operate responsibly in troubled and poorly-governed countries. They need help preventing abuses and responding to them when they occur. They need help seeing the difference between serious allegations and scurrilous attacks. They need help dealing with negligent or abusive host country governments. This is far too complex a minefield for companies to navigate safely by themselves.

Many companies agree and have signed on to voluntary measures that promote human rights. But very few are willing to accept the help they need most. That's because the only meaningful way to provide it is through oversight and regulation by companies' own home governments.

Most major Western companies treat the words "oversight" and "regulation" as anathema, inevitably bound up with some kind of anti-industry political agenda. Just last year, Barrick lobbied vigorously to help defeat legislation that would have mandated the Canadian government to investigate credible allegations of abuse by Canadian oil, mining and gas companies operating overseas. Barrick's position carried the day--but had that kind of oversight been in place, it could have helped the company detect and address its Papua New Guinea problems much sooner.

There may always be disagreements about the proper extent of this kind of regulation. But actors on all sides of the debate should be able to embrace some form of meaningful government oversight as a good step forward. Companies that are serious about protecting human rights should welcome guidance and scrutiny.

It's not very difficult to imagine what this could look like. In 2007, Canadian civil society and industry representatives agreed to recommendations that included setting up an independent ombudsman. Such a government institution would have authority to investigate credible allegations of overseas human rights abuse by Canadian companies. It could have broad enough powers to bring problems to light and help address them, without stoking company fears of excessively burdensome regulation or politically motivated witch hunts.

Canada has not implemented the 2007 recommendations, and other major extractive industry hubs like the United States and Australia have done no better. But the fact that those recommendations exist show that consensus is possible on at least the first steps forward. Companies can either help encourage that consensus, or can go it alone and keep falling flat on their faces.

For companies that genuinely want to do the best they can to manage the human rights impacts of their operations, there's only one real choice. There is no excuse for the rapes and human rights violations at Porgera, and they should remind companies why they ought to support government oversight that can help prevent such abuses from happening.

* Chris Albin-Lackey is a senior business and human rights researcher for Human Rights Watch and the author of the new report, Gold's Costly Dividend.

Mining firms must fix own reputations

By Brian MacLeod, QMI AGENCY

Canada should not act as a de facto police force to Third World countries where Canadian mining firms operate, but recommendations by Human Rights Watch would lead in that direction.

HRW's report on Toronto-based Barrick Gold's actions in Papua New Guinea, released Feb. 1, supported the provisions of Bill C-300, which was narrowly defeated in Parliament last fall. It would have set standards and punishments for companies operating internationally. The mining industry argued some companies might have moved their head offices out of Canada if the bill passed.

HRW's report is valuable because it details the challenges faced by Canadian companies when they operate in countries with poor standards. As a result, they're forced to act as better stewards of human rights--which is where the responsibility should be, on the company and the host government.

Papua New Guinea has almost 7 million people. It occupies the eastern half of the island of New Guinea, north of Australia. It faces rampant poverty and crime, including human trafficking. It's populated with tribal villages with low literacy rates. The government, though democratic, does not closely police mining activities because it needs foreign investment.

Barrick Gold bought the Porgera gold mine from Placer Dome, another Canadian company, in 2006. (Mineral Resources Enga holds 5% ownership.) Porgera is located in a remote highland area with little police presence.

Barrick employs about 500 private security personnel to police the mine and the surrounding area. HRW investigated after reports of violence by the security force. It documented six vicious gang rapes, which HRW said is likely indicative of a "broader pattern of abuse" by security personnel. Because people don't trust the police, most crimes--including the rapes--do not get reported to authorities or the company. To address this, HRW wants Ottawa to adopt legislation that would punish mining companies based here if they don't adhere to human rights standards abroad.

There are two problems. Most of the world's 1,800 mining and exploration companies are headquartered in Canada. They employ more than 300,000 people in about 100 countries. How would Canada monitor operations in a remote region of a country where most of the population doesn't even have telephones? Do they depend on reports from NGOs, or from local authorities, who are most likely corrupt? Do they set up a new bureaucracy to monitor companies' actions?

None of this is necessary. HRW admits Barrick has moved from "dismissive hostility" on reports of human rights abuses to one of collaboration. Crime in villages around the mine has dropped significantly, the company has increased monitoring of security personnel and it has improved a process for those who want to report crimes--especially sexual violence.

It is also looking for alternatives to releasing millions of tonnes of liquid tailings into the Porgera River--a practice that would bring sanctions in Canada.

Mining companies rely on a reputation of responsibility, since they require the approval of host governments to operate. The Government Pension Fund of Norway, for example, will not invest in Barrick Gold because of its environmental practices at the Porgera mine. Publicity such as this is strong motivation for mining companies to clean up their acts.

HRW's appeal for oversight legislation was wisely dismissed recently by the Conservatives and the Liberals, but mining companies should watch how Barrick rehabilitates its reputation in Papua New Guinea if they want to avoid government interference in the future.