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Human Rights Assessment

4. Human Rights and the Baffinland Iron Mines Corporation – Full Finding

Key message

International standards require companies to respect human rights. This implies having a human rights policy, an on-going process to prevent adverse impacts on human rights, and an effective operational-level grievance mechanism. Many leading mining companies and industry associations have begun to develop detailed human rights policies and procedures. One of these companies is Baffinland’s parent company, ArcelorMittal. While there is no legal requirement for Baffinland to explicitly address human rights at the Mary River mine, the company should develop a human rights policy and procedures in order to meet international standards for the mining industry, the corporate policy commitments of ArcelorMittal, and the expectations of its stakeholders.

International standards on business and human rights

International human rights standards require companies to respect human rights. This implies having a human rights policy, an on-going human rights due diligence process, and an effective operational-level grievance mechanism.

These standards are contained in the UN Guiding Principles on Business and Human Rights that were unanimously adopted by all the Member States of the United Nations in 2011.

Human rights responsibilities are being integrated into other key international standards that are relevant to the mining industry, including the UN Global Compact, the Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises, the International Finance Corporation (IFC) Performance Standards and International Standards Organization (ISO) 26000: Guidance for Social Responsibility.

For the mining industry, it is important to note that the International Council on Mining and Metals (ICMM)—an industry association that brings together 22 of the world’s biggest mining and metals companies as well as 34 national and regional mining associations and global commodity associations—has released guidance for their members on management and best practices to respect human rights. Human rights are also referenced in a number of Canadian standards for the mining sector, including the Prospector and Developer’s Association of Canada, “E3 Plus: A Framework for Responsible Exploration,” and the Government of Canada’s International CSR strategy, “Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the Canadian International Extractive Sector.”

While the Government of Canada supports the UN Guiding Principles on Business and Human Rights, there is no strict legal requirement for the Baffinland Iron Mine Corporation to explicitly address international human rights at the Mary River mine.

Overview of international standards relevant to Mary River Project

Baffinland’s policy on human rights

The Baffinland company states that “we respect human rights and the dignity of others” in section 3.0 of its Sustainability Policy. However, it does not have a more specific human rights policy or detailed human rights procedures that would meet the international standards referenced above. As discussed elsewhere in the HRIA, a number of Baffinland’s other policies and procedures address important aspects of human rights.

Many leading mining companies and industry associations have begun to develop human rights policies and due diligence processes. One of these companies is Baffinland’s parent company, ArcelorMittal. Baffinland’s other parent company, Iron Ore Holdings LP, does not have a human rights policy.

ArcelorMittal’s Human Rights Policy has not yet been explicitly integrated into the plans and management systems for the Mary River mine—at least as presented in the initial FEIS for the Mary River mine. Part of the reason for this is that the Human Rights Policy dates from 2010 and human rights were not part of the NIRB guidelines for the FEIS issued in 2009.

ArcelorMittal promises that its Human Rights Policy should be integrated progressively into operations. It says: “the Policy and associated practices are expected to strengthen over time as the Company gains a better understanding of and becomes more experienced in promoting human rights.  In support of this Policy we will develop operating procedures to create an environment where human rights are respected, and to also help ensure that we do not engage in activities that directly or indirectly violate human rights.”

It also states: “[t]he Company’s implementation of this Human Rights Policy is expected to strengthen over time as risk assessments and due diligence procedures will increasingly take into account human rights aspects. Human Rights will also be integrated into social impact assessments, with separate human rights impact assessments completed where required.”

In a 2011 “Communication on Progress” report to the UN Global Compact, ArcelorMittal gave itself a score of 72% on integrating human rights principles into its operations. Its next report is due by the end of July 2013.

In section 1.2.2 of the FEIS, Baffinland has committed to develop its Corporate Social Responsibility governance structures and policies consistent with the group-level commitments of ArcelorMittal. Presumably, this will include the implementation of the ArcelorMittal Human Rights Policy at Mary River.

Baffinland has made additional commitments to conduct due diligence on human rights when it says that it “embraces the principle of Social Responsibility as outlined by the emerging voluntary International Standard, ISO 26000, Guidance for Social Responsibility.” As mentioned above, this ISO standard includes due diligence for human rights according to the UN Guiding Principles on Business and Human Rights.

It is therefore expected that these various international standards will be operationalized at the Mary River Project through strong corporate governance and appropriate human rights policies and due diligence by Baffinland.

Recommendations: What can Baffinland do to respect human rights?

1. In furtherance of its commitments to social responsibility and to implement ArcelorMittal’s policies, Baffinland should develop and implement an explicit human rights policy and operating procedures in accordance with the UN Guiding Principles on Business and Human Rights and the emerging best practices of the mining industry.

2. As human rights were not explicitly addressed and integrated into the FEIS for the Mary River project, Baffinland should consider undertaking a stand-alone human rights impact assessment at an appropriate moment in the future (e.g. at the end of the “Early Revenue Phase”) in order to assess actual impacts of its operations.

Human Rights and the Baffinland Iron Mines Corporation – Summary

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