Social responsibility – will an upcoming Swedish criminal case shake up the corporate mining and oil exploration world?

Canadian companies active in mining and oil exploration account for almost half the world’s activities in the sector. Some of the companies that operate outside Canada enjoy an excellent reputation for Corporate Social Responsibility. Others, especially those in conflictive and/or corrupt locations in the developing world, not so much.

Canadian businesses – as well as Canadian officials and legislators with a role in overseeing the practises of these companies – would profit from following developments now unfolding in Sweden.

In particular, the Swedish Supreme Court has recently set a date in September 2023 for the trial of two senior officers of Orrön Energy, formerly known as Lundin Energy with at least 18 months set aside for hearings. The charges are unusually grave. Alex Schneiter and Ian Lundin, who have been under investigation since 2010, are accused of complicity in war crimes committed by the government of Sudan in order to secure oil operations in southern Sudan, over the period 1999 to 2003. As Harrison A. Meyer, the senior executive editor of the N.Y.U. Journal of International Law & Politics noted last year, “prosecutors further allege that Lundin [the company] was complicit in these war crimes because Lundin requested that the Sudanese Military…provide security to Lundin during oil exploration, knowing such requests would result in illegal military operations by the Sudanese Military.”

The case resembles one brought against Canada’s Talisman Energy in 2001 by the Presbyterian Church of Sudan, for the company’s alleged complicity in human rights abuses by the Sudanese military over the same period, in an adjoining oil concession. That case was dismissed after eight years of litigation in US courts. The judge did not dispute that the Khartoum government had engaged in gross violations of international law but concluded that there was no evidence that the defendant had purposefully aided and abetted such violations.

Swedish prosecutors will face a similar challenge in attempting to prove purpose or intent, exacerbated by the fact that over twenty years have now passed since the alleged offences. Many witnesses will have died or moved away. The government of Sudan, once again in the hands of the military, will certainly not cooperate. And ironically neither will the government of the now independent South Sudan – in which Lundin’s concession was located – lest a successful prosecution deter future investors.

One difference from the Talisman case is that this is a criminal prosecution as opposed to a civil suit. In the event of conviction, Schneiter and Lundin could face life imprisonment; Talisman was only liable for reparations. In its defence, Lundin has consistently maintained that none of its representatives committed or were complicit in any alleged international crimes in Sudan and laid out their case in a detailed 2021 report prepared by Bedford Row International.

However, over the past two decades, the concept of universal jurisdiction – the idea that certain crimes are so serious that the duty to prosecute them transcends all borders – has gained traction. The creation of the International Criminal Court (2002) gave impetus to this. This is why the Swedish case now bears scrutiny. Whether the prosecution succeeds or not, it is likely to set a standard for proving complicity on the part of extractive companies in war crimes committed in troubled far-off places. And no country has more extractive companies operating in such places than Canada.

It isn’t just in the interest of Canadian miners and oil executives to watch the trial. As the Swedish case proceeds, it behoves Canadian legislators and senior officials at Global Affairs and the Department of Justice to pay attention too.

Wherever I have worked as a diplomat, from Colombia to Pakistan, South Africa and Sudan, Canadian government representatives go to great pains to exhort our compatriots to observe best business practises, specifically as recommended by the Organisation for Economic Cooperation and Development (OECD). The OECD code, which runs to 100 pages, aims to help enterprises “avoid and address adverse impacts related to workers, human rights, the environment, bribery, consumers and corporate governance.”At home, the office of the Canadian Ombudsman for Responsible Enterprise (CORE) was established in 2019, with a mandate to address complaints about possible human rights abuses when they involve Canadian companiesthat workabroad in thegarment, mining, and oil and gas sectors.

This is all well and good. But these codes of ethics are voluntary and the CORE only issues recommendations; it is not a court and its decisions are not binding. As a result, far too many companies still boast of their adherence to the OECD principles in their reports to shareholders while often ignoring them in practice. As the home base to more extractive companies than any other country this isn’t good enough and there is a strong case to be made that Canada needs to up its game on Corporate Social Responsibility.

Speaking to this concern, Sheri Meyerhoffer, the CORE Ombudsperson, reported to the House of Commons Standing Committee on International Trade in February 2023 that although CORE currently has the power to conduct investigations, engage in mediation and make remedial recommendations to Canadian companies it cannot order them to produce documents or witnesses.  Having the latter powers, she added, would allow Canada to better address human rights and environmental harms arising from the operations of Canadian mining companies outside of Canada. At the end of the day, Ian Lundin and Alex Schneiter may well be found innocent in Stockholm. But whatever happens, it’s a safe bet that the upcoming trial will lay down new markers for future prosecutions and have a salutary effect on Swedish extractive companies.  The trial may also serve to incentivize Canadian mining companies working outside of Canada to voluntarily participate in the CORE’s complaint process focused on consensual dispute resolution with affected communities. That can only be a good thing for the people where they, and other international extractive companies work, especially in the developing world.

Nicholas Coghlan served as Canada’s first resident diplomat in Khartoum, Sudan (2000–2003). His experiences over that period are recounted in Far in the Waste Sudan (McGill-Queen’s University Press, 2005). He was also the first resident Canadian ambassador in Juba, the capital of the newly independent South Sudan. Coghlan and his wife, Jenny, were awarded the Meritorious Service Cross for their role in the evacuation of Canadian citizens from Juba when civil war broke out in late 2013. His most recent book is Collapse of a Country: A Diplomat’s Memoir of South Sudan (McGill-Queen’s, 2017). He lives on Salt Spring Island, B.C.

 
Photo: Pixabay/Gerd Altmann