Institutional investor coalitions representing religious organizations, pension funds and SRI investors have filed shareholder proposals with two major Canadian multinationals, citing the need for action on safe drinking water and community consultation on future development

On Dec. 9, Les Missionnaires Oblats de Marie Immaculée, member of the Regroupement pour la responsabilité sociale et l’équité (RRSE) – an association of faith-based investors headquartered in Montreal – announced that it filed a shareholder proposal with aluminum giant Alcan, asking for improved community consultation procedures.

And on Jan. 27, RRSE-member les Soeurs de Sainte-Anne du Québec filed a shareholder proposal asking Barrick Gold to report on the measures taken to conform to standards and directives internationally accepted relative to the right to water, the precautionary principle and the consultation of local populations affected by its gold extraction project, Pascua-Lama, at the border of Chile and Argentina.

The Alcan proposal follows years of public opposition to a proposed bauxite mine and aluminum smelter (the Utkal project) in the Kashipur region of India. Alcan owns 45% of the joint venture set up for this project with Aditya Birla-Hindalco. Public protests have been marked by police violence.

The Oblats’ proposal was co-filed by Bâtirente, a Quebec-based pension fund and The Ethical Funds Company, a socially responsible mutual fund company based in Vancouver.

The proposal follows several unsuccessful requests from RRSE members asking Alcan to establish an independent inquiry into the controversy in India in order to address community concerns. “Since we had obtained few satisfactory results through direct engagement with the Company, we have turned to informing other shareholders about the social and economic risks of Utkal and the necessity for Alcan to implement appropriate tools to better manage its relations with communities, ” said Diane Boudreault, coordinator for the RRSE. “A strong cooperation between shareholders should encourage companies to revisit their way of doing.”

The Oblats proposal calls for Alcan to sponsor an advisory group with a mandate to recommend improved assessment and consultation procedures regarding Utkal project affected people with the objective of acquiring their ‘free, prior, and informed consent’, an emerging standard that ensures companies have the full support of local communities, before engaging in project development

In addition, Fonds Esther Blondin of the Sisters of Saint Anne, another RRSE member, and Bâtirente have co-sponsored a shareholder proposal filed by The Ethical Funds Company, asking Alcan to establish best practice and company-wide stakeholder engagement procedures.

“In many cases, Alcan has established a commendable set of policies and procedures to manage the environmental and social challenges that all mining companies and heavy manufacturers face,” said Bob Walker, Vice President of Sustainability for The Ethical Funds Company. “We believe, however, that they have some work to do when it comes to stakeholder engagement. We know that there are tools and procedures that can make Alcan best of class in this area.”

“Free, prior, and informed consent of communities is one of the keys to success of large-scale exploitation projects of natural resources like that of Utkal” according to Daniel Simard, General Coordinator of Bâtirente. “By requiring companies to implement everything they can to secure their investments, we protect the economic long term interests of pension plans’ members”.

The proposals will be voted on by Alcan shareholders at the company’s next annual meeting to be held in April.

Barrick targeted for safe drinking water

The Barrick proposal was also supported by Bâtirente.

Barrick Gold has been examining for a few years the possibility of exploiting a huge reserve of gold located into high altitude in the Andes cordillera. The realization of the project will require the move of the top of three glaciers and gold will be extracted from the ore crushed by cyanidation. The polemic around this open-pit mining project is large as the glaciers are the source of the surrounding rivers and that an accidental cyanide discharge would have considerable and irreversible impacts on the ecosystem and on the quality and the quantity of water available for the local populations, mainly agricultural.

"The right to water is internationally recognized because nobody can live without a sufficient quantity of drinking water” comments Diane Boudreault, coordinator of the RRSE. “International standards, such as the International Covenant on Economic, Social and Cultural Rights mark out this right. It is in Barrick and its shareholders’ interest to conform to it. »

Bâtirente, in addition, filed a proposal asking the company to endorse the Extractive Industry Transparency Initiative (EITI http://eitransparency.org), an independent multi-stakeholder international initiative, which developed tools to enable extractive companies and host countries to define together, with the appropriate stakeholders, the best way to disclose the sums paid and received following exploitation of mining, gas and oil resources.

"The huge amount of money at stake in the attribution of resources exploitation projects and the opacity which surrounds their transfer expose the extractive companies to corruption risks" claims Daniel Simard, general coordinator of Bâtirente. "In Chile, blur as for the royalties and taxes which the company will have to pay to the government exacerbates the resistances of the local populations and jeopardizes Barrick Gold’s social licence to operate".

The proposal was supported by the Soeurs de Sainte-Anne du Quebec.

The proposals will be voted on by Barrick Gold’s shareholders at the company’s next annual meeting in April 2006.

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