Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50881
Protesters from the Huasco Valley in Chile, who oppose current and future mining projects, picket outside Barrick Gold Corp.'s annual general meeting in Toronto in April. I think the best tip would simply be that when something adverse happens in a foreign jurisdiction, be prepared for the worst. People will take advantage of situations. SEAN QUINN, Cameco Corp. local legal differences, but you have to be able to, as a global company, say, 'I'm doing what I can to ensure that I'm apply- ing the same rules across the board.'" Counsel should keep in mind that the company will at some point need to dis- close these policies to the public. However, uniformity is unlikely to happen overnight. That means the legal team must show patience as new opera- tions are realigned with the company's harmonized standards. "Your idea is to go in with the goal that there will be consistency, and work towards that goal, and give it a time frame," she says. "That's very important. If everyone understands that, both on the target and within the company, that helps." But just as important as the company's relationship with its new employees is 20 • JUNE 2010 INHOUSE its approach to external ties. Al Gourley, managing partner of Fasken Martineau DuMoulin LLP's Johannesburg office, says companies he represents — primar- ily Canadian businesses in the energy and mining sectors — face a range of relational issues when setting up shop in Africa. That includes working with local governments, regulatory institutions, and nearby tribes. "Some of the issues that you face are subtle, but if you impose, let's say a mining operation, on a local community without the support of the local community, you're going to be hir- ing from the local community, you're going to be drawing resources from the local community," says Gourley. "Even things as simple as bread and butter that you need to buy from a local market in order to feed your mining staff all involve interconnectivity between the relevant company and the local community." Companies that opt to ignore these fundamental ties end up regretting it, says Gourley. Local communities will often turn hostile. He has seen companies face ongoing theft of corporate assets, which he considers "almost impossible to guard against." He has even seen a local chief impose a toll on a mining company's vehicles for passing through his territory, because the company had not established an adequate relationship with his people. Sean Quinn, vice president of law and general counsel at Saskatoon-based mining company Cameco Corp., knows what can happen when relations sour with a community in the developing world. He says the company took a seri- ous hit following a 1998 sodium cyanide spill into a lake near the Kumtor gold mines it partially owned at the time in Kyrgyzstan. While the spill caused little harm, it quickly morphed into a "public relations disaster," says Quinn. "That was a real learning experience for the compa- ny, on how quickly things can unravel." While the company took quick action to deal with the spill, it led to demonstra- tions by the local population — includ- ing a brief blockade — and became a point of contention with the Kyrgyz government. Quinn says local groups also attempted to use the spill as a bar- gaining chip. Cameco conducted a thor- ough review of the spill and took steps to prevent similar incidents, he says. A compensation agreement was eventu- ally reached with the local authorities. "It was dealt with very responsibly, but it was just the unpredictability of the response that caught everybody by sur- prise," says Quinn. "I think the best tip would simply be that when something adverse happens in a foreign jurisdic- tion, be prepared for the worst. People will take advantage of situations." Meanwhile, Gourley says it's best to leave the management of relationships with local communities to experts, such as consulting firms. Customs in Africa can range widely, so it's vital to gain REUERTS/MIKE CASSESE