Canada attempts to reduce poverty by partnering NGOs with mining companies
A plan by the Canadian government to spend more than $26 million on building capacities of communities around mining areas by funding joint poverty reduction projects between NGOs and Canada’s mining companies in Africa and South America has attracted both criticism and praise.
The announcements made in Sept. 2011 by Beverley Oda, Canada’s minister of international cooperation, include pilot projects in Colombia, Peru, Bolivia, Ghana, and Burkina Faso.
As Canada’s International Development Agency (CIDA)—the government’s foreign aid arm—advances with the payments, some critics worry the move will encourage irresponsible mining by the companies.
“It isn’t a clear policy or at least if it’s one they haven’t revealed it yet, but it does seem like they are moving away from a focus on poverty alleviation and letting the Canadian private sector set the agenda rather than development experts or residents of developing countries themselves,” says Stephen Brown, a political science professor at the University of Ottawa.
Brown has conducted research on the intersection of policies and practices of rich countries and other international actors with politics in poor countries, especially in sub-Saharan Africa. He worries that Canada is treading towards the Chinese style of “tied-aid” if it starts mixing investment trade and aid operations.
Those who support CIDA’s move see an opportunity to advance business ties with developing countries. A senior professor of marketing at the University of Ottawa, Gurprit Kindra, says the move is good marketing for Canadian companies. “This is marketing, PR (public relations) and a sensible approach,” he says. “We need these operations abroad for our markets to do well.”
But it’s not business interests for Canada’s companies that minister Oda highlighted when she announced the support at the Devonshire Initiative CEO Summit in Toronto, an event that brings together leaders of some of Canada’s big NGOs and mining companies to maximise the impact of their works in emerging markets. Instead, Oda invoked poverty reduction and corporate social responsibility as justification for the initiative.
“CIDA is supporting Canada’s corporate social responsibility strategy for the Canadian international extractive sector with initiatives that will contribute to sustainable economic growth, create jobs and long-term poverty reduction,” she said.
With CIDA’s support, an NGO called World University Service of Canada has been implementing a project in Ghana with financial help from the Montreal-based mining company Rio Tinto Alcan. It provides 400 young people who live around mining areas with skills training to help diversify their local economy. The project will also work with the communities’ local governments to provide education and access to clean water for the residents.
In Burkina Faso, CIDA will support NGO Plan Canada and Toronto-based mining company IAMGOLD in a job skills training project in 13 communities to meet labour market demands in a variety of sectors, including the mining sector and its sub-sectors.
Plan Canada’s President Rosemary McCarney welcomed CIDA’s contribution to the project and says she sees it as an opportunity for some of Burkina Faso’s local youth to acquire employable skills through training.
In Peru, CIDA will support World Vision Canada in a program to increase income and standard of living for 1,000 families affected by mining operations. For this project World Vision is working with the Toronto-based Barrick Gold.
The Canadian government sees the move as one way of responding to developing countries’ needs to benefit from foreign investments. “As more and more developing countries see foreign investment as the means to economic growth and our Canadian extractive sector represents a major part in that growth, CIDA can play an important role to help countries achieve their aspirations,” Oda says.
The Executive Director of World University Service of Canada Chris Eaton also welcomed the Canadian government’s help. “This will ensure that communities secure sustainable benefits from the presence of mining operations in their district,” he said.
However, for some of Canada’s analysts, human rights and environmental activists, an aid model designed around using tax payers’ dollars in Western countries to subsidise corporate works still sounds strange.
Catherine Coumans, a research coordinator and Asia pacific program coordinator at MiningWatch Canada, a Canadian initiative supported by organisations with interests in environmental and social justice, called CIDA’s new move a “band-aid” solution. “Tax payer dollars are being transferred to the industry to help it improve its image overseas but this doesn’t address the problem of environmental and social harm caused by mining,” she says.
Coumans has also prepared a brief in protest of the partnership, which she plans to take to the House of Commons’ Standing Committee on Foreign Affairs and International Development. The committee will assess the role of the private sector in achieving Canada’s international development interests.
Over the last two decades there have been many discussions on what could be the best ways to deliver aid. Many governments in Africa have been trying to leverage foreign aid to improve their economic development, but they criticise the approach of some donor countries, especially Western governments, who put conditions on them to deliver that aid. Meanwhile, donors grow frustrated that the money is not being used as effectively as it could.
President Paul Kagame of Rwanda is one leader who has created frameworks to encourage effective use of foreign aid. Kagame has used the Development Partners Meeting (DPM), a biennial high-level political dialogue on development cooperation with donors, the Development Partners Coordination Group (DPCG), the coordination body responsible for overseeing the entire aid coordination system, and the Budget Support Harmonization Group (BSHG), a government-led technical working group, to achieve this goal.
Whether it’s an aid worker with an international or local NGO, or an economics expert with a UN or a foreign government agency, the Rwandan government will find a way of showing where interventions are needed through the established frameworks.
“Why has massive aid been largely ineffective and little investment productive?” Kagame pondered during a Forum on aid effectiveness in Busan, South Korea, last December. “How can we translate aid commitments into effective development outcomes that will drive our graduation to self-sufficiency?”
Invoking the Paris and Accra declarations, which have crafted principles to allow poor countries to design their own national development strategies and donors to align with those plans, as well as running results-oriented projects, Kagame urged delegates at the meeting to channel more aid through national institutions.
“There is still resistance on the part of some donor countries to channel their aid through national systems, which raises important issues of effectiveness and accountability,” he said. “While donors may not be entirely to blame for bypassing these systems where they are weak, or non-functional, why not use aid to build up and strengthen such critical systems?”
It would be interesting in the future to see how countries like Rwanda react to policies where foreign governments invest money in poverty reduction projects in other countries through NGO works that clearly promote foreign corporate interests.
Some analysts in Ottawa believe Canada’s move to help its mining companies abroad is a response to Chinese competition for natural resources in the developing world. “The Chinese government’s approach is one of the things Canada’s mining industry is very worried about,” Coumans says. “As Chinese mining companies are state-owned, for the most part, the Chinese government puts together very nice packages for countries in Africa and elsewhere that include really serious investments in infrastructure, roads, rail, bridges etc.”
Chinese investments in Africa have grown from $490 million in 2003 to $14.7 billion in 2011, a top Chinese government official told the media in Africa last month. More than 2000 Chinese companies have invested in the continent’s budding industries of mining, finance, manufacturing, construction, tourism, agriculture, forestry, animal farming, and fishery.
Subscribe to this comment's feed
