Canada’s National Contact Point Final Statement - Murchison Minerals Ltd. and Former Employees
June 13, 2019
- A Request for Review (RfR) was submitted to the Canadian National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises (“the Guidelines”) on March 14, 2018, by three former employees (the “Notifiers”) of Flemish Investment Burundi s.a., a subsidiary of Flemish Investment Limited, regarding their termination of employment from the Company in Burundi in 2014. The Notifiers allege their termination is in violation of the Concepts and Principles and Employment and Industrial Relations chapters of the OECD Guidelines.
- The Notifiers are seeking compensation from Murchison Minerals Ltd (“the Company”), which acquired the majority shares of Flemish Investment Burundi through an acquisition of its parent, Flemish Investment Limited, in June 2014.
- The NCP is a dialogue facilitation mechanism to help parties resolve issues around the implementation of the OECD Guidelines for Multinational Enterprises. The Canadian NCP followed the procedures set out in the Procedural Guidance to the OECD Guidelines (section C, page 72 of the 2011 edition) and the NCP Procedures Guide (http: //www.international.gc.ca/trade-agreements-accords-commerciaux/ncp-pcn/procedures_guide_de_procedure.aspx?lang=eng). A summary of the NCP process is included in the Annex.
- As per its procedures, the NCP conducted an initial assessment and reviewed all the documentation submitted by the Notifiers and the Company. The NCP determined that the issues raised in the RfR would not benefit from an offer of its good office in the form of facilitated dialogue or mediation. The NCP’s rationale is explained below in the section on the NCP Initial Assessment.
- The NCP thanks the parties for their collaboration during this process. The NCP makes the following recommendations and closes this specific instance.
- While the Company may not have presence abroad at this time and is therefore not considered a multinational enterprise, should the Company operate abroad in the future, the NCP encourages the implementation of the Guidelines as part of the Company’s due diligence framework throughout its various activities and operations. This includes the adoption of appropriate audits and controls to ensure that governance of its subsidiaries reflects the values, ethics, controls and processes of the parent Company.
The Request for Review and the Parties
- The Request for Review was submitted by Ms. Frediane Ndikumana, Mr. Placide Irikigongwe, and Mr. Jean de Dieu Nzisabira (together hereafter referred to as “Notifiers”), all former employees of the Flemish Investments Burundi (FIB) s.a., a subsidiary of Flemish Investment Limited (FIL).
- According to the Company, FIB, the subject of the request for review, was a wholly owned subsidiary of FIL, which was based in Uganda. FIL in turn, was a wholly owned subsidiary of Flemish Gold Corporation (FGC), a Canadian exploration and development Company.
- The Company advised the NCP that in June 2014, FGC completed a reverse business acquisition of Manicouagan Minerals Inc. The same month, Manicouagan Minerals Inc., changed its name to Murchison Minerals Ltd. The Notifiers had requested compensation from the Company as the owner of the majority of shares of FIB.
- The Notifiers alleged to have had nearly four years of continuous employment with Flemish Investments Burundi s.a. The Notifiers alleged that they signed more than ten contracts, which, based on the Burundian Labour Code, accorded them the status of indeterminate employees. However, Flemish Investments Burundi s.a., when closing its operations in Burundi in 2014, decided to pay compensation in lieu of severance. The Notifiers alleged that demands from employees for the management to comply with the Burundian Labour Code were ignored as was a similar recommendation from a representative from Burundi’s labour inspection authority who was brought in to mediate the case. The Notifiers further claimed that while they and fourteen other employees had signed notices of non-renewal of contract, some employees signed the contracts under duress or were made conditional promises of future employment at Flemish Investments Limited, which was based in neighbouring Uganda.
- The Notifiers pursued legal action against Flemish Investments Burundi (FIB) with the Bujumbura Labour Court who ruled in their favour. The Notifiers allege that FIB initiated an out-of-court settlement process through an intermediary and proposed paying the litigants a lump sum of USD 60,000 in exchange for discontinuing legal proceedings. The FIB, however, later abandoned this process and failed to appear in subsequent court hearings. Due to a clerical error in the initial court decision, the Notifiers’ launched an appeal with the Bujumbura Court of Appeal and were, again, successful. In a decision handed down on October 30, 2015, the appeals court upheld the initial decision and compensation awarded to the former employees. At a legal annual interest rate of 6%, the court awarded compensation for all three employees combined, as of August 31, 2017, for a total of USD 223,407. The Notifiers allege that the October 2015 decision was communicated to FIB, which failed to respond. FIB also failed to respond to a claim for voluntary execution sent by the Notifiers on August 21, 2017. The Company, as of March 2015, started reporting the dispute between the Notifiers and Flemish Investments Burundi s.a. in its annual reports as a liability.
- The Notifiers alleged that FIB’s decision to pay compensation in lieu of dismissal pay, together with its refusal to honour the court’s decision, constitute non-observance of the OECD Guidelines.
- The Notifiers cited the following paragraphs of the OECD Guidelines, and requested the NCP’s good offices to mediate a settlement with the Company.
Chapter I - Concepts and Principles
Paragraph 3: "Since the operations of multinational enterprises extend throughout the world, international co-operation in this field should extend to all countries. Governments adhering to the Guidelines encourage the enterprises operating on their territories to observe the Guidelines wherever they operate, while taking into account the particular circumstances of each host country.”
Paragraph 8: “Governments have the right to prescribe the conditions under which multinational enterprises operate within their jurisdictions, subject to international law. The entities of a multinational enterprise located in various countries are subject to the laws applicable in these countries. When multinational enterprises are subject to conflicting requirements by adhering countries or third countries, the governments concerned are encouraged to co-operate in good faith with a view to resolving problems that may arise.”
Chapter V - Employment and Industrial Relations
Introductory paragraph: “Enterprises should, within the framework of applicable law, regulations and prevailing labour relations and employment practices and applicable international labour standards….”. The rest of the chapter lists the expectations of enterprises with regards to employment and industrial relations.
- The Company, in its response, stated that FIB s.a. was not a subsidiary of Flemish Gold Corp as indicated by the Notifiers, but rather a wholly owned subsidiary of Flemish Investments Limited (FIL), a Ugandan Company. According to Company’s response, unfavourable developments in Burundi forced the FIL into dormancy and eventual closure, notably: a new mining code adopted by the government in 2012 that created uncertainty with respect to project ownership; delay in renewal of the Company’s permits; and, the advent of political turmoil in the country.
- Amidst the increasing uncertainty around its future operations in the country at the time, the Company reported that FIB, in consultation with its Burundian legal counsel, decided to offer temporary contracts to its employees. The Company alleges that in 2014, the three former employees (Notifiers) in question signed two temporary contracts - one from January 2014 to March 2014 and the other from April 2014 to May 2014. On May 29, 2014, the three Notifiers, in addition to fourteen others, were given a non-renewal notice which they allegedly signed. The Company claims that its subsidiary (FIB) fulfilled all of its engagement conditions and respected the conditions of the contracts with all of its employees before leaving Burundi in 2014, and that all its former employees received a one-month payment as per the notice outlined in their non-renewal notice.
- The Company alleges that the three Notifiers, by virtue of their position in the FIB had privileged information about the impending closure. Nonetheless, they proceeded to launch a legal action after FIB had left the country and therefore the Company had no funds to defend itself in court and consequently had no representation at the trial.
The NCP’s Initial Assessment
- It is worth recalling that an NCP initial assessment is not a determination of whether or not the corporate behaviour or actions in question were consistent with observance of the OECD Guidelines, although the NCP can make such a determination at its discretion during an NCP process. The initial assessment is an indication of whether the NCP considers that an NCP-led dialogue between parties could be useful to resolve disputes related to the issues raised.
- As per NCP procedures, the NCP reviewed all the information presented in the submission from Messrs. Irikigongwe and Nzisabira and Ms.Ndikumana and the information submitted by the Company, and conducted an initial assessment using the criteria listed in the NCP Procedures Guide and the Guidelines’ Procedural Guidance as follows:
- the identity of the party concerned and its interest in the matter;
- whether the issues are material and substantiated;
- whether there seems to be a link between the enterprise’s activities and the issue raised in the specific instance;
- the relevance of applicable law and procedures, including court rulings;
- how similar issues have been, or are being, treated in other domestic or international proceedings;
- whether the consideration of the specific issue would contribute to the purposes and effectiveness of the Guidelines.
- As per NCP procedures, in order to operate with full transparency, the NCP’s goal is to share, among the parties, the information received from both parties. The procedures also indicate, however, that in order to facilitate the resolution of the issues raised, the NCP can take appropriate steps to protect sensitive business and other information. Thus, to be able to balance transparency and confidentiality, the NCP procedures require seeking the party’s agreement to share some or all of the information that it may provide to the NCP, with the other party. Both parties consented to the NCP sharing all submissions with the other party.
NCP Conclusions and Recommendations
- The NCP has concluded that offering a facilitated dialogue between the Notifiers and the Company would not contribute to the direct resolution of the issues raised in the RfR. Firstly, while the NCP found the termination of employment of the Notifiers to be material to the Guidelines through its initial assessment, ultimately, the main objective of the Notifiers, namely the enforcement of the court decision compelling Flemish Investments Burundi to pay compensation, is not within the mandate of the NCP to enforce. Secondly, though the Company’s organizational chart identifies the Flemish Gold Corporation, Flemish Investments Limited and Flemish Investment Burundi, as being subsidiary companies to the Company, those have been defunct since 2014. Therefore, the NCP was not able to verify the corporate governance structure and internal policies and mechanisms in place at the time to help establish the necessary accountabilities to facilitate the resolution of the issues raised. Furthermore, the Company does not currently have operations outside of Canada. Thus, while there was a business relationship among these entities and an indirect link to the alleged harm, the substantiation of the allegations was difficult to assess.
- Nevertheless, though the Company does not currently have operations outside of Canada, the NCP used this opportunity to discuss and encourage the implementation of the Guidelines as part of the Company’s responsible business conduct policy framework throughout its various activities and operations, should the Company operate overseas in future.
- The NCP, by way of this final statement, considers this specific instance closed.
Annex A: Key Timelines
- 14 March 2018: NCP receives Request for Review (RfR) from Notifiers with consent to share with Company
- 16 March 2018: NCP Secretariat contacts Notifiers to acknowledge receipt of RfR and explain the process.
- 16 March – 16 April, 2018: Translation of documents (from French to English)
- 11 April 2018: NCP contacts Chief Financial Officer (CFO) of the Company to inform of RfR
- 16 April 2018: NCP Chair formal letter to CFO of Company with RfR (both original and translated versions with a deadline of April 27th to respond.
- 20 April 2018: Company acknowledges receipt and requests an extension of deadline to May 11th (NCP grants extension)
- 11 May 2018: Company provides its response to the RfR
- 28 May 2018: Company grants permission to share response with Notifiers
- 30 May 2018: NCP shares Company’s response with Notifiers
- 8 June 2018: Notifiers send their reaction to Company’s response with consent to share with Company
- 15 June 2018: NCP shares Notifiers response with Company who declines to comment
- 26 June 2018: NCP initiates its initial assessment
- 22 November 2018: NCP follow up communicates with the Company to seek clarification and initiate discussion on due diligence
- 21 January 2019: NCP concludes its initial assessment and informs Notifiers of its decision
- 20 February 2019: NCP communicates its decision to Company
- 28 March 2019: NCP shares the draft Final Statement with both parties
Annex B: OECD Guidelines and the NCP Process
The OECD Guidelines for Multinational Enterprises are recommendations addressed by governments to multinational enterprises operating in or from adhering countries. They provide voluntary principles and standards for responsible business conduct (human rights, labour, environment, disclosure, corruption…) in a global context consistent with applicable laws and internationally recognized standards.
National Contact Points (NCPs) are a voluntary, non-judicial dialogue facilitation mechanism. Established through countries’ adherence to the OECD Investment Declaration, they are mandated to: (a) promote the adoption of the OECD Guidelines for Multinational Enterprises on responsible business conduct by companies, as guiding principles in their day-to-day operations, and (b) facilitate dialogue between companies and affected parties, when specific issues related to a Company’s operations fall within the scope of the Guidelines. The process to be followed by the Canadian NCP in dealing with issues that arise relating to the implementation of the Guidelines in specific cases is prescribed in the Procedural Guidance to the OECD Guidelines (section C, page 72 of the 2011 edition) and further explained in the Canadian NCP Procedures Guide.
Following the receipt of a request for review, the NCP conducts an initial assessment to review the issues raised. In doing so and in determining whether to offer its good offices to the parties in the form or mediation or facilitated dialogue, the NCP takes into account a number of factors, as outlined in paragraph 25, page 83 of the 2011 edition of the Guidelines.
If the NCP establishes that a facilitated dialogue could potentially address the issues raised, the NCP can offer to the Company and those making the claim to participate in a facilitated dialogue or mediation on a voluntary and good faith basis. The objective of a dialogue is for parties to establish a better understanding of the issues and identify a path forward and/or solutions to the concerns identified in the submission to the NCP. The Canadian NCP is not required by the OECD to render a finding of “breach” to the Guidelines, but it can do so, at its sole and entire discretion. It is not the role of the Canadian NCP to provide the remedy. The NCP offers a neutral forum for a facilitated dialogue or mediation, for parties to find solutions together, when there is reason to believe that such dialogue can help parties find mutually agreeable solutions, while advancing the implementation of the OECD Guidelines by companies.
Whether the NCP offers its good offices to the parties or not, and whether there is any agreement or not between the parties, the Procedures require the NCP to make the results of its proceedings publicly available by publishing a final statement on its web site.
- Date Modified: