Follow-up statement: Sun Peak Metals and United Tegaru Canada
This is a follow-up statement to a final statement published by Canada’s National Contact Point (the "NCP") for the OECD Guidelines for Multinational Enterprises ("the OECD Guidelines") on April 3, 2024.
Background
On September 10, 2022, Canada’s National Contact Point (NCP) received a request for review from United Tegaru Canada (the Notifier), a non-government organization based in Toronto. The request for review concerned observance of the OECD Guidelines for Multinational Enterprises (the “Guidelines”) by Sun Peak Metals Corporation (the Respondent), a junior mining company based in Vancouver and focused on mineral exploration projects in Ethiopia.
The Notifier’s request for review raised issues concerning paragraphs 1 and 2 of Chapter IV (Human Rights) of the Guidelines. Specifically, the Notifier claimed that by paying taxes/licence fees to the Government of Ethiopia, the Respondent was or had been contributing to adverse human rights impacts allegedly caused by government forces in the context of the Tigray conflict. The Notifier also questioned whether the Respondent had a policy commitment to human rights (Chapter IV, paragraph 4), and whether the Respondent was undertaking appropriate human rights due diligence (Chapter IV, paragraph 5). The Notifier did not claim that the Respondent itself had abused human rights in the context of its activities in Ethiopia.
Following receipt of the request for review, the Respondent adopted and published its “Human Rights Policy” in March 2023. The NCP concluded its initial assessment and offered good offices regarding issues raised around the Respondent’s approach to human rights due diligence (Chapter IV, paragraph 5). Both parties accepted the NCP’s offer of good offices and participated in a dialogue moderated by the NCP on October 11, 2023. The NCP published a final statement on April 3, 2024.
In its final statement, the NCP recommended that the Respondent include more specific information about its human rights due diligence in future public communications and describe how its commitment to “conduct thorough human rights due diligence” (outlined in the company’s Human Rights Policy) would inform any plans to resume work on the properties constituting its Shire Project in Ethiopia. The NCP also committed to follow-up about its recommendations.
Follow-up
On April 4, 2024, the Respondent issued a press release announcing the commencement of exploratory drilling at its Shire Project. The release included a section entitled “Community Engagement”, which stated the following:
Sun Peak has been active on engagement with communities and other stakeholders to ensure that stakeholders provide consent and agreement to our activities that create surface disturbance, including drill holes. All disturbance to the land will be reclaimed after completion of the exploration work. Ongoing community engagement is a vital element of respecting human rights and hearing their voice. The Company’s current operations in Ethiopia are exploratory in nature and cause very little surface disturbance. Community engagement is performed by our experienced local liaison team before the beginning of any activities, which encourages positive interactions. We consider Sun Peak’s presence and continued support and involvement in the Tigray region, during the current circumstances, a positive contribution and we consider our conduct to be consistent with Multinational Enterprises Guidelines. Sun Peak is committed to doing business with integrity and in an ethical manner that is clear and apparent to all internal and external stakeholders. Sun Peak adheres to the Company’s Human Rights Policy and does not tolerate violations of human rights in any way, shape, or form, whether these violations are committed by Sun Peak personnel or contracted third parties.
One September 19, 2024, the NCP secretariat held a follow-up call with the Notifier. The Notifier was aware of the Respondent’s April 4 press release and welcomed the publication of information on the company’s due diligence activities. However, the Notifier emphasized its desire to see the Respondent disclose more detailed and specific information on its human rights due diligence. The Notifier reiterated its concerns about the risk of enterprises in the region becoming involved with adverse impacts on human rights, and the need for enhanced due diligence and communication about due diligence efforts in the current context.
On October 24, 2024, the NCP secretariat held a follow-up call with the Respondent. The secretariat asked the Respondent what human rights due diligence had been undertaken in conjunction with its decision to resume mineral exploration activities in Ethiopia. The Respondent referred to the activities outlined in its April 4 press release and emphasized its close engagement with local communities and stakeholders as part of its due diligence process, led by the company’s dedicated community liaison team. The Respondent also explained to the secretariat the company’s approach to monitoring and verifying respect for the rights of workers engaged on its projects. The Respondent reported that its due diligence approach continues to be informed by the OECD Guidelines and the company’s Human Rights Policy.
In November 2024, the Respondent issued a “Management Discussion and Analysis (MD&A) Quarterly Highlights” document for the nine months ended September 30, 2024. The document stated that “respect for human rights is an essential part of Sun Peak’s commitment to ethical business” and that the company had carried out human rights due diligence before deciding to resume operations at its Shire Project.
Conclusion
The NCP welcomed the Respondent’s updates and further information about its approach to human rights due diligence. The NCP encourages the Respondent to continue conducting human rights due diligence in line with the OECD Guidelines.
The NCP welcomes the Respondent’s decision to include information about its due diligence activities, as well as its policy commitment to respect human rights, in public documents such as its April 4 press release and MD&A Quarterly Highlights.
The NCP recognizes that the Guidelines’ recommendations on disclosure – including the communication of responsible business conduct information – are not intended to place unreasonable administrative or cost burdens on enterprises. Still, the NCP encourages the Respondent to give ongoing consideration to how it implements the Guidelines’ recommendations in this regard to the fullest extent possible, given its size and capacities. In particular, the NCP encourages the Respondent to consider whether the disclosure of more specific information on its human rights due diligence could serve to reinforce its implementation of the Guidelines in the future.
The NCP thanks both parties for participating in the follow-up to this specific instance. Both parties were provided an opportunity to review and comment on this follow-up statement prior to its publication. The NCP considers the follow-up process concluded.
