If they don鈥檛, they鈥檙e not just letting down rural, Indigenous communities in countries such as Guatemala, they鈥檙e failing investors who count on the honesty of Canadian stock markets, according to a Justice and Corporate Accountability Project submission to Ontario鱿鱼视频app Independent Capital Markets Modernization Task Force.
The 51-page submission to the task force, which is charged with reforming rules that govern the Toronto Stock Exchange and other markets operating in Ontario, lays out how investors have lost money over the years when mining conflicts that TSX-listed companies sought to downplay or deny hit the headlines and stock prices immediately took a dive.
The TSX claims about 47 per cent of the world鱿鱼视频app publicly listed mining companies are listed on the Toronto Stock Exchange and the TSX Venture Exchange and more than half of all mine financing over the last five years was completed by companies listed on its exchanges. Almost $41 billion in mining company shares were traded on TSX exchanges in 2019.
鈥淭he company is saying, 鈥極h well, the people love us.鈥� They don鈥檛 mention the three or four assassinations that have never been solved,鈥� Shin Imai, Justice and Corporate Accountability Project founder and Osgoode Hall law professor, told The Catholic Register.
鈥淚f they鈥檙e required to do that 鈥� this is in part the theory about disclosures 鈥� then investors who aren鈥檛 reading the newspaper in Guatemala but are reading the press releases from the company, they will be informed and there will be pressure on companies to behave better because they have to actually reveal this stuff and then people (investors) will react badly.鈥�
Imai argues that investors need a baseline of relevant, factual information and they should be able to get it from the companies they鈥檙e invested in. For faith-based investors who want to engage with companies to improve their behaviour, rather than simply dumping the stock, such information is vital, he said.
鈥淚f the company itself has to tell the truth, then we have a set of facts we can work with,鈥� said Imai. 鈥淔or those who want engagement, I think that it helps engagement.鈥�
The Justice and Corporate Accountability Project submission traces a long series of setbacks for investors in Tahoe Resources, a TSX-listed company that for 10 years owned the Escobal Silver Mine in Guatemala.
With Church support, including projects and groups partly financed by the Canadian Catholic Organization for Development and Peace 鈥� Caritas Canada, local communities have over more than a decade objected to the mine and its environmental practices, with plebiscites that consistently returned above 90 per cent of votes against the mine.
Meanwhile, the Tahoe Resources website claimed the mine had the support of community leaders and company CEO Kevin McArthur told the Business News Network, 鈥渢he communities they love us.鈥� The company did not disclose to investors legal judgments in Guatemala against the mine or mention the violent conflicts surrounding it.
Currently, OSC regulations require 鈥渋dentification of any known legal, political, environmental or other risks that could materially affect the potential development of the mineral resources or mineral reserves.鈥�
It is largely left to companies themselves to determine what could 鈥渕aterially affect鈥� mine plans.
For ethical investors, such as the Archdiocese of Toronto, getting reliable information about mining conflicts is important, but they鈥檙e not relying on disclosure regulations to fill that gap, said Archdiocese of Toronto chancellor of temporal affairs Jim Milway.
鈥淥f course you want disclosure. Disclosure is good. That鱿鱼视频app kind of an apple pie statement,鈥� Milway said.
But rather than another line added to the bottom of press releases, Milway counts on the archdiocese鱿鱼视频app investment managers to do the digging and tell him what鱿鱼视频app really going on with companies the archdiocese is invested in.
鈥淚鈥檓 not countenancing outright lies, but there鱿鱼视频app only so much the regulator can do,鈥� said Milway.
鈥淭here are portfolio managers, the guys who make the calls as to which stocks to buy, who will sit with management and grill them. But they also go on tours and they read the local press, if they鈥檙e doing their job.鈥�
The Ontario Securities Commission, which regulates the TSX, should ensure 鈥渢ruth in advertising,鈥� said Imai.
Tahoe, which was then operated from head offices in Nevada under a board of directors dominated by Americans, said in a 2015 prospectus that it chose to list in Toronto because of the lower regulatory burden.
鈥淩egulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer will be significantly more than the costs incurred as a Canadian foreign private issuer,鈥� Tahoe wrote in its prospectus.
鈥淲e don鈥檛 want our companies exploiting local communities,鈥� said Milway. 鈥淲e hope that our managers are onto that kind of stuff.鈥�
The Independent Capital Markets Modernization Task Force is expected to issue its final report before the new year.