Lexpert Special Editions

LEXPERT RANKED LAWYERS Anyone who doubts CSR has become a force majeur in the boardroom as well as out in the field has likely never worked on financing a major mining project. Companies raising capital for a project of US$10 million or more run into the Equator Principles, a code for managing social and environmental risk developed in 2003 by private-sector banks. The principles govern things such as labour and working conditions, the right of consultation of Aboriginal peoples and environmental standards — an area that covers resource efficiency, pollution prevention and biodiversity issues. As of the summer of 2013, 80 financial institutions in 34 countries had officially adopted the principles, which means they govern over 70 per cent of international project-finance debt in emerging markets. Signatories include some of the world's largest multinational banks from JPMorgan Chase and Bank of America to HSBC and Citigroup. They all agree to require borrowers to conduct a social and environmental assessment to identify any relevant impact or risks as a condition of raising the capital. Borrowers also have to submit environmental-management plans as part of the loan documentation outlining how they will act to mitigate, monitor and manage the situation. All 80 participating banks agree to deny loans to projects where the company cannot or will not comply. A revision this past summer ups the stakes even further, significantly upgrading the banks' commitments to corporate social responsibility including human rights, climate change and transparency. It also extends the principles beyond project-finance structured loans to project-related corporate loans larger than US$100 million or more. One of the reasons banks support the Equator Principles is that they are telling about how a project is really being run, says Michael Torrance, a senior associate at Norton Rose Fulbright Canada LLP. "If a borrower doesn't take sufficient regard of environmental and indigenous peoples' issues, or of labour relations, then that project may have a lot of problems," Torrance says. "The banks are looking at that project being carried out properly to get repayment of the loans, so there's a business interest tied up in there." He says he is constantly surprised that more companies haven't twigged to how important CSR has become and how quickly. "It's funny to me, frankly, that it's not more wellknown. Sometimes it seems like CSR is talked about as if it's this abstract idea that we should be doing but aren't, which I don't think is the reality. I think businesses are grappling a lot with this topic and not just in a theoretical way, in a very practical way." Joanne Freeze, president and CEO of Vancouverbased Candente Copper Corp., is one of them. McAusland, David L. McCarthy Tétrault LLP (514) 397-7814 dmcausland@mccarthy.ca > Mr. McAusland has broad international experience as a senior executive, director and lawyer. He is a senior advisor on major corporate strategies, portfolio transactions, financial structures, governance and regulatory affairs in Canada and abroad. Melanson, Michael N. Bennett Jones LLP (416) 777-6552 melansonm@bennettjones.com > Mr. Melanson practises extensively in the capital markets area, with an emphasis on public and private offerings of securities, take-over bids and M&A. He acts for clients in a wide range of industries, particularly mining. Mercer, Cathy L. Cassels Brock & Blackwell LLP (416) 869-5772 cmercer@casselsbrock.com > Ms. Mercer has extensive experience drafting and negotiating mining royalty, option and joint venture agreements. She has also engaged in transactions involving the debt financing of companies whose mines are on the verge of commercial production. Miner, Richard B. McCarthy Tétrault LLP (416) 601-7910 rminer@mccarthy.ca > Mr. Miner advises international mining clients on the formation of JVs, buying and selling mines and metal sale, processing and royalty agreements. His experience includes precious and base metals, iron ore, diamonds, potash and industrial minerals. Mingay, Cameron A. Cassels Brock & Blackwell LLP (416) 860-6615 cmingay@casselsbrock.com > Mr. Mingay practises M&A, securities, natural resource and cleantech law. He acts on public and private corporate finance transactions as lead counsel for a number of public clients, and is the head of the firm's China Mining Group. Mitchell, Lynn Heenan Blaikie LLP (416) 643-6931 lmitchell@heenan.ca > Ms. Mitchell represents and advises clients on environmental and energy compliance and liability risk in the context of ongoing operations, new projects and transactions. She litigates for clients in civil and regulatory environmental matters. | WWW.LEXPERT.CA 2013/14 | LEXPERT 21

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