ForUM and Friends of the Earth Norway filed a complaint 19May 2009 against Cermaq ASA for multiple breaches of the OECD Guidelines for Multinational Enterprises arising from the fish farming operations of the company's subsidiary Mainstream in Chile and Canada. Based on the complaint of against Cermaq ASA by FoE Norway and ForUM for violating the, the Norwegian National Contact Point for Responsible Business arranged for mediation between the parties.
The final statement by the NCP and the joint statement by the two parties can be read here: http://www.regjeringen.no/upload/UD/Vedlegg/ncp/final_statement.pdf
Please note that the complaint was dealt with by two different NCPs. The former NCP, housed by the section for Economic and Commercial Affairs in the Ministry of foreign affairs, handled the specific instance from 19 May 2009 to 28 February 2011. In March 2011 the Norwegian NCP was reorganised, with a new independent panel of experts forming the main body and a secretariat organised administratively under the Ministry of Foreign Affairs.
During the event in Paris Friends of the Earth Norway and Forum for Environment and Development (ForUM) summed up approximately as follows:
The process
We accepted the NCPs offer of mediation since we saw it as a possibility to get a more constructive dialogue with the company. Through the process the company had provided limited or no information on the most crucial questions. The former NCP had decided not to meet our request for further investigation relating to the these questions, and did not have the legal means to demand the necessary information from the company. We believed the new independent NCP would provide for a balanced negotiation, ensuring that the company also had to acknowledge that there had been problems. As organisations we had been clear that we wanted an independent NCP in the process of reorganization of the NCP. We believed participating in the mediation process would give us recognition as legitimate actors.
In Paris we commended the new Norwegian NCP for its transparent, quick and engaged processing of the case, and also for their general accessibility and willingness to give advice and listen. The mediation in itself was extremely intense and time-consuming; right before summer holidays, particularly for our organizations that also focus on multiple other issues. The NCP was both creative and ambitious in relation to the mediation. At the same time this was a first time experience of mediation for the NCP as well, and requirements, procedures and rules of engagement were not very clear to us during the process.
The old NCP, organized in the MFA with members from the Ministry of Industry and Commerce, the National Federation for Business and Central Labor Union, was to us dominated by direct interest in the industry and in the company. The section for Economic and Commercail Affairs in MFA that hosted the NCP has as their main task the promotion of Norwegian industries and products abroad, and Norwegian salmon has been given priority treatment during decades. The ministry of industry and commerce manages the state ownership. A key minister had been the chair of the board of Cermaq during the critical years. While the process was in the old NCP we used much energy to convince them that we had a case, while the new NCP had a completely new and independent position and attitude.
General recommendations
The case illustrates the big imbalance between the two parties: in terms of resources, competence, and access to information as well as time and legal support. Our limited resources influenced our capacity to provide quick and in-depth responses to the requests by the NCP. In order to compensate for the asymmetry between relatively small organizations with limited and big multinational companies we recommend the following:
- The NCP must be able to provide financial and other resources to the weaker party to ensure equal negotiation capacity and power. Free relevant advice should be made available at an early stage of the process, particularly if the other party is using experienced lawyers. (In this case the NCP provided a consultant. Unfortunately the assistance came too late in the process to have full impact.)
- Clear routines and rules for mediation must be established to ensure predictability on the process and the type and amount of resources that will be required.
- The Norwegian NCP should play a more active role to ensure monitoring of the joint statement. Concrete follow-up mechanisms should be introduced at an early stage the mediation.
- The parties should agree on a plan and time line for independent monitoring of the different elements of the agreement, before concluding a joint statement.
Outcome
Our immediate impression is that the company in recent years has changed its approach and attitude towards CSR in a fundamental way. It has become one of the best in implementing best practices in areas such reporting on sustainable practices and fish hygiene. We believe this is related to the fact that Cermaq involved its top management and board from the very beginning of the complaint and throughout the negotiations. This gave an important signal that the company took the case seriously and recognized us as actors in it. It is common knowledge that changes in business behavior and policies must come from the top to influence the entire business chain.
The communication with the company has improved after mediation and after changing the of CEO of Cermaq. However, we still do not have enough documentation to conclude that the company is complying to the agreed elements in the joint statement. The annual report of Cermaq, including its sustainability report, is not comprehensive in this respect , and there is no independent evaluation of company’s fulfillment of the joint statement. As an example we still lack information concerning the company’s action on a critical topic such as indigenous peoples’ rights.
To us the most important now is how and when implementation of the joint statement will take place. According to this agreement we have accepted to trust that the company will implement the changes agreed. The company does not want an independent evaluation. In many ways this will be a test case for what can be achieved through the NCP by Norwegian civil society organisations . It is the concrete actions and results on the ground where Cermaq operates that will determine whether or not we can recommend others the use of NCP mediation. Time will show!
Background:
Salmon farming is a flagship industry for Norway, with a dominant position internationally both in production and markedshares. Sea food is the second largest export sector in Norway, second only to oil and gas. Cermaq is one of the biggest actors in the industry, active in both fish farming (Mainstream) and production of fish feed (EWOS). The Norwegian state is the largest stock holder in the company with 44% of the shares. For many years since the industry was startet in the 1970s and 80s it has been mired by environmental problems, and despite improvements there are still serious problems also in Norway. Since 2000 we received reports and visits from environmental and rights organizations in Chile and Canada that the industry was damaging the environment and infringing rights of workers and indigenous peoples. Along with the media, we raised the issues in public, with the industry, and particularly with Cermaq as it was partly state owned and considered one of the least responsive companies. The company was not willing to admit any wrongdoing. In 2007 the salmon production in Chile collapsed due to disease as a result of unsustainable practices. That’s when we decided to file the complaint.
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