Mr. Steven Schnoor (As an Individual):
Thank you, Mr. Chair.
I'm a Ph.D. student from Toronto. I'm here because I believe we have a very serious and systemic problem. I also believe that Bill C-300 is a step towards addressing this problem.
For the past five years I've been researching activities surrounding Canadian mining companies operating abroad, with a specific interest in Central America. I've travelled to Guatemala and Honduras several times over the years, and I have found that people there are being seriously harmed by the activities of Canadian mining companies operating in their regions. This is engendering anger towards Canada and Canadians.
I have also produced documentaries to raise awareness about this problem and to represent the views of marginalized communities whose voices are not often heard, many of whom are very upset about the negative impacts they say they've felt as a result of the activities of Canadian mining companies operating near their homes.
My interest in this area began just over five years ago, when I found myself on the receiving end of rage. I was volunteering in Guatemala with a very small Canadian environmental NGO that establishes clean water projects in the developing world.
While there, three other Canadians and I were mistakenly presumed to be secretly working for a Canadian mining company. They thought we were pretending to be working for NGOs as a means of accessing their land to explore for possible mineral deposits. They were incredibly angry.
On this particular day, a local farmer had been killed in a protest against the Canadian-owned Marlin mine. In their eyes, we were representatives of a Canadian mining company. We were blamed for the death of this farmer and for forcing mining upon them. We almost became the target of an angry mob in a country where vigilante justice unfortunately still exists. Our lives were in danger and we were very lucky to escape. I am happy to provide further details if you're interested.
The following day, I contacted the Canadian embassy in Guatemala City to report that my colleagues and I were almost killed by virtue of being mistaken for representatives of a Canadian mining company. I asked what Canadian mining companies could possibly be doing in the region to cause such outrage.
I was told in no uncertain terms that Canadian mining companies have actually done no harm whatsoever; rather, they've been the target of misinformation campaigns initiated by radical left-wing activist environmental NGOs that brainwashed the poor, ignorant, illiterate campesinos into thinking that the Canadian mines will give them AIDS and unleash a monster from the lake.
This surprised me. I stated that I heard nothing about AIDS from the Guatemalans with whom I had spoken, and I certainly heard nothing about a monster coming out of the lake. What I had heard from local Guatemalans was that a Canadian open-pit gold mine was being constructed in the western highlands of the country. This is the Marlin mine, now owned by Goldcorp. People were outraged by the fact that they had not been previously consulted, as legally required.
I'd also heard that the Canadian company constructing this mine—it was Glamis Gold, which is now Goldcorp—had the same type of mine operating in neighbouring Honduras, the San Martin mine in Siria Valley, Honduras. I'd been told that since that mine opened, people reported dramatic changes in the region where the mine was operating. Due to the incredibly water-intensive mining process, rivers and wells had completely dried up. This devastated the primary economy of the region of 40,000 people, agriculture, and it caused a flood of young people to leave the region and to find work in the U.S.
People also told me that the water that had not dried up had become heavily polluted with cyanide and heavy metals. They blamed this for a rash of health problems, which they attributed to the new pollution since the inception of the mine. This included a dramatic increase in the rate of miscarriages both in people and in livestock.
People also feared the serious long-term consequences of ingesting water intoxified by heavy metals over an extended period of time. That includes cancer and liver disease. Many of these people, I should note, lacked access to adequate medical services and the means to buy purified water.
When I told the woman at the embassy about these concerns, I was told that it was all completely untrue. She told me that she had just returned from the region and had seen the mine with her very own eyes, and she could confirm that it was all perfectly fine. I inquired about the concerns regarding cyanide, which she dismissed by assuring me that cyanide really isn't that that harmful. She even said that it's found naturally in almonds.
When I hung up the phone, I felt more troubled than before I had called, because the problem now seemed to be bigger than the very serious allegations against a Canadian mining company. The problem seemed to include a Canadian government position that entirely supported Canadian industry while delegitimizing the concerns of affected communities.
The next year I returned to the region with video equipment to document what would transpire, to document the conditions in the Siria Valley in Honduras. What I saw was a far cry from what the Canadian embassy had told me. Everything was not at all fine. I encountered compelling evidence for virtually every concern that I'd heard raised by local Guatemalans. In fact, many of these concerns have subsequently been documented by world-renowned scientific authorities, including environmental engineer and hydrogeologist Professor Paul Younger from Newcastle University in the U.K.
As a Canadian citizen, I must tell you, I am deeply disturbed that the Canadian embassy was virtually indistinguishable from the PR outlet of a mining company. I began to understand why people in the region, whom I had met, often bitterly referred to the Canadian government as little more than an advocate for Canadian mining companies in the region that seemed to care very little about the well-being and legitimate concerns of the affected communities. “If they do care,” I was repeatedly asked, “why don't they do anything to address these serious problems?”
A documentary film of mine that is critical of Canadian mining was subsequently the target of a misinformation campaign from this very embassy. In January 2007, I filmed the forced evictions of five indigenous Mayan Q'eqchi communities from their ancestral lands in El Estor, in the eastern part of Guatemala.
The forcible evictions were carried out by hundreds of state police and military at the behest of Canadian mining company Skye Resources, which has since been purchased by Canadian mining company HudBay Minerals. Mining company employees took chainsaws and torches to people's homes while women and children stood by watching. In my written brief, I have further details about these evictions.
Skye Resources claimed that they maintained a peaceful atmosphere during this action. They deny any responsibility for any violence that may have ensued over the two-day evictions.
My video served to show that the evictions were anything but peaceful. It's now played at film festivals around the world and to date has been viewed online by over 150,000 people.
Shortly after the video began circulating online, the Canadian Ambassador to Guatemala at the time, Kenneth Cook, began spreading misinformation about it. Ambassador Cook stated that the video lacks credibility because the impoverished Mayan Q'eqchi woman in the video who complains about the forced evictions was actually an actress whom I had paid to perform in this manner, and furthermore, the photographs that I show in the video—some showing people's homes being burned to the ground and people in abject despair as they witness this destruction—were not at all from the evictions, as I claimed them to be, but rather, they were old photos from the internal conflict, which ended in 1996. He claimed that he had seen them many times over the years in many different contexts.
These allegations are very serious and they are entirely and unequivocally false. They portray me as a manipulative propagandist. They defend the mining company's position and they discredit the long-standing land claims, development, and human rights needs of the impoverished local Mayan Q'eqchi people. I am deeply concerned that his actions may be an example of a government that privileges the Canadian extractive industries operating abroad over concerns and well-being of local communities.
I should tell you that I'm currently suing the former ambassador for defamation. I should also tell you that I did not originally intend to sue. It was only after the embassy and the government failed—
Mr. Steven Schnoor:
I'll just conclude on that point by telling you that I never intended, originally, to sue. It was only after the embassy and the government failed to address any concerns that I decided a defamation lawsuit may be the best way to defend the truth of my video and my reputation, but I will leave it at that.
Now, Bill C-300 may help to address this type of problem, as it would allow the Canadian government to withhold embassy support from companies that have been found to have breached human rights and other norms. It could also ensure that the Canadian embassy is not in the awkward position of promoting and defending the interests of mining companies that may breach human rights standards.
Now, as a Canadian citizen, I'm also deeply troubled by how our nation's reputation is being tarnished as a result of the practice of Canadian mining companies operating abroad. In fact, I have a small anecdote for you.
A few years ago while working in Guatemala, I lost my hat. A travel companion of mine gave me his hat, but it had a Canadian flag embroidered on the back. I found this to be a problem. I felt unsafe wearing the Canadian maple leaf and I can tell you that I went out and purchased a black permanent marker and blacked out my own flag. I did this for my own safety.
The current approach that both industry and the Canadian government have proposed, instead of measures like Bill C-300, strikes me as entirely inadequate: CSR policy is in voluntary mechanisms with no measures to ensure compliance. Such voluntary mechanisms strike me as little more than a smokescreen that distracts from better mechanisms that would ensure true accountability.
I want to stress here that I am not anti-mining. I am certainly not anti-development, but I am anti-exploitation, and I'm definitely anti-exploitation that masquerades as development. I am pro-accountability. The conduct of Canadian mining companies and embassies abroad is hurting people and it's hurting our reputation and it's unacceptable.
I also think that Canadians are gradually waking up to this issue. Some of the harm caused abroad is so outrageous, so unacceptable to the average Canadian, that I firmly believe that if they were to consider that our elected representatives opposed accountability mechanisms like Bill C-300, at the obvious behest of the powerful mining lobby in this country, they would rightly be rather upset.
Bill C-300 will not destroy our economy. It will not destroy our mining industry. Bill C-300 will not cause every mining company to pull up stakes and leave the country. I think we should respect the intelligence of the average Canadian and stop parroting this rhetoric and do the right thing.
As I conclude, I doubt that there is anyone in this room right now who would be comfortable with the conditions that we are exporting abroad, that we're imposing upon people who generally live in poor countries with weak governance. These states are often corrupt. They lack any will to protect the interests of those who are most vulnerable and disenfranchised among them. Canadians expect binding standards and accountability mechanisms for companies that operate in Canada. We should not expect less for people living abroad.
Before I end, I would like to conclude with one more example of why I believe we need accountability mechanisms to hold Canadian companies responsible for their actions perpetrated abroad.
On September 27, 2009, near El Estor, Guatemala, Adolfo Ich Chamán, a schoolteacher and community leader who often spoke out against HudBay's Fenix mine, was beaten, macheted, and shot to death, allegedly by security forces employed by HudBay Minerals, right near where I made my documentary. Witnesses have attested that Mynor Padilla, HudBay's head of security, was amongst the men who killed him.
To date, there has been no investigation. There have been no arrests and no charges, and there has been no accountability. This is not surprising. The UN has recently reported that the impunity rate for murders in Guatemala is 98%. If Canada does not do anything, there will never be accountability for such murders. We may not even find out what actually happened.
Canadian accountability mechanisms are badly needed. Bill C-300 is a step in the right direction.
Prof. Richard Steiner:
Good morning, Mr. Chair and honourable members.
I'm Richard Steiner. I've been a professor at the University of Alaska for about 30 years. I'm a conservation biologist and a member of the International Union for the Conservation of Nature's Social and Environmental Accountability of the Private Sector Working Group--that's a mouthful.
I've worked extensively around the world on extractive industry issues and environmental social issues, including, in the past few years, in northern British Columbia with the local people there. I have a deep admiration for Canada: the people, the environment, and the government.
I returned yesterday from a week and a half down in the Gulf of Mexico where I was working on the Deepwater Horizon oil spill and doing a rapid assessment of that event. I find that a tragic and poignant example of what can happen when an extractive industry company does not receive adequate oversight by government and then essentially is left to self-police. I think that's just a very recent example of what can happen.
I strongly support Bill C-300. I think you should all be very proud that it has been formulated and introduced. I respectfully recommend that it be forwarded to the floor and passed.
It has a very straightforward, noble intention to ensure that mining, oil, and gas companies from Canada act in a manner consistent with international environmental practices and with Canada's commitments to international human rights standards. Most companies say they do this anyway, so I'm curious as to how they could oppose a bill that would simply help ensure that this is the case.
The truth of the matter is that many don't live up to these standards, and I think you've heard the eloquent testimony of Mr. Schnoor before me. That's the unfortunate truth. This is true of U.S. companies and companies throughout the world--not simply Canadian companies.
Of the several thousand Canadian mining projects around the world, several are extremely problematic. You've heard of a few in Guatemala from Mr. Schnoor. There are many in Mexico, Peru, Panama, the Philippines, India, Tibet, South Africa, Tanzania, and the Democratic Republic of the Congo. We can list them all and talk about the issues with all of them.
The three I'm most familiar with, in working around the world, are: the Porgera mine in the western highlands of Papua New Guinea; the new Nautilus deep-sea mining project by a Canadian conglomerate offshore in the Bismarck and Solomon Seas off Papua New Guinea; and Pacific Rim's El Dorado project in El Salvador.
The Porgera project—and this is Barrick Gold, the largest gold mining company in the world, based in Toronto—is simply one of the worst environmental and human rights atrocities I have ever witnessed. I was brought there by the Porgera Alliance two years ago to look at what was going on, meet with people, and recommend what needed to happen.
There have been many extrajudicial killings that local people relate directly to the security forces hired by the mine. Many locals were displaced from the mining site to build the mine in the first place.
They've destroyed hundreds of miles of the Porgera, Lagaip, and Strickland rivers, with millions of tonnes of waste a year disposed of in what is euphemistically known as “riverine tailings disposal”--just dumping the waste from the mine into the local rivers. There are several metres of sediment and toxic tailings on the bottoms of many of these rivers.
This is a company that purports to support best environmental practices and social and labour practices. Obviously, it doesn't.
The Nautilus project is the first ever deep-sea mining project in human history. It has not been developed with free, prior, and informed consent. There is an inadequate environmental impact statement, which I was asked to review on behalf of the local people. Again, this in Papua New Guinea. I feel that there's a very seriously co-opted government process that Nautilus has engaged in there; they've resisted the notion of a legitimate citizen's advisory council to engage citizens on a more equal footing in Papua New Guinea.
Finally, the other project I'm most aware of by a Canadian company is the Pacific Rim El Dorado project. I was brought to El Salvador on behalf of the International Union for the Conservation of Nature for a fact-finding mission this past January. There had been several extrajudicial killings that the local people relate directly to the influence of Pacific Rim, a Canadian- and U.S.-based company.
Several local people who were opposed to the mine were murdered just last year. Locals feel that Pacific Rim is behind all of this in one way or another and that they are financing local officials on a campaign of intimidation and violence towards to the opponents of the mine. I think Pacific Rim likely violated OECD guidelines for multinational businesses in regard to combatting bribery, and many other provisions.
It's important that neither the United States nor the Canadian governments have done their due diligence in providing compliance reviews with the OECD guidelines they have ascribed to. These guidelines are great, but they're only as good as the governments' and the industries' reviews in compliance with them.
Finally, on the Pacific Rim project in El Salvador, there is such public resistance to it that the new president of El Salvador, Mauricio Funes, has called for a ban on all metal mining in the country. This is what can happen if a company, from whatever country, does not behave truthfully and honestly by the international best practice standards that they say they are ascribing to.
That could be a detriment and a disadvantage to all other companies, including Canadian companies, that wish to operate in these countries, so there's a strong positive benefit in Bill C-300.
All of these Canadian mining projects that we've referenced have profoundly negative elements: human rights abuses; poor labour practices; forced displacement of local people; violence and murder of local people, whether sponsored directly or indirectly; corruption and bribery of local officials; serious and long-lasting environmental damage; and betrayal of promises of sustainable development in local welfare.
To be honest, many of these projects have lost their social licence to operate and, as Mr. Schnoor mentioned, it really tarnishes the image of Canada in many of these places. The fact of the matter is that host governments in developing countries simply lack the technical and financial capability to provide adequate oversight to these projects; therefore, they allow the companies to run the show. That is not an effective way of doing business.
Canada is better than this. We are all better than this. There are many CSR standards throughout the world. There are the World Bank policies and the OECD policies, to which every OECD country ascribes. The U.S. Ex-Im Bank uses IFC guidelines right now. JBIC, the Nippon Export Investment Insurance organization, has their guidelines. All the multilateral development banks have them...the Equator Principles. And all the extractive industry companies themselves have CSR guidelines.
The sad fact of the matter is that they're not working. Without this additional step that Bill C-300 would provide for the government independently to get involved in providing review and compliance certification, we're not going to get there. Actions speak louder than words. People see the slick, glossy websites of companies that say how wonderful they are, but when it comes right down to it, they see it's not working. There is a number of comparisons of overseas private investment corporations in the United States and Bill C-300...I can go through it at some point, if you'd like.
But the bottom line here is that Canada can provide leadership in enhancing and improving corporate social responsibility with this bill. It's exciting. A number of people in the international community are following this debate. They look forward to Canada's leadership.
It's a great step forward. It evens the playing field for all Canadian corporations. It gives a competitive advantage to those companies that are already ascribing to these standards, and very well, and those that aren't are cutting costs. They have an advantage now. This will even that playing field. It will raise the bar for the U.S. companies working in these places. I think that's a good thing.
It will also raise the bar for host governments. It will give them a better idea of what is meant by international best practice and help raise their compliance review.
It's a clear and precise bill. It's very prudent. It's modest. It's not overreaching by any stretch of the imagination. If this bill had been enacted and a law had been in place, the Porgera atrocity in Papua New Guinea would never have occurred, plain and simple. And in Pacific Rim's case, you might not have an effort by the Government of El Salvador to ban all metal mining in the country if this law were in place and if Pacific Rim had put in some effective mitigations to the problems seen there.
There are several amendments that you could consider, but I think that effectively Bill C-300 is very straightforward, and I would respectfully urge you to pass it along. That's all I have for right now. I would be delighted to entertain questions.
Hon. John McKay (Scarborough—Guildwood, Lib.):
Thank you, Chair.
Thanks to Professor Steiner and Steven Schnoor.
My question is of a largely general nature and it deals with the unwillingness both of government officials and of mining officials to believe the testimony you put forward here today.
Both of you have been direct witnesses on the ground, have seen things, have talked to people, and have made tests, and yet your reports will be disbelieved. My friends across the way will find it almost incredible and, in fact, they'll attack your personal credibility.
It doesn't seem to matter that we have report after report of these items. They are dismissed or ignored. We have you producing documentaries and, instead of dealing with the facts on the documentary as a documentary, your personal reputation is attacked, as is yours, Professor Steiner.
The list of allegations of human rights abuses and environmental damage goes on and on and on. We know darn well that a lot of these countries have very weak governance systems, and yet there is just a flat out unwillingness to confront these facts in our own Canadian psyche. In fact, if either one of you said what you've just said outside of this room without parliamentary privilege, you can absolutely be guaranteed that you'd be served with a lawsuit tomorrow.
And there is no place--no place--that these folks can go to complain. If they complain in their own country, they're dismissed. If they come here, the courts say, well, that's none of our business, that's outside of our country.
There is no legislation that responds in any way to these complaints. So respond to the issue of the denial, the denial of the facts, of what you give testimony to.
Maybe I'll start with Mr. Schnoor.
Prof. Richard Steiner:
First of all, actions speak louder than words, as you have alluded. There are all these CSR guidelines and all the companies say that they ascribe to international best practices and so on.
If that is true, then why would they oppose this independent Bill C-300 to simply affirm that this is so? Obviously, to the extent that a company or a government member is opposing this very prudent, reasonable, modest piece of legislation, it simply indicates their lack of confidence that this is indeed the case, that companies are indeed being honest and forthright about their compliance with CSR standards. If they felt there was no problem, then Bill C-300 would almost be irrelevant to them.
There are many of these, and the proof is in the pudding, as they say down in the south of the U.S. It's the extent to which the government provides oversight. As I said, Canada and the United States are both OECD members. They both signed on to the OECD guidelines, yet the atrocities continue. Porgera and Papua New Guinea and Pacific Rim never would have occurred had the governments really been truly doing their jobs and providing oversight.
Bill C-300, in my book, is excellent. It's far superior to the current OPIC guidelines being developed in the United States, for three particular reasons. One is that Bill C-300 applies universally, as we mentioned before, to all extractive industry companies, whether they have government support or not, and not just on a project-specific basis. That's a positive. That's a good idea.
Second, Bill C-300 requires an investigation and mandatory sanctions for non-compliance, such as withholding credit or insurance or whatever the government role in the company is, and embassy support, as we heard there, and loss of support by Export Development Canada. That is a very good idea.
Third, Bill C-300 requires the Ministers of Foreign Affairs and International Trade independently to develop and enforce these standards and to apply these standards, and it requires that they conduct an investigation for non-frivolous complaints. It's a very simple, straightforward mechanism of governance and jurisprudence, I think.
It would really shift the dynamic, and those companies that are behaving well overseas will appreciate that those that aren't and that are cutting costs and have “an advantage” right now by doing that will no longer have that advantage. So those companies that are -behaving well are going to have a competitive advantage through this.
Prof. Richard Steiner:
Thank you, sir.
First off, to the previous gentleman's comment that the mining companies that we've discussed today, including Barrick and Pacific Rim, etc., have a chance before the committee, I think we can well script.... We can understand exactly what they will say. They will deny any wrongdoing. They will say they have the utmost international best practice.
We know that's what they're going to say, and that's fine, but what I would suggest, sir, is that if you're going to invite them in front of the committee, then some local people living around the mines, who have these issues, should be brought in as well to comment about their perspective about this.
On the second point, the second gentleman's question about the U.S. initiative to increase corporate social responsibility overseas, the U.S. government has been, I think, slower than the Canadian government. I think Bill C-300 would be a step beyond where we are right now, but as I mentioned, the Overseas Private Investment Corporation, OPIC, somewhat analogous to EDC, does have their own CSR guidelines. They are revising them.
As we speak, I think their new guidelines are due out May 20, just a week or so from now. That's exciting. I've been trying to fold some ideas into that, but I don't know what they are.
But again, the only advantage I see currently in the OPIC guidelines is that this applies to all industries, not just extractive industries--fisheries, forestry, pharmaceuticals, investment banking, transportation, and agriculture--all these other international investments that the United States companies have. I think that's an advantage. The disadvantages are, again, that there's really no compliance mechanism; there are no mandatory sanctions within OPIC guidelines right now. They only apply project-specific...so if a company, for instance, has a problem in one project, that's the only thing the OPIC guidelines will focus on, rather than the company's activities as a whole.
So there are disadvantages in regard--
Mr. Carlo Dade (Executive Director, Canadian Foundation for the Americas (FOCAL)):
Thank you very much.
It goes without saying that it is a pleasure to meet the members of this committee again. Last time, we discussed Haiti, I believe. Since then, things have moved a little.
It's indeed a pleasure to be here. I'd like to thank the committee for the invitation.
It is also a little disconcerting to be the only witness. I was told at one time that only ministers and people who are in serious trouble testify in the committee by themselves. I'm sure about not being a minister, and I trust the other part is not the case either.
Indeed, thank you. It's a pleasure to be here this morning to discuss Bill C-300.
I'd like to frame my presentation. You learn much from several of your college professors, and not always things that are germane to what's being taught. An old college professor said that where you stand on an issue is determined by where you sit, so let me frame my presentation by talking about whence our analysis comes when we look at Bill C-300.
First, there was the Canadian Foundation for the Americas. This is Canada's only independent non-university-based think tank focused on Canadian engagement in the hemisphere. As such, we sit at the intersection of academics, civil society, the private sector, and government. We have a foot in each sector, understand each sector, and are able to work with each sector. We receive views from and have exchanges with each one of these sectors.
We also exchange and have the same sorts of relations with public policy institutions, our sister institutions, throughout the hemisphere. In every country throughout the hemisphere there is an institution with which we work very closely and which is structured similarly to how FOCAL, an independent policy research organization, is structured.
We have also had in the past, specific to the subject at hand, work on trade and development and work on indigenous governance and CSR in the extractive sector. This was a project we took over from the North-South Institute, which was led by an indigenous woman from Colombia who had very strong views about mining but was able to do some very interesting things to try to bring the three sectors--government, indigenous groups, and the private sector--together to talk about issues and to try to develop new frameworks for improved discussions.
We have also done surveys of CSR practice and investments--money, time, and resources invested--by Canadian companies in social, economic, and community development projects.
That is the background on the FOCAL side.
On the other side, personally I've worked for 10 years in CSR issues in the Americas. I had a very unique position before I came to Canada and before I joined FOCAL, a position that had me in three spots. It had me on the ground in poor and marginalized communities throughout Haiti, the Dominican Republic, and elsewhere, working with these communities to implement their own social development projects, often with mining companies and with private sector companies, and with banks. It was not just with multinationals, but with small and medium-sized enterprises within these countries, too, so there was a full range of CSR activities.
It also had me at the policy level within the U.S. government on the development of CSR policy, both in the missions in the countries in which I worked and in Washington with other agencies of the U.S. government.
So it was a fairly unique position, I think, that allowed me to understand the broad context, from the macro level to the micro level.
Very quickly, then, based on this analysis, we look at Bill C-300 as an attempt by this committee and by this Parliament to improve the impact of Canadian mining companies on the ground in the communities in which they operate. We look at the bill, what it proposes, and what it offers.
The analysis is that the bill will not offer anything that is not already on the ground and realizable through compliance officers and existing international mechanisms such as the Equator Principles. Indeed, it seems in some ways to have weaker teeth than those of the Equator Principles or some of the other mechanisms that are currently available.
At the same time, it has the potential to have significant Canada-only costs for Canadian mining companies, and this is an important point. In my previous work on the ground, I came across a great deal of the impacts of private investment and of how companies behaved, including their positive impacts and contributions.
We have stories of damage being done. We see this with mining companies. We see this in poor communities with slash-and-burn agriculture that destroys forests and destroys land.
It's a very complex situation on the ground, but for every example we've had of a Canadian mining company doing something harmful, I'm confident that I can come up with three examples of investments that have been made in communities: improved education outcomes, improved health outcomes, and improved livelihoods in communities.
It's a complex story, and if you're going to implement policy, effective policy cannot be based on the sensational from one extreme or the other. It has to be based on a rigorous and rational view of the situation as it exists.
Unfortunately, the bill emphasizes the punitive aspects, and again, I would say, ineffectual punitive aspects. In an attempt to improve conditions on the ground, it ignores the huge opportunities and the huge investments that are there to be leveraged by increasing the good work and the good practices done by Canadian banking companies and also by extractive companies, by the full range of Canadian companies.
I will point the committee to our experience with Talisman in Sudan as an object lesson in how we can get this wrong. Again, there are several factors here. Talisman was in Sudan. There were problems. They moved to address them with a very rigorous and serious CSR program. Increased pressure from activists and activist NGOs in Canada had them leave.
The Chinese and the Indians came in and took over. The first thing they did--the first thing--before they changed the signs on the door was to trash the CSR initiatives, not understanding the importance, not seeing any benefit from this. The oil still flows out of Sudan. The investment is being controlled by the Chinese. The people in the communities are, if anything, worse off than they were before. This is a scenario that has a possibility of repeating itself throughout the hemisphere.
Canadian companies are engaged, and we see them doing positive things on the ground. Again, I will match you story for story the positive things they are doing. But at the same time, by weakening Canadian companies, by imposing costs and risk to reputations, by taking things to the ministerial level, we have the potential to do serious damage.
The damage would be justifiable if you were going to have outcomes on the ground that justified this, if you were going to do something to significantly and quantifiably improve the conditions of life in these communities. But the bill offers nothing in that regard, so there's a real danger there. I can talk about this, too, in the first-hand experience with Falconbridge in the Dominican Republic in my previous job and what we did.
So the real danger here, I think, is that we have a good model in Canada, a model that's viewed throughout the hemisphere as one to be copied and envied in terms of CSR practice. I can talk anecdotally and I can talk quantitatively about this.
But very quickly, I was in Madrid about two years ago, speaking with my counterparts at one of the major think tanks, the Real Instituto Elcano, and Fundacion Carolina. These are two of the major Latin American think tanks. They have both just recently begun work on CSR.
A decision was made by the Spanish government and the Spanish private sector that Spanish companies and the Spanish government were suffering reputational damage, and also competitive disadvantage, from their bad reputation for CSR, so they moved aggressively to address this. My counterparts at the Spanish think tanks were asking if we could share the Canadian experience, because, they said, Canada is viewed widely in the region as having good companies and has a good reputation. They asked if we could share this experience with them.
My first thought was that they had to be nuts. They have a competitive advantage over us with language, with culture, and with immigration. Our one competitive advantage vis-à-vis our Spanish competitors is really the reputation of Canadian companies. We may have been born yesterday, but we weren't born five minutes ago, and we're simply not going to hand that over. But there is room for cooperation in terms of the larger sphere of global CSR practice, and I'd be happy to talk about that.
Finally, there are options for getting this right. Several things could be done. Rather than creating another bureaucracy, another layer of reporting, another cost for the government, there are other mechanisms of which we can avail ourselves.
There's a compliance officer and a compliance office at EDC. Most of the money we're talking about coming out is coming through EDC. Why not simply look at beefing up that function? Give them something on a par with the International Finance Corporation or the Inter-American Development Bank in terms of staff and resources to investigate things more quickly.
It makes little sense to have one review at EDC, a second one at the ministerial level, and then another one at Canadian pensions.... It makes more sense to strengthen them at the point of impact, at the point of origin.
There are also possibilities for work with the Equator Principles. This puts all companies across the globe, regardless of national origin, on the same playing field.
Again, in terms of effectiveness, if I'm a mining company and I can't raise my own money, if I have to raise money from the private sector, am I worried about losing EDC money? To some degree, yes, I am. Or am I more worried about losing money from EDC, the Australian Export Finance and Insurance Corporation, and every major commercial bank from the Arab African International Bank to Banco do Brasil, Bank of America, City, CIBC, BMO, RBC, and Scotia, all the way to Wells Fargo?
That's what the Equator Principles have behind them. These are the more effective mechanisms that we need to look at, that are tested and have more resources behind them, so I would suggest that there are alternatives. I'd be happy to talk to them.
The IFC and the Prince of Wales Business Leaders Forum have put out a new road map for integrating human rights. I would suggest that in terms of time and investment this is where our money would be better spent, not in creating a new bureaucracy that won't improve conditions on the ground, but in working with effective and tried mechanisms that are truly multilateral and that will improve conditions on the ground.
I'll end it there. Thank you.
Mr. James Lunney:
Thank you very much, Mr. Chair.
Mr. Chair, I regard such accusations of all members as being irresponsible and personally take umbrage at those. This denies the good work that the companies do, as has been pointed out by our witness here, in many cases, and I think you can make examples of good work that is being done.
And you deny what our government has been doing, starting with the work of this committee back in 2006 with a report, extensive consultations across the country, and the creation of a CSR counsellor, all of which are designed to address the issues that are before us.
Now, as our witness has pointed out here, there are options available here to do the responsible thing in complicated issues, and those include the Equator Principles, which are there, the UN guidelines on CSR, and a newly put in place CSR counsellor, all of which we hope will help improve the situation.
In your remarks, sir, you said there are options. You talked about the potential for doing serious damage with allegations. Charges under this bill could be brought by anyone who is not even directly involved in the conflict. They may not even be from the country in question and could bring charges.
While they're being investigated.... Now, I notice the witnesses before us earlier were not legal experts, although they have expertise in other areas. The witness at the back of the room has expertise in hydrology, and he worked for an NGO on water issues and now on this issue, but I don't see that he portrayed himself as a legal expert.
We've had legal experts here saying that allegations could very seriously impair Canada's image and the ability of our companies to work in the world...just by bringing forth allegations. We have serious concerns—I certainly do—about industrial warfare, about spurious allegations coming from a competitor who may want to take advantage of a company that's held up by our investigations.
Could you enlighten us or expound on those concerns?
Mr. Carlo Dade:
That's a very interesting point. You raise something of significance and potential significant impact.
Allegations that are handled at the point of origination of a financing entity or the entity that's working directly with the project, such as the International Finance Corporation or Export Development Canada, are viewed one way on the ground in the countries. This is tied to the project. It's tied to the specifics of the engagement, of the investment, of the company's actions.
When it is advanced to the level of minister, especially in the case of Canada and a government that's viewed abroad as Canada is, the charges take on a whole new realm: that there must be something there if the government is investigating.
We spoke about weak governance in several of these countries. There's an issue. If the local government brings charges, it's always assumed that it's political, that someone's uncle is getting back at someone else's uncle or something. But that's not the view with Canada. With Canada, it's viewed as, “My God, this is good governance, this is the seat and font of good governance, so if the government is investigating, there must be something serious here, and there must be something that rises to the level to change a charge”, It does damage, especially if other countries, our competitors in the U.S. and Australia, are relying on current best practice and current mechanisms, and we suddenly put this in.
The other problem with the bill is that the IFC has 15 people on staff in their compliance unit who investigate cases. The IFC does about 450 to 500 deals a year. Of those, I don't know what percentage are extractive. But the number of projects they potentially have to investigate and move on is handled by a staff of 15 dedicated professionals. With Bill C-300, you're looking at a counsellor who would be splitting her time between looking at what is the best practice and looking at this, with one foreign service equivalent working for her.
You have the potential to have these things drag on and on and on. And the longer they do, the more damage is done. For the activist NGOs, the NGOs that spin the stories we hear, this is a godsend: charges against the minister; this company has been charged 16 times; the minister is investigating 16 charges by this company; or these charges have been going on for years.
You have better mechanisms, more efficient and more effective mechanisms to be able to have people's voices heard, to have their complaints taken seriously by organizations with the resources to address them, to respond and to deal with them effectively.
Again, it puts us in a bad situation, and it doesn't improve things on the ground.
Mr. Paul Dewar:
I guess that's the point. Where we are right now is this bill and I have concerns with the critique that if we were to bring this forward, somehow we'd actually be going backwards. I don't buy it. I don't see it from your presentation. I don't see how you can provide evidence on something that hasn't actually been brought into force.
You've looked through the bill. Certainly we've heard from people who say that it's not fair-minded and it would undermine.... But when we've had those folks come forward and say there would be a problem, we've also had other folks who say, in their legal opinion, it wouldn't. The point is that we are seized with it now, and for many of us--and I think for Canadians and Canadian companies--the time is now.
And to see this opportunity depart brings concerns that nothing is going to happen, frankly, because the government has brought forward a counsellor.... And I just have a couple of things on that. The counsellor isn't even set up to take in any concerns at this point. You know the process, right? She can take it in, but it takes two to dance. If the company says it doesn't want to take part, it doesn't have to. You're aware of that. So I don't see that as being helpful, and I think you'd probably be of the same mindset. If you're going to have a process, you must have a process.
Finally, on EDC, when we've asked.... I've asked at the committee and I've asked them in meetings if there has been one instance, just one instance, where they have investigated and found there were concerns among their partners, where they've actually said “you'd better do something or we're going to withdraw”, or where they've actually removed the funding. There were none, so apparently we don't have any problems and this is all some sort of weird conspiracy. I don't think you believe that, because you've intimated that there are some concerns and we need to deal with them.
Mr. Dade, if it's not this--and you've put forward what you think it should it be--isn't it possible to actually have a process that would conform with the general architecture we're talking about? You have concerns about BillC-300. Fine. But what about using this opportunity and this infrastructure to actually change it to adopt those principles you mentioned, to have EDC in the game, and to make sure that when Canadian companies go abroad, there isn't controversy?
Frankly, I think we're entering a time where litigation is happening anyhow. If we don't do something, we're going to be like big tobacco was, really. That's happening. It's already happening. You see it. Do you not see an opportunity here to actually take Bill C-300 and frame the architecture such that it would be helpful?