Good afternoon and welcome, dear colleagues.
This is meeting number 15 of the Standing Committee on Foreign Affairs and International Development of Thursday, February 28, 2008. Today we will have a briefing on the crisis in Sudan and investments.
In our first hour we will hear witnesses. From the Department of Foreign Affairs and International Trade, we have Ken Sunquist, assistant deputy minister, global operations, and chief trade commissioner; Scott Proudfoot, director Sudan task force; and Donica Pottie, director, human security policy division. From the Department of Foreign Affairs, we have David Angell, director general, Africa bureau; and from CIDA ,we have Louise Clément, acting director general, southern and eastern Africa directorate.
We welcome you.
In our second hour we're going to hear from a group on the Sudan issue as well.
I remind the committee that our intentions today are to have a very brief committee business meeting at the close of our meeting. This is to ratify and pass the steering committee report, or at least bring it forward to the committee for its consideration.
Mr. Sunquist will be making a statement, and then we will go into our first round.
Welcome, Mr. Sunquist.
Thank you. My colleagues and me are truly pleased to be here today.
I think it is propitious timing that we're here today. I do have a number of colleagues with me--more than you normally would have--and the rationale for that is that we weren't sure how wide your questioning might be, so we have a number of different groups within Foreign Affairs, from our corporate social responsibility, human security, and Sudan task force. We also have a colleague from CIDA regarding aid and development. So hopefully we can answer the full range of your questions and different issues.
We noted that the committee has an interest in the activities of Canadian companies in Sudan, and I think that was the starting point for us to be here. As the Canadian government does not currently promote investment or commercial activity in Sudan, there are very few companies active in Sudan. As a result, the information available on Canadian companies' activity--potential, real, or for the future--is somewhat limited, but we'll try to address any questions you might have.
Corporate social responsibility issues related to Sudan are also limited because of the number of Canadian companies active. However, the committee may be interested in the overall Canadian government approach and position on corporate social responsibility, upon which I'll elaborate a little bit later in my presentation.
The Government of Canada remains deeply concerned about human rights and the humanitarian situation in Sudan. Canada has repeatedly put on record its serious concern with ongoing human rights violations, in particular violence--including sexual violence--against women and girls, by all parties to the conflict in Sudan.
Canada is centrally involved in the efforts of the international community to find solutions that will lead to lasting peace throughout Sudan. To that end, since 2004 Canada has committed over $441 million in diplomatic, peacekeeping, humanitarian assistance, reconstruction, and rehabilitation projects. Canada has been a supporter of peacekeeping in Darfur. We were one of the principal donors to the African Union mission in Sudan, which contributed to mitigating the violence of attacks against civilians and to providing a more secure environment in which humanitarian actors could operate.
Canada continues to offer its support during the transition period from the African Union mission to the UN mission. We continue to call on all parties to the Darfur conflict to facilitate the deployment of the hybrid mission and to cooperate fully with its implementation. Canadian senior officials systematically raise their concerns with respect to the situation in Sudan, both bilaterally and in multilateral fora. Canada is also participating in international efforts to support the Darfur political process, and we continue to call on all parties to the Darfur conflict to participate in the renewed peace talks.
Restricted humanitarian access also remains a serious concern, and Canada consistently advocates for safe and unhindered humanitarian access to enable humanitarian actors to assist those in need without fear of violence, intimidation, or harassment. Canada regularly calls on parties to the conflict in Darfur to protect civilian populations and refrain from attacks and acts of violence against them and humanitarian workers.
The UN Security Council, through various resolutions, has also imposed an arms embargo against Sudan, subject to certain humanitarian and peacekeeping exceptions, as well as an asset freeze and travel ban against four Sudanese individuals. Canada has implemented these sanctions with regulations under the United Nations Act. We would fully implement other UN Security Council decisions should they decide to take further measures in relation to the conflict in Sudan.
On the commercial side, it is important to note that since 1992, Canada has withheld trade and commercial support under trade development programs to Canadian businesses wishing to do business or invest in Sudan. In 2007, Canada's overall trade with Sudan consisted of imports valued at about $65 million, about 99% of which was gold, and exports valued at about $210 million, about 82% of which were cereals, particularly wheat and foodstuffs for the people.
Also, on February 5, 2008, the Government of Canada supported motion M-410. If passed, this would require the Government of Canada and crown corporations to divest from corporations conducting business in Sudan, as well as from all funds and financial instruments invested in or operating in these countries, subject to certain humanitarian exceptions. This motion will be discussed further in the upcoming weeks, but if it is implemented, it could place further pressures upon the Government of Sudan, including economic pressure, to meet international standards of conduct.
However, given the level of Canadian commercial engagement with Sudan, the overall effects of a unilateral disinvestment measure on the Canadian and Sudanese economies may be minimal. To our knowledge, and utilizing available databases, the department has only been able to identify a limited number of companies with commercial activity in Sudan. For example, La Mancha is a Montreal-based affiliate of a French mining company operating a gold mine in Sudan. Skylink is providing aircraft in support of Canada's commitment to peacekeeping in Darfur.
It should also be noted that more than 100--I think it's 108--Department of National Defence-owned armoured personnel carriers are currently operating in Sudan under the UN mission. These armoured personnel carriers are being maintained by a Canadian company under contract with DND, so when you look at the commercial figures, you'll see that some of that--there's a bit of a spike--is because of things like the helicopters, the maintenance of the armoured personnel carriers, and other issues.
Understanding the Canadian presence in Sudan is of critical importance, and for that reason the department is still investigating whether other, if any, Canadian firms are doing business in Sudan. This will require some time and some resources to confirm, but it's an active file for us.
With respect to corporate social responsibility-related issues in Sudan, we encourage all Canadian companies to adopt voluntary CSR best practices and international standards.
With reference to Canada's broader and overall approach on CSR at home and abroad, our government and Canadian companies continue to play a key role in the promotion of best practices internationally. Corporate social responsibility is defined as the way companies integrate social, economic, and environmental concerns into their business practices. CSR promotes sustainable results as well as wealth creation for companies and stakeholders, and it is critical to helping companies manage risks abroad, including environmental, human rights, and financial risks. The Government of Canada encourages and expects all Canadian companies to uphold voluntary international standards and principles and to reflect our values and international commitments. Voluntary initiatives can advance public policy objectives in a flexible, expeditious, and less costly way than regulation. Canadian companies are also encouraged to work transparently and in consultation with local communities in which they are active.
In February 2007, Canada announced its support for the Extractive Industries Transparency Initiative, or EITI, which calls for improved governance in resource-rich countries through the verification and full publication of government payments and government revenues from oil and gas mining. This is a significant step toward increased transparency and helps hold governments to account for the payments received from mining operations.
In addition, Export Development Canada announced in October 2007 that it has become a signatory to the Equator Principles. This is an international financial industry benchmark for assessing and managing social and environmental risk in project financing. I believe they were the first export finance institution worldwide to sign on to that.
Canada and the Department of Foreign Affairs and International Trade promote CSR through the National Contact Point. This is an office responsible for promoting the OECD guidelines for multinational enterprises. Its aim is to facilitate a positive and constructive dialogue between multinational enterprises and those affected by their operations.
In addition, our department is actively engaged in various outreach initiatives and continues to undertake CSR training and information sessions for government officials at home and abroad, enhancing our ability to best advise companies and engage foreign governments on CSR-related matters.
I should just mention as an aside here that all our heads of mission and all our senior trade officers receive training in CSR now before they go abroad.
In conclusion, with respect to Sudan, the Government of Canada remains deeply concerned about the human rights and humanitarian situation. In terms of commercial activity, we do not anticipate any significant increase in investment activity in Sudan. Moreover, if motion M-410 were to be passed, it would represent a further disincentive to trade and investment with Sudan.
Finally, Canadian companies with operations and activities in Sudan or anywhere else in the world are expected to follow high standards of behaviour with respect to issues relating to corporate/social responsibility.
Thank you, Mr. Chairman. That's I think where we can take the statement and then be open for any comments or questions you might have.
On behalf of all of us, I'd like to congratulate Mr. Obhrai for bearing this new mantle. I'm sure he'll do it as well as he has borne that in Foreign Affairs. Congratulations.
Thank you very much, everyone, for being here today. I think all of us will perhaps agree that a whole-of-country approach is needed to deal with the complexities in Sudan. When I was in Khartoum, I met with the regime there, a few years ago. This longest-serving genocidal regime in the world I found to be, frankly, to not put too fine a point on it, a group of pathological liars.
I'm concerned, frankly, that the CPA in the south is going to collapse. That would be a harbinger, of course, of an extraordinary amount of violence and a rebirth, unfortunately, of what that part of the country endured not so long ago.
My questions are threefold.
Mr. Edwards, the deputy minister, was in front of the committee, and much to the surprise and shock of all of us, he said that there would be no resources whatsoever for the UNAMID mission. If that is still the case, I'd like to know why. And if it isn't the case, perhaps you could let us know, please, what resources specifically are going to be used to support the hard assets that are needed for the UNAMID mission: the helicopters, the ground transportation, and the fixed-wing air transport that's required.
My second question is to determine—and if you don't know this today, that's perfectly understandable, but you could send your response to the committee—the list of resources that CIDA is giving to the south to support the CPA and to support humanitarian needs in the south. I think to an extent it has been forgotten about, and particularly in view of the insecurity in Kenya, making it very difficult perhaps to get assets there.
Last, I'd like to know whether any efforts have been made to convince the members of GNPOC, the Greater Nile Petroleum Operating Company, to engage in a divestment and in return be able to find other oil assets, perhaps from Angola and Nigeria, whereby they could replace their oil needs and essentially sever their ties with Sudan, in exchange for a quid pro quo coming from perhaps places such as Nigeria or Angola.
Thank you, Mr. Chairman.
The fundamental difference between AMIS and UNAMID is that the first is an African Union peace support operation and the second a United Nations operation combined with an AU peace operation.
What that means in financial terms, sir, is that with AMIS, the African Union operation, funding is voluntary; countries are asked to contribute. Canada is among the principal countries to have done so. With regard to a UN peace support operation, funding is very largely through assessed contributions. As member states of the United Nations, we automatically are taxed, if you will—in the case of Canada, approximately 3% of the cost.
I think, sir, what Mr. Edwards was saying is that Canada has made an exceptional contribution to AMIS. We have contributed, I think, $286 million since 2004, making us the fourth contributor to AMIS, but with the transition to UNAMID, funding would be through assessed contributions, and so that sort of exceptional contribution would not be sought, because there is a standard funding formula that would kick in automatically.
Canada has contributed, I think, $48 million towards the transition specifically from AMIS to UNAMID, and we are in discussion with the United Nations about other areas where Canada might contribute, above and beyond its assessed contribution.
Thank you, sir.
I think we need to talk about the context of how large Canadian economic presence is in the country, and it's very small. Why is it small? Since 1992 we have not been promoting the economic exchange. So if companies have come to us and talked to missions, to the department, we have taken the perspective of discussing corporate social responsibility, discussing the role of companies in a warfare situation. We've been discussing these kinds of things, and that has in a sense been a disincentive, a disinvestment, right from the word go, because companies have not wished to participate largely. There are some companies that have. I mentioned that 82% of our commercial activity of exports is around foodstuff, which I think most would agree is probably good for the people in a general sense.
On the import side, the one company that is producing most of the gold has actually been taken off the list by the NGOs in the United States for disinvestment because they are--how best to describe it?--a poster child, one of the best examples of sustainable development, of working in the community. This is according to the NGO rather than from our facts and figures. What we see is a company that has employed over 500 people in jobs that are sustainable, and it isn't part of warring factions. They've built the churches, schools, mosques, hospitals. They've done the traditional good corporate social responsibility, and they've gone a bit farther. Now, this is not a company that is a controlling shareholder in the whole activity.
I think your question is really a difficult one, because it gets to the heart of it. How can you proceed with disinvestment if we don't have very much, and yet, at the same time, get the point across that this is an activity by the Government of Canada, by Canadians, that we don't appreciate and that we don't support what's happening in the region.
So I absolutely agree with you that it's continually talking to companies. You've seen the examples of big companies that were there in the past. They were counselled. They were talked to. They participated in discussions. And most of them have withdrawn.
That is an interesting question. As to which ones should be, we would say most should be, but that's a different issue.
From a quick search of databases, we found that Canada was minuscule. We looked at other countries that had a fairly large presence there and broke it down to just a couple of different ones for presentation purposes.
If you look at the oil and gas sector--without talking about individual companies, because there are multiples in some of them--countries such as China, Malaysia, India, the United States, Germany, the Netherlands, France, and Italy are all in there. As you know, we've retreated from that area for the last little while. In the energy sector, Switzerland, China, France, and India are all there. In telecoms, we have the United Arab Emirates, Lebanon, Kuwait, Germany, and France.
It gets to the heart of your earlier question too, Madame Barbot. There are a lot of countries very active there. Canada made a decision since 1992 that we wouldn't be as active.
I'm not sure if that gets to the heart of your question, but a number of countries and companies are active in Sudan.
I appreciate that probe and the drilling down a bit. We're going to hear from other witnesses who might help us with that and I'm sure they'll share information.
Thank you to our guests today.
One of the issues we've dealt with at this committee has been.... One of the tools in the tool kit for government is SEMA, as you know, and presumably with your experience from the former Yugoslavia you know the history. I guess one of the tools that could be used here--and granted you've already identified that there's not a lot of Canadian investment there--would be SEMA.
My concern—and I will be talking again on Burma, but not today—is how we define how SEMA is implemented, because it is a policy tool that I'd say is fairly new, if you want to look back to 1992 when it came into place. But what we need is to understand the scope of investment. I don't see it today, but perhaps you could provide the committee with a list of exactly what Canadian companies are investing and to what degree.
I'd also be interested in indirect investment, because one of the concerns I had around Burma--and we discussed it at committee--was that the lens we were looking through was one of future investment. I would argue--and this is just my argument--that we should have been going back to existing investment in Burma. If we decide to use this as a direction for the government, a policy tool, we would do the same, looking at not just who's directly investing in Sudan, but indirect investments, so that we are able to touch all of the dollars that might be invested, just as information.
The other thing I want to mention, to see if you had any experience or knowledge of it, is that I was talking to some people today about this issue, and they identified, notwithstanding that there's not a lot of Canadian investment in Sudan presently for reasons aforementioned--there's a lot of investment by Chinese and Indian companies--that there's also a lot of interest in our oil in Canada. The proposition was contract prohibitions and employing CSR, corporate social responsibility, with those companies--for instance, Chinese oil companies that are very interested in our tar sands--and saying, before you invest in oil in the tar sands, let's take a look.... I know our government's interested in this. They announced that they were going to talk about a lens on foreign investment, because they were worried about national security, particularly around investment in the tar sands, and that we can employ the same tack and use that as a tool.
I'll just finish with this comment. The reason I'm concerned about investment in Sudan and Darfur is because of what it does to people. People are being moved off their property. They are not being compensated. The oil companies and the people who are investing there--and these are reports that I've heard and read--are sometimes using the places where drilling is going on for military purposes, and there's dual use going on in terms of the equipment.
I would like to put a question, I guess, to our government. Is there a way to put contract conditions on investment in our oil fields as much as looking at what is going on in Canadian investment and indirect investment, as well, in Sudan?
Mr. Chair, Mr. Dewar asks a difficult question to answer in any short version. But let me divide it into two.
The first one is SEMA, and I think most of you have been through it in terms of Burma. We've used it in terms of Belarus; we've used it in other countries in the past.
The preference, in effect...and I'm not sure I can say the legal preference, but usually it's supposed to be done in concert with others in terms of a multilateral, so it's a UN or a larger grouping. In fact, Burma was one of the first times we did that without that...call it cover or whatever you want to call it; we did it differently.
So the way you can use SEMA is dependent upon, I guess, the way the government wishes to use SEMA. The preference has always been to do it in concert with others, because without doing it in concert.... It becomes a tool without much teeth if other people can get around it in other ways, as Madame Barbot said in her question. So we have an issue of SEMA. We prefer to use it in concert with others so that we can make it....
Your second question is actually more intriguing, in a way. It's one that I don't think any thought has been given to. The whole idea of investment into Canada has been on the basis that companies would perform in Canada to Canadian values, Canadian interests, and that they would be good Canadian corporate citizens, as well. I don't believe we've used it as a line in the sand as to what that company does in the United States or in the UK or in China or Japan. I guess you would get into the reputation of the company, which could be used. It's just one that has not been used as a public policy vehicle.
The question is really around voluntary compliance. But it's also, I would argue, the case that Canadian companies, when they operate anywhere in the world, export Canadian values and Canadian systems. The number of Canadian companies that are ever involved in these issues is very small.
One thing that was most interesting, while we have not talked about it in our statement, is that if you look at Talisman in Sudan a decade ago, I would argue with you that today Talisman is probably a leader in Canada in CSR, and it's because of Sudan. This gets to your comment earlier about some pressure and some differences.
Companies in Canada.... We actually try to promote good CSR values as a niche for Canadians. That's how we want to be seen in the world. We would like people to know that if they deal with Canadian companies, there won't be corruption. In fact, that helps them find contracts, because government people can feel safe that they won't be held up to public scrutiny on these things, because they know that Canadian companies aren't involved in it.
When we find Canadian companies that are going down a path with which we're uncomfortable, our heads of mission, our ambassadors, our high commissioners, our senior trade people speak often and frequently to them about host government regulations. Because sometimes the host government regulations are much easier and laxer than Canadian ones, we're saying that Canadian companies should be bound by the two. And you don't get to choose the lesser of the two; you get to choose the greater of the two.
It's a constant.... I used Talisman, and I can use La Mancha, and I didn't reply to Mr. Martin's last comment about GNPOC. We've met with all the companies that have had anything to do, in the past or currently, with Sudan to talk to them about their actions and what they're doing. We bring this to their attention every day, with somebody talking to somebody.
I like the tenor of your comment, in the sense that it's not a regulatory approach, but it's one that demands that they really think of themselves as Canadians and about our values.
The other thing is the OECD regulations. We have a National Contact Point here that listens and talks to NGOs and talks to companies. So we have a formal mechanism, we have the informal mechanisms, we have the Foreign Affairs kinds of things. We believe we're certainly moving in the right direction and have the right....
I would also say that voluntary standards—we use voluntary international standards of the UN, the World Bank—are not just something somebody thought up in the basement of their house. These are valid standards for extractive industries—for corruption, for whatever. And you'll notice that many Canadian companies are global leaders now. They publish compliance regulations; they publish separate annual reports.
I'm not sure I can answer this better than to say that this is where we are.
I'll just take one second to say that the other thing we need to look at in contracts is whether there are any trade obligations under WTO or GATT negotiations, and I just don't know. That's why I can't.
I'm sorry. I didn't mean to take up your time.
According to our analysis, the United Nations and the Security Council play a very important role. Even though their efforts have not been successful so far, they have been significant.
For example, members of the committee have referred to the importance of creating some tools. We have seen the United Nations and the Security Council create some new tools that had never been seen before in order to resolve the Darfur situation, such as the peacekeeping mission and the combined mission. As a matter of fact, there had never been such a level of a cooperation between the United Nations and the African Union.
The same type of cooperation is present in some of the peace processes. Mr. Roed-Larsen, the representative of the Secretary-General of the United Nations, is working in close cooperation with Mr. Salim Ahmed Salim, representing the president of the African Union Commission. Both work closely with the movement in order to establish the circumstances that would relaunch the negotiations. The Security Council has implemented some measures called the targeted sanctions, applied to the funding of weapons and to the travels of some individuals.
Furthermore, other United Nations people, such as Sir John Holmes, Mr. Guéhenno, on the peacekeeping side, and the Secretary-General himself are still very involved in this situation. Of course, the members of the Security Council, including permanent members such as France, the United Kingdom and China, play very important roles on the Sudan situation in a national context.
Mr. Chairman, with regard to financial contributions for air assets, the Canadian government made an extraordinary contribution during the AMIS phase, but with the creation of UNAMID, the responsibility for the provision of those assets has now been taken on by the United Nations on the basis of assessed contributions. So we have been told formally by the United Nations that the contribution we were making is no longer required.
There is Canadian support for the transport of some of the African peacekeeping forces, for example. There is support still through our helicopters not yet withdrawn, but as UNAMID deploys, that responsibility will be transferred. We've been told formally by the United Nations that the helicopters will no longer be required.
With regard to the responsibility to protect, our has said in a formal statement that R2P does indeed apply to Sudan. What's called for in this case is the effective deployment of a peace support operation, and this is why we have put so much store in getting UNAMID on the ground, and this is why we made such an extraordinary contribution to try to ensure the success of the AU force, AMIS beforehand, sir.
Thank you, Mr. Chairman.
I should explain that I'm not with the Canadian divestment group. My organization is Canadian Economic Development Assistance for Southern Sudan.
I want to thank the members of the committee for this invitation. I hope my experience and comments will be helpful.
In January 2005 I made my first trip to south Sudan. A peace agreement had just been signed between the north and south that ended a 25-year civil war, a civil war that had taken the lives of millions and displaced millions more. Since 2005 I have made between 10 and 12 visits to south Sudan. I just returned in January, and I leave again in March.
Our organization, CEDASS, Canadian Economic Development Assistance for Southern Sudan, is focused on humanitarian aid through economic development. The philosophy is simple: rather than give a person a fish, you teach them to fish.
Let me address this in three segments: what we have done, where we are, and where we are going.
On my first trip to south Sudan, I hired a young Sudanese. We purchased vehicles and SAT phones and left money to start purchasing a product known as gum arabic, a product that I had never heard of before I went to Sudan. The product is harvested from the acacia tree and is indigenous to south Sudan. This is a tremendous resource for south Sudan. Gum arabic is used throughout the world in a myriad of products and industries, and is the key ingredient in the making of Coca-Cola.
After facing every logistical challenge imaginable, in the spring of 2006 we exported the first shipment ever of gum arabic from south Sudan--not through Port Sudan, which would have been so much easier, but through Uganda, then Kenya, to the port of Mombasa. Following this, we re-examined and took apart every aspect of the operation to determine the strengths and weaknesses of the business plan. We recognized the need for a strategic alliance with one of the major international importers of gum arabic if we were to grow the industry.
In 2006 I was appointed as a special adviser to the Ministry of Commerce, Trade and Supply of the government of south Sudan in the area of international trade. CEDASS decided at that time to introduce mechanized farming to the bay area of Bahr al Ghazal. Farming in this area, indeed in most of south Sudan, is done by hand, the result being very low yields per acre.
The irony of south Sudan is that many people are starving, yet there are hundreds of square miles of land. Given the right application, and applying Canadian farming expertise, we believe the land is capable of feeding the population.
In April of last year we held our inaugural fundraising dinner. Minister Peter MacKay, then Minister of Foreign Affairs, attended as our keynote speaker. We were able to raise sufficient funds to purchase, on the advice of Canadian farming experts, walk-behind tractors. We also set up a business plan and model that will allow the program to become self-sustaining.
With regard to the gum, we have made a strategic alliance with an American company, the largest importer of gum arabic in North America and the second-largest in the world. This contact has led us to brokering the sale of approximately 1,000 metric tonnes of gum arabic from the Upper Nile region of south Sudan. We also are in the final stages of due diligence in a joint project in Bahr al Ghazal with the American company.
All the profits made by our organization in gum and farming will obviously be returned to the community for humanitarian purposes.
In December 2007, CEDASS was granted 1,000 acres of land by the government of south Sudan in the Juba area of Central Equatoria State. Our vision is to create a training farm where southern Sudanese can be introduced to and trained in modern farming methods and land cultivating, which will help feed the people of south Sudan. This project can open up the Juba area, which is 20,000 acres of fertile land. Given that it is adjacent to the Nile, we have the advantage of a constant water source.
CEDASS will bring in the experts. To give the committee some idea of the experts we have recruited since December, Mr. Jack Wilkinson, a Canadian and the president of the International Federation of Agricultural Producers, a worldwide organization, has agreed to act as an adviser. We have put together a project team that includes active farmers, academics in agribusiness, and business leaders. The key to this project is the business plan that will be established, which will provide for a self-sustaining farm operation able to grow from revenues as opposed to donations.
With respect to where we are going, CEDASS will continue to look for opportunities that can create self-sustaining operations. These operations will generate jobs, which in turn will generate wealth, and which hopefully will help to create an economy operated and controlled by the south Sudanese. By concentrating on training and financial assistance to south Sudan, we avoid what I refer to as “economic colonization”.
As part of my mandate as an adviser, I will encourage Canadian business to think of south Sudan as an investment opportunity, where corporate goals in regard to profits can be achieved and, in addition, provide training, education, and capacity-building to the south.
In December we were asked by the President of Southern Sudan to deliver a letter to thanking Canada for its ongoing support. President Salva Kiir Mayardit is anxious to visit Canada and would also like to see ministers of this government visit south Sudan. We would be happy to help achieve this visit and are prepared to assist in any way.
During the many visits I have made to south Sudan, I have developed a passion for the people of south Sudan, a people who have the ability to survive, the likes of which I have never seen, and possess an optimism that is beyond comprehension. They are not looking for retribution, Mr. Chairman; they are looking for opportunity.
We as a country should strive to help them achieve it. Canada is a generous nation populated by a compassionate people. In Sudan, there are countless projects and situations that cry out for international help and aid. In my opinion, Canada should be proud of what it is doing and what it has done.
I believe we have to be judicious, however, and prudent in the projects we involve ourselves in. As this committee knows, Canada has committed over $440 million to south Sudan, which includes $285 million to assist in the settling of the Darfur crisis. This is significant. Canada's policy of working through NGOs and the Multi-Donor Trust Fund is the right policy and it should continue.
I would like to make three recommendations.
First, all projects presented to CIDA or other Canadian government agencies should be accompanied by a detailed business plan. Individuals, NGOs, or other institutions should be required to demonstrate their expertise, especially those projects that require knowledgeable, not just well-intentioned, people to operate them.
Rather than divest, I would encourage Canadians to look at south Sudan as an area of business opportunity. There is no doubt that Canadian business people can survive and do well in this country and at the same time assist in the capacity-building, economic development, and employment.
The third and last one is that we should create a central registry of all NGOs and companies operating in south Sudan to provide better liaison between the different bodies.
In conclusion, Mr. Chairman, I appreciate the opportunity to address you. I would like to take this opportunity to thank the members of the Sudan Task Force. They have been a tremendous source of information for us and have made themselves available to us at all times. I would also like to thank CIDA and CIDA Inc. for the information they have provided and their offer to act as a resource.
I hope my comments and recommendations will assist you in your deliberations. We, CEDASS, will go forward with the Juba project and we'll raise funds in the private and institutional sectors. We think this is good for south Sudan and we believe it is good for Canada.
South Sudan survived the war. It is up to us to do what we can do to make sure it wins the peace by reaching its potential.
I'm happy to answer any questions you may have. Thank you.
Mr. Chair, members of the committee, thank you for allowing me to testify today.
I represent the Sudan Divestment Task Force, which is a project of the Genocide Intervention Network. We're an NGO that is based in Washington, D.C. We also have offices in London.
Our organization primarily focuses on a model of targeted divestment we have developed that focuses on ameliorating the situation in Sudan by placing targeted economic pressure on worst-offending corporate actors, primarily those in the oil, mineral extraction, power, and military equipment sectors.
Before I begin, I would like to piggyback off the previous testimony by saying that we actually encourage investment in southern Sudan and eastern Sudan and Darfur and other marginalized areas of the country.
This is a model of divestment that has been adopted by 22 states in the United States. The federal government in the United States recently passed divestment and contract prohibition legislation that we authored, and international pension funds, including one Dutch pension fund, have also started to look into the matter and divest. It's a model of divestment that encourages investment in marginalized regions while focusing exclusively in those areas that actually benefit the regime.
This is a regime that is exceptionally vulnerable to economic pressure. Its foreign debt exceeds its gross domestic product, and with its overwhelming reliance on oil—90% of its export revenue comes from oil—it makes sense why up to 70% of that oil revenue then goes toward its military expenditures.
Sudan, though, does not have the technical expertise to exploit its own oil resources. For that, it relies on a small subset of foreign oil companies—primarily, a majority are wholly state-owned companies from China, Malaysia, and India—to drill and provide the profits necessary to prosecute the war in Sudan.
There is such a thing as responsible investment in Sudan. As was mentioned in the previous panel, Montreal-based La Mancha Resources is the largest mining company in Sudan. It primarily operates a gold mine in eastern Sudan. After being on our highest offenders list for several months, it became receptive to engagement and decided to take a number of steps. This is precisely the type of corporate presence we want in Sudan.
Sudan is China's fourth largest provider of oil; we don't see China leaving Sudan any time soon. It is the same with India and Malaysia. But there are ways that companies can use their influence for good, use their economic leverage to help end the atrocities. La Mancha is a great example of that.
The company publicly refrained from any new investment in the country—they had previously planned to do a multi-million dollar mine expansion, which would have given the Government of Sudan a lot of new revenue streams—until a peacekeeping force consistent with Resolution 1769, UNAMID, fully deploys unimpeded. They have also committed to funding humanitarian efforts in Darfur in addition to what they were already doing in eastern Sudan, even though Darfur is on the other side of the country from where they operate. They also met with Sudan's then-minister of Energy and Mining, Dr. Ahmed Al-Jaz, to discuss the situation, urging the Government of Sudan to again allow the UNAMID force access to the region.
That's the exact type of the operations we want to see happening in Sudan. Unfortunately, foreign companies, primarily these Asian companies, have done quite the opposite.
I would point your attention to one specific company, and that is China National Petroleum Corporation, which operates six of the seven active oil blocks in Sudan and has also invested in a couple of others that are currently in the exploration phase. It facilitates weapons transfers to the Sudanese regime and allows its facilities to be used as staging points for attacks by the government on civilians. It also refuels military aircraft.
Sudan's air force is primarily Chinese and Russian equipped. Iran also provides some small arms. In fact, this government, which partially funds an NGO called the Small Arms Survey, has done a really excellent job of documenting just that, as did the Harker commission in 2000 when it investigated the Talisman case.
A question about the Greater Nile Petroleum Operating Company was brought up earlier. CNPC is the operator for that consortium and for most of the other major consortiums currently doing work in Sudan. The total number of people who have been displaced as a result of CNPC's drilling in Sudan is well above 15,000. There is, however, an ability for this government to change that. There are several things that Canada can do.
First, it can join the targeted divestment movement that's already well under way in the United States. Many of Canada's public pension plans may be invested in these foreign companies and therefore have power as shareholders to change the behaviour of those companies in Sudan. They can also, if those companies prove unresponsive, divest and hit their share price.
Second, CNPC, as was alluded to before by a question from MP Dewar, currently has 11 oil blocks in Alberta in the tar sands. None of them is currently operating yet, but they've expressed interest in acquiring several more. ONGC, which is the Oil and Natural Gas Corporation of India, India's primary oil company operating in Sudan, has also expressed interest in drilling the tar sands in Alberta.
On New Year's Eve, President Bush in the United States signed the Sudan Accountability and Divestment Act. That act prohibits contracts from going to companies that are considered highest offenders, that meet the criteria for having a harmful presence in Sudan and have refused to take any actions to address that.
Perhaps more so than any other western country, because of the Alberta tar sands contracts, Canada has unique leverage, truly a more important type of leverage, to engage with CNPC to make it stop the displacement, stop the weapons transfers, stop refuelling military aircraft, and most importantly, pressure the government to end these atrocities.
In many cases, state-owned enterprises follow the lead of their home country governments. In the case of Sudan, CNPC is actually, in some ways, leading China's foreign policy. China protects Sudan at the UN and China gives weapons to Sudan to the extent that it does because of CNPC and for very little other reason.
I would urge this government to use its unique position of leverage to seriously engage with CNPC to make clear to CNPC and ONGC and any other state-owned enterprise or other company involved with Sudan in problematic ways that doing business in Canada must be contingent upon respecting human rights in other parts of the world where they're operating.
Thank you very much, again, for allowing me to testify. I would be happy to take any questions.
Mr. Chairman and members of the committee, thank you for inviting me to present before this committee.
For the past two years I have worked closely with students and citizens across the country for a common cause, to mobilize a critical mass of Canadian students, citizens, and decision-makers to end the crisis in Darfur and respond to future threats of genocide.
The standing order before this committee is an important step towards more meaningful government action on the crisis in Sudan. As the national divestment coordinator for STAND Canada, I oversee grassroots campaigns at the local, provincial, and federal levels. The goal of these campaigns is to investigate public and private holdings and companies operating in Sudan to facilitate shareholder engagement and identify ways to pressure the Government of Sudan to bring an end to suffering in Darfur.
Many of you seated around the table have received letters, phones calls, and e-mails from your constituents on these issues. They are concerned about the crisis in Darfur and Canada's role in ending the suffering there and promoting a lasting political settlement to the crisis. This case is exceptional in the international landscape of gross human rights violations. Canadians realize that and want our country to play an integral role in the fight to end continued mass killing and displacement in Darfur.
Thus far, international efforts to broker that settlement have faltered. I know that today's proceedings will provide the committee with concrete initiatives, as we've already heard, that the Canadian government can undertake now to expedite a resolution to that crisis.
Today I bring to you the message of my organization and its stakeholders. Students Taking Action Now: Darfur is a truly national organization with over 70 chapters in high schools and universities from coast to coast. Our chapters are a vibrant part of the communities they are in, and our organization works closely with citizens, decision-makers, and local, provincial, and federal governments—thousands of young and enthusiastic students engaging in a common cause, sending thousands of letters, and making thousands of phone calls to your offices with one message.
The details of this message are clear and simple: one, Canadians care about Darfur; two, Canadians want their government to take a leadership role in resolving the conflict there; and three, Canadians want to know that their investments are not making an already terrible situation in Sudan worse.
The message is clear, but how do we attain these lofty goals? Individual investors, university administrators, and investment fund managers have all taken action. The British Columbia Investment Management Corporation is engaging the companies it holds that are operating in Sudan to clarify their operations there and to ensure that these companies have corporate social responsibility policies that govern their operations in crisis zones. Student and community activists in British Columbia can be credited for this success.
Queen's University took concrete steps to regulate their investment portfolio in March 2007. As a precursor to a larger ethical investment strategy, they divested from certain companies with strong ties to the Government of Sudan. The students at Queen's, myself included, wanted transparency in the investments of the institutions they are a part of and demanded action from the university administrators. Students are demanding action across the country—at the University of Ottawa in the capital city, the University of Western Ontario in London, Laval University in Quebec, Memorial University on the east coast, the University of British Columbia on the west coast, and many more.
Finally, private investors across the country, from elementary school teachers to film and television producers, independent musicians, fund managers, and business consultants contact us on a weekly basis. They want to learn more about their personal investments and companies operating in Sudan and how some of those companies fuel the conflict in Darfur. Citizens in civil society organizations are facilitating this engagement process. The Canadian government should enact a legal framework regulating public fund investment in companies that are fuelling egregious human rights violations.
The research is ongoing and the facts are clear. Certain companies operating in Sudan are aggravating an already dire humanitarian crisis. Canadians need leadership on this issue. Canadians want a formal government-approved process whereby they can make these tough investment decisions. The result will be widespread shareholder action, engaging the companies that are responsibly contributing to the economy in Sudan and divesting from the companies that are fuelling the crisis there.
Canadian investors are in a unique position because of Talisman Energy's experience in Sudan. In my capacity as a coordinator of the Sudan divestment campaign, I recently spoke at length with the senior manager at Talisman Energy in charge of corporate social responsibility. Before Talisman's experience in Sudan, no such position existed on their board and social responsibility was not on the company's radar. He commented that I would be hard-pressed to find a similar meaningful position on the board of the Chinese and Indian companies operating in Sudan, and I think he is correct.
The Talisman experience shows that corporate social responsibility will never be a priority for any company unless it is either demanded by its shareholders or mandated by the government. In the case of private companies, there are no public shareholders to speak up on these issues; the only consideration is the company's bottom line.
Investors across the country are doing their job. Now it's time for the government to act. The Canadian government should mandate CSR standards and reporting obligations for Canadian companies consistent with the final report of the National Round Table on CSR, which we heard about earlier. Almost a year after the report, no formal government response has been issued.
But ensuring basic human rights standards starts at home. Numerous companies operating in Sudan with close relationships to the Government of Sudan are also operating in Canada. The Canadian government is in a unique position to leverage those relationships with the goal of engaging the Government of Sudan—an historically challenging proposition.
The extent to which these companies do business in Canada should be contingent on their operations in Sudan. If a company is fuelling violent escalations by the Government of Sudan's military forces, as news agencies continue to report new hostilities in Darfur detailing hundreds of deaths and thousands displaced, then that company's contracts with the federal or provincial government should be examined. Government contracts with companies operating in Sudan should be examined. The Canadian government should make doing business in Canada contingent on a company's governance policy and historical practice of corporate social responsibility.
In closing, let me reiterate the main recommendations in my brief. One, public investment should be audited, and investments in companies operating in Sudan should be examined. A public government statement on these issues is what thousands of Canadians are waiting for.
The Canadian corporate social responsibility framework must be implemented to ensure compliance at home and abroad, and the spirit of that framework should be applied to government contracts in Canada with foreign companies that also operate in Sudan.
Thank you. I'd be happy to answer any questions.
As you know, there have been some difficulties with the CPA over this winter, and they seem to have settled down. With all of the people I talk to, both in community groups in Sudan and the government of south Sudan, there are probably two messages that are consistent.
First of all, the people of south Sudan did not want to go back to war and they want the comprehensive agreement to work. The problem is the frustration they feel from what they verbalize as the continual frustration imposed by the government of the north in not living up to all of the conditions and terms of the Comprehensive Peace Agreement—which I also think is having an effect on Darfur. The people of Darfur are asking why they should enter into an agreement similar to that which was done with the south when the comprehensive agreement in the south is not being lived up to.
I think it is 50-50 as to whether the comprehensive agreement will hold. I think there are obviously not going to be elections in 2008, because money has not been released by the north for the census. Will there be in 2009? I don't know. But there is the big vote in 2011.
With respect to the oil fields, I heard in the previous session comments about Talisman. I have no interest in Talisman. I'm a businessman, but I have no interest in Talisman.
But I would say this. I think we have to be very careful. We have replaced Talisman with a conglomerate that has no interest in the environment, has no interest in human rights, and we have no persuasive powers over them. Can we get that persuasive power? I think that is more up to people like you than it is up to me. But I have people who come to me in south Sudan and tell me that they are blocking and damming rivers. In my opinion, their objective is to pump as much oil as they possibly can before 2011.
I hope that answers your question this morning.
I am a bit frustrated to hear about Sudan in the context of the oil companies and their wealth when the reasons why we should talk about that country are the misery of people, the war, the fact that they have been living in camps for many years and that there is no end in sight. Personally, I find that a bit odious.
In fact, we talk about the wealth of the northern countries and about the power of the countries extracting the natural resources but we nearly never talk about the lives of the local people. It is as if they did not exist. I find that intolerable because, at the end of the day, the wealth that the other countries are accumulating is of absolutely no interest to me, if only because this wealth is located in African countries the resources of which we are extracting while leaving the local peoples in extremely dire situations. I listen to you, like I listened to the government officials who were here before you, and it is as if Darfur was not in Sudan. Talking about the companies operating in Sudan without talking about Darfur does not make any sense, as far as I am concerned. Of course, I have never been there and I do not know how people live on the ground but I know that there are people there who live, give birth and die in camps and that we do nothing for them. It is criminal. It is a crime against humanity and it is intolerable.
I will try to calm down and come back to the topic of the day.
Mr. Goldstein, you are part of a group called STAND Canada and you are recommending an embargo. However, all the experts tell us that embargoes do more bad than good for the people. Since we know that there are very few Canadian corporations in Sudan, what would be the point of an embargo? Would it be for us to be able to claim that we have done something in mobilizing Canadian, American and European students? Do you really believe that this situation would be resolved the day the few Canadian corporations operating in Sudan have left?
Mr. Tennant, I'm so delighted that you're here. I had this very conversation with the previous minister of the previous government. Why can we not invest in a business fashion? As you say, the projects and the details of business plan and demonstrated expertise.... Your company, your involvement, has demonstrated the export of gum arabic, and it is a tremendous experience. Plus what it does is create capacity for people to be independent rather than divest.
My question would be this. Would divesting diminish their ability? Iran, North Korea, Iraq, and other countries have survived sanctions, let alone divestment.
I think my young colleagues have tremendous, great ideas. I love their ideals and their beliefs. But we have perhaps over-estimated our ability to influence some of the other countries. China or India are not going to go away, I agree with you 100%. What are the first things a family wants? It's food on the table, clothes on their backs, and they want to know that if their kid is sick they can get a doctor, and if there is education required, that they can go to school. That is not going to come, in my view, from divesting. It is going to come from investing and increasing the capacity of those people.
I would like to hear your comments on that, as to the issue of investment and divestment.