Thank you, Mr. Chair. I look forward to being grilled and grilled.
Thank you, colleagues, for this opportunity to speak to you about this important initiative. As you know, this initiative has, in the last little while, generated a great deal of controversy. I hope that over the course of this next hour we can direct our minds to some of the issues that might be generated by . This committee, under the chairmanship of Dr. Bernard Patry, issued a report in 2005 to ensure socially and environmentally responsible conduct by Canadian companies, with a particular interest in the activities of a particular Canadian mining company, TVI Pacific, in the Philippines.
It was a comprehensive report that recognized that Canada, as a leader in the extractive sector, had a moral and legal responsibility to lead. It was also an unanimous report. It said in part that “Canada does not yet have laws to ensure that the activities of Canadian mining companies in developing countries conform to human rights standards, including the rights of workers and of indigenous peoples.”
The report led to the round tables in 2007. I have here a copy of the round tables' report. The round tables were a multi-stakeholder group of people from industry, NGOs, and various other entities who compiled the reports and tabled them. They had six recommendations, of which numbers three and four are the most significant for the purposes of this committee. Recommendation three called for “An independent ombudsman office to provide advisory services, fact finding and reporting regarding complaints with respect to the operations in developing countries of Canadian extractive companies.”
And the fourth called for “A tripartite Compliance Review Committee to determine the nature and degree of company non-compliance with the Canadian CSR Standards, based upon findings of the ombudsman with respect to complaints, and to make recommendations regarding appropriate responses in such cases.”
It was felt this would improve Canada's competitive position. It was hoped that the government would respond in a timely fashion, but it didn't do so. In 2009, the report was re-tabled. We still have had no response. So along comes Bill , a rather modest little bill that.... If you listen to its critics, you'd think we were approaching the end of western civilization as we know it.
The government has felt that doing nothing was not an option, so they chose to do the next best thing, which is the appearance of doing something while in fact doing very little. In fact, I'll argue that what they did on March 26--that is, the issuance of a press release and the order in council appointment of a counsellor--is in fact worse than nothing.
I'm working on the assumption that all of you are fairly well informed about corporate social responsibility and environmental stewardship. In the time allowed to me, I don't propose to re-plow old ground—although I dare say that given your witness list, there will be quite a number of witnesses who do want to raise to your attention some very, very serious issues regarding CSR and environmental stewardship.
Ironically, the tabling of the press release and the setting up of a dedicated counsellor foreclose the debate about CSR. The government, by doing so, has in fact confirmed that we—meaning Canada—do have a CSR problem and proposes to address it in particular way. So the debate about whether we should or we shouldn't is now over. Now we're on to the question of what is the appropriate methodology.
So essentially you have three approaches. You have this approach, which is the round table report. You have the second approach, which is the government's press release with an order in council attached. And you have Bill .
For the purposes of our discussion, this approach is off the table. It is very clear that whatever response this government is going to give to CSR, it has given it already. It is reasonable to conclude that the Prime Minister has done pretty well everything he's going to do about CSR during this government.
What he has proposed instead is the appointment, by order in council, of a counsellor dedicated to CSR, with a mandate to educate and investigate. I have no great objection to the Government of Canada educating and encouraging Canadian companies to be world leaders and to adopt best practices on CSR. That should be applauded. My objection is to the investigative part of the mandate, which, in my judgment, has the appearance of doing something while doing little or nothing.
The counsellor is an order in council appointment. It's trite but true, but what a Prime Minister can make, a Prime Minister can unmake. The appointment will only last as long as the Prime Minister wants it to last, and if the counsellor strikes a course just a touch too independent for the Prime Minister, he will have his appointment revoked or suffer the fate of a death by a thousand cuts--witness Mr. Page, in the Library of Parliament. There is nothing like having your budget cut to curb your investigatory enthusiasm.
Bill , on the other hand, proposes a legislative mandate that will not be subject to the whims of a Prime Minister or, indeed, of any Prime Minister. A repeal of the order in council requires a pen and a piece of paper in the hands of a Prime Minister, whereas a repeal of an act of Parliament requires an act of Parliament--two very different beasts.
In addition to the vulnerabilities that the appointment process and the whim of a Prime Minister's limitations place upon the ability of the counsellor to investigate, there is within the mandate a heading called “Limitations on Authority”. It says that no investigation can be launched into the activities of a Canadian mining company unless the company itself consents to the counsellor conducting the investigation with the “express written consent of the parties involved”.
How do you think that's going to play out? Would it be reasonable to assume that the only companies that are going to consent are already CSR-compliant? If they are already CSR-compliant and they agree to an investigation, what kind of report is the counsellor going to produce? We're going to have a happy bunch of little reports that are entirely useless to everyone.
Contrast that to Bill , wherein the minister is not under a similar restriction. Under a Bill C-300 regime, the minister will not have to obtain the consent of the corporation or company prior to launching an investigation. It's a little like the police asking the accused whether they can investigate the allegation first. Just to state it makes it sound somewhat dubious.
So we have a counsellor appointed--or unappointed, as the case may be--on the whim of a Prime Minister, vulnerable to budget restrictions without notice, and producing happy little reports of dubious benefit to anyone. But it gets worse.
Prior to launching an investigation, the counsellor shall “consult with the national contact point”. You will hear from other witnesses on what they think about the national contact point, but “dysfunctional” and “a tremendous reputational burden for inaction” are words you will hear. Civil society and private sector actors in the national round tables agreed that the national contact point was not an appropriate mechanism for advancing human rights and performance standards in mining, oil, and gas.
It gets worse. In addition, “The Counsellor shall not...make binding recommendations”. If the recommendation is not binding, what is it?
The counsellor may only review on getting a request from an individual, group, or community that “may be adversely affected”. If an NGO such as the Mennonite Central Committee--or any other NGO, for that matter--observes something that is a breach of CSR standards, it in itself is not adversely affected, so the counsellor has no mandate to investigate.
Further, under section 6.2, the counsellor may not on his or her own initiate a review. If an NGO sees something that should be investigated, the counsellor's hands are tied. He or she has no power to do an independent investigation.
So let's review. We have an order in council, which is on the PM's prerogative. We have an inappropriate precondition of a national contact point. If we have no consent by the company, we have no investigation. If there are no adverse interests affected, the person has no status to complain. There is no independence on the part of the counsellor and no initiative ability. And just to top it all off, all recommendations aren't binding.
If the counsellor jumps through all these hoops, there's an elaborate process set out in paragraphs 6(5)(a) to 6(5)(f) for conducting a review that will have a number of formal and informal add-ons from the lawyers of the affected company. I say good luck to that counsellor.
If the counsellor jumps through all the foregoing hoops, before he or she issues a statement the counsellor must inform the parties of the results. If the report is adverse, the counsellor must give them opportunity to comment. If the counsellor is still determined to publish after all this, the company then may go to the courts and seek a mandamus order to quash the findings. So how many adverse findings do you think we're going to hear out of this counsellor?
Canada is at a crossroads here. It's an important player on the international stage in this area, and the complaints are starting to pile up. You have a bill kit. You'll see in there three very serious complaints: one about Barrick in Papua New Guinea; another one about Goldcorp in Honduras; and another about Banro in the Congo. You'll see some pretty negative commentary on the part of some pretty respectable people.
On the Barrick Gold one, it says there have been numerous complaints over the actions of Barrick Gold at this mine, with the most recent allegations culminating in the Norwegian Ministry of Finance disposing of its shares in the company over ethical concerns in regard to their waste disposal practices. Based on an in-depth assessment of Barrick's operations in Porgera, the pension fund's council of ethics concluded that investment in Barrick amounted to “an unacceptable risk of the Fund contributing to serious environmental damage.” The council added that “the company's assertions that its operations do not cause long-term and irreversible environmental damage carry little credibility.”
You can read the rest for yourselves. Goldcorp in Honduras had the largest fine ever assessed by the Honduran government against a corporation. And then, in the Congo, that's another story altogether.
So there we have it. Other witnesses will speak far more eloquently than I about these complaints and, I assume, others. I'm quite prepared to concede that occasionally these reports may be frivolous and vexatious and there may be actually other games in play, but if you look at Bill , there is a mechanism to deal with frivolous and vexatious complaints.
We will be presenting amendments that incorporate the Government of Canada's press release and the counsellor into Bill . We think incorporating the counsellor into Bill C-300 meets some of the criticisms I've just outlined and addresses the vulnerability of the appointment in the preconditions of consent and the ability of the counsellor to initiate proceedings. It also neatly sidesteps the royal recommendation, because the Government of Canada, in its press release, has already committed funding to a regime. I would invite any one of my Conservative colleagues to move that amendment. I'd be happy to have you move it.
As members of Parliament, you will incur significant blowback from some of the most powerful people and companies in Canada who do not want, under any circumstances, a legislative response to the allegations of a growing CSR problem. From their perspective, a preferable course would be to do nothing at all. Their default position, however, is the Government of Canada press release and then fighting it out behind closed doors with the counsellor.
Let's be clear here. Canada has a choice: it can legislate a response that would put Canada at the head of the class, or it's more business as usual--see no evil and hear no evil. Voluntary guidelines have pretty well run their course. The question is really whether you as MPs want to move Canada along to the next logical position: a legislative mandate for CSR. Their preference would be to kill Bill and then lawyer it to death. Unless you give the counsellor some legislative spying, it will be a repetitive environment.
You have written your report, and it now has a response some four years later. I wish you Godspeed in your deliberations, and I thank you for your time and attention.
And thank you, Mr. McKay, for being here today and for your initiative.
You are aware of what SEMA is, the Special Economic Measures Act. It's interesting to note that when others say we normally don't intervene with companies vis-à-vis their economic investments overseas, this government invokes SEMA. In fact, this government brought forward SEMA, and in fact what it does is restrict investment. And that, of course, is out of cabinet.
So I want to put on the record that the whole notion that governments act for the benefit of people overseas when it comes to Canadian investment is not only something that is done, but also that it was this government that has done it. And I was one of the ones who pushed to do that in Burma, along with colleagues.
I don't know, but is this government saying that if a company says everything is fine in Burma, then we just look the other way? The last time I checked, things weren't fine in Burma—and they're not fine in the Congo.
And I want to touch on what's happening in the United States, because right now there's a piece of legislation there that, it could be argued, is a lot stronger than your modest private member's bill—which I fully support, and I thank you for bringing forward. It actually is going to trace where minerals are coming from. And they're in fact looking at something analogous to what we Canadians put together with the Kimberley process on blood diamonds. They'll be looking at blood coltan and other things.
So I have to say that I'm really surprised at the reaction you're getting. It is a modest bill. As you mentioned, the round table report represents a consensus of business opinion, and should know that. He should read it. It's worthy reading. Read who was there. Business was there. Civil society was there. It took this government two years to make recommendations, and you are absolutely right in saying they go nowhere in terms of being as strong.
Mr. McKay, if Mr. Abbott, for instance, thinks everything is fine, then he shouldn't have a problem with your process. If there's no problem, then this is something that companies should welcome.
I just want to get an opinion from you, Mr. McKay. If you see the opposition to your modest bill going forward, do you think it's a matter of us policy-makers just not getting it, that we just don't know what's going on around the world? I ask because I could, for instance, spend far too much time telling you about what I heard in the Congo. And what I heard in the Congo, Mr. McKay, was that we need to do this. What they asked me in the Congo was, why are your companies coming in here and making money and handing over money to militias who are taking lives? Some of the worst incidents of violence against females right now are connected to our mining operations—and you can't wash that away.
So I would ask you, Mr. McKay, if you think the opposition to this is a matter of ignorance, or is this a matter of people just thinking governments shouldn't be involved in this? And if they think that, then I'd ask them to look up SEMA and ask why we are invoking SEMA in places like Burma.
Thank you very much, Chairman and colleagues.
When I last appeared before the committee in February, I noted that my department was embarking on its second century of existence at a time when the world around us is also undergoing profound and rapid change. The global economy remains in turmoil. The political environment is marked by unpredictability and danger. Solutions to many of the issues we face, from peace and security to the struggle for democracy to cross-border challenges such as pandemics and climate change, are beyond the reach of any single country acting in isolation.
That is why we are continuing to advance Canada's role in the world and why our government is committed to providing the strong leadership that Canadians expect and deserve.
The primary goal of our government's foreign policy is to advance and protect the prosperity and security of Canadians while promoting Canadian values such as freedom, democracy, human rights and the rule of law.
To meet today's international challenges, our government has focused Canada's foreign policy on specific priorities: creating economic opportunities for Canadians by pursuing emerging markets, with a specific focus on our valued Asian partners; a renewed relationship with the United States and strengthened engagement with the Americas; peace and security in Afghanistan, including in the context of neighbouring countries; and exercising and strengthening our Arctic sovereignty.
With respect to our first priority, creating economic opportunity with a focus on emerging markets, it is not surprising that our recent foreign policy has been heavily focused on the economic problems we face as a member of a global economy. Our government, together with our global partners, is working to address the immediate global economic downturn while turning our attention to the rules and institutions that underpin the global financial system.
We are already deeply engaged in preparing to host the 2010 G8 summit in Ontario, and we have played an active role in the G20 meetings that have been held. Canada's exceptionally resilient system has been widely recognized as an international model, including by the World Economic Forum. Both the G8 and the G20 have provided Canada with key opportunities to shape the international response to the economic crisis. In addition, our government has advocated strongly against protectionism, a short-term temptation that we know from past experience leads to long-term damage.
Continued trade liberalization and increased access to new and traditional markets will be fundamental to advancing and protecting Canada's prosperity. That is the driving principle behind the government's global commerce strategy. That is why we have worked to strengthen our economic relations with countries like Japan, China and India.
Over the past year we have announced six new trade offices in China and three in India. Since 2006, our government has undertaken 16 ministerial level visits to China with my visit this month being the most recent.
We continue to actively engage with our largest trading partner and one of our closest allies, the United States. We have begun an intensive dialogue, led by the Prime Minister and supported by the active engagement of some 20 ministers, including me, with the Obama administration to engage the U.S. on a wide variety of issues. From immediate concerns, such as the economy and Afghanistan, to long-term issues, such as climate changes, energy security, and the Arctic, I regularly engage the U.S. Secretary of State, Hillary Clinton, on these issues of importance to Canadians.
Our government has also re-engaged in the rest of the Americas with a strategy that has sought to promote economic prosperity, along with security and democratic governance, through bilateral and multilateral engagement.
The fifth Summit of the Americas provided an excellent opportunity to make progress on all of these fronts. During that summit, we were able to announce a temporary $4 billion U.S. increase in our callable capital to the Inter-American Development Bank an innovative approach that will enable us to double the IDB's lending capacity without any direct cost to Canadian taxpayers.
A new emerging leaders scholarship program in the Americas will allow up to 1,600 students from the region to study in Canada every year.
A trade-related technical assistance program will allow countries signing free trade agreements with Canada to maximize the opportunities and benefits of increased trade and investment.
A $5 million contribution to the Organization of American States' hemispheric electoral assistance initiative will help countries in the region improve the transparency and effectiveness of their electoral process.
And we have continued to pursue our goals on a bilateral basis, a campaign that has included some 25 visits to the region by ministers and senior officials.
Canada has also maintained its commitment to security and development in Haiti where we remain the country's second largest donor of bilateral aid, and are contributing 100 police officers to the development of a professional Haitian police force. We will maintain our focus in Haiti on high-level political engagement as well as specific activities to promote stabilization, reconstruction and long-term development.
I'm pleased to tell the committee that as part of our high-level political engagement with Haiti and our commitment to the Haitian people in their efforts to strengthen freedom, democracy, human rights and the rule of law I will be traveling to Haiti soon. As a matter of fact, I was supposed to go tomorrow, but since none of the opposition parties agreed to accompany me, I had to cancel the trip.
Let me turn now to Afghanistan, where we have pressed on with a whole-of-government approach to support security, stability, and democratic governance.
We have established six clear priorities and three signature projects to ensure a measurable improvement in the lives of Afghans between now and 2011. Specifically, we have worked to enable the Afghan National Army and police in Kandahar province to sustain a more secure environment and to promote law and order; strengthen Afghan governance institutions and local democratic structures in order to deliver core services and promote economic growth; provide humanitarian assistance for vulnerable populations; enhance border security by facilitating a bilateral dialogue between Afghan and Pakistani authorities; help advance Afghanistan's capacity for democratic governance by contributing to effective, accountable public institutions and electoral processes; and support Afghan-led efforts towards political reconciliation.
The ultimate goal, colleagues, remains the same: to leave Afghanistan to Afghans in a country that is better governed, more peaceful, and more secure.
Turning to the Arctic, our government continues to demonstrate our sovereignty over the lands and waters of the Canadian Arctic. The Arctic is not only an integral part of Canada as a territorial fact, it is also central to our identity as a northern country. We have embarked on a variety of measures that make up a comprehensive strategy to affirm Canadian sovereignty in the Arctic through our government's Northern Strategy.
These measures included: conducting a comprehensive mapping survey of Canada's continental shelf; investing in key Arctic science and technology facilities; enhancing our military presence; concluding the Ilulissat Declaration on the Arctic Ocean; and extending the Arctic Waters Pollution Prevention Act to 200 nautical miles.
We continue to play a vigorous role in the Arctic Council—including at the recent ministerial meeting which I attended. We are also pursuing our Arctic policy agenda on a bilateral basis. I've had the opportunity to have bilateral meetings with the United States, Russia, Denmark and Norway.
In addition to our government's key priority areas, we have been active in a number of other fronts. In Africa, for instance, we have worked with partners in the region and beyond to address key security and governance issues, for example, in Congo, Zimbabwe, and Sudan.
Canada's foreign policy priorities are also about people and values. The values that Canadians share have taken us to the far corners of the earth, where we continue to be engaged in addressing ongoing security threats, including terrorism, international crime, nuclear proliferation, and fragile states.
We've been active in promoting democracy, and our efforts have included sponsoring the United Nations resolution on human rights abuses in Iran and improving the effectiveness of the UN Human Rights Council.
We have made an effective contribution to the international response to natural disasters in Haiti, China, and Burma.
Finally, we have launched a vigorous effort to gather international support for a Canadian seat on the United Nations Security Council for 2011-12.
The past year has been a busy period in Canadian diplomacy—requiring us to address challenging political, security and economic issues in North America, the hemisphere and further afield. Nevertheless, I'm confident that we will be able to meet those challenges going forward.
With that, Mr. Chairman, I would be happy to respond to the committee's questions.
Thank you for that question.
I mentioned in my statement before that Canada is pursuing an Arctic policy that is based on our northern strategy. As you know, our northern strategy promotes governance and democracy. It promotes economic development, the protection of the environment, and of course, sovereignty.
I had the opportunity to meet with a lot of my counterparts, ministers responsible for the Arctic Council, when I was in Tromsø, Norway, not long ago, where we had the opportunity to hold our meeting. A number of issues were discussed there, some extremely important, as you know, particularly in terms of doing the geographic mapping of the Arctic and the continental plateau. That is under way as we speak.
Canada is doing a great job in cooperation with the Americans sometimes, and with the Danes. We're out there making sure that by the year 2013 we will have done all of the surveying and will have finished the mapping of that area, so that the decisions made at Ilulissat two years ago will indeed have a basis in terms of respecting the United Nations Convention on the Law of the Sea, and so that we will have the necessary data in place to be able to make that determination.
So briefly, as you know, Canada has its border; then beyond that, we have our 200-mile economic zone; and beyond that, we are now doing the mapping of the continental plateau. I've had the opportunity to speak with people from our department, as well as people from NRCan, as to how that is progressing. It's going very well. We do have, on the part of all of the coastal members as well as the members of the Arctic Council, not only a willingness but also a commitment to respect the decisions that will come forward from that process.
On another front, of course, I might want to point out how the EU had made a request to become a permanent observer at the Arctic Council. Canada refused that request. We refused it because we feel the sensitivities needed by some of the states or some of the countries in the EU, particularly regarding the well-being of the Inuit and the first nations who live there in terms of their seal hunting and their procuring of their basic needs, have not yet been well recognized by the EU. Therefore, over the coming year, given certain criteria that are going to be put forward, we will be able to evaluate observer status for different countries, as well as for the European Union.