: Bonjour, chers collègues
This is the 39th meeting of the Standing Committee on Foreign Affairs and International Development, on Tuesday, November 17, 2009. Our orders of the day include a return to our committee's study of Bill , an act respecting corporate accountability for the activities of mining, oil, or gas in developing countries.
As our witnesses on our first panel today, we have, from the Canada Pension Plan Investment Board, Ian Dale, the senior vice-president, communications and stakeholder relations, and Donald Raymond, senior vice-president, public market investments.
Welcome to you.
Also, from the Prospectors and Developers Association of Canada, we have Anthony Andrews, the executive director, and Bernarda Elizalde, the program director for sustainable development.
We also have Robert Wisner appearing as an individual.
I'm not certain if any or all of you have attended committee meetings before, but we look forward to your opening statements and then we'll move into different rounds of questions that the members of this committee may have for you.
Perhaps I'll just open up the invitation to Mr. Dale and we'll proceed from there.
Thank you very much, Mr. Chairman.
My name is Donald Raymond and I'm the senior vice-president of public market investments at the CPP Investment Board. I'm joined by my colleague Mr. Dale, senior vice-president of communications and stakeholder relations.
Thank you for the opportunity to speak to the committee on Bill .
The CPP Investment Board was created by the federal and provincial governments in 1997, the result of comprehensive reforms to the CPP in the mid-1990s. These reforms were implemented following extensive public consultations with business, labour, senior organizations, and Canadians across the country.
Federal and provincial policy-makers established the CPP Investment Board as an independent professional investment management organization--accountable, yet arm's length from governments--responsible for investing the CPP contributions not needed to pay current benefits.
One of the main concerns expressed by Canadians in 1997, which persists today, is that governments would interfere with the investment decisions of the CPP fund. Our independence, established in the Canada Pension Plan Investment Board Act, addressed these concerns and has contributed to our success. Our long-term goal is to contribute to the financial strength of the CPP, arguably one of Canada's most important social programs, and to help sustain the future pensions of 17 million Canadian contributors and beneficiaries.
We have a high degree of accountability to the federal and provincial finance ministers, but the reformers of 1996-97 built important protections around the CPP fund and the CPP Investment Board. For example, the assets in the CPP fund are segregated from government assets and are not tax dollars, as they are contributed directly by employers and employees.
The mandate of the CPP Investment Board, as set out in the act, is simple and fundamental to all of its activities: to maximize the investment rate of return without undue risk of loss. Under the terms of the act we may engage in no other activities. In the pursuit of this very focused mandate we have taken a leadership role in the development and implementation of a policy on responsible investing. This policy articulates how we integrate environmental, social, and governance factors, also known as ESG factors, in how we invest, including Canadian companies in the extractive industries.
As you will hear, the proactive efforts of the CPP Investment Board parallel the intent of Bill and make its inclusion in the terms of the bill unnecessary. In addition, the bill provides for government ministers to direct investment decisions at the CPP Investment Board. This runs counter to the public policy intent of the federal-provincial reforms of the CPP in 1996-97. Also, because of the provisions of the act, the bill cannot come into force without the required consent of the provincial governments.
Accordingly, we respectfully request that Bill be amended by this committee in order to remove reference to and, more specifically, direction to the CPP Investment Board.
In considering our approach to responsible investing, it is important to understand the unusually long investment horizon of the CPP fund, which is being invested for decades and generations. While other investors measure their progress by quarter, we look at decades and the quarter century. Being a patient, long-term investor is relevant to our policy on responsible investing because ESG factors tend to play out over longer time horizons.
Secondly, to effectively deliver on our promise to help sustain the CPP, we invest in more than 2,900 public companies around the globe, including more than 600 in Canada. Of that number, approximately 400 are in the extractive industries. As a long-term owner and investor, we believe that responsible behaviour regarding environmental, social, and governance factors by these companies can have a positive influence on their long-term financial performance and therefore to our investment return.
In keeping with our mandate, we view the ESG factors only in terms of investment risk and return. Simply stated, it is in the best interests of the CPP fund when the companies in which we invest meet high standards of disclosure and performance on ESG issues. Our approach to ESG issues is guided by two important documents that have become powerful agents for change, not only for us, but for institutional investors around the world.
The first document is the “United Nations Principles for Responsible Investment”. We contributed to the development of the UNPRI and were in the first group of signatories to this ground-breaking accord in 2006. I was privileged to represent the CPP Investment Board, and was the only Canadian investor involved in the development of this far-reaching initiative. I can report to you today that there are more than 500 signatories to the UN principles, representing more than $18 trillion in assets under management. Like our own policy on responsible investing, the UNPRI reflects the view that effective disclosure and management of ESG factors can positively contribute to the long-term financial performance of investments.
The UN principles are implemented through a collaborative approach coordinated by the UNPRI engagement clearing house, where we work with other global funds to engage companies on ESG issues. In January 2009 this group wrote to 130 companies that had voluntarily committed to standards of disclosure on human rights, labour, environment, and anti-corruption practices—part of the UN global compact.
The CPP Investment Board's own comprehensive policy on responsible investing predates but parallels the UNPRI. Framed by our mandate, this policy articulates how we address these important environmental, social, and governance issues in our investments. A copy of this policy has been provided to this committee.
The implementation of our policy on responsible investing takes a number of forms, including activities that proactively address issues identified by Bill . The first activity is engagement. This involves communicating with the senior executives and board members of companies in which we invest, as well as regulators, industry associations, and other stakeholders.
Our direct engagement activities are highly focused. Most of the companies we select are Canadian. We concentrate on three areas: climate change, executive compensation, and extractive industries—oil and gas, and mining companies. We seek enhanced disclosure and transparency from these companies. Disclosure allows all investors to see and understand the potential risk posed by ESG issues. Disclosure of these risks is the first step to addressing them, and we encourage companies to adopt best practices in the management of ESG issues to improve financial performance.
In the past year we have engaged with Canadian and international companies operating in high-risk countries, including Burma, the Democratic Republic of Congo, and Guatemala, to encourage improved transparency and risk management strategies. It is important to note that this is our initiative, undertaken proactively in the best interests of the CPP fund. It is not in response to any government requirement or specific complaint from a third party.
Influencing corporate behaviour, as you know, takes time. Engagement is a long-term strategy, but one ideally suited to our long-term approach to investing.
Parallel to our engagement processes, we encourage the investment industry to produce enhanced research and analysis of environmental, social, and governance issues. This research from investment dealers and other research sources helps all investors integrate relevant ESG factors into their investment decisions.
Our policy on responsible investing also informs our voting on shareholder issues via our published proxy voting principles and guidelines. Proxy voting by large investors is effective in enhancing disclosure, transparency, and improved behaviour on environmental, social, and governance issues.
As owners we vote on proposals at public companies' annual and special meetings. Proxy voting allows us to engage with all public companies in our portfolio. In the course of the 2009 proxy voting season we participated in more than 3,000 shareholder meetings, including 555 here in Canada. That count includes companies in the mining and oil and gas industries, both Canadian and international.
We voted on nearly 18,000 agenda items. In 15% of those items we voted against management. We make these results public. A summary of our proxy voting activity is included in our 2009 report on responsible investing, and the results of all proxy votes appear on our website.
As a respected global investor, our actions are closely watched and our voice is heard, not only by the companies in which we invest, but by the broader investment community. We also work with other investors, and a relevant, collaborative approach is our participation in the extractive industries transparency initiative. The EITI brings together companies, investors, non-governmental organizations, and governments, including the Government of Canada. Its focus is on oil and gas and mining companies, precisely because they deal with a range of ESG issues that must be managed effectively for long-term financial performance.
Let me explain how this initiative works. Through the collaborative efforts of EITI signatories, more than 40 of the world's largest oil and gas and mining companies are now actively supporting better transparency in 29 candidate countries. Signatories commit to disclosure of company tax and royalty payments, as well as government revenues from oil and gas and mining. This is key to illuminating sources of corruption in those countries.
Our proactive approach and industry leadership have been recognized internationally. The Social Investment Organization of Canada acknowledged our policy on responsible investing and related engagement approach as positive examples of responsible investing activities. We have been cited by the UNPRI for our disclosure of proxy votes. Our policy on responsible investing and proxy voting principles and guidelines have been named as global best practices.
In summary, the CPP Investment Board was created by the federal and provincial governments to invest at arm's length from governments. Our mandate is to generate investment returns to help sustain the future pensions of 17 million Canadian contributors and beneficiaries. The terms of our legislation state that the act may not be amended without the consent of both federal and provincial governments.
Through our policy on responsible investing we have been recognized as a global leader for proactively addressing environmental, social, and governance issues. For these reasons we respectfully submit that Bill C-300 be amended to remove both reference and direction to the CPP Investment Board.
We appreciate the opportunity to appear before this committee today, and we look forward to answering your questions.
Thank you, Mr. Chairman. I appreciate the opportunity to be here today to talk about this important subject.
My name is Tony Andrews. I'm the executive director of the Prospectors and Developers Association of Canada. My colleague Bernarda Elizalde, before joining the PDAC, spent a number of years advising mining companies on how to apply CSR practices in Central and South America, so she has an interesting perspective to add to the discussion today.
The PDAC is a national association focused on mineral exploration. Our 7,000 members work all over the world and include a large number of junior exploration companies. The Canadian juniors lead the world in numbers of companies and proportion of total funds they raise and spend worldwide on exploration and development. They are small businesses dependent on the capital markets for raising funds. Normally, they do not avail themselves of debt capital from banks and financial institutions. Our members are world leaders in the financing and technical areas and also in the emerging field of CSR. However, we are still in the early stages of understanding CSR development, and there is much work that will be done. It's an evolving process.
I was a member of the advisory group of the CSR national round table process along with a member of our board of directors. The association publicly supported the advisory group report, with some commentary and recommendations. PDAC is in the business of creating leading practice. It has recently launched what we call e3 Plus. It's a comprehensive, online framework for responsible exploration, and stands for excellence in three areas: social responsibility, environmental stewardship, and health and safety. It has an information-educational component consisting of principles, a guidance document, and three comprehensive tool kits. This was launched in March of this year. It also has an accountability component, which is in development at present. This will consist of performance objectives, reporting guidelines, and a system of verification.
As we understand it, the issue before this committee is how to ensure two things: the continuous improvement in CSR practices, and the accountability of Canadian companies operating in developing countries. We believe that the most effective way of accomplishing this will be on the basis of a systematic, integrated approach that will involve a combination of both voluntary and mandatory mechanisms, basically similar to the recommendations of the national CSR round table advisory group report and the CSR strategy recently introduced by the Canadian government. In our opinion, the legislation proposed by Bill would not contribute to the objectives of either improved CSR practice or accountability. In fact, it will pose significant risk to the Canadian industry.
Over the next few minutes I'm going to do three things: I'm going to review some key realities that define CSR at present; I'm going to measure these against the approach contemplated by Bill ; and I'm going to define what we feel are key opportunities for making progress in CSR performance and in accountability.
Here are some current realities about CSR. Over the past 15 years, the focus in public priorities has shifted from environmental issues to social issues and, most recently, to an emphasis on human rights and ethical practice. The mining industry has made significant progress with environmental and social issues. Social issues are much more complex, given that they are centred on human relations and human behaviour and complicated by different cultures, values, beliefs, perceptions, and needs—often competing needs.
Environmental matters lend themselves to a prescriptive regulatory regime. Matters of corporate social responsibility do not. Any standard or guidelines for CSR must be comprehensive enough to satisfy public expectations of corporate behaviour. At the same time, they must be scalable to the size and the nature of the company and the project as well as to the stage of exploration or development.
Standards must be flexible to accommodate the wide variety of geographical, cultural, and environmental circumstances where projects occur. The reality is that what will work at one site will not necessarily work at another, so the successful application of CSR will be based on the experience and judgment of industry managers at the site.
What is our level of understanding of CSR? Well, it's a relatively new phenomenon that is still being assimilated. It involves rapidly evolving expectations and uncertainty about how to deliver on those expectations. Until recently there were no comprehensive international guidelines that attempted to define for the exploration business what CSR is and how it should deliver on those expectations. E3 Plus, which I described before, is an attempt to accomplish this.
Most companies are trying to apply CSR. They believe that they are applying CSR, using common sense, oftentimes, and homegrown approaches, but they have nothing against which to benchmark their practices. Therefore, there is wide variability in the manner and approach of their applications. This is where guidelines and assistance to our members come into play.
It is not only about human rights. Human rights are central to the issue of CSR, but it is not only about human rights. CSR involves broad dimensions of social responsibility, environmental stewardship, and health and safety, all encompassed in government regulations, industry good practice, and international instruments and conventions. It's a very broad and complex area.
How many allegations have been made against Canadian mining companies? Research conducted this year by the Canadian Centre for the Study of Resource Conflict revealed that over the past ten years there have been a total of 171 alleged CSR violations by mining companies. These are reported from around the world and from all sources. About 50% of these allegations were reported by advocacy NGOs. Of the 171 allegations, 56 involved Canadian companies. That is an average of fewer than six alleged cases a year.
Since its inception in 2000, the IFC compliance advisor ombudsman, the CAO, has received and processed a total of 110 complaints. Of these, there were eight complaints involving four mining companies. Of these, one was Canadian and another was partly Canadian owned.
I'll just add that as of June 2008, just prior to the global financial crisis, there were about 1,000 Canadian companies working in over 100 countries on 5,000 projects outside Canada. I think those numbers put this into context.
Given these realities, how does Bill measure up as a practical, effective system of applying accountability? It is an investigative, punitive system based on assigning blame and imposing sanctions. It will be dependent on the difficult process of collecting evidence in foreign jurisdictions. It will try to discriminate between right and wrong.
How can this approach be rationalized in a situation that is so fluid and variable and that is complicated by differing cultures, beliefs, perceptions, and needs? How will companies be judged against a set of guidelines that will need to be scalable and flexible? How will companies know where the boundaries of compliance are? How will the minister determine whether a contravention has occurred? Why would we introduce such a negative, high-risk approach in a situation that cries out for information, education, and assistance and that involves so few cases of proven intent to harm? Why would we introduce such a punitive approach prior to the establishment of fundamental definitions, basic information, and clarity of expectations?
These are fundamental problems that cannot be corrected through the artful rewriting or amending of Bill . There are additional significant legal issues with the bill, which I'm sure my colleague, Mr. Wisner, is going to describe.
Canadian mining companies are already accountable in many different ways and on many different levels, but we believe there are some areas where accountability can be improved. The first and most important one is host country governance capacity-building. This is a highly significant area. This is the seat of accountability for Canadian companies and it lies with the host government where they are working. So attention and resources should be focused on governance capacity-building in those countries where governance is a critical issue.
The second area I would suggest we have a look at is access to capital and strengthening the requirements in securities regulations around materiality. This is related to disclosure and reporting of CSR matters to investors and the public.
Significant improvements for industry need to occur in the area of due diligence and risk assessment, as well as community engagement. That's our own assessment. This will contribute to accountability as preventative mechanisms.
Finally, applying the fundamental building blocks of accountability to industry good practice guidance makes a lot of sense to us. This includes performance measures, reporting requirements, an ombudsman function to take care of a grievance, and a form of verification. To us, the advantage of this kind of approach is that it's focused on the preventive, it helps companies perform better, it's broad in scope so it will capture a large part of the industry, and it's upfront and integrated into the business practice.
Thank you very much, Mr. Chairman.
Members of the committee, it is a great honour to appear before you today to talk about the legal problems that Bill causes.
The international law and fairness issues that I will discuss today are set out in more detail in a written submission that we prepared at the request of the PDAC that and will be distributed to members of this committee later this week.
From my perspective as an international lawyer, Bill will do more harm than good to the worthwhile causes that it seeks to promote. That's because it suffers from three fundamental legal flaws that cannot be remedied by minor amendments.
First, the bill will hamstring the ability of the Canadian government to promote Canadian values abroad because it will be seen by developing countries as an interference into areas that are their exclusive jurisdiction under international law.
Second, the obligations in the bill are so vague that they will create a high degree of legal uncertainty for Canadian mining, oil, and gas companies.
Third, the bill lacks guarantees for even a minimum level of procedural fairness for the companies that will be accused of wrongdoing. That is a problem that, as I will explain, is inherent in a private member's bill, which cannot allocate funds to provide the necessary level of procedural fairness. This uncertainty and lack of procedural fairness will deter even the most responsible Canadian companies from investing abroad. That deterrence of foreign investment harms not only the Canadian economy, but developing countries as well.
Let me begin with how the bill will make it harder for the Canadian government to promote Canadian values abroad.
It's important to understand here that the issue is not one of voluntary or mandatory standards. The voluntary CSR guidelines that PDAC and other groups have developed are intended to complement rather than substitute for mandatory legal standards. Rather, the issue is about who should decide what the mandatory legal requirements should be. Should it be the governments of the states where the activities are actually taking place, or should it be a government thousands of miles away?
The underlying assumption behind Bill C-300 is that all developing countries, as they are defined in the bill, suffer from a legal void in terms of environmental, labour, or human rights rules. That assumption is simply incorrect. As you'll see in my written submission, every relevant jurisdiction for Canadian mining companies has detailed laws and regulations to hold corporations accountable in these areas, laws that are usually drafted with the help of UN agencies or international financial institutions.
What proponents of Bill C-300 are really doing is asking the Government of Canada to pass judgment on how other countries are enforcing their own laws. At the same time, Bill C-300 doesn't distinguish between governments that have the capacity to enforce their own laws and those that don't. So for example, in testimony before this committee that I've seen, disputes in democracies such as Chile and Argentina have been lumped together with disputes in conflict zones that are emerging from civil war.
We all agree that some developing countries could benefit from assistance in building their enforcement capacities, which is something the Canadian government has agreed to provide them with. The question, however, is whether we should ignore a developing country's own enforcement decisions simply because of Canadian ownership of a corporation in its territory. Under international law the answer to that question is no. With limited exceptions, Canada's Parliament and its government agencies cannot exercise jurisdiction outside of Canadian territory. These limits arise from the very foundation of the international legal order, which is respect for state sovereignty.
On other occasions, I've heard Mr. McKay suggest that Bill C-300 avoids any extraterritorial jurisdiction because it merely imposes conditions on Canadian government assistance. If this were so, the bill would be redundant, because as you've heard this morning, CPP and other government agencies do set conditions and do screen the assistance that they provide, but the heart of this bill sets standards and calls for investigations of companies that may not receive a single penny of government assistance. Furthermore, these companies do not even meet the definition of a Canadian company under international law.
Bill 's violation of international law is exactly the same as what Canada protested when the United States tried to regulate Canadian subsidiaries of U.S. companies that trade with Cuba. We even passed laws, under the Foreign Extraterritorial Measures Act, blocking these companies from complying with those directions.
Imagine, if you will, what would happen if the Minister of Foreign Affairs of Brazil or his representative were to show up in Canada one day, start examining witnesses in Sudbury, for example, hold hearings there, and then put pressure on a Brazilian shareholder of a Canadian mining company to close his operations because they don't comply with that minister's view of appropriate environmental standards. I don't think Canadians would view that as an appropriate exercise of Brazil's jurisdiction.
This breach of international law will make the promotion of human rights and the environment by our own diplomats much more difficult. It will be hard for us to be listened to if we're seen as being selective in our own application of international law.
Let me turn to some of the specific problems with the way the bill imposes rules on Canadian mining, oil, or gas companies. Bill doesn't actually set out what those rules are going to be. Rather, it directs the ministers to develop standards based on two types of documents.
First, you have more than 260 pages of voluntary guidelines that cover just about every aspect of corporate conduct. Now, these are valuable and important documents, but they were not drafted with the intention of being binding legal rules. They were supposed to be guidelines that help management make better business decisions. That means they're not written in accordance with legislative conventions and they lack the clarity and specificity that you normally see in legislation.
To give you an example of this, it's like the difference between a manual on safe driving put out by a driving school and the Highway Traffic Act. The manual on safe driving is a very useful, important document, and it helps people to be better drivers, but it won't have the clear rules and definitions that you usually see when legal penalties are being applied.
The second set of documents incorporated into the bill is made up of international human rights conventions to which Canada is a party. These rules are indeed binding legal rules, but they're designed to be binding on states, not on private persons. As a result, they have no clear meaning when they are applied to corporations. It's as if, overnight, the Canadian Charter of Rights was extended from governments to private citizens. If that happened, there would be a great deal of uncertainty as to what exactly was the meaning of the obligations that were being imposed.
When you take standards that are designed for one purpose and simply transpose them into another area, you raise a whole host of questions about their meaning. This bill therefore makes every Canadian mining, oil, and gas corporation operating in developing countries, no matter how responsibly run, a target for costly and unpredictable investigations.
Finally, because it is a private member's bill and cannot create any new offices, the bill lacks the procedural fairness safeguards that must accompany any ministerial investigation into alleged wrongdoing. For example, in the Canadian Human Rights Act, we create a Human Rights Commission to examine complaints, and then an independent Canadian Human Rights Tribunal to hold hearings into whether standards have been violated. Bill is completely silent on all of these elements of procedural fairness, because including those in the bill would render it out of order.
Having said that, I note that even if this type of administrative tribunal were created, it would still expose Canadian companies to the stigma of government investigations and second-guess good faith decisions by Canadian agencies and diplomats. This is completely different from the non-governmental bodies that were recommended by the advisory group report following the national round tables on corporate social responsibility.
We've already had some experience with this type of plaintiff diplomacy, and it hasn't worked very well. A Canadian company, Talisman, was sued in the United States based on nothing more than the fact that it paid royalties to the Government of Sudan and upgraded infrastructure. After several years of litigation, that complaint was thrown out of court because of lack of evidence. By that time, the damage was already done. After enduring the adverse publicity generated by the legal complaint, Talisman sold its interests. The ultimate dismissal of the complaint went virtually unnoticed by the media and the cause of corporate social responsibility was hardly advanced by the new owners.
Bill creates very similar risks. Indeed, witnesses appearing before this committee have already alleged that simply by paying royalties to bad governments or by building roads that can be used by government forces, Canadian companies are committing human rights violations abroad. If this is a standard to be applied, no Canadian company can avoid being investigated, and that will mean that many worthwhile projects will not go forward. That's not just bad for Canada, it's bad for developing countries as well.
I'm trying to lay out the fact that these Canadian investments and pension funds were investing in Burma, in some cases a 50-50 split of assets with the junta, where there was a clear determination by the government to actually have Canadian companies withdraw investments, quite rightly, through SEMA—not existing investments, and that was something I was hoping they'd go further with.
I mention that because there was an indication that screening isn't something we should do, and I would lay out that example as something that probably most Canadians, if they were aware that this was happening.... And certainly many Canadians became aware, and it took a brutal crackdown by a repugnant regime for Canadians to become aware of it. What we're trying to do here is lay out fair rules so that everyone is going to be aware of what the responsibilities are.
And I have to say that some of the things that have been laid out here, as if we are going in to tell people how to conduct their affairs.... Yes, you can lay out that argument, but many have disagreed. We've heard lawyers come forward and entirely disagree, with all due respect, with what we've heard today.
What we're trying to do here is ensure that in cases like I've just laid out, there are clear responsibilities, clear rules, and that the good work that has been done by various people around this table is going to be furthered, and to an extent that, when there are concerns about Canadian companies abroad, there's a manner in which we can deal with them.
You've just laid out for me the reasons why we should have this. It wasn't, quite frankly, until the government invoked SEMA that CPP was really forced to do what it has done. I know you might disagree with that, but I'm stating that because we've heard from you and I'm just laying it out.
One of the things that concerns me—and I turn to our other witnesses—is the fact that we've had other jurisdictions do this. We've had jurisdictions say, “You know, when it comes to our country's brand abroad, we want our companies to perform in a certain way”. In fact, Norway has put in certain provisions on standards, in terms of their pension funds.
I'm very concerned that you think if this bill passes you're going to instruct people not to invest in Canada. That worries me, but that's your right to do so. It says that we have eight months or more to figure out regulations. How is this bill going to stranglehold anyone who's doing the right thing? There is a process here; it isn't going into a country and saying “Thou must do this”. There is a process to say that our Canadian companies who are performing in these countries have to abide by certain standards. What are you afraid of here?
It is a privilege to share with you today the North-South Institute's views with respect to Bill , proposed legislation that takes critical steps towards Canadian government accountability in the extractive sector overseas. By way of background, the North-South Institute is an independent, non-partisan think tank that conducts research designed to inform policy development, stimulate public dialogue, and support efforts to reduce poverty and inequality.
Since 1998, the institute has been involved in research examining issues at the crossroads of corporate social responsibility, human rights, and the extractives. In light of growing investments by Canadian extractive companies in Latin America and the Caribbean in the late 1990s and increased reports of severe conflicts in areas that are the homelands of indigenous and tribal peoples, in 2000 the North-South Institute launched a collaborative research program highlighting indigenous and Afro-descendant perspectives respecting appropriate processes for consultation and decision-making in this region.
My talk today will draw on this extensive research program. I will use two specific case studies to highlight the need for the mechanisms established in Bill C-300 and to show that this bill takes some important steps forward in light of the challenges and realities faced by the communities affected by the Canadian extractive sector overseas.
The first case I will talk about is that of Colombia. I want to acknowledge the presence here today of Carlos Rosero, of Proceso de Comunidades Negras, a national Afro-descendant organization that is one of our research partners in Colombia. I encourage you to address any questions about the Colombian situation to Carlos during question period; we have provided translation services for this purpose.
On paper, Colombia has one of the most progressive regimes in the world with respect to constitutional and legislative protections of indigenous and Afro-descendant rights. In practice, however, indigenous and tribal rights are violated on a regular basis. Indeed, despite official reports that the Colombian armed conflict may be lessening, the reality is that for indigenous and Afro-Colombian communities the conflict is intensifying. There appears to be a direct link between increased violence in indigenous and Afro-descendant communities and interest in natural resources, particularly minerals and metals. Here are concrete and recent examples involving the communities and organizations NSI is partnering with.
On October 22, a paramilitary group faxed a written threat identifying organizations and several leaders of Afro-descendant communities in the municipalities of Buenos Aires and Suarez as targets for military action in light of their "not letting in multi-national companies that will bring benefits to the communities".
Far from being anti-mining, these are communities whose primary economic activity is artisanal mining, but whose lands and work areas are being concessioned or sold off to large-scale companies, and who are facing in-migration from small-scale miners, including demobilized paramilitaries. In the wake of new changes to the Colombian mining code, black communities undertaking artisanal mining in this area since the 1600s are now facing the possibility that their mining will be declared illegal and that they will be forcefully evicted.
I know of at least one Canadian junior whose activities are adding to the pressures in this area and whose activities have not involved prior consultation with the Afro-descendant communities, as required by ILO Convention 169 enshrined in Colombian legislation, or free, prior, and informed consent, upheld as a minimum standard in the UN Declaration on the Rights of Indigenous Peoples, which is supported by Colombia.
Indigenous communities and their leaders are also the target of increased violence, even at the hands of local police. For example, on October 26, the Resguardo Indígena de Cañamomo Lomaprieta—an indigenous reserve, and one of our research partners—was subject to an attack in which four masked and armed men interrupted an afternoon soccer match and shot and wounded an 84-year-old and a 26-year-old man. Later, it was revealed that these armed men were members of the local police, who were later released. This event demonstrates not only the lack of protection by the police force, but the abuse of human rights indigenous peoples suffer, despite their clearly protected rights through legislation and special measures put in place by the Ministry of Defense.
Importantly, the collective territories of this reserve, together with the lands of the Afro-Colombian communities with which we are working in Cauca area, are within a large exploration concession area granted to a South African multinational that is in a joint venture with a Canadian junior.
Between March and April 2008, the indigenous communities of Cañamomo Lomaprieta experienced one month of fly-over exploration, including over sacred sites, without any form of prior consultation or consent. This created a variety of immediate negative impacts, including fear for personal safety.
Why am I telling you all of this? I am purposefully painting a detailed picture of the realities faced by indigenous and Afro-Colombian communities to highlight the extremely complex situation that doing business in Colombia entails from a human rights perspective. With the negotiation of the Canada-Colombia free trade agreement and active promotion of Colombia as a safe place to do business, there will be increased investment by Canadian extractive companies in Colombia, and the pressures and violence experienced by communities in Colombia will no doubt increase further.
The current CSR strategy of the Canadian government simply does not provide appropriate tools for navigating this complex situation. The voluntary principles on human rights and security target only one among a multitude of potential human rights violations in which Canadian extractive companies, and by extension the Canadian government, might unwittingly become complicit, despite best intentions.
The second case I want to touch on very briefly is that of Suriname. This is actually a stark exception to the claims Mr. Wisner made that all countries have in place detailed systems for accountability. Suriname is the only country in the western hemisphere where there is no recognition or protection of indigenous or tribal rights; it also has no legislation mandating environmental and social impact assessments. In short, Suriname provides a perfect litmus test from which to gauge the feasibility and effectiveness of voluntary initiatives in addressing human rights and environmental protection.
Since 2004, the North-South Institute has partnered with the Association of Indigenous Village Leaders in Suriname to support indigenous communities affected by proposed large-scale bauxite mining and related activities. The original proponents are members of the International Council on Mining and Metals, an industry association representing the world's largest multinational companies.
Our research has documented numerous instances in which these companies failed to implement their own or ICMM's policies and commitments. To cite one of the most egregious examples, the companies undertook advanced exploration in 2,800 square kilometres of primary rainforest, the traditional territory of the Lokono people, without any environmental and social impact assessment, contrary to company policies. The company has made several public apologies for this large oversight. However, saying “sorry” for not adequately protecting and mitigating social and environmental impacts in advanced exploration is simply not acceptable. It's also a harbinger of potential future practices and behaviour.
Our research in Suriname leads to two conclusions. First, left to their own devices, companies will try to get away with as little due diligence as possible, despite their own policies. Second, voluntary measures are simply not an effective means for protecting the environment or human rights.
Thank you for reminding me.
If even the world's largest and most well-endowed companies are not implementing their own voluntary commitments, there's little likelihood that Canadian juniors or companies will do so.
In the case of countries experiencing armed conflict, like Colombia, or countries like Suriname with large governance gaps, relying on voluntary mechanisms to protect human rights and the environment is simply not sufficient. While Bill cannot purport to address these realities in their entirety, it does offer an important mechanism with which to strengthen the current Canadian CSR strategy. Notably, Bill C-300 provides recourse to an investigation for communities that may have been subject to human rights violations by a Canadian company, whether or not the company consents to the investigation. This is currently not possible for the CSR counsellor, who is not authorized to investigate cases and can review them only with the consent of the company in question.
It also offers the Canadian government the possibility of withdrawing government, political, and financial support should an investigation lead to the conclusion that human rights violations did occur. In other words, it provides a mechanism for government accountability to the Canadian public and a stronger incentive for companies to respect human rights and environmental protections, particularly if they have received government funding, in contrast to the purely voluntary regime recently announced by the Canadian government.
It also offers the Canadian public some assurance that taxpayers' money will not be used to support extractive activities violating human rights and environmental protections, at least over the long term. Where a company is found to have violated human rights or environmental protections, it is not deprived of the chance to correct this behaviour and reapply for government funding.
Ultimately, Bill embodies the spirit and intent of the recommendations in the consensus-based document produced by the multi-stakeholder advisory group established under the Canadian round table on CSR process. If passed, Bill C-300 would bring the current government strategy in line with the outcomes of this public and democratic process. In addition, it would put in place mechanisms that would hold our overseas companies to account, as recommended by the UN Committee on the Elimination of Racial Discrimination. Finally, it would place Canada as a front-runner, rather than a laggard, in addressing issues of corporate and government accountability.
Well, yes. I was going to make the comment that we may very well, even in the minority government situation that we're existing in here today, have the privilege of extending that to five years, given the participation of the parties opposite. I think it's very appropriate. As a government, we certainly would like to have the continuity of this government so that we can get some real action done and have some continuity to it.
It states, “In time of real or apprehended war, invasion or insurrection, a House of Commons may be continued by Parliament and a legislative assembly may be continued by the legislature beyond five years if such continuation is not opposed by the votes of more than one-third of the members of the House of Commons or the legislative assembly, as the case may be”. That gives us an opening here to continue it, if we have participation here from opposite us.
It states, “There shall be a sitting of Parliament and of each legislature at least once every twelve months”.
Still we have not entered into any referencing here for this extraterritorial protection under the Constitution, so I'll continue and see if we can find it in here.
On mobility rights, it states, “Every citizen of Canada has the right to enter, remain in and leave Canada”. Also, it states, “Every citizen of Canada and every person who has the status of a permanent resident of Canada has the right...to move to and take up residence in any province”. I would add here that perhaps this may be a bit of an oversight on the part of the writers; I would include “or territory”. It states that it can be “to pursue the gaining of a livelihood in any province”. Once again, I would be very open to including the reference to territories, too.
But clearly it's not suggesting that you have the right to move into any other country on planet Earth and move from any other state within those countries.
It states, “The rights specified in subsection (2) are subject to...any laws or practices of general application in force in a province other than those that discriminate among persons primarily on the basis of province”—and I would suggest “or territory”—“of present or previous residence...”. Clearly, these are domestic laws. They are not talking of international laws.
It mentions “...any laws providing for reasonable residency requirements as a qualification for the receipt of publicly provided social services”. So there are some provisos, even here in Canada. It states, “Subsections (2) and (3) do not preclude any law, program or activity that has as its object the amelioration in a province of--”