Good morning, colleagues.
This is meeting 43 of the Standing Committee on Foreign Affairs and International Development, Tuesday, December 1, 2009. Our orders of the day include a return to our committee's study of Bill .
On our first panel today we have, from the Department of Foreign Affairs and International Trade, Grant Manuge, the director general of the trade commissioner service, operations; Mr. James Lambert, the director general for Latin America and the Caribbean; Sabine Nölke, director of the United Nations human rights and economic law division; and Ms. Sara Wilshaw, the director of trade commissioner service support.
We welcome you to our committee this morning. I'll invite you to make your opening statements, and then we'll proceed into the first and second round of questioning.
I want to remind the members of our committee today that we are going to try to adjourn this by 10:15 to 10:30, somewhere in there, and move into steering committee. We'll really be on the time clock today in terms of the seven-minute rounds for questions and answers.
Thank you very much, Mr. Chair.
Thank you for inviting the Department of Foreign Affairs and International Trade-- “DFAIT”, as we refer to it--to return to this committee.
Today we would like to build upon previous testimony made by this department and comment on the potential implications of implementing Bill , the challenges of the quasi-judicial process it would create, and the CSR-related activities in which DFAIT is currently engaged as part of our mandate when it comes to fostering the expansion of Canada's international trade and commerce and coordinating Canada's international economic relations.
Officials at the department have been following closely the committee's study of Bill C-300 and have carefully reviewed your comments and questions, as well as the testimony provided by the many witnesses and stakeholders who have appeared since the department last appeared in June.
During that appearance, officials spoke of the new corporate social responsibility strategy tabled by the government in March, the work of the national contact point and the network of foreign service officers around the world. It was also noted during that appearance that departmental officials had some concerns with the proposed implementation of this bill. That appearance was followed with a written submission outlining these concerns and questions.
Since that time, many issues have been raised by the various stakeholders. You have heard from the industry, civil society organizations, Export Development Canada, the Canada Pension Plan Investment Board and some of our partner departments.
Rather than focusing on areas that have already been substantively addressed by others, DFAIT would like to use its time today to raise a number of issues that would have considerable impact on this department and on its work. These issues include the use and operation of the Special Economic Measures Act; the question of applying international human rights standards to non-state actors; the way in which DFAIT provides CSR support to Canadian companies, including those in the mining, oil and gas sector; and the foreign policy implications of the bill.
To highlight some of these issues, it might be useful to undertake a close examination of the implications for this department of setting up and conducting an examination process as it is set out in the bill.
As the department that would ultimately be responsible for implementing and applying many of the provisions of this legislation, we needed to look carefully at what would be asked of us should this legislation pass. In so doing, we felt it was important to carefully examine the provisions of the legislation as it currently stands and to assess the various implications, some of which I will mention here.
Bill asks the ministers of the Department of Foreign Affairs and International Trade to draft a set of what appear to be mandatory regulations using a number of internationally recognized, voluntary guidelines and one policy that is internal to the International Finance Corporation. This is challenging, because these instruments are currently drafted as guidelines, and not regulations, so that they remain flexible enough to embrace the wide range of complex circumstances and conditions under which firms from Canada and other countries operate in countries around the world.
The bill also asks the ministers to incorporate human rights standards and “any other standard consistent with international human rights standards”. In this regard, Dr. John Ruggie, special representative of the UN Secretary-General on the issue of human rights and transnational corporations and other business enterprises, noted in his report of April 22, 2009, that “human rights instruments were written by States, for States. Their meaning for businesses has not always been understood clearly by human rights experts....” It would be difficult to determine which international human rights standards to apply and how those standards should apply to non-state actors prior to the completion of the work of Dr. Ruggie.
This point also serves to highlight the fact that Bill would require DFAIT to build or acquire the capacity to investigate and adjudicate claims of human rights abuse and environmental degradation. In addition, ministers would need to take into account not only the legal risk of making a determination, which could be subject to judicial review, but also potential impacts such a determination might have on local communities, host governments, Canadian companies, civil society organizations, and other stakeholders.
As noted in our earlier submission, the link between the actions of a Canadian extractive company and grave breaches of human rights by states is unclear and does not seem to be consistent with the purpose of enhancing corporate social responsibility abroad.
Bill requires the Department of Foreign Affairs and International Trade to set up a quasi-judicial process. That process would need to meet all the requirements of due process, procedural fairness, and natural justice. Foreign Affairs and International Trade currently does not have the ability to function as a quasi-judicial body. There is no provision within the DFAIT Act to house such a mechanism.
In order to set up a process to accept or reject complaints, conduct examinations, and make decisions based upon those examinations, a carefully drafted framework would be required, firmly respecting the principles of natural justice. This extensive regulatory framework would be required to ensure that rights are being protected.
The issues outlined above also raise questions as to whether or not DFAIT officials have the right skills or will have sufficient resources available to train or recruit individuals with the appropriate professional competencies to do this work.
It may be helpful to review the current practice of the department when DFAIT officials are presented with allegations of wrongdoing by a Canadian company abroad. When the department learns of such allegations, we take these very seriously and try to play a constructive and helpful role. Our heads of missions and foreign service officers in Canada and abroad consult and work closely with companies and the affected communities, and with governments, indigenous peoples, and civil society organizations to facilitate an open and informed dialogue among all parties.
In the event that the territory in which the alleged activity took place is not a signatory to the OECD guidelines for multinational enterprises and does not have their own national contact point, or NCP, we would offer the services of Canada's NCP to the affected individuals, communities or their representatives.
The Department of Foreign Affairs and International Trade currently chairs the interdepartmental committee that is Canada's national contact point (NCP) for the OECD guidelines. These guidelines are a key element of Canada's CSR approach.
The NCP promotes the guidelines, handles inquiries, and can foster a constructive dialogue between stakeholders when issues arise. If the allegations fall outside the scope of the OECD guidelines, the department could offer the services of the newly appointed Extractive Sector CSR Counsellor to the affected communities for issues that fall within her mandate.
The department's approach to engaging with stakeholders in the event of such allegations is one that reflects the principles that guide Canada's foreign relations and the observance of Canada's commitments under international agreements and obligations, including respect for the sovereignty of states.
It is an approach that is consistent with the way states in general work with one another when issues such as these are raised. It also demonstrates a commitment not only to help companies perform better and act in a socially responsible manner but also to work with host governments and local communities to enhance their ability to manage natural resources and benefit from the development opportunity afforded to them by such endowments.
When amending the DFAIT Act to put constraints on the kind of support officials are able to provide to Canadian companies in certain circumstances, it might be useful to note what some of those activities are. It will be challenging to draw a distinction between the activities of DFAIT officials that promote and support Canadian companies, and would have to be withdrawn in the case of a negative determination by the ministers, and activities that could be considered improving overall CSR performance.
These activities include hosting sustainable development and CSR conferences, seminars, and workshops; assisting Canadian delegations of indigenous peoples to meet with groups of indigenous peoples in other countries to talk about CSR and natural resource development; visiting mining sites and speaking with stakeholders; providing information about Canadian policies and programs to foreign governments; assisting in bringing foreign delegations to trade shows, such as GLOBE and PDAC, to meet with Canadian companies and learn about new technologies and approaches to natural resource development; advising companies with respect to the local cultural, political, and social environments and encouraging them to develop CSR best practices; participating in dialogues with civil society organizations and other stakeholders to better understand the range of issues and concerns and to adapt our policies and practices accordingly; sharing advice and information with partners across government and working together to create a whole-of-government approach to promoting CSR; actively supporting the creation of the CSR centre of excellence; and engaging on CSR at the bilateral and multilateral levels in a vast array of fora and through a wide range of instruments.
In summary, the experience of this department has demonstrated the value of seeking to facilitate dialogue to identify shared objectives among multiple stakeholders and build a consensus about how they can be most effectively realized. This requires flexibility, creativity, balance, and readiness to adapt approaches to specific circumstances, particularly in light of the highly complex political and economic situations that exist in many developing countries. This is particularly true if the goal is not only to promote respect for human rights but also to work toward remedy where the potential exists for behaviours inconsistent with the proposed guidelines.
Insofar as the analysis undertaken of the potential impact of Bill on DFAIT, it could restrict our ability, in areas where we most need to engage, to influence a positive outcome and ultimately limit the ability of this department to make positive contributions in the area of corporate social responsibility.
Thank you for the question.
During the course of the past months, after this department appeared before the committee in June, following our written submission after the appearance in June and in the lead-up to our appearance today, we felt that as the department that would ultimately be responsible for implementing a large part of the provisions of the bill, we should in good faith assess very carefully what the provisions of the bill would mean in terms of implementing for our department.
In this regard, the comments that I provided in the opening statement, and the ones noted in our written submission subsequent to our last appearance, itemized in some detail our concerns with the process of transforming what are currently drafted as guidelines into what would appear to be regulations that would require compliance on the part of Canadian companies abroad. At the same time, we wanted to look at how we would actually implement the process of examination that would be required.
It would appear to us that this would require the creation of a unit within our department that would focus on accepting complaints that would be submitted, on assessing them, on reviewing them, on establishing a process to be followed, and on providing related legal services.
This would require certain human resources, financial resources, that we believe could potentially be very significant.
Thank you for appearing here today.
My question is along the same line, although it doesn't necessarily deal with the costing of it. I'm sensing from your comments here that it's in agreement with what we've been hearing from industry, what we've been hearing from EDC, and, quite frankly, what we heard from an earlier witness. The earlier witness from Argentina gave the implication that they were looking towards this bill to in effect codify, institute, responsibility to Canadian...Canadian concerns, to pick up the slack where Argentina's laws may not be complete, or to institute Canadian laws that are more complete. Quite frankly, what we then have is a scenario of interfering with another country's national aspirations and sovereignty, in effect, which would lead to the complications that poses.
I'm sensing from what you're saying in this dissertation that you also see that. That is one of the major reasons you can't quite quantify what this legal responsibility might be, ultimately. Is this one of the concerns?
You can extrapolate this to other parts of the world where mining interests might be. If we try to have our mining concerns involved in and adhering to the various laws and legal systems of the various countries around the world, you'd have to have an amazing amount of knowledge and capability in your legal department. We even go into some parts of the world where there are things like Sharia law. Should the mining concerns be adherent to Sharia law because that is the local custom in the local area of consideration?
Are these large complications? Can we kind of quantify this and say more coherently to what level this would take the legal requirements of the department?
I'm very happy to have the opportunity to respond to the question.
I currently oversee 26 Canadian embassies and high commissions in the Americas. Our economic footprint in the region is a lot about investment and exploitive industries as well, where the CSR issues are front and centre. The ability of the people in our missions to engage constructively has been set out by my colleagues.
I'd like to mention one concern that can be identified about this. It's in the latter part of the draft, which deals with the Special Economic Measures Act. It seems to me there's a very unclear linkage between the discourse on corporate social responsibility and the larger intent that's written in here, to change the act to in fact address entire regime offences against human rights violations.
First of all, procedurally there's a lack of clarity about how the issues involving a Canadian corporation on the ground in a given country would then be extended to deal with the broader issues about human rights abuse, past and present, as it's currently written in this draft.
Secondly, there's a question here about whether this is an appropriate mechanism indeed to get into the classification of regimes in this region or other parts of the world.
It does seem to open up a great window. When we talked about the number of resources that would be required, I think Mr. Manuge was addressing himself largely to carrying out the corporate social responsibility elements of this. If we extend this to take into account assessment of human rights regimes in the Americas or around the world, it becomes an enormous task.
This is one of those topics that I'm sure many of us around the table have high emotion around--the value that Canadians put on human rights.
In thinking in terms of Mr. Ruggie, where he talked about having a duty to respect human rights, it seems that a bill like this comes forward when people start to make the assumption that perhaps Canadian corporations have been too flexible in some of the countries they've gone into. However, there's another side to this. If we are policing Canadian companies, to an extent we're also protecting them from the frivolous kinds of accusations that could be made.
I do agree with Mr. Rae—that happens on occasion—when he talks about ministerial responsibility and how, once a bill is passed, the regulations come into place, and it's up to the minister to get to that point.
I've had a number of people come through my office from the Philippines and other countries talking about Canadian corporations. The way I express it best is with what King Henry said about Thomas Becket: Will no one rid me of this troublesome monk? All of a sudden you get trade unionists being murdered.
I'm not suggesting Canadian companies are doing that with any deliberation, but even a casual conversation in some countries can lead to such things. I think that's the impetus behind a bill like this coming forward.
I understand from previous testimony—I just want to check the name of the group, because I'm not a regular on this committee—that the Rights and Democracy group talked about the human rights impact assessment tools that are available.
If we're talking tools and we're talking cost, as you were a few minutes ago, you have no suggested value, not even remotely close, that could be put on what it would cost?
Members of the committee, I am a lawyer. I have more than 16 years' experience in international cooperation, in institution building and in democratic development in Latin America and Africa. I have spent time in countries that have allowed Canadian mining projects and I have investigated a number of cases of human rights violations with the UN and the OAS. I have worked with the War Crimes Unit in Canada. I am currently working with the Clinique internationale de défense des droits humains at UQAM. Thank you for inviting me here today.
My presentation will focus on three points: first, the status quo is not a viable solution; second, Bill C-300 is an option that would strengthen corporate social responsibility; third, Canada needs a bill on civil responsibility for human rights violations committed overseas by our companies.
||You cannot have a functioning global economy with a dysfunctional global legal system: there has to be somewhere, somehow, that people who feel that their rights have been trampled on can attempt redress...and if the complaints turn out to be unfounded, so be it....people with bona fide claims of abuse have no recourse or remedy, while companies who are falsely vilified for alleged complicity in human rights abuses can not effectively clear their names....it points to the need to have some forum in which this kind of complaint can be ventilated and resolved, and not [be] simply left as a dissatisfied local population squared off against a foreign company with no means of introducing a legal structure to look after the fall-out.
The status quo, meaning the lack of a forum at which parties can be heard, is not a viable solution. This is what Supreme Court Justice Binnie has just told us. It is not viable economically, socially, politically or legally, and this applies to all stakeholders.
Bill C-300 provides for an accessible, predictable and legitimate forum where the two parties can be heard. It is a domestic administrative process that has repercussions beyond our borders, but it is not Canada exercising extraterritorial jurisdiction. Bill C-300 means that decisions made by agents of Canada must comply with Canadian legislation and with Canada's international obligations. The decisions are made on Canadian soil; this therefore gives the federal government the authority to exercise its jurisdiction.
Canada's extraterritorial jurisdiction is exercised directly on a person or firm that has committed acts overseas when a connection with Canada exists. Under certain circumstances, Canada already exercises its extraterritorial jurisdiction on Canadian companies operating overseas. This includes criminal matters, under the Crimes Against Humanity and War Crimes Act. Canada already conducts investigations in the field under that act and under others.
Canada is not the only country to monitor the activities of its mining companies. In fact, some states go much further. They monitor the activities of foreign mining companies. This is the case for Norway, the United States and France, to name but a few.
If we compare what this bill is proposing with what Norway has put in place since 2004, the Norwegian finance minister authorizes extraterritorial investigations into the activities of foreign mining companies. The minister's Council on Ethics uses public sources of information and conducts investigations in the field.
In Canada, neither the 2009 strategy nor the C-300 process allows us to go and conduct investigations overseas at the moment. It remains to be seen what the protocol and the budget will allow, once approved. Even with a budget, an investigation conducted by the CSR counsellor will have the same challenges and constraints as those foreseen by Bill C-300, such as the availability of Canadian resources for investigations, the permission to investigate in host countries, and so on. However, none of that seems to pose any problems for Norway.
As to the way in which complaints are dealt with, the rules of procedural fairness and natural justice apply to all administrative bodies established by a Canadian act. It is assumed that Bill C-300 complies with the Constitution and with the principle of procedural fairness. A recommendation from the counsellor that a company must comply with environmental and human rights standards would have the same force as a decision by the minister under bill C-300, because agents of the state, as representatives of Her Majesty, remain bound by Canadian law. So their decisions must comply.
An agent of the state could not continue to support and encourage a company that has to comply voluntarily. If the company is accused of complicity in torture, rape or war crimes committed in the host country, for example, the agent could also be accused of complicity and tried in Canada.
While we are discussing whether we should make voluntary standards mandatory for government agencies, the United States is discussing The Conflict Minerals Trade Act , a private bill that not only seeks to identify mining companies operating in conflict zones in the DRC, but also seeks to make a map available to the public, and to require communications technology companies, among others, who import those minerals to certify that the minerals used in their consumer products do not come from conflict zones.
So it must be said that, not only is Bill C-300 a tiny step for Canada internationally, but that the mechanism is also far from achieving the compliance that the United Nations recommends for Canada and for mining companies. In fact, the United Nations Committee on the Elimination of Racial Discrimination has already recommended that Canada act to prevent natural resources companies in its jurisdiction from violating the human rights of aboriginal peoples overseas and to make them accountable for their actions.
Bill C-300 does not prevent Canadian companies from violating the standards outside Canada, it does not deal with the responsibility of those that do, and it provides no recourse or compensation for the victims. Should a Canadian act provide for all that? Yes; there is such an act in the United States. It allows complainants to obtain compensation, if need be, and it allows companies to re-establish their reputation. This is exactly what happened with Talisman Energy.
As the American act, the Alien Tort Claims Act, has no equivalent in Canada, provincial programs of civil responsibility apply, or tort law. There is a major legal obstacle: the judge has the discretion to determine whether the most appropriate court to hear the case is here in Canada or in the host state. So the judge can send the case to another country. This is the doctrine of forum non conveniens.
Sending cases back to the host country sometimes results in a denial of justice and a lack of compensation for the victims. This is exactly what happened in the Cambior case. That 1995 case dealt with 2.3 billion litres of liquid containing cyanide, heavy metals and other pollutants that had been spilled into two rivers in Guyana, one of which was the main source of water for the people who lived there. In 1998, a Canadian judge sent the case back to Guyanese courts and they dismissed all subsequent suits, leaving the victims with no recourse and no damages.
The Copper Mesa Mining case, which is currently before Canadian courts, is trying to get round this legal obstacle by contending that decisions made under Canadian jurisdiction, at the head office of a Canadian mining company, gave rise to human rights violations in Ecuador.
Some states are also trying to get around the doctrine. At the end of the 1990s, some countries in Central America passed what are called blocking statutes designed to discourage judges from sending cases back to their countries. In Europe, forum non conveniens is now limited in its application. National courts in member countries of the European Union cannot use the doctrine to dismiss complaints against companies headquartered in those countries.
We are now seeing Canadian companies being sued in the United States and Australia, sanctioned by the World Bank, Norway and France, and investigated in England. Perhaps, with the bill in the United States, we may soon see them overseen by various UN committees, or subject to UN investigations or restrictions or prohibitions in host countries. Canadian mining companies will become more and more watched over, controlled and judged by third party states or international organizations, thereby filling the legal and administrative void in Canada.
In conclusion, at this time when everything is equitable, or eco-, or bio-, when buildings are green, when consumption is ethical, when responsibility is social and when development is sustainable and certified, industries like textiles and agri-food have, both in the North and in the South, set a new course towards greater transparency and greater compliance with human rights. And it has brought them handsome profits.
Are we in Canada going to set that course too and start the journey? Are we going to continue to have others make us do so?