Evidence of meeting #17 for Foreign Affairs and International Development in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was countries.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Jack Mintz  Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
  • Daniel Runde  Director, Project on Prosperity and Development, Center for Strategic and International Studies
  • Robert Schulz  Professor, Haskayne School of Business, University of Calgary, As an Individual

10:20 a.m.

Professor, Haskayne School of Business, University of Calgary, As an Individual

Dr. Robert Schulz

I think CIDA can play a major role and already does.

It would be helpful for CIDA to document its successes in the field, because there's not enough documentation of why things work in the field and why they don't, which could then be made available to the private companies that are in the same geographic territory. In addition to that, CIDA could provide the meeting and the co-lead, if you will.

I'm a co-author on a book called Corporate Integrity: A Toolkit for Managing Beyond Compliance. The first author is Donna Kennedy-Glans, former vice-president international for Nexen. She went all over the world. The key aspect we found is that corporations have different levels of what they would call ethics or corporate responsibility. Some manage only with the compliance level, just the rules, and that's level five. We actually go to ten levels. So one of the things that CIDA could do is to try to get the corporations to move to a higher level of understanding of what corporate responsibility is all about.

It's not just about following the rules, but at the end of the day we want corporations to spend their money wisely so that there's sustainable development, and it's not just the money and product that's coming out of a country, but what's left behind. The key aspect for that would be for CIDA to try to find someone like Bill Gates or Warren Buffet in Canada to also be a co-lead in this, because they are at level ten in their levels of integrity.

So there's a lot of work there for CIDA to do, and it's all possible, in my opinion.

10:25 a.m.

NDP

Jinny Sims Newton—North Delta, BC

Thank you.

Over to Jean-François.

December 13th, 2011 / 10:25 a.m.

NDP

Jean-François Larose Repentigny, QC

Dr. Schulz, thank you for being here. Your presence is greatly appreciated.

The private sector’s record in developing countries is somewhat of a problem to my mind. If one is very familiar with history and the different eras, one knows that everything began with an army that marched from country to country with private interests in mind. In time, governments intervened, with broader intentions, and I am thinking here of the United Nations. We have now moved on to another stage, and yet there are more and more errors being made. It always seems that we come up with formulas that involve calculated risks, but that is something else altogether. There is an oversimplification that I would call the sanitization of the idea. It consists in going to a neighbour's while having in mind an idea of what is required for each of the countries. And when things get complicated, it seems no one is able to understand.

The private sector is more problematic for me because we always come back to the fact that even here at home, in our own backyard, in our own country, we have difficulty agreeing on the right approach. Oftentimes, the public sector has had to bail out the private sector. During the last economic crisis, it was public money that was used to pull the United States out of the crisis.

Good intentions are always welcome. However, the problem is that the private sector is constantly at the mercy of fluctuations owing to the international economy. The good intentions remain, but the course of a corporation is excessively influenced by this market.

My question is a simple one. Regarding the percentage of influence of the public sector versus the private sector, you talked of cooperation. I am in full agreement with you. The problem is that the cooperation being considered at present is very simplistic, relying greatly on finance and leaving a little too much room for the private sector.

In Africa, I find that this looks a little bit like the Far West, because there is very little regulation. Here, at home, there is a lot of lobbying under way to deregulate anything that comes under government control; however, these very same companies want to venture out into these countries with the belief that they are providing some benefit.

Does Canadian leadership not lie precisely in this cooperation, the purpose of which would be to regulate and to ensure a better balance? I do not know if you get my question.

10:25 a.m.

Conservative

The Chair Dean Allison

Dr. Schulz, you've got about a minute and a half to answer.

10:25 a.m.

Professor, Haskayne School of Business, University of Calgary, As an Individual

Dr. Robert Schulz

It seems to me that the issue always is whether the glass is half empty or half full. I think most corporations say they're doing more than they've done before, and many people would say they could be doing more.

My view is, there's more that could be done and there's a role for the public sector to help corporations do more and to manage the compliance as well. The key aspect is getting the chief executive officers of the large mining companies and the large oil and gas companies that are involved in international business in the room together with the government and no media and say, "Let's talk about how to really be serious about helping people and spending our money wisely." If that's a simple solution, let's do it, because it hasn't been done yet.

10:25 a.m.

Conservative

The Chair Dean Allison

Thank you very much.

Mr. Dechert, seven minutes.

10:25 a.m.

Conservative

Bob Dechert Mississauga—Erindale, ON

Thank you, Mr. Chair.

Thank you, Dr. Schulz, for being here today.

On the answer you gave to a previous question, I've got two questions. What role can the Canadian government play in policy development to utilize core competencies of the Canadian extractive industries in international development? Secondly, in your opinion, are there a number of things holding private companies back from playing a larger role in international development? If there are, maybe you could describe those to us and what maybe the government can do to try to alleviate some of those issues.

10:30 a.m.

Professor, Haskayne School of Business, University of Calgary, As an Individual

Dr. Robert Schulz

On the government lead, I've already described the government calling for a summit of five or six of the senior people in extractive industries, getting them in the room together with the government and saying let's see if we can work better on this. If the lead comes at the CEO level for the companies who say they're interested in corporate responsibility, the government says okay, let's do it.

The second aspect is what's holding companies back. Part of it is that the companies themselves want to promote their own initiative for some companies, rather than a collaboration. Companies would say that if they put money into a collective pot then they may not be able to get the concessions they want or the ability to go into foreign countries. So there's the rub. Yet many corporations are already working in health and safety, they're already working in policy in terms of representatives, as you said, of government. I don't see any reason why companies can't work together to spend their money wisely, along with the government's money. If there's a matching of NGO money by the government along with the corporations, that's working together. They're saying, "We’re going to go put our power system into Africa. We’ll build a network off the satellite. We'll take all the schools in the neighbourhood and give them all access to the Internet. There are computers there. We are already running power batteries. We'll go charge the batteries for the schools in the neighbourhoods." That's working together.

The pieces are all there, in my opinion. The networking isn't there. The Government of Canada can take the lead.

10:30 a.m.

Conservative

Bob Dechert Mississauga—Erindale, ON

From your experience, can you give us some examples of Canadian companies that are doing good international development work, and perhaps some places where more can be done and how the government can support that?

10:30 a.m.

Professor, Haskayne School of Business, University of Calgary, As an Individual

Dr. Robert Schulz

In terms of international development work, the extractive industries are ready with technology in terms of the work they're doing in zinc, for example, which you've already heard about.

The key aspect here is that each company is doing its own individual part, but we need to do a little better in terms of leveraging the collective that's there.

10:30 a.m.

Conservative

Bob Dechert Mississauga—Erindale, ON

I'll defer to Ms. Brown.

10:30 a.m.

Conservative

Lois Brown Newmarket—Aurora, ON

Thank you very much.

Thank you, Mr. Schulz, for being here. I really appreciate your discussion.

I had the opportunity to be in Zambia a couple of years ago. After meeting members of their parliament, I met with members of the extractive industry and many other companies doing business in Zambia. Zambia, as we know, has come out of a socialist regime and they are anxious to see companies come in now and provide expertise and development in the area. But the Canadian companies we met said that they're caught in this no-man's land. The Zambians say that in the past, companies provided schools and these companies aren't providing schools any more; they provided roads, and they're not providing roads any more. If you talk to the extractive companies, who pay an enormous amount of tax to the government.... The government has a policy of providing the schools and providing the roads. They're caught in this tension, shall we say.

How do you see us helping to alleviate those tensions? Are there things that Canada can do as bridge-building—in the metaphorical sense—to assist in lowering the temperature for our companies to go in and do that kind of development work?

10:30 a.m.

Professor, Haskayne School of Business, University of Calgary, As an Individual

Dr. Robert Schulz

It seems to me that there is a lot of information at the grassroots level that never gets to the top level in corporations. Most people who are in corporate responsibility or international development work are off to the side in corporations and relatively junior. Those people have to be positioned with the CEOs. That's why, if the government provided the opportunity to get the CEOs together on some of the issues that you just presented and asked how could we do this better, it seems to me that the CEOs would then reach down through their own organizations, put the people around them and ask, “How can we do this better?” So that's recognition by the local governments in terms of what is and is not being done.

In terms of schools, if someone provides books or computers to a school, but there are no teachers to teach the students, or if someone provides laptop computers but there is nothing to charge the batteries with, or if someone provides water but there is no one to fix the water well, then at the end of the day the money goes in, but it's not sustainable. The whole issue is sustainable corporate social responsibility, not just one-way giving so that then when the companies leave nothing happens.

10:30 a.m.

Conservative

Lois Brown Newmarket—Aurora, ON

One of the observations I've made when I'm in Africa is the lack of teachers. I've suggested to them that less than a hundred years ago in Canada we had young people who went from our secondary level of school to teaching little ones their one-plus-ones, and that they are missing a resource they have available to them in regard to having their older students become the trainers.

What we really need is trainers of trainers to go in there, assist them, and put that resource back into their own school system. There seems to be some interest in doing that.

This is not really a question, but an observation. Hopefully we can get some of our corporations involved in that kind of program.

10:35 a.m.

Professor, Haskayne School of Business, University of Calgary, As an Individual

Dr. Robert Schulz

So I'll turn it into a question: What can we do? We could have internships for students, including MBA students, who would love to spend a summer internship in Africa trying to help companies build. But they're also prepared. They aren't just going in there unprepared. In addition to that, Global e-Training, which is a company that's run by two of my former students, has online training programs in many different trades, programs that are available all over the world, and they would like to do that.

Again, the pieces are there: we just have to find a way to sew the pieces together.

Finally, one of my faculty colleagues, Joe Arvai, has done behavioural decision-making in Africa. What he found was that many people don't understand the choices they have. They have to be able to understand the choices for water and for schools and other choices, including the government. He is a Stanford fellow whose office is right next to mine at the Haskayne School of Business.

So again, we have Canadian resources that are in place and ready to go, and the government could then provide some additional sewing to get these pieces to go together.