Foreign Affairs Committee on Feb. 29th, 2012

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Yes.

How can we partner with NGOs to build the capacity necessary to improve the life of the poor?

[Brent Bergeron]

We have a very interesting proposal right now from a foundation here in Canada that does eye surgery. They would like to work with us in Guatemala. They have another foundation in Guatemala that they work with, but they're a bit afraid of working with an extractive company. Having the Canadian government assist in managing that project with the extractive industry would add to the credibility of being able to attract the local NGOs and make a project work.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We are going to go over to Ms. Sims, and then if there are no other final questions, we're going to finish with Mr. Schellenberger.

So we'll have Ms. Sims for five minutes, and then we'll move over here.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you.

My question is to Mr. Bebbington.

I think what I'm hearing is that all of us want to see long-term, sustainable development, and I'm hearing that from both of the speakers here.

One thing we do know is that both advocacy and civil society play a really critical role in holding both governments and corporations, not only accountable, but more transparent in their process. We really nourish our civil society movements here, because we know how they play out and we want the same in other countries as well.

Do you believe that Canada's overseas development aid can be used in creating capacity in civil society? That's my first question.

My second question is to you, again, Mr. Bebbington. As a specialist in extractive industries with your commentaries—this is talking about overseas extractive industries—can you also comment on your knowledge of the kind of impacts you've seen in Peru around this particular industry?

[Prof. Anthony Bebbington]

I think the answer to the first question is clearly a yes. There is also clearly a history of Canadian foreign aid, either directly, bilaterally, or in partnership with Canadian civil society organizations, building a range of capacities or working in partnership with civil society organizations internationally to build capacities, whether it's in advocacy, monitoring, or straight development administration. There's a track record there.

I guess the question is what's the most appropriate mechanism to do that through. It's not the only question, but it's an important question. It strikes me that some of that history of sustained partnerships between civil society groups, universities, or maybe even public organizations here and similar organizations internationally has a lot to offer to that process.

Personally, I'm not convinced that doing that through combining forces with CSR activities would be a way to go, not only because of the social sensitivities that my colleague has referred to, but because, on the one hand, there must always be the open question as to whether the combination of CIDA resources and company resources is adding value or simply displacing resources that companies might have spent otherwise. On the other hand, it can create an aura around capacity-building initiatives that might lead many critical organizations to distance themselves in that process.

That would be my answer to the first question, an absolutely resounding yes. There is significant experience to draw upon already in Canada through these partnership arrangements.

On the impacts of extractive industries in Peru, you could...well, there are many books written on that topic.

[Jinny Sims, NDP, Newton—North Delta, BC]

The key points.

[Prof. Anthony Bebbington]

I think the most critical point is the point about social conflicts. The data produced by the human rights ombudsman's office on social conflicts shows a very significant increase in conflicts in Peru over the last decade. It shows consistently that around half of those conflicts are linked to extractive industries.

So that's one set of impacts, and one set of correlations. There's clearly a relationship between the rise of extractive industries and conflict.

There is a set of impacts around environment. It's very debated, but I think the most critical effects relate to generalized concern around the security of water resources. I was in Peru just a couple of weeks ago, in the south, which is very dry, talking to regional presidents and people in government. There's clearly grave concern about that issue. The fear is that extractive industries that need significant quantities of water resources will divert those resources from other activities.

Here we link back to questions around economic diversification. If the water gets used for extraction rather than expanding the agricultural frontier, you not only divert the water use, but also reduce the possibility of economic diversification. So there are critical issues around the water.

I think there is a series of issues around governance as well, and then with this, I'll stop. I don't think, I'm sure, that the relationship between tax transfers to regions, and increases not just in conflictiveness in regions but in the distortion of what municipalities do, is an issue. There are municipalities in the south of Peru that have very large lists of employees who are basically kept on holding contracts that are funded by these tax transfers. They're not working particularly productively; it's a political patronage machine.

I think the importance here is not just that it happens; it's that once patterns are in place, it becomes very difficult to escape from certain patterns of behaviour and certain reputations that get created in these processes. It creates a series of governance problems, looking forward, that I think there isn't an easy solution to yet.

So conflicts, water, and governance would be my three main domains.

[The Chair, Conservative, Dean Allison]

Thank you very much.

Mr. Schellenberger, we're going to finish up with you today. You have the final word.

[Gary Schellenberger, Conservative, Perth—Wellington, ON]

Thank you, Chair.

Thank you to our witnesses today. I've been listening intently to some of the things that have been said.

First, you talked about the discontent that can happen in some of these areas and that can divide a community. We have a little of that in Ontario right now, with the wind turbine farms that the Government of Ontario has decided to subsidize very heavily. What happens in these proceedings is that contracts are signed by wind turbine companies, and they're done in secrecy. Then all of a sudden you find out that you didn't sign on—you didn't want to have any health problems or some of those things that might come from those facilities—but your neighbour signed it a year ago, and there will be a wind turbine within 550 metres of your home.

These things can happen, and I'm wondering if this isn't what causes some of the conflict in some of these places. Maybe the extractive industry people, when they go into some of these areas....

Is it done through the government or is it done gradually, through the people who live in those communities?

Mr. Bergeron, please.

[Brent Bergeron]

In terms of how the process works for us—I can't speak to you in terms of the other companies—we have been developing a project in Chile, for instance, of which we recently announced the construction and that's going to start in September of this year. We've been involved in the communities at different levels. We've been having conversations with the different communities in terms of the actual environmental assessment that was done. We've had consultations with them in terms of the actual planning of the mine area, where they have the ability to tell us that they don't want certain parts of our mine placed here, or they want it placed in another area.

The consultative process actually starts quite before we even start the construction part. That's in part legislated in certain countries in terms of the regulations you need to follow. Our company has actually taken the step of going even further on something like this, because we believe it's the only way to ensure that we will have good community relations.

Now there are some communities that decide they do not want to consult with you. We try to send them information anyway, but at the end of the day, it's their choice as to what they would like to do. In general we try to reach out to as many people as we can. We try to reach out to the local politicians also, in terms of them being able to get the information to the communities.

[Gary Schellenberger, Conservative, Perth—Wellington, ON]

Mr. Bebbington, do you have anything on that?

[Prof. Anthony Bebbington]

Your wind farm example, I think, actually takes us back to the issue of land use planning as well. If there was a prior process of strategic planning on the use of land and the linking of that development plan, then people ex ante would be much clearer on the sorts of things that are or are not likely to happen in the areas in which they live, and would know better how to position themselves vis-à-vis that rather than trying to second guess their neighbours.

I think that's what I wanted to link to that.

[Gary Schellenberger, Conservative, Perth—Wellington, ON]

All I can say is that this does divide communities. We now have small communities, rural communities, that used to hold a dance on Saturday night, and they can't even hold the dance anymore because there are those for and those against, and they get into big fights. So I can understand wholeheartedly what happens in some of these developing communities.

Land registry is very important. Are there land registry issues? Do most of the people who live in these areas have land rights, or is it government land that you do your extractive industry on?

[Brent Bergeron]

It differs from one country to the next. For instance in Mexico, there are land owners, and it's communal land that is owned by different people, but anything that's below ground will actually be owned by the national government. The concessions are registered with the federal government, but we have to do a long-term partnership arrangement—a lease or rental agreement—over the period of the mine with the actual land owners.

These types of agreements are negotiated and consulted on from the beginning, so that they are actually aware of what is coming. In Mexico, for instance, there is an attorney general for the land owners. We've been involved quite a bit with them in terms of having them consult with us with the actual land owners. They represent the land owners, but they actually work with the extractive industry, tourism, or agricultural industries to make sure that whatever type of agreement you reach with these land owners is fair to them and is fair for the company over the long term. That, to us, adds a lot more stability in terms of the environment within which we're operating.

[Gary Schellenberger, Conservative, Perth—Wellington, ON]

Thank you.

[The Chair, Conservative, Dean Allison]

I want to ask a question.

Did you have another question, or did John, or anyone else?

We'll have a quick question and then we'll wrap up.

[Jinny Sims, NDP, Newton—North Delta, BC]

First of all, I want to thank both of you. You've helped me to clarify lots, and you've given us lots to think about. As a committee member, I felt I could not let something go today, because I've been sitting here, and a comment that you made has really been bothering me. I realized how much work we as a committee have to do on this.

When I heard the comment—and you quoted it, it was not your own words—“I don't know if Canada has been quite so discredited”, and it was followed up with, “I do not think Canada cares” or something to that effect. What that really brought home to me is that we have to take a look at all of this very seriously, because all of us around this table do care very deeply, and we care about protecting Canada's reputation and making sure that the name of Canada is not tarnished internationally. So we want to make sure that our international work really makes us shine, rather than that.

Also the comment that was made, once again a quote, about the role of the ambassador and connection, and what is the role of an ambassador in another nation. As a committee member, what I am taking away from what I've heard from you is that you've given us some things that we have to address in a very serious manner, because it's not the first time I've heard comments similar to those.

[Prof. Anthony Bebbington]

I think there's a relationship between this point and the point about the divided community that you just made, which is that, when a community becomes that divided, it's just so hard to think about doing development in that sort of context because it's so hard to think about recovering trust, recovering mutual confidence, and building partnerships. The challenge is—I think for all of us, but in this case for Canadian foreign aid—to avoid souring the relationships so much that it makes your job building partnerships much harder, and to recover trust and to be able to do development together with other actors. But I think these are just the same problems at different scales.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you so much.

[The Chair, Conservative, Dean Allison]

Thank you.

I think the other thing we've seen here as well is that there's probably a right way to do it, and there's a wrong way to do it. As Goldcorp has demonstrated, when you go in, you consult, and you do the right things, you don't divide the communities like you can if you don't lay that groundwork. So there are some good thoughts on both sides of the coin.

To our witnesses, thank you very much for taking the time today. We appreciate that.

Just to remind people, we will be meeting on Ukraine next week. We'll be meeting in Centre Block, because it will be televised, and we've invited the Subcommittee on International Human Rights to join us and sit in on our meetings as well. So just to remind everybody, we'll be meeting on the issue of the Ukraine next week, and we're doing that in Centre Block, 237-C.

Thank you, everyone. Meeting is adjourned.