Foreign Affairs Committee on April 23rd, 2012

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

What could the Government of Canada do or what has it done to help accelerate your plan?

[David Tennant]

Well, it could give me a million dollars. That would be a nice gift.

[Voices]

Oh, oh!

[David Tennant]

I think we've had tremendous encouragement, not only from members of Parliament but also from government officials. We worked very closely with the Sudan task force prior to....

We have made applications to CIDA. We have not yet convinced them that our project is something that should be funded, but we will continue talking to CIDA in the hope that they will see that the private sector, coupled with the humanitarian aspect, is the best way to deliver aid to countries. It's not the only way to deliver aid to a country, but it is one of the premier ways to deliver aid to a country.

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

What's the major obstacle you face today?

[David Tennant]

I think there is instability in South Sudan. They're a young country, struggling with many issues, not the least of which is still the problems with the north. There has also been some tribal violence. I still think our major issue, though, from our very small and limited perspective, is funding.

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

As you go forward with this project, the idea is to have the Sudanese then take over the farm and carry on down the way. Does this look like a realistic idea right now?

[David Tennant]

I think it very definitely is. We have several Sudanese people who we are training in Sudan. It takes time, but they are starting to learn management principles. It's the application of these management principles that will allow them, as we did in our country years and years ago, to go down the road of entrepreneurialism and hopefully establish their own farm.

We also have to understand that the South Sudanese for 25 to 50 years have struggled to survive and have fought to survive. You almost in some cases, especially in the rural areas—we're in the bush, 30 miles in the bush—have to teach them how to work. You have to take it all the way.

So it's a slow progress, but to me it's a progress that can be achieved.

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

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We'll go back over to the opposition for the final questions in this round.

Mr. Eyking, seven minutes, sir.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Chair.

I thank both gentlemen for coming here today and for the work you're doing to help the people in need. You're in different categories but your missions are the same, and your successes are there.

I want to start off with you, Mr. Baker, and with some of the things you were saying. It's unbelievable how much of the money that should be in the hands of these people is escaping. I think you mentioned $1 trillion. These are big numbers floating around.

How do we get more international standards out there? We have international standards out there on human rights and various things for different countries. Should we have international standards or a tribunal process that can deal with these countries? You see so much money escaping these poor countries, whether to Swiss accounts or wherever it goes. How can you really get a grasp on that money, and how can we maybe have some sort of process...?

We just recently visited the Netherlands. Of course, they have the international court there, the Hague, but they don't really deal with this kind of thing. Is there something that maybe the UN should be setting up here so that we can have some basic standards for these countries, or for the people or companies who are participating in these countries?

[Raymond Baker]

Thank you for your question. It's a huge question.

The money that disappears out of developing countries for the most part passes through a global shadow financial system that brings it finally into our western coffers. This shadow financial system was developed by us in the west, beginning in the 1960s. It now comprises tax havens, more than 60 around the world, secrecy jurisdictions allowing tax haven entities to be set up behind nominees and trustees such that no one knows who is the real owner.

These disguised corporations, mostly, now number in the millions around the world. Quite honestly, more of them are in the United States than anywhere else. Anonymous trust accounts are part of this structure. Fake foundations are part of this structure. Money-laundering techniques of various kinds are used. Then the mispricing of trade is the key element in the movement of the commercial tax-evading component of money abroad, which, as I said to you, is about 60% to 65% of the global total. This is the system that operates to facilitate the flow of this money out of developing countries.

Part of my reason for explaining that to you is to make the point that solving this problem is very much a two-way street. It's not just the poor countries that need to develop better tax administrations and customs capabilities and so forth. It's us in the west who need to curtail our receptivity to that kind of money, that comes so easily out of developing countries.

This is one of the things that distinguish us from some other organizations: we stress that the solution to this problem is a two-way street, with a very big part of the problem resting in our own western economies, to curtail our receipt of that money.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

That being said, we have treaties for land mines and we have various international treaties. Should we have a stronger international treaty or a set of standards that we all should be encouraging, instead of trying to pressure each country to step up to the plate?

[Raymond Baker]

Oh, I agree. We need to have much stronger—

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Where would that start? We're doing things with international banking and various things like that now, but where would you start with this process? Would you start it at the UN? Where would you start it? Would you start it at a finance ministers conference of the G-20 and say, okay, guys, there's...? Would you start it there?

[Raymond Baker]

There's a lot going on at the present time. The G-20 for the first time two years ago used the term “illicit financial flows”. We've succeeded in getting that basic vocabulary into the thinking of the G-20, the UN, the World Bank, the IMF, OECD, and others.

It is not that difficult to curtail—we're not trying to stop, but curtail—the illicit money that flows out of developing countries, and with some pretty straightforward measures. I mentioned one: country-by-country reporting. There are other ways to do this as well. Making tax evasion a criminal offence would be a step in the right direction. Automatic exchange of tax information, such as the United States and Canada have had for a long time, would be extremely valuable.

There are things that can be done to strengthen our anti-money laundering legislation, as progressed by the financial action task force in Paris. The financial action task force, in its last meeting in February, said that tax evasion should be a predicate offence for a money laundering charge. The next step in that direction is to make it a criminal offence under any circumstances, whether attached to tax evasion or not. There are steps we can take and there are organs of international institutions working on these steps.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you.

I have only a few minutes left.

Mr. Tennant, before I got into politics, I did work like you've been doing. It's amazing when you go to an area that has all the ingredients to water the land and so forth, but the key things are land rights, water rights, and people being protective of their property. Sometimes you give them the tools, but it's the rest of it, the infrastructure, the ownership of rights and various things....

It's even the financing, right? If they can't get microfinancing, it's hard for farmers to get going. Is that also one of the biggest issues there? You can bring the seed, you can bring the fertilizer, you can set up the irrigation systems, but it's still a fairly unruly place, where somebody would go in and steal their fuel or....

Is that something we should be pushing for? Should we be helping these countries set up the proper framework? Then people like you could have an easier job of getting farmers to invest their own money or to get microfinancing.

[David Tennant]

I think it's something governments should encourage.

Obviously, security is a big issue. I've never believed in martyrdom. Security is a big issue for us. We have been very fortunate. We're in an area where we've had one tribal outbreak. There are a lot of things happening, with the north agitating the tribes in the south, so it is a difficult country to work in.

But the key is to work with the local community. Those in the local community are the owners and the beneficiaries of the land, so we work with the local community. This year, we gave them a percentage. We worked with them in training. We helped them develop their own plots.

There now are banks coming in from Kenya—one of them being the Equity Bank, an agricultural bank out of Kenya—that are very keen on the microfinancing that will be required to build the agricultural industry. To me, the agricultural industry is an industry that is open to all of the people of South Sudan, whereas some of the industries, such as the oil industry, are not.

I think if you can encourage the agricultural sector with things like microfinancing, with security, with dealing with land rights.... South Sudan has just gone through about three years of trying to develop land registration, and they're now on the cusp of that. But basically, the land is owned by the local people, and that's where you have to start.

[The Chair, Conservative, Dean Allison]

That's all the time—

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I have just one more quick question, Mr. Chair, if everybody would agree. It's just a short one.

Are the water rights for the Nile going to be an issue? If you're going to be the breadbasket of central Africa—there are many countries on the Nile—are the water rights going to be an issue?

[The Chair, Conservative, Dean Allison]

A quick answer.

[David Tennant]

The quick answer is that Egypt believes it will, but I'm not sure about any of the countries that are tributary to the Nile. The Nile does not start in Egypt; it ends in Egypt.

So it could be a problem, but the reality is that in our area, we have a climate such that we do not at this point in time require irrigation. We have a very good climate of rain.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We'll now move to the second round, which will be five minutes.

Mr. Van Kesteren, five minutes, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

Thank you to everybody for appearing.

Mr. Tennant, we had a conversation about four years ago now, I think, and Jeff was in my office as well. It's amazing; I know at that time you had another project, and perhaps you could quickly tell us about your first project. What happened, and what's it doing today?