International Trade Committee on Sept. 27th, 2012

[Jorge H. Miranda Corona]

In procurement, there are opportunities in the Panama Canal Authority, of course.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Because we did not sign this agreement in a timely manner, we did lose some, but still, opportunities are there. Thank you.

[Jorge H. Miranda Corona]

The passage of this treaty is not related to the Panama Canal Authority bids, but certainly the passage of the treaty will benefit the sense of the investment.

[Devinder Shory, Conservative, Calgary Northeast, AB]

I have another question, on taxation. Actually, before that, this money-laundering issue was raised by the NDP. Again, it's fearmongering, basically. That's how I look at it.

Let me ask you this. In your opinion—and I'm sure you've had this experience as well—in Panama, have things changed from 2002, 2003, and 2004 as far as the money-laundering laws are concerned?

[Jorge H. Miranda Corona]

Indeed, they have changed dramatically.

[Devinder Shory, Conservative, Calgary Northeast, AB]

How? Are they more stringent than before? If yes, how are they more stringent and what are the outcomes? What are...?

[Jorge H. Miranda Corona]

Laws have changed. It is not as easy for someone to open an account in Panama as it used to be. The laws comply more with the international laws against money laundering. We are trying to do our best in our institutions, in security, and we expect also to share information and have more cooperation, for instance, with Transport Canada. Transport Canada is helping us in a great manner. It's a good institution.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Did you have a chance to meet Canadian businesses that are already involved in Panama?

[Jorge H. Miranda Corona]

Yes. I had the opportunity to see the Inmet Mining Corporation in Panama. Also, as I mentioned, I visited some bed-and-breakfast hotels, little investments that some Canadians are doing in Panama. There is also the presence of Scotiabank. I don't know them. I haven't met them.

[Devinder Shory, Conservative, Calgary Northeast, AB]

I know that you've made some comments about the level of investment they've made. During all their business activities, do they—in simple language—regret making investments, or are they excited to see if the agreement will be implemented so that they will have some expansion opportunities and will have more comfort in expanding all of those? What do you see?

[Jorge H. Miranda Corona]

Companies are happier in Panama, including Inmet, Scotiabank, and the entrepreneurs that I mentioned. Besides that, we recently approved a law so that all you Canadians could come to Panama and have your migratory papers without bureaucracy, without papers.

Very soon, too, you will be able to obtain your naturalization in a very simple manner, because we are trying to attract people from your country, and people from other parts of the world as well, to come to live in my country. This law that I mentioned benefited not just Canadians, and it's not part of the treaty. It's a law that the government passed recently. It also benefited citizens of the U.S., Spain, and other countries, who we are looking to attract to spend their lives in our country.

[The Chair, Conservative, Rob Merrifield]

That's very good.

We want to thank you very much for coming in, Ambassador. We thank you, Mr. Aparicio, for being here as well. We look forward to the completion of the deal, the signing of it, and putting it into law as soon as possible.

With that, I want to suspend the meeting and ask our next panel to come forward. We will just pause as we do that.

[The Chair, Conservative, Rob Merrifield]

I call the meeting back to order.

We have our witnesses at the end of the table. We have members taking their seats.

First we want to thank Jennifer Moore, from the Latin America program of MiningWatch Canada, for being here. We have Canada Pork International, represented by Jacques Pomerleau. You've been here before, and we welcome you back. We look forward to your testimony.

We'll start with Madam Moore. The floor is yours.

[Jennifer Moore, Latin America Program Coordinator, MiningWatch Canada]

Thank you very much for the opportunity to present to the committee today. My comments are going to focus on the investment aspects of the free trade agreement in relation to the Canadian mining industry and related services in Panama.

In short, MiningWatch's concerns haven't changed much since we last contributed to these hearings in November 2010, but they have grown more acute as a result of developments over the last 22 months, since the committee last met to discuss implementation of the agreement.

Just to summarize, this agreement is going to ensure greater legal stability for the Canadian mining industry within the context of a regulatory regime in Panama that has demonstrated itself to be ineffective at preventing detrimental consequences to the lives and well-being of indigenous and non-indigenous peoples and the environment they depend on. It will provide access to Canadian mining companies to costly international dispute settlement procedures to which affected communities and other Panamanian citizens and public interest groups have no access. Although it includes an environmental side chapter, this is a non-binding declaration that relies on political will for its implementation, of which sort we have not seen in Panama. On the contrary, we've seen the undermining of environmental protections at the behest of Canadian companies.

Just to illustrate these points a little bit further, contrary to the assertions of mining industry representatives who have already presented before this committee, the Canadian mining industry has been a source of serious conflict in Panama and has given rise to broad-based opposition to mining in the country.

Donald-Fraser Clarke, who presented to this committee in November 2010 as a representative of Clarke Educational Services, is known in Panama and to the Canadian embassy in Panama as a representative of Corriente Resources, an exploration company. Corriente Resources has been operating in western Panama, in the Ngöbe Buglé comarca, an area administered by the Ngöbe Buglé indigenous people, without the consent of their representative organizations and without any licence from Panamanian authorities. His team has been accused of fomenting divisions and rumours and of supporting particular electoral candidates within the comarca, and as a result of this, Clarke and his team have been declared personae non gratae in the comarca and repeatedly asked to leave.

Furthermore, the testimony of a Ngöbe Buglé general council member who was in Ottawa earlier this week indicates that Clarke helped form and support a local association on their territory that aggravated conflict between the Ngöbe Buglé and the Panamanian government throughout 2011 and 2012. Over this period, the Ngöbe Buglé, Panama's largest indigenous population, have staged massive protests in opposition to changes to the state's mining legislation. In January 2012, one protestor and one bystander were killed when state police and border patrol enacted a brutal crackdown on the Ngöbe Buglé's road blockade.

The evident lack of effective channels for peaceful dispute resolution in Panama and the government's lack of compliance with promises and agreements it has made with the Ngöbe Buglé has also led to loss of credibility of the governing regime and loss of confidence in the political will to genuinely solve existing problems.

Inmet Mining has also claimed before this committee to have a good reputation in Panama and to have demonstrated respect for free, prior and informed consent of indigenous communities that will be displaced by its massive three-pit copper project. This project will open up some 59 square kilometres within largely primary rainforest in the Meso-American biological corridor, which has an average annual rainfall of some five metres per year. Local indigenous community members report that far from respecting their right to give or withhold their free consent, the Inmet subsidiary has been pressuring them to accept a relocation compensation package.

In early 2012, Martin Rodriguez, a community leader in the area, told CBC reporter Mellissa Fung that:

People who are working for the mine turned up in our community and explained that at some point everyone would have to be evicted, because they say the lands here are part of the mining concession.

When community members refused to leave, Rodriguez said that Inmet tried to gain their favour through other means:

They say that they're going to give us a health centre and a school. But I don't want that from them. As a leader, I can see through that. How much destruction and pollution is there going to be? Schools and health centres, that's the government's responsibility.

Inmet's claims of corporate social responsibility have also been thrown into question by its efforts to obstruct environmental protection measures by taking advantage of weaknesses in the Panamanian regulatory and judicial system. In particular, the company sought a constitutional injunction against the creation of a protected area in the district of Donoso, where it's operating.

The Supreme Court found against this injunction in July of 2011, but only announced its decision a day after the environmental authority in Panama approved the company's environmental licence in late December of 2011. Later, in April of this year, an administrative tribunal overturned the protected area status. The Panamanian Environmental Advocacy Center notes this latter decision was emitted under the charge of a court magistrate who was named by President Martinelli and who is a former adviser to the current president.

Furthermore, in the wake of major protests and the death of two indigenous men, the Panamanian government has enacted mining code reforms that permit Inmet to obtain foreign state financing to facilitate its project in the province of Colón. Public interest organizations in Panama have been criticizing this decision as unconstitutional, given that the Panamanian constitution prohibits national territory from being ceded, leased, or transferred, either temporarily or partially, to other states.

As a result, mining-affected communities and civil society organizations in Panama have demonstrated growing resistance to mining and are in favour of sustainable development options. In early 2011 proposals to ban open-pit mining nationwide attracted high-level attention, at which time the national ombudsman and others called for a moratorium on mining until the country could strengthen its institutions.

A national survey carried out at this same time found that 67.7% of Panamanians were opposed to mining in Panama and that 68.8% of Panamanians disagreed with pro-mining legal reforms. In 2012 the Ngöbe Buglé achieved prohibition of mining within their administrated area, and now among those believed to be running for the president's office in 2014 is an environmentalist who has been building his platform in part based on opposition to mining.

Under such conditions, implementing the Panama-Canada free trade agreement would be to give Canada's seal of approval to a questionable regulatory and institutional framework that is failing to ensure democratic channels and effective protections for the lives and living environment of indigenous and non-indigenous Panamanians, while conditions already skewed in favour of a conflict-ridden industry are shored up.

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We will now move on to Canada Pork International. Mr. Pomerleau, the floor is yours.

[Jacques Pomerleau, President, Canada Pork International]

I will make my presentation in French.

Thank you for inviting me to discuss the Free Trade Agreement between Canada and the Republic of Panama. I will discuss only the part that applies to free trade.

I want to begin by saying that the negotiations on our product, pork, have been fairly complex. That product is a sensitive one for Panama. Despite everything, our negotiators have successfully obtained a comprehensive elimination of tariffs that applied to our products, even though it is over a longer period than what we had seen in other agreements.

We are satisfied with the agreement that has been concluded in terms of our product, as we have maintained very close contact with the negotiators over the course of the negotiations with Panama. We know how difficult it was to obtain concessions from that country. In addition, we applaud the wisdom of our negotiators who succeeded in negotiating a clause that will help us catch up with the Americans once they have been able to implement their free trade agreement. We think that should happen within the next month, once the agreement between the United States and Panama goes into effect.

It should be pointed out that Canada, historically speaking, was Panama's first foreign supplier and maintained that status for a number of years. As the Americans have concluded and finalized an agreement before us, we are losing the competitive advantage we had in that country.

We are also very pleased that the government was able to create coordinating positions though the agreement to help facilitate the resolution of sanitary and phytosanitary issues that could arise between our two countries. As I mentioned, this agreement is very complex. It is actually the most complex one I have ever seen when it comes to pork, regardless of the country. Despite the difficulties our negotiators came across, we are very happy with the final outcome.

However, it is still difficult for us to note that failing to conclude an agreement, not ratifying it on time or ratifying it after our main competitors, does place us in a difficult situation and makes us lose markets. I think you are very familiar with the situation involving South Korea. We were that country's preferred supplier, but since we have still not managed to conclude an agreement, that very substantial market is slipping away from us. In Panama's case, the agreement has been concluded, but it has not been ratified yet, and that puts us in the same situation.

Thank you for the opportunity to speak.

[The Chair, Conservative, Rob Merrifield]

Thank you very much for that testimony.

We will now move to our first questioner, Ms. Papillon.

[Annick Papillon, NDP, Québec, QC]

Thank you, Mr. Chair.

I want to thank the witnesses for coming here today to answer our questions.

I will first address Ms. Moore.

In 2010, the Panamanian government announced Law 30, which eliminated the requirement to carry out independent environmental assessments prior to approving major mining projects. That law was strongly opposed and was ultimately struck down.

However, according to a number of environmentalists, there has nevertheless been a dramatic drop in environmental protection with the introduction of the new Law 65.

Could you compare Panamanian and Canadian laws when it comes to environmental protection?

[Jennifer Moore]

The environmental protection was the link.

There were significant protests following Law 30, which is referred to as the “sausage law”, because they tried to jam so much into it. Protests at the time actually resulted in some significant repression.

Environmental protections in Panama are weak at best. The environmental assessment process does not allow for sufficient time, resources, or opportunity for effective community or public interest organizations to participate.

This is an issue that has emerged recently as well, with Inmet Mining's project. They submitted a 14,000-page environmental assessment in late 2010. Organizations were given 10 days to provide their comments on that massive tome. There are considerable weaknesses in it as well as in the institutions that are in place to monitor and regulate the sector. The environmental ministry also lacks its own capacity to properly assess and deal with these sorts of environmental assessments.

Once again, in the case of Inmet Mining's project, they had to pay for a consultant to work for the Panamanian environmental authority to take a look at Inmet's environmental assessment. Their choice of consultant was highly contested by civil society as a result of the person's close association with the mining and oil industry in Chile.

[Annick Papillon, NDP, Québec, QC]

Has the Government of Panama proposed concrete solutions to the communities that have been affected by the violation of environmental rights?

[Jennifer Moore]

I'm sorry; could you repeat that?

[Annick Papillon, NDP, Québec, QC]

I would like to know whether the Government of Panama has proposed concrete solutions to the communities affected by the violation of environmental rights and whether this agreement could provide those local communities with some answers.

[Jennifer Moore]

The channels for the resolution of these disputes have generally been limited, and communities have seen a necessity to protest massively in order to reach a resolution to these disputes.

In the case, first, of Law 30, it was not passed, as a result of massive protests throughout the country at that time in 2010. Similarly, in 2011 and 2012, while there was recent resolution to disputes over mining law reforms that were being proposed, it was only after several indigenous protesters were killed at the hands of police and border patrol guards that a dialogue space was opened up. In this case, mining code reforms were shoved through, and a prohibition was placed on mining in an indigenous-administered area that has, for now, quelled the protests in that part of the country. However, in terms of a resolution for affected communities in other parts of the country, those are still outstanding.

[Annick Papillon, NDP, Québec, QC]

In December 2011, CIAM, Panama's leading environmental law centre, testified before the Standing Committee on International Trade. It stated the following with regard to the supplementary agreement on the environment associated with the Free Trade Agreement between Canada and Panama:

The so-called environmental agreement, in chapter seventeen of the FTA, is made up of three articles that amount to a non-binding declaration of principles or good intentions. It then constitutes a non-self-executing treaty, the implementation of which relies on political will.

Do you share that opinion?

[Jennifer Moore]

No. We share a similar concern. The Panamanian government has not shown the will to consistently apply environmental measures and protections within the country. I think one good example of this is how it has dealt with the protected area in the district of Donoso within the Meso-American biological corridor.

It's worth pointing out that in 2008 the International Union for Conservation of Nature, the IUCN, recommended a moratorium on all mining within this biological corridor, given its sensitivity, the endemic species found there, and the presence of primary forest. In Panama and the area in which Inmet is located in the district of Donoso, this is the third-last and largest forest within Panama.

While in 2009 there was a protected area designated for that area which should have started a process for the development of a management plan, the company immediately sought an injunction against that protected area, which stifled the management plan process from taking place. Even though that injunction was denied two years later, there were irregularities in the way that decision was made public. It was withheld from the public for four months and only released after the environmental authority had announced its approval of the company's EIA, environmental impact assessment. When the Supreme Court made that decision, the company did not disclose that information. Some months later, an administrative tribunal actually overturned that protection.

There are serious questions, then, about the will, and also the strength and independence, of the institutions and judicial system within Panama to ensure significant protections of important areas, both for their ecological value and also because they're where people live.