Thank you very much.
It goes without saying that it is a pleasure to meet the members of this committee again. Last time, we discussed Haiti, I believe. Since then, things have moved a little.
It's indeed a pleasure to be here. I'd like to thank the committee for the invitation.
It is also a little disconcerting to be the only witness. I was told at one time that only ministers and people who are in serious trouble testify in the committee by themselves. I'm sure about not being a minister, and I trust the other part is not the case either.
Indeed, thank you. It's a pleasure to be here this morning to discuss Bill C-300.
I'd like to frame my presentation. You learn much from several of your college professors, and not always things that are germane to what's being taught. An old college professor said that where you stand on an issue is determined by where you sit, so let me frame my presentation by talking about whence our analysis comes when we look at Bill C-300.
First, there was the Canadian Foundation for the Americas. This is Canada's only independent non-university-based think tank focused on Canadian engagement in the hemisphere. As such, we sit at the intersection of academics, civil society, the private sector, and government. We have a foot in each sector, understand each sector, and are able to work with each sector. We receive views from and have exchanges with each one of these sectors.
We also exchange and have the same sorts of relations with public policy institutions, our sister institutions, throughout the hemisphere. In every country throughout the hemisphere there is an institution with which we work very closely and which is structured similarly to how FOCAL, an independent policy research organization, is structured.
We have also had in the past, specific to the subject at hand, work on trade and development and work on indigenous governance and CSR in the extractive sector. This was a project we took over from the North-South Institute, which was led by an indigenous woman from Colombia who had very strong views about mining but was able to do some very interesting things to try to bring the three sectors--government, indigenous groups, and the private sector--together to talk about issues and to try to develop new frameworks for improved discussions.
We have also done surveys of CSR practice and investments--money, time, and resources invested--by Canadian companies in social, economic, and community development projects.
That is the background on the FOCAL side.
On the other side, personally I've worked for 10 years in CSR issues in the Americas. I had a very unique position before I came to Canada and before I joined FOCAL, a position that had me in three spots. It had me on the ground in poor and marginalized communities throughout Haiti, the Dominican Republic, and elsewhere, working with these communities to implement their own social development projects, often with mining companies and with private sector companies, and with banks. It was not just with multinationals, but with small and medium-sized enterprises within these countries, too, so there was a full range of CSR activities.
It also had me at the policy level within the U.S. government on the development of CSR policy, both in the missions in the countries in which I worked and in Washington with other agencies of the U.S. government.
So it was a fairly unique position, I think, that allowed me to understand the broad context, from the macro level to the micro level.
Very quickly, then, based on this analysis, we look at Bill C-300 as an attempt by this committee and by this Parliament to improve the impact of Canadian mining companies on the ground in the communities in which they operate. We look at the bill, what it proposes, and what it offers.
The analysis is that the bill will not offer anything that is not already on the ground and realizable through compliance officers and existing international mechanisms such as the Equator Principles. Indeed, it seems in some ways to have weaker teeth than those of the Equator Principles or some of the other mechanisms that are currently available.
At the same time, it has the potential to have significant Canada-only costs for Canadian mining companies, and this is an important point. In my previous work on the ground, I came across a great deal of the impacts of private investment and of how companies behaved, including their positive impacts and contributions.
We have stories of damage being done. We see this with mining companies. We see this in poor communities with slash-and-burn agriculture that destroys forests and destroys land.
It's a very complex situation on the ground, but for every example we've had of a Canadian mining company doing something harmful, I'm confident that I can come up with three examples of investments that have been made in communities: improved education outcomes, improved health outcomes, and improved livelihoods in communities.
It's a complex story, and if you're going to implement policy, effective policy cannot be based on the sensational from one extreme or the other. It has to be based on a rigorous and rational view of the situation as it exists.
Unfortunately, the bill emphasizes the punitive aspects, and again, I would say, ineffectual punitive aspects. In an attempt to improve conditions on the ground, it ignores the huge opportunities and the huge investments that are there to be leveraged by increasing the good work and the good practices done by Canadian banking companies and also by extractive companies, by the full range of Canadian companies.
I will point the committee to our experience with Talisman in Sudan as an object lesson in how we can get this wrong. Again, there are several factors here. Talisman was in Sudan. There were problems. They moved to address them with a very rigorous and serious CSR program. Increased pressure from activists and activist NGOs in Canada had them leave.
The Chinese and the Indians came in and took over. The first thing they did--the first thing--before they changed the signs on the door was to trash the CSR initiatives, not understanding the importance, not seeing any benefit from this. The oil still flows out of Sudan. The investment is being controlled by the Chinese. The people in the communities are, if anything, worse off than they were before. This is a scenario that has a possibility of repeating itself throughout the hemisphere.
Canadian companies are engaged, and we see them doing positive things on the ground. Again, I will match you story for story the positive things they are doing. But at the same time, by weakening Canadian companies, by imposing costs and risk to reputations, by taking things to the ministerial level, we have the potential to do serious damage.
The damage would be justifiable if you were going to have outcomes on the ground that justified this, if you were going to do something to significantly and quantifiably improve the conditions of life in these communities. But the bill offers nothing in that regard, so there's a real danger there. I can talk about this, too, in the first-hand experience with Falconbridge in the Dominican Republic in my previous job and what we did.
So the real danger here, I think, is that we have a good model in Canada, a model that's viewed throughout the hemisphere as one to be copied and envied in terms of CSR practice. I can talk anecdotally and I can talk quantitatively about this.
But very quickly, I was in Madrid about two years ago, speaking with my counterparts at one of the major think tanks, the Real Instituto Elcano, and Fundacion Carolina. These are two of the major Latin American think tanks. They have both just recently begun work on CSR.
A decision was made by the Spanish government and the Spanish private sector that Spanish companies and the Spanish government were suffering reputational damage, and also competitive disadvantage, from their bad reputation for CSR, so they moved aggressively to address this. My counterparts at the Spanish think tanks were asking if we could share the Canadian experience, because, they said, Canada is viewed widely in the region as having good companies and has a good reputation. They asked if we could share this experience with them.
My first thought was that they had to be nuts. They have a competitive advantage over us with language, with culture, and with immigration. Our one competitive advantage vis-à-vis our Spanish competitors is really the reputation of Canadian companies. We may have been born yesterday, but we weren't born five minutes ago, and we're simply not going to hand that over. But there is room for cooperation in terms of the larger sphere of global CSR practice, and I'd be happy to talk about that.
Finally, there are options for getting this right. Several things could be done. Rather than creating another bureaucracy, another layer of reporting, another cost for the government, there are other mechanisms of which we can avail ourselves.
There's a compliance officer and a compliance office at EDC. Most of the money we're talking about coming out is coming through EDC. Why not simply look at beefing up that function? Give them something on a par with the International Finance Corporation or the Inter-American Development Bank in terms of staff and resources to investigate things more quickly.
It makes little sense to have one review at EDC, a second one at the ministerial level, and then another one at Canadian pensions.... It makes more sense to strengthen them at the point of impact, at the point of origin.
There are also possibilities for work with the Equator Principles. This puts all companies across the globe, regardless of national origin, on the same playing field.
Again, in terms of effectiveness, if I'm a mining company and I can't raise my own money, if I have to raise money from the private sector, am I worried about losing EDC money? To some degree, yes, I am. Or am I more worried about losing money from EDC, the Australian Export Finance and Insurance Corporation, and every major commercial bank from the Arab African International Bank to Banco do Brasil, Bank of America, City, CIBC, BMO, RBC, and Scotia, all the way to Wells Fargo?
That's what the Equator Principles have behind them. These are the more effective mechanisms that we need to look at, that are tested and have more resources behind them, so I would suggest that there are alternatives. I'd be happy to talk to them.
The IFC and the Prince of Wales Business Leaders Forum have put out a new road map for integrating human rights. I would suggest that in terms of time and investment this is where our money would be better spent, not in creating a new bureaucracy that won't improve conditions on the ground, but in working with effective and tried mechanisms that are truly multilateral and that will improve conditions on the ground.
I'll end it there. Thank you.
