Bill C-300 (Historical)

Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act

An Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries

The purpose of this enactment is to promote environmental best practices and to ensure the protection and promotion of international human rights standards in respect of the mining, oil or gas activities of Canadian corporations in developing countries. It also gives the Minister of Foreign Affairs and Minister of International Trade the responsibility to issue guidelines that articulate corporate accountability standards for mining, oil or gas activities and it requires the Ministers to submit an annual report to both Houses of Parliament on the provisions and operation of this Act.

[Alex Neve, Secretary General, Amnesty International]

Thank you, Mr. Chair.

Good morning, committee members. It's a pleasure to be in front of the committee again in the context of your study of Canada-South America trade relations.

I was before the committee back in April 2008 as part of your study of free trade negotiations at the time between Canada and Colombia. At that time, I detailed what we described as a disturbing human rights situation in Colombia, one that was nothing short of a crisis. During the 19 months since, Amnesty International has continued to carry out detailed monitoring of the human rights situation in different regions of the country, and we have had numerous on-the-ground fact-finding visits.

The evidence we've gathered continues to paint a dire picture, certainly not in keeping with claims by the Colombian government and others that the country has overcome its troubled human rights past.

Some indicators of conflict-related violence, such as kidnappings and hostage-taking, for instance, have improved. This means that the security situation for some has perhaps gotten better. However, other important indicators of conflict-related violence have deteriorated.

One of the most worrying trends is a dramatic increase in the number of Colombians forced to flee from their homes. As many as 380,000 people were forced to flee their homes in 2008 alone, an increase of more than 24% from 2007. That brings the total number of internally displaced people in Colombia now to somewhere between three and four million, amongst the highest in the world. Additionally, at least half a million Colombians have fled to other countries. Displacement has become an extreme crisis.

Many of those displaced have been deliberately targeted by guerrilla groups, paramilitaries, or state security forces as part of strategies designed to remove whole communities from areas of military, strategic, or economic importance. The great majority of those affected are small farmers, Afro-descendants, or indigenous peoples, many of whom live in areas of economic interest.

In particular, threats against and killings of indigenous people by all of Colombia's warring parties have increased over the last several years. More than 1,000 indigenous people have been killed in the last six years alone.

As the committee may know, in July of this year, James Anaya, the UN Special Rapporteur on the Situation of Human Rights and Fundamental Freedoms of Indigenous Peoples visited Colombia. His preliminary report repeats some of the conclusions described by his predecessor five years earlier, in 2004, particularly that “Colombia's Indigenous people find themselves in a serious, critical and profoundly worrying human rights situation” and that “this description still applies”, despite some initiatives by the Colombian government.

Among concerns he draws attention to are ongoing violations committed by FARC, such as the massacre of Awá indigenous people, which Amnesty denounced as well in February. He also warns that “extensive corporate interest in the natural resources in Indigenous territory often threatens the rights of Indigenous peoples”.

He highlights that lack of regard for free, prior, and informed consent, as stipulated in international law and Colombia's own constitution, remains a persistent problem.

Amnesty International has issued a series of recent urgent actions about threats and attacks on vulnerable Afro-descendant communities and indigenous peoples that appear aimed at securing control of areas of economic potential.

For instance, on October 9 we issued an urgent action after three indigenous leaders from two reservations in Risaralda received a threat that said “You have 5 working days to withdraw...otherwise we will kill your families”. It was signed the “Southern Bloc”. The threat from this paramilitary group came a few days after the Risaralda Indigenous Regional Council had launched a report in which the indigenous communities said they are being driven out of their lands by powerful people looking to exploit the area's significant mineral resources. The indigenous leaders fled from the area in order to protect the lives of their families.

Then, on October 22, a fax signed by the paramilitary group Black Eagles New Generation arrived at the Valle del Cauca office of the Trade Union Congress, known by its acronym CUT. It warned that members of the CUT in that area were now military targets. The threat stated, “it is necessary to expand the fight against those who hide in social organizations such as CUT Valle, human rights defenders, NGOs.” It specifically accused the trade unionists of stopping economic development and progress by opposing “entry for the multinationals”. The death threat named others as well, including the group the Black Communities Process, whose leader, Carlos Rosero, I believe you heard from on Tuesday of this week.

These and countless similar cases make it abundantly clear that paramilitary groups continue to operate in many parts of the country, sometimes in collusion with sectors of the security forces, despite government claims that they had all laid down their arms following a government-sponsored demobilization that began in 2003. In fact, Amnesty International's information suggests that these groups, which have adopted a variety of names, appear to have become more organized and consolidated over the last year.

We have also documented a worrying increase in the use of death threats against human rights defenders, again attributed mostly to paramilitary groups.

In March, a fax signed by the Capital Bloc of the Black Eagles paramilitary group arrived at the office of the internationally respected Colombian Commission of Jurists, accusing one of their lawyers, Lina Paola Malagon Diaz, of being a “bitch guerrilla working for the defence of trade unionists”. The note said that paramilitaries were looking for her and for members of her family. She was given this warning: “Leave or we will kill you. You have one day to leave Bogota and do not come back.” She did flee the country. Notably, she had produced a report about human rights violations against Colombian trade unionists by all sides in Colombia's armed conflict, which was used in a hearing in the U.S. Congress a few weeks before that.

More than a dozen human rights defenders and 46 trade unionists were killed in 2008 alone. The scope and gravity of ongoing attacks and threats against trade unionists or those who speak out about violations of the rights of trade unionists is clear. It does not come down to a mere matter of statistical analysis. I think much is always made of the numbers when we talk about these issues, but I would urge you to recognize that this is about quantity and quality, not just quantity. I would urge you to keep that in mind as you analyze arguments you hear from other witnesses, for instance, who do bring it down to simply a statistical consideration, many of whom do not have particular expertise in the area of human rights monitoring.

We and others remain gravely concerned about what the UN High Commissioner for Human Rights described in her March report, that “The worrying practice by some senior Government officials of publicly stigmatizing human rights defenders and trade union members, as biased and sympathetic to guerrilla groups, continued.”

This same concern has been highlighted following recent high-level UN human rights visits to Colombia, including by the special rapporteur on the situation of human rights defenders in September and the special rapporteur on extrajudicial executions in June.

The Inter-American Commission on Human Rights has also stressed that such comments from senior government officials not only increase the risks that human rights defenders face, but “could suggest that the acts of violence aimed at suppressing them in one way or another enjoy the acquiescence of the governments”. Indeed, death threats, attacks, and even assassinations have often followed such public statements.

As this committee will know, human rights defenders who are under threat have long enjoyed a comprehensive program of assistance from the government. But in April of this year, a media investigation revealed that the civilian intelligence service, the DAS, which answers directly to the Colombian president and was the agency responsible for providing bodyguards and other protection to human rights defenders, has for at least seven years carried out a massive illegal espionage operation—including surveillance and wiretapping—against human rights defenders and others, including opposition politicians, judges, and journalists, with an aim to “restrict or neutralize their work”. Members of the diplomatic community, the United Nations, and foreign human rights organizations, including Amnesty International, were also targeted.

There is much more at play as well. The “parapolitical” scandal continues with 80 congress people, most belonging to parties from the ruling coalition, under criminal investigation for alleged links to paramilitary groups. Several magistrates investigating that case have been threatened, placed under surveillance, and had their communications intercepted.

Revelations in 2008 that the security forces had extrajudicially executed dozens of young men have now led to investigations by the attorney general's office of some 2,000 extrajudicial executions carried out over the last two decades. However, lawyers working on these cases, as well as a number of witnesses and family members of those killed, have been threatened and attacked.

Those are the immense challenges of confronting impunity in high-profile cases. More widely, justice remains the exception and impunity the norm, giving a green light to those who continue to abuse human rights.

So considering all of these concerns--and there's much I've left out--in the context of the free trade agreement, Amnesty International's key recommendation has remained the same for several years. We believe it is of critical importance that the agreement be subject to an independent human rights impact assessment, certainly before passage of Bill C-23, and that any negative findings be adequately addressed before proceeding further with the legislation and the entry into force of the deal.

We were pleased that this committee also called for an independent human rights impact assessment in its June 2008 report. We also have recommended that the deal not be finalized and that Bill C-23 not be passed until we have in place enforceable standards for Canadian companies operating abroad, which we of course hope will soon be the case if Bill C-300 becomes law. I must stress that we do not consider the hearings you are conducting now nor the more comprehensive hearings on Bill C-23 that would follow second reading of the bill to constitute that independent human rights impact assessment. The assessment would be an expert process that would take place outside of the parliamentary context. We would, however, very much urge that any body conducting such an assessment report back to Parliament.

In the context of grave and systematic human rights violations in Colombia and a pattern of ongoing serious abuses in areas of economic interest, an independent human rights impact assessment of the provisions of the trade agreement is, in our view, an essential step of due diligence. While it is not yet standard practice, there is growing interest in this tool, and there is a growing body of practical examples, analysis, proposals, and academic work to draw upon. Notably, even at the World Trade Organization, there's now significant discussion about this. In September, there was a session at the WTO's public forum in Geneva, moderated by counsel at the office of the WTO director general, entitled “Human Rights Impact Assessments: A Pertinent Tool for Informing and Improving Trade Governance?”

In 2006, Thailand's National Human Rights Commission considered the potential future human rights impacts of the free trade agreement that Thailand had been negotiating with the U.S. In 2007, the Ecumenical Advocacy Alliance, in collaboration with the FoodFirst Information & Action Network, commissioned studies to consider the impact of trade liberalization on the right to food for rice farming communities in Ghana, Honduras, and Indonesia. The European Union systematically conducts economic, social, and environmental impact assessments of all major multilateral and bilateral trade negotiations. These are known as sustainability impact assessments. And over the last decade the United Nations Environment Programme has developed an impact assessment methodology that incorporates integrated environmental, economic, and social assessment.

Finally, I do want to highlight that Canadians are concerned about this. For instance, I have here a copy of a photo petition put together by a member of Amnesty International in Edmonton. She gathered the pictures of hundreds of Canadians from communities across the country, of diverse backgrounds, all of whom believe an independent human rights impact assessment is essential. This petition has already been sent both to the Prime Minister and to all three party leaders in the opposition.

In ending, I do feel I must signal some disquiet and concern about the way in which debate about the Canada-Colombia deal is progressing. It is certainly our hope and expectation that sessions held as part of this committee's general study of Canada's trade relations with South America will not in any way substitute for thorough and rigorous consideration of Bill C-23 itself when it is referred to committee. At that time, we urge that the committee hear from a full slate of balanced witnesses representing all relevant stakeholders, certainly including the most vulnerable sectors of Colombian society likely to feel the impact of this deal. Among others, Amnesty International would welcome an opportunity to appear at that time and offer specific recommendations with respect to Bill C-23 itself.

Thank you, Mr. Chair. Those are my comments.

[Paul Dewar, NDP, Ottawa Centre, ON]

That's where I'm going.

I think many people see that Bill C-300 isn't the end of CSR; it's not that we stop here and it's all done. It's actually in context, and the context is that there are other things being done. Everyone's talked about the things they're doing within their own companies, but to evolve the process as a government, many of us want to see governments—and I say plural because hopefully this will be adopted by others—to actually have a process that takes out the litigation.

I referenced in committee before to look at what's happened to big tobacco. No one wants to see that happen with mining. No one--not me, not you. So to protect from litigation, I think it's smart to come up with a process that was referenced in the round table.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you.

I just want to go back to what we have in place right now with the counsellor. The evidence that was brought forward to this committee is that right now she actually isn't prepared to take in anything. She's in the midst of putting together her regime and regulations.

In fact, I asked her if EDC was obviously supporting a company, so it is well known, and there is a concern about a company, would EDC be compelled to cooperate with her? She didn't know because they're still developing the process.

In fact, she couldn't tell us when the process would actually get going. I just lay that on the table because there's an impression that this is up and running and that we have a process. In fact, right now we have none. Yet we still have concerns, which we've all talked about.

Where many people have seen this bill going—and the limitations of a private member's bill are known by all of us, and certainly by you, Mr. Peterson, as a former member of Parliament. If this bill was brought in, I think it's reasonable to say that an enlightened thing to do would be to do what the round table and witnesses from industry asked for, and that would be to have an objective third-party--an ombudsperson/ombudsman--appointed. I'm looking for a bridge to that common ground.

My question is, Mr. Peterson, would you not see that putting an ombudsman in place, as was recommended in the round table discussions by both civil society and by business, was a smart thing to do, that it could actually deal with some of the concerns you have regarding Bill C-300?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you, Chair.

Jantzi Research recommends that Goldcorp be ineligible for socially responsible investing. They talk about a site visit to a mine in Guatemala at which various representatives of the local and international community were present—the Guatemalan and Canadian governments, etc. It didn't seem to be all that difficult to set up, and at the conclusion of it, they made the decision that Goldcorp would no longer be eligible for socially responsible investments.

Concerning Barrick, the Norwegian government, when it did its review, said that the investment in Barrick amounted to “an unacceptable risk of the Fund contributing to serious environmental damage”:

The Council added that “the company's assertions that its operations do not cause long-term and irreversible environmental damage carry little credibility. This is reinforced by the lack of openness and transparency in the company's environmental reporting.”

—not exactly a good report. They don't seem to have any difficulties conducting investigations wherever they need to conduct investigations.

We've had testimony from a former minister of the environment that her offices were firebombed, she was personally threatened, access was prevented to a national park, etc. We've had testimony from Harvard University, which has pointed out that “Numerous accounts of rape show a similar pattern.” This is in Papua New Guinea. “The guards, usually in a group of five or more, find a woman while they are patrolling on or near mine property. They take turns threatening, beating, and raping her.” And so on. Barrick Gold has a memorandum of understanding with the police force to basically pay for the police force. They pay for the uniforms; they pay for the salaries. To no one's great surprise, therefore, there's been no real investigation into these allegations.

All of these are allegations, and all of you are very upset about what's going on in the newspapers these days. But you seem to prefer the status quo. You'd rather duke it out in the newspapers, hire a phalanx of lawyers and consultants, and let the damage be where it is.

When the CSR counsellor was here—who seems a fine, qualified person and has many of the things that you want—and was asked whether she could investigate anything that was in the newspaper, the answer was quite clearly no, because none of you would ever consent; none of you would ever, under any circumstances, advise your clients to consent to an investigation.

So what you want, really, is status quo. You can say that you want the CSR counsellor, but you don't really want her. You don't want the good things that brings, because there is no possibility that this counsellor will ever investigate anything that appeared in the newspapers or any allegation that has appeared before this committee.

I put it to you that Bill C-300 is a very modest step that, when seen in conjunction with the CSR counsellor, actually gives her a possibility that she could investigate the things that make you upset.

[Paul Dewar, NDP, Ottawa Centre, ON]

I'm just wondering if anyone at the table is assuming that if Bill C-300 is passed they would actually pull operations out of Canada.

[Paul Dewar, NDP, Ottawa Centre, ON]

Okay.

I'm asking this because there is this notion that somehow this law would cause more complaints, and that right now there aren't concerns out there. I go back to the fact that we're trying to set rules so that there is a level playing field and actual protection for Canadian corporations.

The problem I'm having is the certainty that we've had from all presenters today that this will cause companies to pull out of Canada--I've been hearing that possibility.... When I asked someone before from the industry if he would pull out if Bill C-300 is passed, he said no--

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

Thank you very much for being here, ladies and gentlemen.

I first want to make a comment.

Given the two submissions we have here about the lack of consultation with the mining industry, and given, Mr. Peterson, your and Mr. Chrétien's expertise, both in government service and now in the mining industry, I am horrified that there's been so little consultation.

Both of you say here, “To our knowledge not one...company was consulted with respect of [the drafting of] the bill”, and the executive summary says, “We respectfully submit, however, that the Bill...was proposed without any consultation of any sort with any extractive company or industry association....” I find that disturbing, to say the least.

But what I want to ask is this. The other day we started on this in a way, but Mr. Chrétien, perhaps you can go on. The other day we heard what I would say were some damning accusations about Barrick Gold from one of the witnesses. They said the company was standoffish, resistant, aggressive, and dangerous:

I and my closest staff were personally and physically threatened.... My children were threatened, my office was wiretapped, my staff was bought, and the public officials who once controlled Barrick for me became paid employees of Barrick Gold.

It's inflammatory towards the companies, but my question is, if Bill C-300 were in place, what would happen to a mining industry wherein those accusations were brought forward?

Mr. Chrétien, perhaps you could go on to say what you wanted to say to Ms. Lalonde.

[Michael J. Bourassa]

Thank you.

I guess the question really relates to what's currently on the table with Building the Canadian Advantage as compared to Bill C-300. I think that's what it comes down to.

I just think the current bill is not workable. I don't know how you could even make amendments to make it workable without having to make drastic changes to the bill and make it a completely new bill. If you're talking about putting in some form of counsellor or ombudsman, you'd have to frame that in terms of abilities to do certain things. Of course, there would be expenditures relating to that, which you can't do with a private member's bill.

Fundamentally, the way the bill is now, having the complaints go to a minister under that whole process--that part's not amendable, from our point of view. We are completely against that.

In terms of Building the Canadian Advantage, which is what the government has put on the table, we think it's a very workable situation. It's a good start. It provides lots of other things besides the counsellor. It talks about centres of excellence and about programs to build some of the capacity within the countries where some of the Canadian companies are operating.

From our point of view, Building the Canadian Advantage is a far better approach. We think it will result in better practices. It will be better for the industry and better for CSR standards.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Good morning, ladies and gentlemen.

First, I want to tell you I am impressed to be addressing such a panel of experts. I will dare make my comments anyway.

I do not think anybody here is against mining companies. But personally, if there is one thing I am against, it is impunity. The situation is somewhat uncomfortable. For several weeks now, we have been examining Bill C-300. We hear many individuals and NGOs who talk to us about horrible things happening in Africa, in South America, and the Philippines. Whether we like it or not, we can relate very much to this evidence. It is not like it is anything new for the Standing Committee on Foreign Affairs and International Trade to make this kind of investigation. As early as 2005, it looked into this issue.

Its 14^th report was entitled “Mining in Developing Countries and Corporate Social Responsibility”. The government responded to the report, and here is what it had to say, “Consequently, issues of the type raised by the Committee are likely to increase in both intensity and volume in the coming years--”.

We are in 2009, just before 2010, and we are still debating this same issue. Since 2005, we had extensive consultations over a period of two years, and the result was a report with a number of recommendations. A wide consensus emerged between members of the civil society, experts, and people from mining companies.

Do you think we could design a bill that would include these recommendations from the report resulting from roundtables? Would that be better than Bill C-300? I gather from what you said that this bill is--

[Michael J. Bourassa]

I'm happy to start with that.

I think, Mr. Rae, what you've described with some of those institutions, EDC or the IFC, are processes that of course every company would take seriously. Those institutions would have their due diligence processes to go through, CSR standards, and the companies would have the opportunity to respond. It's a process. It possibly even could be a remedial process.

With Bill C-300, the damage is that it's basically a complaint to a minister that elevates it to such a high level. Once a minister has received a complaint--and you can refer to some of the news in the last few days--the ramping up of that rhetoric is huge. These are all allegations against companies. They're serious allegations. These are not fact, and nobody is--

[Michael J. Bourassa]

I would like to conclude by describing two different scenarios. The current economic environment in Canada in our successful mining sector is embodied in the following invitation to mining companies and investors: “Come to Canada, or stay in Canada, because we have developed mineral centres of excellence, and we'll help you obtain financing and provide you with technical support.”

Let's look at scenario A if Bill C-300 is passed. In addition to the invitation that I just mentioned, we'd be saying to them: “However, if you have a CSR problem, or if you have in the past, you could be the subject of complaints to the Government of Canada. If you are named in a complaint, you will not be given an opportunity to remedy or resolve your problems. The government will not work to help you to improve your performance. Instead, they could investigate you for your activities and you would be subject to serious sanctions, including the loss of financing and damage to your reputation.”

Let's look at the alternative, scenario B, one that is currently proposed by the government. In addition to the invitation I mentioned at the beginning of this conclusion, we'd be saying: “The government will help you when CSR difficulties arise by offering mediation and support and possibly by offering capacity-building expertise in the areas of the world that are having difficulties.”

Which scenario is going to result in a stronger and more vibrant industry for Canada? Which scenario is going to achieve higher CSR standards? Which scenario is going to result in more economic activity in Canada and developing countries?

Our respectful submission is that the collaborative approach proposed is the best option. This bill is well intentioned, but in our submission it's unworkable and will do significant harm to Canada's investment climate and Canadian mining companies.

Thank you very much for giving us the opportunity to present today. We'd be happy to take any questions you have.

[Michael J. Bourassa, Partner, Fasken Martineau DuMoulin LLP]

Thank you, Raymond.

Mr. Chairman, ladies and gentlemen, my name is Michael Bourassa. It's a privilege to be here today.

I feel very strongly about this issue. Canada has excelled in international exploration and mining. We are recognized by our competitors for that success. I'm concerned that this bill could jeopardize Canada's continued competitive position, might do very little for improved accountability in the CSR realm, and could harm economic activity in Canada and in developing countries.

The Honourable Jim Peterson has told you about Canada's strength and leadership in the global mining sector. In order for the Canadian mining industry to remain successful, companies need to be able to compete in the global market. If passed, Bill C-300 will undermine the competitive position of Canadian companies. It could cause an exodus of mining companies from Canada and could potentially render Canada a less attractive jurisdiction for mining investment.

The bill will apply only to Canadian companies that operate in developing countries. As such, Canadian companies will find themselves at a disadvantage compared to their competitors. Let me provide you with a hypothetical example. A Canadian company and a foreign company are both interested in acquiring a mine that has had some historical community relations issues. The Canadian company has a strong corporate social responsibility program and known successes working with local communities and governments to remedy such problems. However, the Canadian company would be subject to a bill that is retroactive in its application and is non-remedial in nature. If the Canadian company acquires the mine, it could immediately become subject to a complaint, possible investigation, and sanctions, including the loss of financing. The foreign competitor would not face the same risks and uncertainties. The competitive disadvantage to the Canadian company is obvious.

The bill could also disadvantage Canada as a mining investment jurisdiction of choice. So many mining companies headquarter and list in Canada because of the country's vast expertise in this sector. This is an expertise that is actively promoted by most provinces and the federal government. For example, over the past four years, I've attended an international mining conference in Vancouver, and every year the Premier of British Columbia has remarked that mining is the most important industry in that province. Quebec also actively promotes itself as a jurisdiction of choice for mining investment and is ranked, in a 2009 survey, as the top jurisdiction in the world for encouraging mining investment. Newfoundland and Labrador, Alberta, New Brunswick, Manitoba, Saskatchewan, and Ontario are all highly ranked.

If this bill becomes law, every Canadian company, or any company contemplating setting up in Canada, will have to undertake a serious risk- and cost-benefit analysis to decide whether to locate here.

[James Peterson, Counsel, Fasken Martineau DuMoulin LLP]

Mr. Chairman and honourable members, thank you very much. It's indeed a pleasure to be here. I had the privilege of serving some 23 years, and also as Minister of International Trade. I am now very pleased to be counsel to Fasken Martineau. With me today are two of my colleagues, Raymond Chrétien and Michael Bourassa.

Before joining Fasken's as a partner and strategic advisor, Raymond Chrétien served with great distinction in Canada's public service for 38 years. He was Canadian ambassador to France, the United States, Belgium, Mexico, and the Democratic Republic of Congo. He served as Associate Under-Secretary of State for External Affairs from 1988 to 1991.

Michael Bourassa is the coordinator and co-leader of our firm's Global Mining Group. He is also a director of the Prospectors and Developers Association of Canada and sits on the executive committee of the mining law section of the International Bar Association.

For the past five years, Fasken's has been recognized by the International Who's Who of Business Lawyers, a publication based in London, England, as the number one law firm in the world for mining. It is without question that Canadian companies must operate in a responsible and accountable manner. The federal government has been working with companies on this aim for several years. In 2005, the then Liberal government, of which I was a part, commissioned a report from this very committee. It instigated a consultative process that culminated in the release by the federal government last March of Building the Canadian Advantage.

The intentions behind Bill C-300 are laudable, as they focus on corporate social responsibility. We submit, however, that the bill is flawed in its construction and highly prejudicial to Canada's mining sector. As many of you know, mining and exploration are very important to our economy. They comprise 5% of our GDP, employ 351,000 Canadians, and in 2008 the industry paid $11.5 billion in taxes and royalties to the three levels of government. The industry also contributes significantly to R and D. In 2006, mining companies invested $648 million in Canada in R and D alone.

Canadian mining companies have exported their expertise to all comers of the globe, and Canada is now the world leader in the global mining sector. In 2008, over 75% of the world's exploration and mining companies were headquartered in Canada, operating in 100 countries around the world. As Mac Penney has indicated, Canada has emerged as a centre of mining finance globally.

The Boston Consulting Group reported that we now have a leading concentration of expertise required to finance mining, metals, and energy in Canada. Financing mining in Canada employs 7,000 financial sector people. Core to this activity are our stock exchanges. Of the world's public mining companies, 57% are listed on the TSX or the TSX Venture Exchange. Along with Vancouver, Toronto constitutes the world's largest source of equity capital for mining companies undertaking exploration and development.

Canadian mining companies, including the juniors, employ many Canadians and engage numerous industries and service providers in support of our international mining activities. These include equipment manufacturers, contractors, consultants, accountants, financial legal advisors, and our financial institutions.

There are 3,140 Canadian goods and services firms supplying our mining sector. We have centres of mining excellence across the country, in Bathurst, Quebec City, Montreal, Val d'Or, Rouyn-Noranda, Sudbury, North Bay, Timmins, Toronto, Mississauga, Yellowknife, Saskatoon, Edmonton, Kelowna, Kamloops, and Vancouver.

In conclusion, given the importance of mining to Canada, and given the country's leadership and expertise in mining activities abroad, we submit that a primary focus of the Canadian government and the Ministry of Foreign Affairs and International Trade, in particular, should be promoting our mining industry, both domestically and internationally, and working collaboratively with Canadian companies to continually enhance CSR standards.

Thank you.

Raymond.

[Dina Aloi, Vice-President, Corporate Social Responsibility, Goldcorp Inc.]

Thank you, Mac.

Honourable members, thank you for this opportunity to address you today.

I am Dina Aloi. I'm the vice-president responsible for corporate social responsibility for Goldcorp.

As background, I have a degree in rural sociology and I have a master's degree in anthropology. I became involved in the mining industry and joined Goldcorp after 15 years of working on human rights and international development issues with NGOs. My dedication to these important issues is unchanged, and I'm pleased to have the opportunity to bring my experience to a company where my commitment to human rights is mirrored.

This committee has repeatedly heard the rhetorical question: if it's true that Canadian mining companies conduct their operations in accordance with the highest standards of corporate social responsibility and are held to account for their mining practices abroad, why are they opposed to this bill? Our comments today will answer that question. The short answer is Bill C-300 will not actually get at companies that operate with low CSR standards, but will, instead, do serious harm to responsible Canadian companies. In all of our submissions today, we want to outline how and why this bill will harm responsible Canadian mining companies.

This bill does nothing to improve CSR or build capacity in foreign countries, something that we believe is critical to long-term success. This bill would create a new adversarial complaint and investigation process that is sure to be exploited by traditional opponents of mining. It would also expose responsible Canadian mining companies to stigma and reputational damage from a poorly conceived investigation process through a ministerial office ill-equipped for this purpose.

In order for the committee to understand why this bill is so harmful, it's critical for the committee to understand the environment in which we operate globally. Our industry is often confronted with false allegations of misconduct in countries in which we operate. Regardless of merit, once made, allegations have lasting impacts on our industry's reputation. In my experience, evidence that proves an allegation is false, or a retraction of a false allegation, is often ignored.

For example, an extraordinarily serious claim was made that a Canadian mining company was involved in the murder of 50 artisanal miners in Tanzania, all of whom were said to have been buried alive. At the request of an NGO, these claims were extensively investigated by credible independent sources, including the World Bank. The company acquired the property in 1999, three years after the incident was alleged to have occurred. In 2002, the ombudsman of the World Bank undertook to assess these allegations. A comprehensive investigation into these allegations was made and they were found to be completely without foundation. Although it was completely cleared, and indeed the ombudsman was highly critical of the lack of accountability of the NGOs that made the allegations, these serious and extraordinary allegations continue to be made against this Canadian company, including at these committee hearings.

I have two further examples of untrue allegations that, if this bill were in effect, would likely have ended up on the minister's desk and had to have been investigated. We were recently accused by a Canadian NGO of organizing a coup. We were also accused of contaminating water in another country with a chemical we didn't even use. Both allegations were completely false. If they had been subject to this bill and investigated by the crown, they would have been provided with false credibility, causing undue harm and alarm with our stakeholders and shareholders, our employees and our community partners, and it would have harmed our corporate reputation.

At this point, it's easy to accuse Canadian mining companies operating abroad of all manner of unethical and outrageous behaviour. Correcting the record, however, is very difficult. You may ask then, if we're already operating in an environment in which complaints get made and can live on in perpetuity, why would the complaints process under this bill cause us particular concern?

To be unfairly accused by an individual or an NGO in a press release or a blog causes harm. This harm is of an entirely different magnitude when this complaint is investigated by the minister of the crown, which suggests that the complaint has some merit, and, under this bill, requires an investigation by our own government.

The bill does provide a mechanism for the minister to dismiss a complaint without investigation if it is determined to be false, frivolous, vexatious or made in bad faith. However, for a serious accusation coming from a remote foreign country, it is impossible to conceive that a minister could dismiss the complaint without an investigation and the expenditure of resources. Equally troubling is that this bill does not contemplate any consequences whatsoever for an individual or organization that makes frivolous, vexatious, or untrue allegations, or which does so repeatedly. At best, a retraction from the minister will be printed in the Gazette many months later, not a widely read publication in many circles, after the harm is done, which will go entirely unnoticed.

The relationship between Canadian mining companies and host countries relies on mutual respect. This would be seriously strained through the complaints and investigation process. Canadian companies operating abroad strive to build respectful relationships with local stakeholders and the governments of the host countries. Weakening these positive relationships will only harm our competitiveness in the mining industry and our ability to influence non-Canadian companies to adopt high standards of CSR. Our non-Canadian competitors, many of whom operate at lower CSR standards, would be more than happy to take advantage of a decline in our reputation as good corporate citizens and to dislodge us from our assets abroad.

I want to emphasize that the Canadian mining industry is not afraid of scrutiny when it comes to being held to account for the way in which we operate at home and abroad, but we are concerned by this bill because it will damage us even as we operate at the highest global standards of corporate social responsibility. Each of the companies presenting today is fully committed to operating in an environmentally and socially responsible manner, to protecting human rights, and to making a positive difference in the communities in which we operate. As Mac said, we support the objectives of this bill, and we take seriously the demands and the complexities of corporate social responsibility. We expect to be and are held accountable. What we do not expect is to be subject to legislation that harms us, irrespective of how we conduct ourselves.

Thank you very much for listening to our submissions today.

[Mac Penney]

Thanks, Peter.

One of the many sanctions of the bill is the withdrawal of EDC financing. It's been said variously that this is a modest or a mild sanction. Somewhat paradoxically, however, proponents of the bill say that what makes this bill and the model approach to CSR superior to any alternative is that it has sanctions with real teeth. One of the toothy parts of the bill is meant to be the withdrawal of EDC financing.

I'd like to talk a little bit about the risk that creates for Canadian business, about how the way in which companies will actually operate to manage that risk will likely put the EDC on the sidelines for financing of Canadian projects overseas, and, paradoxically, how the bill in fact declaws itself because of the risk management strategy it will incent companies to follow.

The fact is that no extraction or development project or any joint venture between a Canadian company and another Canadian company, or between a Canadian company and a foreign company, can proceed without adequate and secure financing, and, in some cases, depending on the location, political risk insurance. Typically, Canadian companies will rely both on export development agencies, such as the EDC, and traditional commercial lenders, traditional banks, as sources for financing. The bill will clearly create a new financing risk by creating a sanction directly tied to one of those sources of financing, that being the Export Development Corporation. The severity of the risk will depend on a number of interrelated factors, such as the overall health of the credit markets and the creditworthiness of the companies involved. In constrained, risk-averse credit markets, such as those that our country and its businesses have experienced over the past year or so, access to credit agency financing becomes far more important and, in some cases, the most important source of financing, so loss of access or the threat of loss of access to this source of financing is a serious issue for business.

Because of these risks and uncertainties, Canadian mining companies and oil and gas companies overseas will find it difficult to rely on EDC financing for any of their projects. The risk created by this bill is that if we have EDC financing as part of a syndicate and we are found to be offside or inconsistent with these guidelines, which are yet to be developed, then we lose the financing. In that case, we're in trouble with our partners, and the project itself will be in trouble, because we don't have the secure financing to proceed.

To manage that risk, we'll have to turn elsewhere for financing, and the EDC may find itself riding the pine in terms of overseas development for Canadian mining going forward. The result is that either we'll have an investment that doesn't proceed at all, and Canada and the host country will be deprived of the value of that investment, or the project will be developed by a foreign competitor, or the project may proceed with the greater portion of its financing sourced outside Canada.

In all these cases, the project would fall outside the ambit of this bill in terms of the sanctions, since there's no EDC financing involved. Therefore we have now sidelined the EDC, defanged the bill, and done nothing to advance CSR. We see this as being a peculiar paradox inside the legislation.

I would also say that the bill would offer some threat--and I wouldn't want to overemphasize, but I'll just table it for the committee's attention--to Canada's status as a world leader in global financing. Recently the Toronto financial services working group reported that listings on mines, energy, and minerals in Canada create and support 7,000 financial services jobs. They've recommended a pretty ambitious goal: that Canada should try to achieve 70% of world listings in this particular market share by the year 2015. By their estimates--and these estimates were done for them by the Boston Consulting Group--a 70% share in this area would create an additional 4,000 to 6,000 direct jobs, create 10,000 to 15,000 indirect jobs, and generate GD impact somewhere between $1 billion to $1.5 billion.

We suggest to the committee that the sentiments expressed in Bill C-300 actually run contrary to, and would actually conflict with, what we see as a pretty ambitious goal to leverage an area in which Canada definitely has a competitive advantage and expertise.

We think that rather than signing on to the Bill C-300 approach to financing, Canada would be better advised to subscribe to and support, as the EDC does, the Equator Principles. These are principles of financing that were agreed to by multilateral and traditional lenders. Some 40 major institutions representing lenders that provide 80% of global financing in the sector subscribe to these, and as companies, if we want financing to do these projects, we have to ensure that we comply with those guidelines. We think the multilateral approach is a far better approach in this area.

With that, I'll ask Dina to conclude our presentation.