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.

[William McGuinty]

Those are pretty basic business assumptions, but my biggest concern would be my ability after going through this process. Let's just use an exploration company's process. There is no sanction for a company not seeking financial gain in Bill C-300, so I go through this process. I'm guilty or I'm not guilty. I'm still in the community. If I'm guilty, I have a problem. There is a public outing of something I've done as an actor that is inconsistent with international law and human rights. I have an issue that I have to deal with. I'm still there. If I haven't done anything wrong, that issue still sits there in that community, and it's been exacerbated by a much larger external confrontation of that community.

My biggest concern with this process is how Canadian companies go through it and come out the other side, being able to validly and appropriately do their business on the ground in those countries.

[Carole Samdup]

I think the question here is why the voluntary standards are not sufficient. I would like to remind all the members that human rights are not discretionary policies and they're not aspirational goals: human rights are actually international law. There needs to be an accountability mechanism that's applied equally to all actors, and that mechanism should not be voluntary, just as it is not voluntary whether you obey the rules of the road.

I think this is an important thing to remember, and this is the contribution that Bill C-300 seeks to make.

[William McGuinty]

I think it's important to note that “frivolous” and “vexatious” come up a couple of times in various parts of that very short law.

What Bill C-300 lacks, and what I don't know if it can attain, is a way of developing precision about what it does and about what the minister can do. It really does lead to a very....

Somehow a case would have to have a significant merit for the minister to really make a decision. At the end of the day, if it's a complaint brought by a local community member or an NGO or another company--or another government, for that matter--there's no sanction for any of those people. The fact that they've been written up in the Gazette is not a sanction for any of these people. The only group being sanctioned at the end of the day is someone who might inevitably be found guilty of a charge of a human rights violation.

It's a question of the volume of complaints versus the validity of those charges. In my experience in working in small communities and in various countries, the timeframes for these discussions and the timeframes for the debate and the accommodations between a company and a host community are very long; the minister is going to come in with a very short timeframe to give an answer to the public, the complainant, and to make something very concise out of what is a very contorted position.

I don't know how Bill C-300 in its current form accommodates that.

[Tyler Giannini]

Thank you for the question.

First, I think I would answer that by saying that the review of a situation, such as what was going on in PNG, is an important first step. That review of the process will hopefully bring additional information to light from all the actors. Information is a key piece for eventually assessing what a government would do. That's what the review would hopefully do.

Bill C-300 lays out specific ways in which there may be repercussions in light of a review by the ministers. The details of how the review would be conducted would be laid out. Under international standards right now, there has not been a specific complaint involving this mine to an international body.

Again, to bring home who the main players are here, the actors on the ground are the PNG government, which has not pursued the investigation at the level you would want it to, and the corporations. The home country really can fill a void in terms of review and investigation, which would facilitate, hopefully, better solutions and deterrence of future abuses on the ground.

[Bob Rae, Liberal, Toronto Centre, ON]

Thank you very much.

I'd like to thank all the witnesses for their presentations.

It's difficult, but I want to try to draw it together by asking Mr. McGuinty a question, if I may.

Mr. McGuinty, you described in your presentation that you've already received a lot of complaints or issues being raised that you regarded as frivolous or vexatious or not having any factual basis. Is it not possible to look at something like Bill C-300—and we can all talk about how it might be improved—and say that it's the one mechanism that actually gives you the opportunity to get the minister to say that there is absolutely no foundation for this? As it now stands, you can say there is no foundation to this, but you're you. It's the same thing with me. If I've done or haven't done something and somebody says I have, I'm going to say that I didn't do it. You need somebody else to come in and say that there is no basis for the complaint at all.

Given the fact that now corporate social responsibility is an accepted premise and principle of activity, we have now a series of measures that the government has initiated that in fact provide for some modest accountability—not as much as many people think is necessary, but some. I'm not quite sure if I understand why Bill C-300 is seen by you as so revolutionary.

The fact is, these complaints are being made anyway. We've heard from Mr. Giannini and Ms. Knuckey that they themselves have gone down and interviewed people and have come forward with terrible accusations with respect to activities surrounding a mine in Papua New Guinea. Where do these complaints go if we don't create some kind of process that allows them to be considered and then say, yes, there is a foundation to this one, but there's absolutely no foundation to the other one? I hear your anxiety and I hear your concern, and I'm not insensitive to it. But I'm just wondering, given that there are going to be these complaints and that there is going to be anti-mining agitation around the world—we have it in Ontario and we have it everywhere—why would there not be some advantage to you in having a mechanism to deal with it?

[Sarah Knuckey, Lawyer, Center for Human Rights and Global Justice, New York University School of Law]

Mr. Chairperson and committee members, like Mr. Giannini, I avail myself of the parliamentary privilege.

Mr. Chairperson, we have documented allegations of grave human rights abuses--killings, rapes, beatings--by security personnel employed by Canadian companies. The seriousness of these alleged abuses and the absence to date of accountability point clearly to the need for a bill like Bill C-300, which would create an independent mechanism to receive and examine complaints by victims.

In the course of our work, we have interviewed more than 250 individuals, including alleged victims, witnesses, family members of alleged victims, local residents, local and international civil society, health officials, government officials, police, mine staff, and current and former PJV security guards. We have also reviewed medical and police records.

In Porgera, poverty drives locals to trespass on what is now mine property. Certainly, some of the cases of use of force by PJV's guards have likely been justified, either in the defence of property or of life. However, I would like to share with you today accounts of rapes we have documented that have been especially brutal and that are, of course, without any possible justification.

Numerous accounts of rapes show a similar pattern. 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. In a number of cases, women reported to me being forced to chew and swallow the condoms used by guards during the rape.

Most of the women told me that they did not report the rapes for fear of retribution. Those who had stated that the police took no action. If a woman's family finds out about the abuse, she is often further shunned. In no cases were the women aware of any investigation, prosecution, or punishment of the alleged perpetrators.

I would like to highlight for the committee one particular incident that a 25-year-old woman reported to me in March this year. Her account went as follows.

She resided just a few minutes' walk from the mine and often went there to look for gold. She used the money she made from selling it to buy basic necessities, such as clothing and food, for members of her family. In 2008, five PJV security guards caught her while she was on mine property. She told me that the guards asked her if she wanted to go home or if she wanted to be sent to jail. When she replied that she wanted to go home, they said that they would rape her first.

She explained to me that she tried to run, but that they held her, tore off her shorts, tore off her shirt and her underwear, and threw her down on the rocks. She said that each of the five took turns raping her while the others guarded the road. They pointed their guns at her and threatened to shoot if she tried to escape. They beat her legs and hit her with stones. They held her head down with the butt of a gun. She showed me the scars on her shoulder and hand, which she told me were the result of struggling during the rapes.

A male relative of hers stated that he witnessed part of this attack and reported it to police, but they appear to have taken no action.

This is just one example of many cases of alleged abuse that we have documented. Security guards have themselves recounted to me abuses that they have either witnessed or committed. In fact, during one of my trips to PNG in 2006, I witnessed a guard yelling at a local woman that he had raped many women, and he was calling for her to come near him so that he could rape her too.

Mr. Chairperson, committee members, we have documented serious and consistent allegations of grave human rights abuses at a mine owned and operated by a Canadian company. Allegations date back nearly 20 years, and violence appears to be ongoing. Despite the seriousness of these allegations, little has been done to investigate.

But the victims have a right to have their complaints investigated in a transparent, comprehensive, and independent manner. Bill C-300 is a step in the right direction in providing an independent venue to which victims may complain. Importantly, the bill also has the potential to deter and prevent future incidents of brutal violence by promoting accountability for the actions of Canadian companies overseas.

Thank you.

[Tyler Giannini, Lecturer on Law, International Human Rights Clinic, Harvard Law School]

Thank you very much, Mr. Chairman and committee members, for giving us the opportunity to speak before you today. My name is Tyler Giannini, and I head the International Human Rights Clinic at Harvard Law School. I'm joined today by Ms. Sarah Knuckey of the Center for Human Rights and Global Justice at the New York University School of Law.

Before I begin, I wish to state my understanding that my presentation and my statements to this committee are covered by the parliamentary privilege, and to the extent I need to assert such privilege, I hereby do.

Ms. Knuckey and I are human rights lawyers with some two decades of combined experience documenting human rights violations. Since 2006 Ms. Knuckey has traveled to Papua New Guinea, or PNG, three times, and I twice, to investigate personally the impact of the Porgera Joint Venture, or PJV, mine, majority-owned and operated by Canadian mining interests since its inception.

Today we speak about security and human rights at the PJV mine and discuss why Bill C-300 is particularly important when independent investigations have failed to materialize despite consistent allegations of abuse. First, I will illustrate how Bill C-300 gives the Canadian government a critical role in promoting accountability by offering a venue for victim complaints when other actors fail to do so. This is especially true when host countries like PNG and corporations may have an inherent conflict of interest that inhibits the likelihood of independent investigations from taking place.

Secondly, Ms. Knuckey will discuss the serious allegations of violence that have persisted during the life of this mine in light of the failure to investigate the abuses adequately. The PJV mine began operations in the 1990s in a remote area of PNG, pursuant to an agreement between the PNG government and Placer Dome, a Canadian corporation. In 2006 Barrick Gold purchased Placer Dome and acquired the mine.

Dating to the 1990s, there have been reports of serious human rights abuses associated with the mine. Individuals we have spoken with have detailed allegations of the following grave abuses: rapes, including gang rapes; physical assault; and killings. The PNG government and the PJV mine have responsibilities to investigate such allegations; however, based on interviews and documents obtained in PNG, independent investigations by these parties appear unlikely.

First, according to many witnesses and victims, local police have repeatedly failed to investigate adequately allegations of abuse by PJV personnel. Police officers have also indicated that their investigative efforts have been hampered by PJV security officers who have restricted immediate access to crime scenes within the mine and, in their view, may have tampered with evidence.

In 2005, in the wake of local pressure and company acknowledgement of mine-related deaths, the PNG government created a committee to investigate the situation. However, despite completing its work in 2006, the committee report has not yet been released.

Secondly, we have concerns about the independent investigations because mine security forces are comprised largely of police reservists. Many of the abuses alleged to have been committed by mine security forces are attributed to these police.

During our March 2009 fact-finding trip to the country, we were able to view and transcribe a memorandum of understanding between the mine and the police force, which we have included in its entirety for the record. This document, which was shown to members of the Harvard team by a senior police official in PNG, authorized “the deployment of an agreed number of Reserve Police (who are employees of the PJV)”. The MOU also specifies that the mine is responsible for “all costs and expenses associated with the Reserve Police, made up of authorized PJV employees, including remuneration, training and the provisions of uniforms and equipment”.

Law enforcement offices we spoke with also indicated that the police reservists comprise the majority of the mine's armed security officers and take day-to-day orders from mine officials.

We were further told that the weapons and equipment used by the reservists--the weapons and equipment that may have been used to commit the alleged abuses--are purchased by the mine. On its face, the MOU raises significant conflict of interest concerns.

As it stands now, given that, one, the PNG government's failure to act or even make public its government committee report on deaths related to the mine; two, the existence of the MOU, which creates inherent conflicts of interest; and three, the consistent inaction on the ground, there is little possibility of a comprehensive, independent, and fair investigation of alleged abuses by the actors in PNG. In such a situation there's a clear need for an external party to conduct an independent review. That's exactly what Bill C-300 does. It establishes a mechanism that makes such an external review possible.

With what, I now turn this over to Ms. Knuckey, who will detail the gravity of the allegations and further demonstrate the need for a bill like Bill C-300.

[William McGuinty, President, OTD Exploration Services Inc.]

Thank you, Mr. Chair and members of the committee, for sharing your time with me today.

I come as an individual to present my concerns regarding the effects of Bill C-300. OTD is a family business. My wife and I have been working in the mineral sector for the last 20-plus years and have experience in the management and support of Canadian junior exploration companies working as corporate enterprises in Canada, and effective exploration operators in Canada and offshore.

As the Department of Foreign Affairs and International Trade points out on their website, there are about 7,000 to 8,000 mineral exploration projects in the hands of Canadian explorers in over 100 countries. This represents a large globally distributed number of communities where at least one Canadian plays a role in local development. The images from many of these places are striking, whether they appear on an exploration company's website or one belonging to an aid agency or to a civil society. They span the same range of natural environments, from pristine to overstressed, and they span that same range of human conditions. These are places where we would hope the mineral sector, civil society, and the Canadian government would consider mineral development to be part of the solution to improvement in the conditions of a host community and a host nation. They are also places where no other Canadian economic investment or development leadership may be available. They are also places where perhaps no other international or domestic leadership exists.

You might ask why I'm concerned if I work for junior capital exploration companies. Junior companies do not in general avail themselves of the financial mechanisms that are at risk of sanction from the minister. As an exploration geologist, I could work most of my career in mineral development and never see a project that would have to consider the financial facilities that Bill C-300 proposals to withhold. I am concerned because many of the examples being used in public positions taken on Bill C-300 are situations where junior exploration companies are identified at various exploration stages.

Bill C-300 doesn't outline a link between the minister's review of a claim and a candidacy for financial support. Any allegation can be submitted, regardless of the project's potential fiscal relationship to the Canadian government. The sanctions on a bad actor at the production stage are clear enough under Bill C-300. They will come at the end of what will be a long and difficult investigation and a decision by the minister. It also happens at the end of a longer process of development at the mine project. The company has a large historic investment and future measured benefits to defend, as well as its reputation.

A sanction may interfere with a host nation's plans or its development opportunity. It may force the company to abandon its intentions. However, a sanction at this point still will leave a project that someone may develop in the future, within the life of the affected community or that of a future generation.

The effect of what amounts to non-monetary sanctions on exploration projects will be more immediate. In many cases, due process might never reach the planned end in the Gazette. I used the word “project” and not “company” specifically here because the junior exploration company is usually shorter-lived than the project. The company may move on or possibly dissolve. It has component technical, financial, and administrative pieces that will come apart and eventually recombine somewhere else in the sector. This would not be out of the ordinary. It's a function of exploration and of financing exploration. Bill C-300 just provides another catalyst for it to happen. It kind of adds a 300-pound gorilla into the mix. The junior company may not survive the time of the minister's investigation, regardless of the merit of the claim against it. It may decide the dispute is not worth the time and effort, or that the defence will cost more than the current exploration value of the project. Perhaps that is the desired outcome of a claim in the first place.

Regardless, there is still a mineral project there. The minister's decision will be a beginning, and not an end, to a larger Canadian involvement in human rights claims in the resource sector. If Canada has decided that Canada should prevent an activity by a Canadian company or remove it from contention to operate a project, Canada must understand that by doing so it has an obligation to ensure that the situation we leave does less harm than the one we acted against. By taking action against a company, Canada will have picked up the reins of responsibility, and we must see that those we seek to protect are no worse off for our intervention.

The debris left behind after a minister's decision, either supporting or dismissing a claim, will remain with the project, that point on the planet where the company, two nations, civil society, and all those in the host community who took stands and fought for their interests and rights played out. It is hard to imagine that upon resolution the host community will feel the same closure as the minister may in his or her annual report. They may feel further abused by the externality of the process, especially if the adjudicator offers no suggestions or solutions to improve the company's position over its previous situation. If Bill C-300 were about justice, it would contain mechanisms to ensure this.

What would Canada offer to a host community to replace the lost opportunity and guide them to a better outcome once the fight is over?

Claims against Canadian exploration companies and projects at the early stage of enterprise will be numerous, hard to investigate, and often rooted in all-too-human frailties such as greed, ambition, and plain old politics. It is not presumptuous to say that 5% of 7,000 projects have a local complaint that could make its way to the minister. That would be a new briefing note for the minister every day, a new investigation beginning every day.

From my own experience, mining operations, especially those represented by a foreign actor, can attract suspicion and hostility on principle. Companies I have led through exploration projects have been accused of dumping cyanide in a river and exploring with helicopters at night to avoid protesters in El Salvador, stealing gold and damaging water tables in Argentina, and corrupting officials pretty much everywhere. All of these are untrue. I was not undertaking any work where my level of activity matched the accusation, even in theory. Despite the lack of any factual supporting evidence, these accusations appeared on the Internet, linked by Canadian and American sponsors who made no attempt to verify the claims or even speak to me before assisting in the dissemination of the accusations, nor have they since.

This is what the entry point can look like for the minister when a claim is made, if it has merit or it doesn't.

My personal favourite was being accused by the wives of my employees in Madagascar of making 70 of their men impotent. I will admit there was a lack of cultural acumen on my part. I was able to resolve it, but I'm sure it would have made a great sound bite on one of the CBC Radio morning shows.

I've tried to describe what I think are challenges for Canada in the decisions about Canadian exploration companies and host communities under Bill C-300. I'm going to try to be slightly cynical here for a moment.

In my weaker moments, I don't think Bill C-300 is about extractives at all. I think it's about challenging the Government of Canada's policies and actions on the international stage. This is about any member of society from anywhere attacking what they feel is a want in Canada's moral policy. This is about driving the interpretation of subclause 5(2), which was talked about earlier, about what is “consistent with international human rights standards” to where someone thinks Canada should be going. This could be about a weak foreign government sponsoring the removal of a Canadian company to replace it with one of its own, or one from another country with better state-to-state incentives.

In a weaker moment, I would ask the Canadian government if they were satisfied with the results of the previous ouster of Talisman in the case of the Somalis who were involved and what the minister's action would have looked like had Bill C-300 existed then.

Bill C-300 will make Canada liable for the results of the vacuum created by the exercise of our enlightened human rights determinations, while at the same time removing its best available tool, a fully engaged extractive company. Although designed to create another layer of accountability in Canadian actions abroad, this bill neither practically nor effectively accomplishes that, nor does it offer to define mechanisms for assuring justice for host communities.

In closing, members of the committee, I would refer you to the tools that my colleagues in the extractive sector will present to you during these hearings: the Prospectors and Developers Association's e3Plus, the Mining Association's Towards Sustainable Mining, and the Equator Principles. It is my impression that the extractive sector as a whole, including my piece of it, is coming to embrace their operational aspects and, more particularly, the motivations that created them in the first place. In fact, it was the operational aspects that were lacking. I participated in the development of e3Plus, and the shared concern for its design was that it place good operational tools in the hands of field personnel working with our host communities.

Now, e3Plus was designed during the time the industry and civil society waited for the government's CSR position paper, Building the Canadian Advantage, and for its policy, which is now on the DFAIT website. They're both in place. They're both still evolving. Being new initiatives, both are largely untested as bodies of practice or mechanisms to improve CSR. However, they're both aimed at improving performance of Canadian extractives in all aspects of their activities, including human rights. They will persist in doing so, while at the end of the day Bill C-300 will obstruct Canada's and the extractive sector's efforts to successfully resolve societal issues and mediate disputes in communities where they originate. It will do so in places where host communities will need it the most.

Thank you.

[Rémy M. Beauregard, President, Rights & Democracy]

Thank you very much, Mr. Chairman.

I wish to introduce to you my colleague Carole Samdup who is the program officer responsible for this file at Rights and Democracy.

I would like to begin by thanking the chair, Mr. Sorenson, as well as the committee members for their attention to the issue of corporate accountability and for inviting us today.

As you know, we were created by an act of Parliament back in 1988 to promote and defend human rights and democratic development internationally. For more than 20 years, we've been implementing this mandate on behalf of Canadians and have reported to them through Parliament. We will have an opportunity, about two weeks from now, to appear in front of you to discuss our five-year review.

We promote and defend human rights and democratic freedoms around the world. We support individuals, communities, and democracy activists. And we assist in the building of democratic institutions and processes that give effect to universal human rights.

One of the greatest economic challenges in the 21^st century consists in seeing to it that the increased movements of international investments and the activity of large corporations not stand in the way of our commitment to respecting human rights. This is not a rhetorical issue. It affects millions of people throughout the world. The arrival of a foreign business in a community can be a good thing for the population but it can also be a very bad piece of news.

Sometimes the project incorporates all of the components of a complex spectrum that goes from sustainable development to the respect of human rights. In those specific cases, local populations can derive a great deal from such an experience, and the investment then becomes a positive for their development. In other cases, things take a less fortunate turn. When projects are developed in countries where human rights are not always taken into account, investments may be made to the detriment of the host populations. Numerous cases of violations have indeed been reported and documented in several developing countries.

Moreover for a number of years the practices of businesses that breach human rights standards have been exposed by the media. In certain cases, the companies concerned were directly involved in breaching fundamental rights, for example by working conditions that run counter to the standards of the International Labour Organization, or by forcibly moving populations. In other cases, they became the accomplices of a system set up by authoritarian states by resorting to the use of government security forces to repress any opposition.

That is, in a nutshell, the debate behind the bill that is before you. How do we see to it that foreign investment by Canadian companies make a positive contribution to the host populations? How do we ensure the accountability of those businesses when international human rights laws are not respected? How do we ensure that the people and communities concerned have access to measures of redress when their rights are violated?

Since 1994, Rights and Democracy has been actively involved in various projects concerning corporate social responsibility as well as the impact of foreign trade and investments on human rights. As a member of the advisory group, we took part in the National Roundtables on Corporate Social Responsibility and Canadian Extractive Industry in Developing Countries.

In 2005, in cooperation with several civil society organizations in five countries, we assessed the impact of foreign investment projects. In doing these studies, we realized that the communities affected by these projects were often poorly equipped to make representations to the state, negotiate with the businesses, participate in decision-making and influence it, or even understand the national and international redress mechanisms at their disposal.

On the basis of those observations, we have developed a methodology that the communities now use, from Cameroun to Ecuador, to advocate for their rights in the face of foreign investment. More than ever, we have to see to it that the increased movement of international investments and of the activity of large corporations not stand in the way of our commitment and obligations.

As you debate Bill C-300 and the issue of corporate accountability more broadly, we hope to provide you with some of the principles we have come to view as essential for effective corporate responsibility over the last decade and a half. These principles can be divided into three categories, which John Ruggie, the UN Secretary-General's special representative on business and human rights, applies. They are called “protect”, “respect”, and “remedy”.

The first principle deals with the state duty to protect against human rights abuse by third parties, including business.

In our experience, developing countries have often ratified key international human rights treaties, but are either incapable or unwilling to fully implement them. This is particularly true for less developed countries or countries in conflict or under the control of dictators. Businesses operating in this environment are susceptible to being complicit in human rights violations or, more often than not, benefiting from violations committed by state authorities. In these situations, in which the host state is weak or corrupt, foreign companies and their home states bear an added responsibility to avoid infringing on the rights of others.

The Government of Canada and Canadians can and do contribute to building capacity in developing countries, and they encourage the implementation of human rights obligations, but this is not a substitute for ensuring our own actions abroad to not contravene human rights laws.

The second principle deals with the responsibility of business to respect human rights. This means that companies must take every precaution to avoid committing human rights violations or benefiting from them. In our experience, most companies are law-abiding and respect human rights, but some companies are in fact responsible for human rights violations. We cannot hide this fact. For these companies in the minority, regulations are needed based on human rights; voluntary measures are often not enough. They have some usefulness as a statement of intent, but they are not sufficient.

As John Ruggie recently stated:

A pure model of self-regulation beyond compliance with national laws lacks prima facie credibility. We live in a world of 192 nations, 80,000 multinational corporations, millions of affiliates and suppliers, and countless other firms, large and small. There is not enough magic in any marketplace, real or imaginary, to overcome the staggering collective action problems.

Human rights provide the framework of international standards that have been negotiated and adopted by states. As such, they serve as an international consensus. In addition, human rights norms are also directly binding on non-state actors. Human rights offer a well-established governance and monitoring framework through the various activities and procedures of the UN human rights system. Human rights provide a set of procedural principles that serve as a due diligence checklist for companies when evaluating potential future projects. These include non-discrimination, transparency, participation, and accountability.

Importantly, human rights do not impose any new standards or commitments other than those that are stated and agreed to already. It should not, therefore, be difficult for countries like Canada to build a regulatory framework based on human rights principles, nor prohibitive for companies to adhere to them.

Finally, the third principle deals with the need for greater access by victims to effective remedies. Those most affected by foreign investment projects are rarely, if ever, consulted. When things go bad and their rights are violated, they have no recourse to obtain justice.

Victims must be able to submit a claim to an adjudicating body when their rights are violated, and they must be able to do so without fear of persecution or reprisal. Complaint mechanisms or fair and impartial judicial processes are non-existent in many developing countries, but this must not be a licence for a company to operate in this vacuum and escape responsibility.

In this respect, the Government of Canada can play an important role. Our government has a shared responsibility under international human rights law to ensure that human rights are protected, even outside its own territory. Once Canada allocates public funds to an investment project, it has responsibility for its impact, no matter where the impact is experienced. Canada has a moral obligation to ensure its funds are not used in a manner that would be illegal in domestic law as a violation of human rights.

By instituting an enforcement mechanism with a mandate to investigate claims and make binding decisions, and to which victims can seek remedy for violations committed by Canadian companies overseas, Parliament would be taking an important step toward fulfilling the promise of corporate social responsibility. Consulting local communities before undertaking foreign investment projects and ensuring that the human rights risks are mitigated would be far more effective and beneficial to all actors. In order to level the playing field, an effective enforcement mechanism is required.

These three principles should guide your deliberations on legislation to ensure that Canada's actions abroad favour rather than hinder universal human rights.

Thank you.

[James Lunney, Conservative, Nanaimo—Alberni, BC]

I have a follow-up to Mr. Goldring's question about paragraph 5(2)(c), a part of Bill C-300that calls on ministers to issue guidelines to ensure that corporations operate in a manner consistent with international human rights standards.

Mr. Goldring raised this point with you. That's a developing issue, international human rights standards. There are all kinds of things out there, some of which many nations, including Canada, do not fully endorse. Was it clear that you were to get back to us on this issue, with respect to whether it would be problematic?

[Dr. Stephen Lucas]

I'd like to respond to a number of points raised in the question.

First of all, the Government of Canada, in adhering to and promoting the OECD guidelines for multinational enterprises, does have an economy-wide approach and the national contact point, representing a mechanism to both promote and address complaints associated with implementation of those guidelines by Canadian firms working in Canada, as well as Canadian corporations working abroad.

Secondly, as noted in my opening remarks, increasingly business—and in particular, businesses in the mining and oil and gas sectors working in Canada and abroad—recognize that their competitiveness in terms of access to resources and the ability to earn their legal and social licence to raise funds and be supported by shareholders requires not only economic performance but environmental and social responsibility performance against those international standards outlined by the IFC, as well as the specific laws of any country in which they operate.

In regard to your question on specific challenges in the bill, I return to the point I made that a number of carefully considered mechanisms are in place now that have arisen over the past number of years, as I noted, including the OECD guidelines and national contact point, work by industry, and then the four pillars of the government strategy, which we believe together provide a fulsome response to addressing the twin objectives of improving CSR performance, addressing challenges as they arise, and improving the governance capacity of host countries working in partnership with those governments.

The addition of a legislative approach such as envisaged in Bill C-300 would add a different dimension that we believe is inconsistent with the policy-based proactive approach to addressing those objectives, as I noted in the CSR strategy, which builds on a number of mechanisms already in place. So it's that concern that this mechanism and the complexity and cost associated with it will create the potential for confusion and duplication and not allow the collaborative, proactive approach of the strategy to move forward. It'll be really driven by meeting the minimum rules envisaged in that, as opposed to reaching for the bar of improved performance and addressing the root issue of the governance capacity challenges in developing countries.

One of the areas that the bill notes is in regard to respecting human rights and the role of corporations. Currently state conventions on human rights link the responsibility or outline the relationship between individuals and the state. The work of John Ruggie, which is still under way, mandated by the UN Secretary General, is looking at the issue of the role of corporations, but that work is not as yet complete. I think it would be very challenging for Canada to step into that area before that work is complete and addressed in a multilateral UN process that it originated from.

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

With your permission, I will be sharing my time with Ms. Lalonde

Good morning. A broad consultation was conducted over two years and a report was prepared. People were consulted from all walks of life—civil society, the mining industry and experts. The report recommends above all that non-compliers no longer be entitled to tax advantages, to loan guarantees or to other forms of government assistance.

On the matter of the government's accountability strategy, can you give us some examples of non-compliant companies? What is the government, or are the EDC people doing when they learn that a company is breaching the Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries where they are operating? For instance, in Peru, in 2004, some 40 cases of non-compliant companies were reported.

What is the reaction of Canadian government representatives in the face of these businesses that commit violations of human rights or environmental offences, for instance?

[Bernard Patry, Liberal, Pierrefonds—Dollard, QC]

Mr. Lucas, in my opinion, Ms. Evans has no power. And what the government has proposed is an empty shell.

According to your experience, would Canadian mining and gas companies that do business abroad leave Canada because of a bill such as Bill C-300? That is my first question.

[Bernard Patry, Liberal, Pierrefonds—Dollard, QC]

Thank you very much, Mr. Chairman.

Thank you, Mr. Lucas and Ms. Flood.

Last October 2, the Minister of International Trade announced the appointment of Ms. Evans to the new position of corporate social responsibility advisor. In other countries that also do business in the mining, oil and gas sectors, for instance the United States, the United Kingdom, Germany, France and Brazil, is there a complaint and investigation system such as the one that has just been proposed by the government, and related sanctions as proposed by Bill C-300?

[The Chair, Conservative, Kevin Sorenson]

I'm not sure you really answered his question. His question was specific to this bill and I think was driving at whether there is a way, through certain amendments or modifications, as Mr. Rae said, that we can still work with Bill C-300.