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.

[Bob Rae, Liberal, Toronto Centre, ON]

Mr. Lucas, thank you very much for your presentation.

With respect to Bill C-300, is it not possible to see that Bill C-300 could work in a very collaborative way—with some modest changes—with the government's current approach? In other words, we recognize what the government is doing and we see the progress that's been made, but would it not be possible to see Bill C-300 as working in parallel with what else is happening on the administrative level?

As an example, the development of the standards that is taking place at the international level would clearly give the government guidance with respect to the standards and guidelines that the legislation anticipates would be brought forward. In fact, there would be nothing dramatically different in what the guidelines are; it would simply be that if somebody has a complaint, there's a process by which the minister can then determine whether the complaint is frivolous or not.

It shouldn't be seen that Bill C-300 is in some sense antagonistic to the approach that's already being identified by the government. Or am I seeing the world through rose-coloured glasses, as my friends opposite might sometimes want to accuse me of doing?

[The Chair, Conservative, Kevin Sorenson]

Good morning, colleagues. This is meeting number 33 of the Standing Committee on Foreign Affairs and International Development, on Tuesday, October 20, 2009.

Our orders of the day include a return to our committee's study of Bill C-300, An Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries. As witnesses in the first hour today, we are pleased to have, from the Department of Natural Resources, Stephen Lucas, assistant deputy minister, minerals and metals sector; and also Ginny Flood, director general of the minerals, metals and materials policy branch.

I invite you to make your opening testimony, and then we will proceed into rounds of questioning.

Madame Lalonde, you had asked for time in committee business at the end of the first hour, and we will definitely leave time for committee business. Did you want that for today and Thursday, or for Thursday?

Foreign Affairs and International Development

[Kevin Sorenson, Conservative, Crowfoot, AB]

Mr. Speaker, I have the honour to present, in both official languages, the seventh report of the Standing Committee on Foreign Affairs and International Development requesting an extension of 30 sitting days to consider Bill C-300.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much.

Unfortunately, our time is up here.

Thank you very much, Mr. Peeling, for your testimony today. You certainly answered many of the questions; there are others that we look forward to hearing other opinions on.

We will move now to committee business.

First of all, when we passed our steering committee report, part of that report asked that the committee pass a motion for an extension of 30 sitting days to consider Bill C-300.

I would welcome a motion on that.

(Motion agreed to [See Minutes of Proceedings])

[Gordon Peeling, President and Chief Executive Officer, Mining Association of Canada]

Merci beaucoup.

I'm Gordon Peeling, president of the Mining Association of Canada. I do represent the national organization of the mining industry, which represents the major producers of base metals, precious metals, diamonds, iron ore, steel-making coal, uranium, and oil sands, and also the integrated smelting and refining of metals. As well, we represent another 50 suppliers of engineering and environmental technology, service providers, and financial and small companies in the pre-production phase of development.

As an organization, we have a mandatory CSR program for our producing members, called “Towards Sustainable Mining”, which is mandatory for domestic operations. It's still voluntary for international operations. I'll come back to the strength of that a little later.

I'll also mention that I was a member of the advisory group for the CSR round table process. As noted by the earlier witnesses, yes, we did sign off. I personally signed off on it.

I want to talk about the round table and its process for a minute just to remind or inform those who didn't take part in this process about what transpired. When we started, there was obviously considerable mistrust and quite different starting points on the nature of finding a solution and making progress.

For many elements in civil society--and forgive me for generalizing--there was an immediate call for sanctions and remedy through extraterritorial application of Canadian law. For industry, there was a sense that improvements were required but that what was needed was an enabling environment that would help industry deal with very complex on-the-ground situations and help improve performance.

Out of those two end points over the course of the round tables, and in hearing from many experts like Mr. Janda, came some remarkable common ground. The advisory group report of recommendations to the government may have dragged all of us beyond our comfort zones at the end, or beyond where we thought we would end up, but that probably indicates that we were pretty much getting to the right point.

Let me turn now to a couple of those key outcomes, because they do bear on our views on Bill C-300. The round table recommendations did not embrace extraterritorial application of Canadian law or a legislative solution. The approach was a policy framework that was enabling for improved performance of industry and for assistance in capacity building for developing countries' governments, a key point for industry.

The “ombuds” type of function was housed within this policy framework, not within a legislative construct. It was at arm's length from government, and there were very specific reasons for doing that: because they didn't raise some of the issues that members have pointed to around this table.

From our perspective, capacity building was key to treating the disease as opposed to band-aiding the symptoms. If governments had the capacity to enforce environmental regulations, protect their citizens, live up to their international obligations on human rights and indigenous rights, and collect and redistribute taxes, including investing in social and institutional infrastructure, we would probably have nothing to talk about today.

Hence, for us, the most important part of the government response is the commitment to the extractive industry's transparency initiative and the voluntary principles on human rights and security, and a commitment to multilateral and bilateral processes to improve governance and capacity in developing countries as they struggle to manage the resource development process. That was all part of the round table recommendations, which we did sign off on.

Turning more directly to the government response, this may be where we have some differences of opinion amongst the advisory group in our process, but our expectations were not of the kind that thought we would get everything recommended in the report. Very few reports of this kind--indeed, even royal commissions--get everything they recommend.

In our view, the government response is directionally correct. And it is a starting point. We always have to start with those first steps, build upon them, learn from them, and make improvements as we go along. This we see as a first step, not an end point.

The Mining Association of Canada is committed to work in good faith with government and other interested partners to see this successfully implemented. It does put Canada in a leadership position. The path of progress starts with that first step, as I noted, and this, in our view, is an important first step. The government's recent announcement on the counsellor position, in just the last few days, adds further substance to that commitment.

Now let me talk a bit about Bill C-300. From my perspective, Bill C-300 takes us back to the divisive beginning of the round table, something I thought was behind us. From our perspective, the bill is not in keeping with the spirit or intent of the round table report. Also, at its very core, Bill C-300 is based on creating a legislative and punitive approach to corporate accountability that ignores the need for an enabling environment to improve performance.

By creating legislation, the bill also introduces many issues such as, in one sense, in our view, not demonstrating any sensitivity to intruding into the sovereign right of other governments to manage resource development to meet their national needs. MAC member companies remain committed to respecting sovereign right of governments as best placed to make the difficult choices in responding to their societal needs while managing the development of their resources.

There is also the confusion arising as it relates to standards out of Bill C-300, which, in our view, does not bring clarity to the question of standards but serves to add a new and possibly confusing perspective from Canada. MAC supports the federal government's commitment to the extractive industries transparency initiative, the EITI; the voluntary principles on human rights and security; and a commitment to multilateral and bilateral processes to improve governance capacity in developing countries.

Canadian companies need to operate on a level playing field with their competitors, and there are a wide range of international guidelines and standards that provide appropriate reference points for the CSR-related processes and issues.

The IFC is referenced, but the IFC already applies to us, as it does to everyone else. That in essence is a level playing field, but the IFC standards, you have to understand, weren't meant to be the equivalent of a regulatory requirement. That's an important point that maybe we can discuss further in the question and answer time.

On human rights, the Secretary-General of the UN has charged his special representative, John Ruggie, to interpret state obligations of international conventions on human rights for application at the corporate level. He has completed the first part of his work in three years and is in the midst of a further two-year assignment to bring down that detail into the corporate sphere of how a corporation should act to respect human rights that have been written on a state-to-state international convention basis.

That is why, even in the round table process, we did create space, because we all agreed that it was a gap that was, with the intention of Ruggie's work from the UN level, to be filled and to provide some guidance to companies as to how best to respect human rights in that regard. But that indicates that we're not at an end point in this process. Industry is still digesting the first part of Ruggie's report. It is trying to improve its complaint mechanisms itself and is waiting for the next stage in Ruggie's report.

In our view, Bill C-300 misses this dynamic. The bill makes no distinction between trivial and substantive compliance issues. They both presumably result in CPP selling off whatever shares it may have with those corporations and the loss of EDC financing.

The bill creates a huge disincentive to acquiring foreign assets by Canadian resource companies, because if there are problems they are inheriting as a result of past actions of the previous owner, they may well have no time to bring that performance up to standard should a complaint be launched and within eight months of some determination that results in sanctions.

So we see here damage without a lot of balancing aspects to the bill, and the reputational damage can be serious. Yet there are no appeal mechanisms in the bill, and we're not even sure what the evidentiary rules will be.

I want to turn to EDC for a moment. EDC support flows through to Canadian service providers. In other words, when Canadian mining companies engage EDC for a loan action, loan agreements, etc., often that money is a direct flow-through to the purchase of Canadian engineering services, service providers of technology, etc. What then does the EDC decision result in? A breach of all those contracts? Once that litigation starts, what company then would, in the future, seek EDC support? How could the supplier rely on it? Who knows whether that breach of the company might be trivial or substantive?

Now just let me talk about Canadian direct investment abroad in the minerals and metals area. Statistics Canada indicated that, at the end of 2008, $66.7 billion had been invested as Canadian direct investment abroad from this sector since 1990, and that was an $11 billion increase from 2007. These numbers are huge relative to official aid flows from Canada and they do much good. They create jobs. They lead to business development, local training, health services improvements, education, improvements in local areas. In our view, this bill puts certainly some of that at risk. So we do have very specific concerns about Bill C-300.

I want to tell you about CSR. We do recognize the voluntary challenges there, absolutely. We have not been idle in the field of CSR, and we have had a program in place for quite some time, albeit mainly with a domestic focus. We have always had the international aspect in mind, but it was getting our own house in order first and then turning attention to some of the international issues. At the end of the day, industry does recognize that you can't have one operating ethic in Canada and a different operating ethic outside of Canada.

TSM is a condition of membership. I'll just say what other people say about TSM. Five Winds is a major international organization that specializes in sustainable development processes. It initially did a contract for the Canadian government to look at a number of CSR processes across the retail council, forest products, etc. We were not included in that, so we asked them to include us. Our results are that we exceed best practice and we're consistent with best practice in all areas. In other words, we have no elements that are below best practice.

The Canadian Business for Social Responsibility recently profiled 11 different frameworks, ranging from the global compact to the OECD guidelines to the global reporting initiative to the IFC performance standards. CBSR--and this was done without our knowledge--ranked TSM the highest, as “more prescriptive, more guidance and stricter compliance provisions”. We are committed to continued evolution of this program with our members, just as we are committed to work with governments, the NGO community and others, to improve performance in all these areas, particularly environmental and human rights, social matters related to benefits to local communities, etc.

At the end of the day, though, we do respect the sovereign right of governments as the best place to make the difficult choices in responding to societal needs while managing the development of resources. We endorse the development of a policy framework that would enable improved industry performance and provide a capacity building for developing countries. We endorse a policy approach that is directed towards finding solutions through mediation, discussion, fact-finding, and problem solving. This was described in the CSR round table report, in which we think the counsellor position takes us some way along that line, as did the national contact point, in its first work.

Thank you.

[The Chair, Conservative, Kevin Sorenson]

I call the meeting back to order. In the second hour we have Mr. Gordon Peeling, president and chief executive officer of the Mining Association of Canada. We're certainly pleased to have him here.

We have designated a few minutes for committee business. My understanding is that the one motion that was presented just this past week has been withdrawn. Is there still a pressing need to move into committee business? We have a very short order in that we have to pass a motion in our committee to extend the meetings on the bill that we're debating this morning, Bill C-300, for 30 days. That passed our steering committee and it just calls upon this committee to have the motion. We'll do this later on. Maybe we'll go to 10:50 or whatever; we'll try to keep it to 45 minutes.

Mr. Peeling, welcome. I noted that you were present for part of the discussion in the first hour. We thank you for coming today. You can have approximately ten minutes as an introduction and then field some questions.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Thank you to all the witnesses for being here.

One of the concerns I have is that in your testimony you have not told us specifically which clauses and specifically how Bill C-300 would help. I would suggest, particularly to Ms. Coumans, who is going to be giving us a written submission, which might be very helpful to come from MiningWatch Canada, particularly in light of the testimony that will likely follow, that this committee—and I would say this to all other future witnesses—is probably best served if we have specific references to specific clauses and specifically how it would achieve the objectives that the bill is intended for.

Mr. Janda, I was interested in your testimony about funding sources being stopped.

I need to understand, are both of your organizations at all familiar with the Equator Principles?

For the benefit of the committee, the Export Development Canada signed on to the Equator Principles in 2007. They require financial institutions to sign on and to rank projects by social and environmental risk. They also require borrowers to submit social and environmental assessments and detailed plans for ensuring that risks are mitigated and results are measured. EDC, in this case, will not be providing loans to projects if the borrower cannot comply with these policies.

It seems to me that these are the steps that are called for in Bill C-300, yet as we see, in 2007, the EDC signed on to those principles. So why in the world do we need Bill C-300?

[Richard Janda]

Firstly, Bill C-300 has not simply come out of nowhere. It is an attempt to implement the round table recommendations.

As I suspect the next witness will tell you, what frightens industry is the prospect of moving straightaway from a voluntary approach to a binding approach. They are afraid that the government will step in and legislate.

You need to look carefully at the exact wording of the round table recommendations. The message is clear: it is not simply that there should be a mechanism to allow for funding to be withdrawn when certain principles are violated, but, rather, that in such instances, funding must be withdrawn.

How can that be implemented? We need a framework. It appears that industry would rather see a discretionary approach, a non-transparent process. However, my interpretation of the round table report is that a framework is required to implement this recommendation. The bill does not aim high: it speaks of a complaint process and the implementation of guidelines for federal government agencies. It is, nonetheless, in keeping with the round table recommendations, and industry is mistaken to say otherwise.

Allow me to make one final comment. As an observer, and as a citizen, I am deeply troubled to see industry participate in an extensive consultation process, to see it support the outcome, but then, at the first opportunity, to flip-flop and implement only what suits it, simply discarding the rest.

Why are groups such as Ms. Coumans outraged? Because they get involved in these round tables in good faith, they agree to compromises, and then industry simply walks away saying too bad! It is verging on scandalous.

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

People from a whole range of backgrounds were involved in these round tables: representatives from NGOs; experts; and the mining and extractive industry. A huge consultation. Consensus was reached on the recommendations contained in the report that was tabled.

To my mind, Bill C-300 constitutes a step in the right direction, a sound idea from a member of Parliament. As parliamentarians, we are empowered to table a private members' bill in an effort to put pressure on the government.

However, Ms. Coumans, you have already pointed out that the bill does not have enough teeth. Is it sufficiently in keeping with the recommendations included in the report issued by the round table?

[Richard Janda, Professor, McGill University, Canadian Network on Corporate Accountability]

Thank you very much, Mr. Chair and members of Parliament.

It's an honour to participate in these deliberations with you on a matter of considerable importance.

With your permission, I would like to begin by acknowledging the work done on this report by my friend and colleague, Charles Gonthier, retired Justice of the Supreme Court. Sadly, Charles has now passed away, but I want you to know that when I asked him to collaborate on the report we have prepared for your committee he firmly committed to doing so, even though he was already in hospital. He wanted to be involved as this work goes to the heart of one of his most cherished principles. He believed that, in addition to the freedom to access markets and the need to ensure equality between all members, a sense of fraternity is also required. Our responsibility to others was Charles Gonthier's pet subject. He saw corporate social responsibility as an example of this sense of fraternity. I would therefore like to dedicate this report to the memory of Charles Gonthier.

The report you have received was prepared for the Canadian Network on Corporate Accountability, which is a group of 20 NGOs that cuts across faith-based groups, human rights groups, and unions. It represents a cross-section of civil society. The work we did, though, was independent, and it was conducted through the Centre for International Sustainable Development Law, for which I am a researcher. I want to underscore that although I am the signatory on the report, it was work that was done with a number of jurists, and the findings we came to unequivocally were considered after a period of some long deliberation.

We were asked to look at what we were told were the most serious concerns being raised from both a legal standpoint and from the point of view of fundamental policy concerns about the bill. We were able to conclude, with no equivocation, that the bill was sound and that it addressed, in a measured way, all the dimensions of the national round tables on CSR strategy that remain to be implemented.

I would like only to underscore four elements of the report. And I welcome your questions about specific further features of it. I think that these are the four ideas that have been most critical to your deliberations on Bill C-300.

First, the question can be put as follows: is there undue prejudice to Canadian companies from this measure that will subject them uniquely to a process of oversight that other companies don't share, either in Canada or abroad? The answer we came to on that question is straightforward. Far from there being prejudice to Canadian companies, we believe there is a very close connection between helping to build the reputation of Canadian companies abroad with respect to their human rights and environmental practices and in fact giving them competitive advantage. I must say that this is something about which I feel quite strongly, because it is the result of some years of research that led to a book I co-authored with Michael Kerr and Chip Pitts on corporate social responsibility.

The drivers of corporate social responsibility are not simply the NGO groups, like those represented by Catherine, that seek to hold corporations accountable. It's also the fact that all the dimensions of Bill C-300 are risk factors for corporations that affect their own picture as investment vehicles. So the ability of this legislation to provide something like distant early warning of risks Canadian companies face is a way of building a reputation for Canadian companies abroad and their competitive advantage.

The second main question that has been raised is related to the first one, and that is whether Canadian companies will face high transaction costs. Will they face an awful lot of trouble associated with the complaints procedure? Will they be subject to tiresome and costly attacks on their reputations? Indeed, will that lead them to perhaps leave the country rather than stay in the country if they are facing such transaction costs? Will they pick up their stakes and move elsewhere? The answer we came to on that question was equally clear but somewhat nuanced, and it is as follows: no, that should not be the result of this legislation. In fact, if anything, the legislation will provide a context within which credible and legitimate airing of public concerns can take place, bearing in mind that Canadian mining companies are already subject to precisely this kind of scrutiny from abroad.

There is such a thing as a court of public opinion internationally. As you know, that court of public opinion internationally has translated into, for example, the Norwegian pension fund withdrawing its investments from Barrick Gold. If there's a credible, transparent, and legitimate process that allows Canadian companies to address concerns, if anything it should allow them to cut their costs and diminish the possible negative impacts of the assessments that are taking place in any event. However, and this is the nuance, it is possible that some companies are unwilling to invest in the process of addressing public concerns. They may indeed seek to escape from scrutiny by moving to other jurisdictions. The question, I suppose, for members of Parliament is, should legislation be framed to address the worst performers? That's the group that would be an issue.

I'll touch briefly upon two final questions. One is extraterritoriality and the other is the problem of sanction.

In simple terms, this is not extraterritorial legislation. It is legislation that applies to the instrumentalities of the Canadian government. It's a matter of keeping the Canadian government itself accountable for the use of public moneys through the Export Development Corporation and the Canada Pension Plan. Yes, there is the ability to gather information abroad, but that is something the Canadian government does all the time through its embassies and consulates. We see no dimension of this that extends past the point of international law. It's something we can get into in greater detail.

Finally, on the question of sanctions, is this punitive legislation? Is this legislation that would subject Canadian companies to the stick rather than the carrot and as a consequence face them with an inability to improve their performance? The answer to that is no. This legislation has to be seen in the context of all the measures that are being taken by the Canadian government, including, of course, the measures now announced with respect to the counsellor. We have the carrot in place.

The national round table made clear--and my colleague, Mr. Peeling, who will be speaking later, signed off on that document--that we also needed a way of ensuring that Canadian moneys were being spent responsibly and accountably when Canadian companies were failing to act upon the principles and issues. This is not a sanction; this is a matter of finding by ministers, who then turn it over to the Export Development Corporation and the Canada Pension Plan and ask them to implement their standards.

In conclusion, I'm proud as a Canadian citizen that Parliament is considering this legislation. We have an opportunity here to make a real contribution to international discussion. Following this discussion, I was contacted yesterday by a group from Argentina who have been following this debate. I know that groups from around the world are following this debate. The eyes of the world, in a manner of speaking, are on this committee. I very much hope that you will see your way clear to making this legislation a reality.

[Catherine Coumans]

Let me first highlight that I believe we have come to an important consensus with industry. The Prospectors and Developers Association of Canada notes that many countries lack the governance and institutional capacity to enforce legislation and to ensure a stable regulatory regime. However, industry's response to this governance gap is to focus on voluntary CSR measures to be taken by corporations, supported by host country capacity-building to be undertaken by northern hemisphere countries like Canada.

Remarkably, this line of argument appears to support a position that extractive industries should remain exempt from effective legal and regulatory mechanisms, at least until the Government of Canada and other northern hemisphere countries have created sufficient capacity to regulate and provide legal accountability in all weak governance and conflict zones around the world where PDAC and its members choose to operate.

Voluntary CSR approaches by extractive companies, while necessary, are not sufficient to ensure respect of human rights and environments by corporations. They do not, for example, deal with the problem of laggards, companies that choose not to apply CSR standards, or apply them inconsistently and not uniformly across all operations. Another key problem with existing CSR codes and instruments is that they are all weak on human rights, referencing only a subset of human rights, if at all. Another key deficit of voluntary CSR instruments, and this is identified by Ruggie, the UN special representative, is that no CSR instruments have effective accountability mechanisms, particularly with respect to sanction and remedy.

If we can agree that there is a governance gap in many host countries in which our corporations operate, and that voluntary CSR measures, while necessary, are not sufficient, and if we recognize that there is no international regulatory system that can deal with corporate abuses in weak governance zones, nor is there an international legal system to which aggrieved parties can turn, then we must come to the conclusion that it is only the home state of multinationals, home states such as Canada, that can address the governance gap identified by Ruggie.

I'll leave it at that. I would say this conclusion is a conclusion this committee came to in 2005 with the report that was issued at that time. It's also a conclusion that 137 members of Parliament must have come to when they voted in favour of Bill C-300 in the House of Commons on April 22.

Thank you.

[Catherine Coumans, Research Coordinator and Asia Pacific Program, MiningWatch Canada]

Thank you, Mr. Chair, and my thanks to the members of this committee for providing us this opportunity to speak to you today.

In 2008, John Ruggie, the United Nations special representative on the issue of human rights and transnational corporations and other business enterprises, concluded his first two-year mandate by stating, and I am quoting:

The root cause of the business and human rights predicament today lies in the governance gaps created by globalization—between the scope and the impact of economic forces and actors and the capacity of societies to manage their adverse consequences.

These governance gaps provide the permissive environment for wrongful acts by companies of all kinds, without adequate sanctioning or reparation. How to narrow and ultimately bridge the gaps in relation to human rights is our fundamental challenge.

While the high-profile work of Special Representative Ruggie is garnering a lot of international attention, it is appropriate in this context to remember that Ruggie's conclusions of 2008 had already been recognized in the groundbreaking and unanimously endorsed 14th report of this committee in 2005. I am now quoting from this committee's report of 2005:

These hearings have underlined the fact that mining activities in some developing countries have had adverse effects on local host communities, especially where regulations governing the mining sector and its impacts on the economic and social well-being of employees and local residents, as well as on the environment, are weak or non-existent, or where they are not enforced.

That was the SCIFAIT report of 2005, which is now being echoed by John Ruggie, special representative, in 2008.

I had the privilege of testifying before the subcommittee in 2005, and I am encouraged to see some familiar faces of members of Parliament from that committee around this table today.

I would like to start my presentation by putting a human face on the problem that Ruggie identifies and then to explain why MiningWatch Canada believes that Bill C-300 is an appropriate response.

I was first confronted with the environmental devastation and the human rights and health consequences that can result from irresponsible mining practices when I arrived on the small Philippine island of Marinduque in 1988 to start my Ph.D. fieldwork in religious anthropology. I had never seen a mine or spent one day of my life thinking about the potential consequences of mining.

It was sheer coincidence that a huge copper mine in the central hills of this small island province was owned and operated by a Canadian company, but this fact did not immediately persuade me that I had any role to play in the struggle that was taking place on this small island to protect a critical marine environment, the food security of 12 fishing villages that relied on coral reefs for their food, and the health of local children who were exposed to metals in mine waste being dumped into Calancan Bay.

I lived in one of those fishing villages for over a year and came to understand, as I carried on with my research project, the devastating impact the mine was having on the lives of the people of Calancan Bay. It wasn't until years later that a health study conducted by the Philippine department of health confirmed that the children that I had been surrounded with during my fieldwork had unacceptable levels of lead, cadmium, copper, and zinc in their blood. The Philippine government declared a state of emergency in Calancan Bay for health reasons. This was in 1997.

In 1993, the same year that I completed my Ph.D. in Canada, an earthen dam burst at the same mine site and tons of highly acidic and metal-rich mine waste flooded down the Mogpog River. Villages were inundated with mine waste. Houses and livestock were swept away and two young children of Marites Tagle died. They were smothered by the mine waste.

The Canadian managers of the mine said that the mine bore no legal responsibility for the disaster as it was an act of God, brought on by a typhoon. Mrs. Tagle reportedly received, for compassionate reasons, 1,000 pesos from the mine for each of her two dead children, which in Canadian dollars is about $23.

The Mogpog River has never recovered. It is heavily silted by mine waste that flows through the dam. Studies have shown that it is acidic and laden with toxic metals.

This past April I was back in Marinduque after 20 years. I helped villagers fill rice bags with waste from the river in an attempt to lower the level of the river and stop the regular flooding of nearby villages with contaminated water.

In 1996 I was at Cornell University doing post-doctoral research when yet another mine waste impoundment in the hills of Marinduque burst. Another river, this time the Boac River, filled with mine tailings from the mountains to the sea.

This third disaster on this small Philippine island finally closed down the mine. But now, more than 10 years later, the tailings are still piled in sandbags along the banks of the Boac River. Canadian engineers Klohn Crippen have warned that further disasters are likely as the dams and structures of the deserted and unrehabilitated mine site in the mountains crumble away.

I've told you this story because it contains elements of many of the stories regarding Canadian mining companies operating overseas that we are dealing with daily at MiningWatch Canada.

MiningWatch started in 1999, so I've now worked at MiningWatch for 10 years. When I first started at MiningWatch, I did not expect, as an employee of that organization--I was the original employee--that I would see cases as bad as the one that set me on this path in my life. But in fact we are dealing with these same situations literally all the time, from all over the world--irresponsible mine practices, environmental degradation, human rights abuses, health impacts, and the complicity of corrupt, inept, or even dictatorial governments.

Philippine dictator Ferdinand Marcos turned out, when he was deposed, to have been a secret partner in that Marinduque mine that was run and owned by a Canadian company. He had a 50% share in that mine.

The other aspect of this story that is common to others that we deal with at MiningWatch Canada is the lack of recourse for the people who have been damaged--the lack of, as Ruggie put it, sanctioning or reparation.

In this case, a lawsuit was launched by the Province of Marinduque in 2005 against Placer Dome, which was the mining company, now taken over by Barrick Gold. This lawsuit is slowly making its way through the courts. It is a potentially precedent-setting case, because the court it is making its way through is in the United States. Just last week a U.S. judge ruled in favour of the province's suit, and sent it to Nevada state court to proceed.

Three similar suits against the company in the Philippines, one dating back to 1996 when the final spill happened, continue to languish and are going nowhere.

Before turning to the merits of Bill C-300, I want to quickly touch on just a few of the mining cases we are engaged in at MiningWatch Canada.

My final submission to this committee on this brief will provide further detail and references for these cases. I only heard that I was presenting for you on Monday, so I haven't had a chance to finalize my brief. I will just run quickly through this, in the interest of time, to give you a sense of how broad this is.

We are engaged in a number of cases right now. The first is in Ecuador. In March of this year, Toronto-based law firm Klippensteins filed another potentially precedent-setting case against the Canadian junior called Copper Mesa Mining Corporation and against the Toronto Stock Exchange on behalf of Ecuadorian villagers who allege that the company's paramilitary agents have resorted to physical assaults, death threats, and other human rights abuses to break opposition to the company's operations.

This committee in fact heard from one of those villagers, Carlos Zorrilla, from the community of Intag, I think a year or two ago.

The second case is in Tanzania. An independent scientific report released just this week supports reports that we have been receiving from communities near the North Mara gold mine regarding serious human health impacts, and even deaths, related to acid mine drainage and heavy metal and cyanide leakage from the mine into the surrounding environment, and particularly into the nearby rivers.

I won't quote from the report, but I have a copy with me. I can do that later.

The third is in Papua New Guinea. This year Norway's government pension fund announced that it has dropped its shares in Canada's Barrick Gold as a result of the Porgera Joint Venture's mine waste disposal into an 800-kilometre-long Strickland River system.

This is a mine that literally dumps its tailings and its waste directly into a huge tropical river system, one of the largest in the world. That waste goes all the way down, 800 kilometres, to the sea.

At the same mine there have been allegations of killings of civilians by the Porgera mine security guards, and these allegations became the subject of a Papua New Guinea government inquiry in 2005 and 2006, but the final report of that inquiry was never released. In 2005 the then-owner of the mine, Placer Dome, did admit in a newspaper article to eight deaths at the hands of its security guards.

Honduras. Tests carried out by an organization in the United Kingdom and Development and Peace here in Canada have shown evidence of dangerous levels of arsenic, cyanide, and other heavy metals in water sources flowing close to or from within the mine boundary. In 2007 the Honduras Secretariat of Natural Resources and Environment fined Goldcorp, a Canadian company, one million lempiras, equivalent in value to about $26,000 Canadian at the time, for pollution and damage to the environment.

[The Chair, Conservative, Kevin Sorenson]

Good morning, everyone. This is Thursday, October 8, 2009. The Foreign Affairs and International Development Committee is meeting to discuss and hear testimony on Bill C-300, An Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries.

We're very pleased to have with us this morning Ms. Catherine Coumans, the research coordinator for the Asia-Pacific program at MiningWatch Canada. Thank you for coming, Ms. Coumans. We also have Richard Janda, a professor at McGill University. He is accompanied by research assistant Rachel Doran. We thank all three of you for being here today and we look forward to your comments.

I'm not certain if you've had the privilege of appearing before committee before, but we look forward to your opening comments. Try to keep them within a ten minute range, and then we'll be able to have more time for questions.

I would invite Ms. Coumans to open.

Canada-Colombia Free Trade Agreement Implementation Act

[Larry Bagnell, Liberal, Yukon, YT]

Madam Speaker, the member, in his speech, complained a lot about Bill C-300. Unfortunately, his government was basically the author of that bill by not reacting to the major exercise he talked about, which was corporate social responsibility.

The Government of Canada-sponsored round table with industry and NGOs came up with solutions and recommendations. This was quite a rare situation where everyone agreed to that extent and came up with some good solutions, yet the government did not react. It sat on it for months and months, even though everyone agreed. Even though the government was a sponsor in part, it did not react.

What the member was complaining about was unfortunately caused by his own government's inaction. Even after Bill C-300, it came up with an inadequate response. It was the government's inaction that inspired Bill C-300 and also the motion by the member for Pierrefonds—Dollard to take action on something that industry and NGOs had agreed upon.

[Deepak Obhrai, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Madam Speaker, it is with great pleasure that I speak to the issue of corporate social responsibility today as it relates to the Canada-Colombia free trade agreement.

I agree completely with the Liberal foreign affairs critic when he says that there are those of us who support this agreement. I also agree with his statement that NDP members are talking nonsense when they say that by supporting this agreement we are condoning murder or human rights abuses or the violence that is taking place in Colombia. That is totally misleading and is fearmongering by the NDP, done by the NDP to support the position they always take, which is against this free trade agreement.

Why do they not just say they oppose it because of their ideology? To say that this is directly related to violence is absolutely nonsense. I want to make it very clear that is not the position here.

Today I am standing up to talk about the corporate social responsibility that Canadian companies undergo when they go overseas to do business. The free trade agreement with Colombia would allow a lot of Canadian companies to go there, so social corporate responsibility becomes a key element in the operation of Canadian companies and what Canadians have come to accept.

The Government of Canada undertook a very lengthy in-depth analysis of corporate social responsibility with stakeholders in Canada, with all those involved in corporate social responsibilities, including NGOs, government people, and industrial people. We came up with a voluntary code of conduct which the government has now provided to Parliament in response. This extensive corporate social responsibility analysis done by the Government of Canada and all Canadian stakeholders has laid the foundation for what is expected of Canadian companies when they are in other countries.

I was in Tanzania in April of this year as well as in Zambia where Canadian companies are working. I had the pleasure of talking to the companies to see what they were doing as part of their corporate social responsibility. I was very impressed at the amount of effort Canadian companies are putting toward corporate social responsibilities such as providing fresh water, schools, and little dispensaries which the local government cannot provide. These Canadian companies are providing these basic services on a voluntary basis and giving hope to many.

Canadians should be proud of many of these companies. The majority of companies that operate overseas do a fantastic job with respect to corporate social responsibility. That is why Canadian companies and Canadians in general have such a high reputation around the world.

This is something the NDP should go and see. Those members would never go to countries where progress has taken place. They will always choose countries that are mired in violence and come forward with their ideology to oppose the free trade agreement.

As a result of the in-depth consultation that took place, the Government of Canada will soon be creating a new consular office to help resolve any issue that could arise between Canadian companies and the communities in which they operate. An announcement will be made very shortly. This is one way of ensuring that everyone will voluntarily comply with what is expected, which has come out of the round table conference. The government has taken this strong, positive step to ensure that all stakeholders adhere to the recommendations regarding corporate social responsibility.

The Government of Canada is also going to support a new centre of excellence. This centre of excellence should be outside of the government to develop high quality tools for corporate social responsibility to see what our best practice is. This is a joint venture with the stakeholders. These are some of the positive steps that this government is taking arising out of the consultation process, which is the right way to do things when we talk about this.

This brings me to the question of looking at what the government's approach has been in talking to stakeholders. We have a Liberal member's private member's bill, Bill C-300, which is now before the committee and which has been hastily prepared without stakeholders' input into it. It was badly drafted and would penalize Canadian companies doing business overseas. The bill is one of those bills that has been emotionally created without input from company stakeholders. It just follows an emotional outburst.

This is not how a minority Parliament should work. I would be very much interested to hear the stance of the Liberal trade critic, whose speech I read, and the Liberal foreign affairs critic, who just spoke about how free trade agreements have a potential of helping in this country, on Bill C-300. This is contrary to what they have been talking about. I hope that common sense prevails on the other side and that when it comes before the committee they will kill this bill. This bill has the potential of damaging the great reputations of people doing business overseas.

The intention is good. We all want corporate social responsibility to take place, but the way it was brought forward, the way it was drafted and the way it has lacked consultations and been coached is just using the minority status to push through something that would have serious consequences for Canadian companies, NGOs and everybody else. There is a small minority of NGOs who are supporting this, but I think that overall, under this major exercise that the Government of Canada undertook last year on corporate social responsibility, that is the way the government should be working. That is how we should work on this thing.

I am very happy to state that the Government of Canada is taking corporate social responsibility very seriously. As I have just said, we will be making announcements about our new councillor as well as the centre for excellence. It must be recognized that the free trade agreement, with its side agreements on labour as well as the environment and other issues, will ensure that there is a rules-based system in our dealings with Colombia.

That is what every Canadian wants because that would ensure strong ties between Canada and Colombia. At the same time, we can engage with Colombia on issues of human rights and others.