Thank you.
I've been asked to comment more broadly on Bill C-300, so I will not be responding directly to Mr. Shrake's remarks.
I was a member of the national roundtables on corporate social responsibility and the Canadian extractive industry in developing countries. I was also a member of the Harker mission in 1999 that went to Sudan to investigate allegations with respect to Talisman Energy in that country.
What I want to say today about Bill C-300 is fairly straightforward. Let me begin with this point. I think we would all agree that the Canadian government has a legitimate interest in how its money is spent--that is to say, how its financial support, or investments, or tax incentives are used by those who are the recipients. This is true whether that money goes to support domestic or international projects, or whether the recipient of government funding is a non-governmental organization that is part of civil society or a corporation.
In other words, the Government of Canada, I hope you will all agree, has an interest in accountability for how its money is spent, and Bill C-300, in short, is nothing more or less than a mechanism for accountability. That is to say, the government supplies export credit and investment and undertakes promotional activities for Canadian corporations in their activities abroad. Bill C-300 is, I think, directed at ensuring that the financial support that the government provides is not spent on conduct that would run contrary to Canada's public policy commitments or international human rights obligations.
It seems to me that in the government expenditure of funds for overseas projects, whether that's through CIDA or the IDRC, there too the government has a legitimate interest in ensuring that the money it provides is used for purposes that are consistent with Canada's own obligations and its public policy with respect to, say, international development in the case of CIDA.
So, really, Bill C-300 is no more or less than simply a mechanism for holding those recipients of government financing—corporations—accountable for how they use government money, and a way of saying, “We, the government, the taxpayers of Canada, don't want to spend our money on activities or conduct that we think are inimical to Canadian public policy or our international human rights obligations.”
I hope that by saying that, I've made one point very clear: in no way is this bill about extraterritoriality, any more than Canada acts extraterritorially in deciding whether CIDA is going to fund some project in another country. We don't say that's an act of extraterritorial regulation, and neither is this; this is about how the government is going to spend its money. No company, no corporation, has a legal entitlement to that money, and there's nothing wrong with holding it accountable for how that money is spent.
Now, what does this bill suggest or indicate will be the criteria for accountability? Well, it indicates a couple of codes of conduct, most notably, I think, the voluntary principles on security and human rights and the International Finance Corporation's policy on social and environmental sustainability, performance standards on social and environmental sustainability, etc.
These are codes of conduct that many companies have voluntarily signed on to--though not all companies. These are also standards or principles that the International Finance Corporation, which is the commercial branch of the World Bank, uses to decide who it's going to lend money to. These principles also form part of what are called the “equator principles”, which private lending banks around the world have used as criteria for deciding to whom they will lend money.
So for the Canadian government to bring these principles to bear in assessing accountability for recipients of government support is not to stray far beyond and is not to extend its reach beyond what we already see in play among financial actors worldwide.
These principles are evidently not so vague that international banks can't apply them or that the companies that want loans from these international banks can't meet them. They're not so vague or general or devoid of meaning that companies are unwilling to sign on to them for fear that they are signing on to principles they cannot understand or operationalize.
This is a way to bring those same principles and standards of accountability to bear on the forms of government support that Canada provides to companies. In so doing, I think Canada is simply acting in a way that is consistent with what the special representative of the Secretary General, John Ruggie, proposes as a good way to ensure corporate social responsibility worldwide. It encourages individual states to use instruments within their jurisdiction and authority. So it's consistent internationally. It's not inconsistent with what host states can do or will do. In the end, then, it is just a mechanism for Canada to take part in the global trend toward ensuring accountability for how transnational corporations engage in their activities in various states.
I think that you have already heard my colleague Penelope Simons' response to a concern that this form of accountability will somehow drive Canadian companies to incorporate elsewhere, that it will encourage corporate flight, so I won't reiterate what she said. I will only say that all over the world countries are adopting various mechanisms for holding their corporations accountable for their activities abroad. They aren't identical to what Bill C-300 does; some are much more interventionist. The United States, for example, has in place a whole system of tort liability.
This statute in no way creates a new ground of civil liability. It's not as if anybody can use this statute to go and sue a Canadian company in a Canadian court. Nor does it create any kind of criminal liability, an even more significant form of regulation. It doesn't do any of those things.
Some people, some organizations, take the position that perhaps Canada should await the outcome of special representative John Ruggie's report sometime in 2011 before taking any steps. I would simply point out that John Ruggie has in fact come out in favour of home state regulation. Some people take the position that if states are the ones to regulate it should be the host states and not the home states of corporations that do the regulating.
There are three responses to this. First, not all host states have the rule of law infrastructure to effectively regulate themselves. Second, they do not necessarily oppose or find a conflict between a mechanism like this and the actions they may take. These are not substitutes; they may be complementary. Third, it's important to realize that a claim that companies will flee Canada if they are held accountable in the way that Bill C-300 proposes is in a sense a threat. It's a mechanism of intimidation that companies use. If you regulate in this way, they say, firms will leave. Canada's a pretty strong country. It's a fairly financially secure country. If those kinds of mechanisms of intimidation are used against a country like Canada, imagine what corporations are saying to the host states, which are weaker, less able to regulate, and more desperate for investment. They might ask a host state to sign a contract that exempts them from their national regulation. They might demand that a foreign government sign an agreement not to pursue disputes against them in their national courts.
I'd encourage members of the committee to be mindful of these strategies of intimidation that are used to discourage home state regulation. If your view is that it is appropriate for the host state to regulate, you should know that they, too, are being subjected to similar kinds of challenges and they are even less able than a country like Canada to deal with them effectively.
Thank you.
