Bill C-474 (Historical)

Transparency of Payments Made by Mining, Oil and Gas Corporations to Foreign Governments Act

An Act respecting the promotion of financial transparency, improved accountability and long-term economic sustainability through the public reporting of payments made by mining, oil and gas corporations to foreign governments

This enactment requires mining, oil and gas corporations to submit annual transparency reports that disclose all payments provided by them or their subsidiaries to a foreign government for the purpose of furthering mining, oil or gas industry activities. It also makes it an offence to fail to comply with this requirement and establishes a penalty for such contravention.

Transparency of Payments Made by Mining, Oil and Gas Corporations to Foreign Governments Act

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

moved that Bill C-474, an act respecting the promotion of financial transparency, improved accountability and long-term economic sustainability through the public reporting of payments made by mining, oil and gas corporations to foreign governments, be read the second time and referred to a committee.

Mr. Speaker, I thank my hon. colleague from Winnipeg North for being the seconder to this bill.

It appears we are at the end of a parliamentary week and this has indeed been a week about corruption, I am afraid. I wish it were not so, but it is.

Ironically, today, the government introduced Bill S-14, which is a bill about corruption and we had quite a number of interventions on that bill. Then question period followed and that, too, was, regrettably, about carryings-on about corruption, bribery and things of that nature. Then we were supposed to proceed with Bill S-14 after question period, but the government switched off that bill.

However, my colleague from the NDP raised the issue of the report of the foreign affairs committee where, in fact, it was also a discussion in some manner or other about the use and abuse of aid money in the extractive sectors.

Here we are, at the end of our parliamentary week, talking about bill C-474, which I have suggested be called the “sunshine bill”. The reason we call it the sunshine bill is that sunshine is light on, how shall we say, murky practices. It is light on goings-on that people only suspect.

However, it also has another aspect. Sunshine also has the aspect of killing bacteria. In some respects when we have legislation such as the sunshine bill, I would suggest it would not only shed light on somewhat murky and dubious practices, but it would also kill off some of those murky and dubious practices.

The bill is, as far as I have been able to make it within our legislative framework, a mirror image of the Cardin-Lugar amendment to the Dodd-Frank bill.

Members will recall that in 2008-09 the world went through a pretty significant financial crisis. The major legislative response by the United States was the Dodd-Frank bill. In the Dodd-Frank bill was an amendment made by Senators Cardin and Lugar which said, in effect, that an extractive company operating in a foreign jurisdiction must, within 180 days of its fiscal year end, produce an audited statement to be filed with the Securities Exchange Commission, which discloses all payments it has made in the course of its previous fiscal year, those payments being taxes, royalties, dividends, licence fees, production entitlements, bonuses, provision of infrastructure and other in-kind payments and a variety of other payments that would be appropriate to disclosure.

Insofar as I have been able to make this bill as mirror image as our American friends have done, I have done so.

In the United States, the sanction for failing to file will be delisting from U.S. stock exchanges. Therefore, we can imagine that the Americans are very serious about corruption. Failure to comply means that a company will be delisted from, primarily, the New York Exchange. Its stock will be worth zero. The company will be functus. That is how serious the Americans are about corruption in companies in which it has administrative jurisdiction.

We do not have a national securities regulator. That case was decided about a year ago. I actually applaud the government's efforts to try to create a national securities regulator. Our securities regulation in the country is a joke. There are all kinds of little silos doing various different things. Therefore, I applaud the government's efforts, but those efforts failed. As a consequence, we had to rejig the sanction to be a fine sanction.

Failure to file with the government in a similar fashion as the Cardin-Lugar amendment would, in this instance, attract a fine rather than a delisting from a U.S. stock exchange.

I know the Americans are extremely keen on this legislation. In 2011 or 2012, I am not quite sure in which was the meeting, President Obama raised this matter with his G7 partners. All the partners at the G7 wanted each nation to commit to legislation similar to the Cardin-Lugar amendment. The only nation that resisted was Canada, which is quite regrettable because we are the world centre for the extractive industry. More transactions take place on the TSX than pretty well anywhere else in the world. This is the centre of the world for mine financing, law firms, accounting and geology. We are the best in the world in mining. That is an extremely important industry to us and our nation's well-being. Therefore, we should also be the leaders in an international regulatory environment for the benefit of our nation and the companies that call Canada home. It is good for Canada, for the industry and it is good for our national reputation.

Unfortunately, Canadians are fed up of reading in their national newspapers and other media about various companies that find themselves on the wrong side of bribery allegations, the latest example being SNC-Lavalin, which is by anyone's standard a world-class engineering firm. However, because of bribery convictions in Bangladesh, it has been barred from competing in world bank contracts for the next 10 years. That basically takes SNC-Lavalin, and essentially Canada, out from competing for engineering projects. Officials have been fired and the stock has been hammered.

One can go through quite a number of Canadian and Canadian-based companies such as: the Calgary-based Griffiths engineering company, which recently paid a $10 million fine for an inappropriate financial relationship with the wife of the Chad's former ambassador; Niko Resources another $9 million fine in 2011 for again an inappropriate relationship with a former energy minister in Bangladesh; and Blackfire Exploration Ltd. is having its offices raided by the RCMP.

This is serious stuff. The common pattern is the conviction gets registered, the officials get fired, the stock gets hammered, so there is a bunch of unhappy people and the most unhappy of all are the shareholders. All of us are shareholders in many of these companies because they are all on the TSX and our Canada pension plan has large holdings on many of these companies.

It gets worse than that. Members may or may not have caught an article in The Globe and Mail last year entitled “Canada ranked worst of G7 nations in fighting bribery, corruption”. In the second paragraph it states:

Transparency International, a group that monitors global corruption, put Canada in the lowest category of countries with “little or no enforcement” when it comes to applying bribery standards set out by the [OECD].

Mr. Dent further states that:

—the United States has prosecuted more than 200 companies and individuals, many of them “a veritable who’s who of the corporate world”...

The United States is serious about this kind of corruption and is very serious not only in a legislative fashion but also in a prosecutorial fashion in trying to deal with these allegations and concerns.

The United States, in a comparable period of time, has conducted 227 prosecutions. In a similar period of time, we have conducted two. We are the world centre for mining. Maybe when things go north of the border, we suddenly become a whole lot better than the rest of the world. I suppose we are entitled to believe in our fantasies.

However, the Americans, the British treat and the Europeans treat this very seriously. Unfortunately, the big hole in the legislative fence is right here. This has reputational damage, and it is not only reputation.

I hear my friends chirping over there because they are a little nervous that they have been caught with no legislative response going into the G8 next month.

If Conservatives do not think this is serious to shareholders, if they do not think it is serious to management, if they do not think it is serious to our corporations or our corporate brand, they should think about it in terms of our national reputation.

Positive views of Canada fell most steeply in the United States, Britain and China, according to the BBC World News survey of 20,000 people in 20 countries who were asked if Canada had a mainly positive or negative influence on the world. It is the first time Canada's popularity among its major trading partners has declined since polling from GlobeScan began tracking international sentiment in 2005.

GlobeScan chairman, Doug Miller, said, “the deterioration could hurt Canadian business interests”. He said, “If the conditions persist, it can start to set in more cognitively and become an anchor that weighs down [Canada's] reputation. What countries have found is that it's extremely hard work to regain trust”.

The industry is actually cognizant of this. The industry gets it. Over the last couple of years, I have been meeting quite regularly with industry groups. In many instances they have signed up for EITI, the extractive industries transparency initiative. In many instances they understand that not only is it important that their company have a good reputation, but it is important that their industry have a good reputation and it is important that our nation have a good reputation.

They have conducted on their own, at their own expense, all kinds of seminars, education things and the government has in some respects facilitated some of that discussion with the Vancouver-based organization which is on EITI.

Interestingly, Canada as a nation, unlike other nations like the United States, has not signed on for EITI. We actually cannot hold our own companies to account, even though some of our own companies have voluntarily joined the EITI initiative themselves.

Joe Ringwald, Transparency International Canada representative and an industry representative, said, “It is become important to become a leader in order to gain this reputational advantage”. He also stated that Canada had become a laggard on this industry, that industry in general was taking a favourable tone to this legislation and that there had been a number of industry players who wanted transparency.

The industry, the various other actors, the NGOs and others are stepping up to the plate, but what is really worrisome is that, internationally, we are about to get one more black eye.

At the G8 meeting in June, Prime Minister Cameron wants transparency to be one of the takeaways from that meeting. He wants the rest of the G8 partners to adopt the legislation similar to the Cardin-Lugar amendment. Thus far we are going in with fig leaves.

Bill S-14 is a fig leaf. It is wonderful in so far as getting prosecution, but it is not much good in terms of generating evidence.

I would encourage my colleagues, particularly my colleagues opposite, to support this legislation. This is extremely important to the industry and extremely important for our nation.

[Bob Dechert, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, the great irony here is the legislation the member is complaining about, the legislation that he says is not robust enough to convict Canadian companies responsible for corrupting foreign public officials, is known as the Corruption of Foreign Public Officials Act. It was passed in 1999 by the government the member was a minister in. Now he stands here today and says that there have not been enough prosecutions, not enough investigations under that act. It was actually his party, the government he sat at the cabinet table of, that passed that act and then sat on it for several years. That is the legislation the member is now complaining about.

Our government came forward with Bill S-14. The president of Transparency International, whom the member likes to quote, has said that Transparency International is delighted that the Government of Canada is moving to strengthen the corruption of foreign public officials act, the one that his government passed that is not robust enough to do what he says it should do, in accordance with Canada's international obligation and encourages the government to ensure that the RCMP have the resources necessary to enforce the CFPOA effectively--

[Some hon. members]

Oh, oh!

[The Acting Speaker, Conservative, Barry Devolin]

Order, please. I see that the hon. parliamentary secretary is next on the agenda. He will have the opportunity to conclude his remarks at that point.

The hon. member for Scarborough—Guildwood.

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

Mr. Speaker, it is a nifty technique to make his speech in a question and then come back and make his speech all over again.

The simple issue is that this legislation has been on the books since 1999. He is perfectly correct about that. If it was not being prosecuted then he has had six, seven or eight years now to have done something about it. It is not as if the world has not been asking for Canada to step up to the plate. Conservatives have had the opportunity but they have not. Then to turn around and say now that we have this new legislation, Bill S-14, good, I am great about that, but we are not going to support 494, which is the evidence base that any prosecutor, any police officer is going to be able to use in order to have successful prosecutions. It is useless having legislation if we do not have evidence and we do not have resources and that is what Motion No. 494 does.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, this morning when we were discussing the other bill from the Senate I talked of the need to actually get Canada in the game again. The member talked about some aspects in the bill, about fines versus deregistering on the stock exchange that some have talked about in terms of critique. By and large, I think everyone is on board with this idea. The G8 is coming up and this will be front and centre. The question is will the government be onside with transparency?

I assume my colleague has full support of his own party. Is the government saying it is against this initiative based on merit or is it based on politics? If it is based on politics, how does he see this in light of what is about to happen in the G8, where this is going to be front and centre and something that Prime Minister Cameron is focusing on? I would like to get the member's comments on that.

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

Mr. Speaker, the hon. member asks a perfectly sensible question because we are coming up to the G8. He and I met with the sous-sherpa of Prime Minister Cameron. They are keen to have this kind of legislation. This is the kind of legislation the world needs, the world wants. When the Americans get behind something, that is when we want to be there. We have one foreign policy that frankly is “do not get too far ahead of the Americans and do not get too far behind them”. When they get behind this kind of legislation, they set the world standards and we need to be on that train. This is extremely important for our international reputation.

The final point I would make is these are our main trading partners. Why gratuitously irritate the United States by not accepting legislation such as this, which is largely a mirror image of their own legislation? Why gratuitously irritate the EU while we are negotiating a trade agreement with it when this is something that industry wants, the international community wants and I know Canadians want?

[Bob Dechert, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, I am pleased to rise today to participate in the debate on Bill C-474, the transparency of payments made by mining, oil and gas corporations to foreign governments act.

Let me state at the outset that our government believes that responsible resource governance practices should include transparency to ensure that the extractive sector sustains economic growth and reduces poverty. Without sound management, natural resource exploitation can lead to increased corruption, poor development outcomes, and at times, the fueling of armed conflict or illicit trafficking.

Openness, clarity and accountability are not only good for the local community but enhance investor predictability and stability. This type of responsible conduct is valued by governments, communities and corporations. This is why it is important to have a solution that works for Canadians, a solution that promotes transparency and good governance and one that respects our Constitution and creates a stable investment environment in Canada and abroad.

Canada is a major player in the international extractive sector, which includes oil, mining and natural gas. This is an important sector for the Canadian economy, our government's top priority. It accounts for 1.6 million jobs and nearly 20% of Canada's GDP. In 2011, Canadian resource companies exceeded $128 billion in outward foreign direct investment. We know that Canadian companies operate overall in a responsible manner, not only here in Canada but around the world. They are instrumental in improving the lives of people in the communities in which they operate.

Let me be clear that our government is not opposed to the objectives of this bill. Indeed, we value transparency initiatives that work for all Canadians. Our corporate social responsibility strategy for the Canadian international extractive sector, or CSR strategy, works for Canadians. It builds host country capacity, promotes widely recognized voluntary international guidelines, provides an independent dispute resolution system through the Office of the Extractive Sector Corporate Social Responsibility Counsellor, and last, facilitates a multi-stakeholder group comprising business, government and civil society to provide practical tools and information on CSR.

Our government continues to innovate with new ways to responsibly advance natural resource governance that works for Canadians. In 2011, at the commonwealth summit, the Prime Minister announced a $25 million contribution for the creation of the Canadian Centre for Extractive Industries and Development. This institution will be jointly operated by the University of British Columbia and Simon Fraser University and will advance best practices in extractive sector technology and management to reduce poverty and protect the environment.

In 2007, the Minister of Finance announced Canada's support for the extractive industries transparency initiative, also known as EITI. Today, Canada is the second largest funder of the EITI multi-donor trust fund, as well as the largest funder of the World Bank's Extractive Industries Technical Advisory Facility. We also host the secretariat of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development, which convenes developing countries, training partners and donors to discuss and advance issues of mutual concern, such as international standards and best practices in extractive sector management and governance.

As well, let us not forget the Prime Minister's announcement in 2012 of $15.3 million in new funding for the African Minerals Development Centre. The AMDC will deliver guidance and policy advice to African countries on how to manage their extractive sectors responsibly and sustainably.

These are examples of Canadian solutions that work. They encourage extractive companies to make responsible investments, advance transparency and increase accountability. They reinforce Canada's brand as a global leader in this regard. This is why our government advances solutions that bring results not only here in Canada but around the world.

When it comes to advancing transparency and accountability, it is important to bear in mind that we are not the only player in town. At the upcoming G8, all countries will be working together to address this important issue. It is important that we work with our international allies to ensure that we have a strong transparency regime while ensuring that we have a comprehensive framework that does not unduly burden industry. Industry and civil society are also bringing new Canadian solutions to the forefront. There is work under way by Canadian mining companies and civil society to develop a framework for transparent financial reporting of payments to foreign governments.

In July 2012, the Mining Association of Canada, the Prospectors and Developers Association of Canada, Revenue Watch international and Publish What You Pay Canada, signed a memorandum of understanding to develop a framework for the reporting of Canadian extractive companies' revenues to foreign governments on a country-by-country and project-by-project basis. The objective is to create a single reporting framework that would reduce the reporting burden on companies, as well as to simplify the provision of information to all stakeholders.

This is an example of how Canadian industry is stepping up to encourage financial transparency in foreign markets. It demonstrates a constructive consultation for a workable solution. Unfortunately, Bill C-474 is not a workable solution. Bill C-474 tries to impose reporting features taken from other countries, such as the United States and Europe, with little regard to how our system works.

First, Bill C-474 has been presented without, it seems, consideration of how it would actually work under the Canadian Constitution. Our assessment is that the proposed legislation lacks constitutional validity under Canada's criminal law and our federal trade and commerce regulations. Simply put, Bill C-474 does not work under our Constitution. Second, the bill addresses the extraction of natural resources outside of Canada and does not include a domestic reporting regime. Third, Bill C-474 does not recognize the existing consultation in industry trends. Without effective engagement, the bill could result in an undue burden on the extractive sector. Bill C-474 does not work for our industry.

We believe in an approach that works for Canada, for Canadian companies, and an approach that advances transparency and accountability while also increasing economic prosperity and jobs for hard-working Canadians.

While I am standing, I would like to address an issue that I heard from the opposition members earlier today and that I have heard on an ongoing basis, that somehow Canada's international reputation has been going down. They do not cite any data for that. They cite a favoured member of the chattering classes.

I would like to put forward an article from The Toronto Star dated Thursday, May 23. The headline reads: “Canada's international reputation rising” says survey. It continues:

Canada's reputation is improving overseas according to a new public-opinion survey of respondents in 20 countries. Keep that maple leaf patch on your backpack for at least another year. Canada's reputation is improving overseas, according to a new public-opinion survey of respondents in 20 countries. Fifty-six per cent of about 20,000 respondents view Canada favourably, up from 53 per cent last year. The findings are included in a report by the polling firm GlobeScan [which was released yesterday]. Canada's reputation outside its own borders trails only Germany.

Around the world, Canada is the second most favourably viewed country in the world. That is hard data, done by an internationally recognized polling firm that has been doing this on an ongoing basis for 10 years. I understand that the opposition does not want to bring this to the attention of the Canadian people because it does not go along with what they have been trying to tell people for the last couple of years. The facts are that Canada's reputation in the world is going up not down, and that is because we have a responsible and principled foreign policy.

The pollster who did the survey said Canada's reputation has been trending positively since at least 2010, when 51% of the survey respondents had a favourable opinion of Canada. Those are the facts. I hope the opposition will read The Toronto Star. I am pretty sure my hon. friend from Scarborough—Guildwood is a subscriber. He might want to take a look at that article and perhaps respond to it at another time.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I rise today to speak to what I think is a valid initiative and something we should get behind. We have talked a bit about this already earlier today, when we were talking about the bill from the Senate on corruption.

What is astounding about the current government is that even when there is a good idea, the Conservatives have to put a partisan political veil on it. I am going to diverge from my notes for a second here and respond a bit to the parliamentary secretary's comments.

He said that the government cannot support this bill. Let us remember that this is a private member's bill, so I encourage every member of the Conservative Party to look at this with an independent lens, to look at what the rest of the world is doing and saying, and to remember that it is a private member's bill and that they can vote, hopefully with their conscience, and represent their constituents on this issue. I know many of their constituents would be in favour of this bill.

In fact, when they look at who is supporting this bill and this initiative, they would be hard pressed to find constituents in any of their ridings who would be against it. What are they against? They would be against transparency, which our friends south of the border would be in favour of, and against the whole focus of the upcoming G8 conference.

If the Conservatives have problems with the bill, they should at least bring forward amendments. However, what the Conservatives are saying is that because it does not come from them but from someone else, they will kill it immediately. That is the philosophy of the current government.

To address the parliamentary secretary's comments, he should discern, and we sure do, the difference between the reputation of Canada as a country versus what is happening to our reputation because of the government. It is what happens when we do things as inane as what we did at the United Nations this past fall, where we hectored and lectored. Even though our Prime Minister was in the very city where people were addressing the General Assembly, we instead sent our Minister of Foreign Affairs, who got to speak to a nearly empty hall and hectored and lectored everyone in the hall. Then the Conservatives wonder why we are not getting along with our allies and others and are not on the Security Council.

However, on the bill, it looks to the future and says that when Canadian companies are doing their affairs abroad, they should be entirely transparent in their transactions. That is exactly what we need to see from Canadian companies, and interestingly, Canadian companies want to do it. My colleague and I, as he mentioned, had a meeting with the representative from the U.K. who is looking at organizing the meeting for the G8, and there were also representatives from the mining industry. They were saying they want to get on board with this approach. The government does not. Why? It is because it did not come from the government.

I am going to bring forward to second reading, hopefully in this next year, a bill on conflict minerals. My bill, like the one from my colleague from the Liberal Party, is based on the Dodd–Frank initiative from south of the border. We think it is smart to get in line with some of these initiatives that our allies are getting in line with because it is good for business and good for our reputation abroad to say that as a country we are going to be responsible actors abroad, nothing more and nothing less.

The Conservatives are so stuck in the past that they cannot even look at a good idea and say, “If we have problems with it, let's work it out.” That attitude is astonishing to constituents when they hear that there is a good idea being put in front of Parliament and that in fact it is a private member's initiative. I had thought that certainly members of the Reform Party thought that it was a really good idea to empower private members' initiatives, that they would actually be able to look at it on the basis of the merit of the idea and have a debate, have a vote and get behind it if they thought it was good for the country and for their constituents. However, what we see here and what was demonstrated by the parliamentary secretary is what we see time and time again. Why could there not be amendments? They could go to committee and do it, but no, we do not even get to go past the first reading point.

I hope the Conservatives remember this, because they will know that someday they will not be in government. One day they will have to take a look at how Parliament is functioning, and people will remind them of how they behaved. I hope they remember that, because right now we are seeing good ideas getting shut down. This is a good idea, and it seems that the government will kill it.

I hope those who are on the backbench actually look at the bill, listen to their constituents and say "based on the merits of the idea, I am going to support it" or "I do not agree with it and here is why" and have a debate about it. Just to get in line and do what they are told is fundamentally undermining their role in Parliament.

That is unfortunate, because most constituents within their ridings want to see transparency. They want to see good ideas put forward. In the case the sunshine bill, it is about Canada's reputation. It is about moving forward, not going backward. We see the government avoiding these ideas.

Do we really want to be seen overseas as laggards on transparency? I think not. Do we want to be seen as fighting even the motivation initiatives of industry? I hope not. That is what people will be doing, in essence, when they say no to this bill.

Finally, I will identify and go through some of the people who are behind this: Transparency International Canada; Probe International; Partnership Africa, which is doing good work on the ground in Africa; Africa Files; and the Corporate Knights. As I said, mining umbrella groups are behind the idea of this as is Publish What You Pay.

Why would anyone be against it? What the parliamentary secretary has pointed out is that somehow we are unable to apply this legislation, which has been adopted in other legislatures and jurisdictions in Canada, because of our Constitution.

We know how legislation is drafted. We know how it has to be in accordance with Canadian law. That is why we have amendments. As they say, that dog will not hunt. If they really do not believe that something can be done, amendments can be made. They cannot reject an idea just based on that.

In summation of why I think this bill is important to adopt, we have to take a look at what is happening in the global economy right now. We have a multi-polar world. We have the BRIC countries, which are major actors in the extractives. We have to get the social license to do business in countries abroad.

If we are not going to get in line with these norms that everyone else is adopting, what does that do to Canada's strategic advantage? If we reject transparency and if we reject the norms that we see others adopting, what does that do?

What it does, interestingly enough, is undermines the very goals that the government claims to be in favour of, which are to expand our investment and trade abroad. If we are seen as laggards on basic transparency, on governance and on the norms that others are following, it is clear what that will do to our reputation, not just as a country, but in terms of investment and how Canadian companies are seen abroad. This is not because of their behaviour, per se, but because of the lack of leadership from the government.

I would encourage all hon. members to take an independent look at this bill, listen to their constituents and ask them what they think of it. What are they here for if not to listen to their constituents, the primary mandate of any member of Parliament? If they hear from the constituents that it is a good idea that should be adopted, then they should break loose, do their jobs, vote independently, seize the day and free themselves from the tyranny of the whip and say "please support transparency".

[Irwin Cotler, Liberal, Mount Royal, QC]

Mr. Speaker, I rise today to address Bill C-474, the transparency of payments made by mining, oil and gas corporations to foreign governments act.

I would first like to commend the sponsor, my colleague representing Scarborough—Guildwood, for his persistence and dedication involved in seeing this legislation through Parliament these past several years.

Bill C-474, the sunshine bill, as my colleague has properly characterized it, would compel Canadian-based extractive companies operating abroad to disclose all payments made to foreign governments after having been reviewed by a qualified independent auditor. The disclosures would be made to the Minister of Natural Resources who would then ensure that they are made available online for public viewing. If it is discovered that a company has failed to disclose a payment, it would be deemed guilty of an offence and face a fine upon summary conviction of up to $5 million.

These provisions will not only help to promote greater transparency and accountability in Canada's extractive sector, the sunshine aspect, as my colleague put it, but they will also discourage the kinds of illicit payments to foreign governments, especially those that routinely violate human rights, the disinfectant aspect, that have long been used to gain access to resource reserves.

To be clear, this legislation is not an indictment of all Canadian extractive companies, nor will this legislation stifle business and trade. As Pierre Gratton, president of the Mining Association of Canada, stated last year with respect to payment disclosures:

I think by and large it's not only seen as the right thing to do, but it's starting to be seen as actually good business to have these payments to government published.

This legislation is about combatting corruption and ensuring corporate social responsibility and accountability. Admittedly, many Canadian companies already have excellent track records in this regard, but as my colleague pointed out, this is now a question for Canada's reputational integrity and to make these countries even more attractive to investors. There is also precedent for this kind of legislation in other jurisdictions, including the U.S. and the EU, as has been pointed out, as well as broad support from civil society organizations in Canada. I am therefore pleased to support this bill and trust that it may enjoy the full support of the House.

Canada has already established itself as a world leader in the extractive industry. This distinction, however, carries significant responsibility in terms of ensuring that our companies conduct business abroad in an ethical manner and with the utmost respect for human rights. Regrettably, this has not always been the case, as my colleague has pointed out, which is largely why this bill is being brought forward.

As well, throughout this parliamentary session, the House Subcommittee on International Human Rights, of which I am vice-chair, has heard from witnesses as to the activities of Canadian extractive companies in countries around the world. Regrettably, much of the testimony has given us cause for concern.

For example, this past October, the subcommittee had the pleasure of receiving Neri Colmenares, a member of the Philippine House of Representatives and an authentic human rights hero in his country. In his testimony, Mr. Colmenares explained how transnational corporations operating in his country, including Canadian mining company Toronto Ventures Incorporated, TVI, have hired paramilitary groups for security, which he dubbed “a recipe for disaster”. These “unwieldy elements”, as he put it, have reportedly carried out routine violations of human rights dating back many years.

In a recent example, Mr. Colmenares described how local media were detained and held hostage by such a paramilitary group hired by TVI. This is but one example Mr. Colmenares shared with our subcommittee and in several meetings that I had with him. Indeed, his testimony and similar witness statements only underscore the need for the kind of legislation at hand.

In addition to the Philippines case, the subcommittee has also been inquiring into the state of human rights in Eritrea, which, as members will know, is the most closed society in Africa, dubbed the North Korea of Africa, and is one of the world's most egregious violators of human rights.

This past November, the subcommittee heard testimony from Cliff Davis, president and CEO of Nevsun Resources, another Canadian-based mining company with operations in Eritrea. Mr. Davis repeatedly insisted that all who work at the company's mine, which it co-owns with the Eritrean government, are there of their own free will and are provided with good working conditions, food and accommodations, in accordance with international standards. Moreover, Mr. Davis claimed that his company fully addressed allegations of human rights violations, particularly the use of conscripted labour by an Eritrean government subcontractor employed by Nevsun.

However, in witness testimony before our committee, we heard Nevsun does not know whether conscripted labour is being used or that the company has been repeatedly denied the right to investigate by the Eritrean government-owned subcontractor and now “appears to feel it has no power” and has responded with “quiet acceptance”.

This is precisely the impression I was left with after hearing Mr. Davis' testimony.

When I asked him if he was aware of human rights violations in Eritrea, generally speaking, notwithstanding the public record, he said no. When I asked him if he was ever advised about human rights violations in Eritrea by anyone, he said no. When I asked him if he was aware of human rights violations at the mine site, he said no. When I asked him if he was advised by anyone of human rights violations at the mine site, he said no. When I asked him whether he had ever conveyed to the Eritrean government any concern of any kind about any human rights violations, he said, and I am paraphrasing for reasons of time, “ I do not acknowledge the premise of the question. That is a premise asserted by people outside of our mine site, and there are no human rights violations at our mine site”. In the end, it was, in my view, akin to hear no evil, speak no evil and see no evil.

Simply put, it is unacceptable for Canadian companies to profit while funding and enabling those who violate human rights. I believe that Bill C-474 can help end that practice. The legislation would also serve to advance the principles of transparency and accountability that have already taken root among Canadian companies, while reinforcing the notion in the minds of investors that corporate social responsibility is good business.

I trust that the House will adopt the bill.

[Scott Reid, Conservative, Lanark—Frontenac—Lennox and Addington, ON]

Mr. Speaker, it is my pleasure to contribute to the debate on Bill C-474. This proposed legislation focuses on Canadian extractive companies, Canadian mining companies in other words, that are operating internationally. Its main objective, which I do not think anyone could object to, is the improvement of financial transparency, accountability and economic sustainability through public reporting of any payment that Canadian mining companies or Canadian oil and gas companies make to foreign governments.

This is important because Canada is the world's largest investor in extractive industries, at least if we leave oil and hydrocarbons aside. We have investments in roughly 8,000 properties and around 100 countries around the world. Nearly 20% of Canada's foreign investments are in the extractive sector and 60% of the world's publicly listed mining corporations are listed on Canadian stock exchanges.

My own interest in this issue comes from the fact that I am the chair of the human rights subcommittee of the foreign affairs committee. We have done some work into human rights issues that relates to mineral extraction. In some cases, this involves mineral extraction, where Canadian companies either are involved, or potentially could be involved in the future. My colleague, the member for Mount Royal, mentioned the example of looking into the Bisha mine site in Eritrea which is operated by a Canadian company. There are other examples as well.

This is important because it is not always easy for Canada to have an influence on international human rights issues. We are not as influential in the hard power way as some of the other countries in the world: the United States, Britain, France and China. However, when it comes to the power of our investments in the international extractive sector, we are the most significant player.

Having said all of that, there are certain human rights issues that strike me as being particularly important. They have to be taken into account when one is dealing with these kinds of investments. For example, there is the issue of property rights and the land tenure of people who live on the land on which a potential mine might be placed. This can happen even in my own riding. Here in Canada we have had mineral exploration on property where the individuals who have lived for their entire lives do not have the underground rights to their own property and this creates conflict. However, in Canada we have expropriation acts; we have the rule of law. This is not true everywhere. Canadians investing in countries that do not have these rules have to find a way of dealing with the fact that these countries often do not have a proper mechanism for dealing with this kind of thing. In some cases, this includes issues that relate to indigenous rights in those countries. We have an obligation to deal with that.

We have to deal with the fact that in some countries the population is not truly free. There is the danger that we could find ourselves operating in a professional manner, but in an area where the population is enserfed, where there is forced labour. We could find ourselves, if we are not careful, complicit in some kind of human rights abuse. This is of course a major concern to this government, and to any responsible Canadian.

There are these considerations, and some others that are not truly human rights issues, but clearly they are human rights in the broader sense. The destruction of the environment, which can happen from mining, is a real worry. For example, one great tragedy that has occurred, which we could say is a human rights issue, has been the pollution of rivers with arsenic as a result of the gold mining industry. It is for this reason that the world community—and Canada has been a key participant in this—has adopted rules and practices relating to the use and monitoring of arsenic in mineral extraction to make sure this kind of harm does not occur. It can have disastrous implications. These are, in the broad sense, of course, human rights implications.

One issue to be concerned about is how we deal with foreign bribery, kickbacks and so on. The intent of Bill C-474 is to deal with illicit payments to officials in foreign jurisdictions in order to get access to resources or for favouritism.

The way that Bill C-474 aims to do this is by requiring Canadian extractive companies and their subsidiaries that are incorporated under Canadian or provincial law to submit to the Minister of Foreign Affairs and the Minister of Natural Resources an independently audited annual transparency report. This is all quite reasonable, but there are some problems that need to be addressed with regard to this bill.

First of all, Bill C-474 pre-empts the work currently under way involving Canada's international partners in the G8 in preparation for the G8 leaders summit, which is occurring this summer. The issue of transparency in the world's extractive industries is expected to be a key item at the G8 summit.

Second, Bill C-474 also pre-empts the collaborative work currently under way involving industry representatives and NGOs, work that is scheduled to be completed this summer as well. The revenue transparency working group is putting together a framework for mandatory reporting of payments that will ensure that we are in line with our international partners' regimes to ensure, again, that we have strong transparency that does not burden Canadian businesses disproportionately, as compared to our trading partners and competitors, with unnecessary red tape.

Third, there are many international or multilateral initiatives that already exist. For example, there is the extractive industries transparency index, which the government supports. In fact, just last October, Prime Minister Harper announced $20 million over a four-year period in support—

[The Acting Speaker, Conservative, Barry Devolin]

Order. The hon. member cannot refer to colleagues, including the Prime Minister, by their given names but rather simply by their titles.

[Scott Reid, Conservative, Lanark—Frontenac—Lennox and Addington, ON]

Mr. Speaker, my comments refer to the current Prime Minister. I think we all know which prime minister we are talking about. I will leave those who are watching to figure out which prime minister the reference is being made to.

The Prime Minister announced $20 million over a four-year period in support of the EITI and the extractive industries technical advisory facility. This support was announced at the francophonie session in Kinshasa, which oddly enough, or ironically enough, happens to be in the capital of a country that has been kicked out of EITI, or is currently suspended, because it is not compliant with EITI.

Canada is trying to support this initiative. I invite members to go to the EITI website. What they will see is that this is an initiative that essentially involves the countries in which the extraction will take place getting involved and demonstrating that they are living up to certain standards.

A map reveals those countries that are candidate countries, those that are full members and those that have become members and then have failed to comply and have been kicked out. They essentially cover a swath across Central Africa and Central Asia. They are the countries that are rich in resources but have a history of very problematic resource extraction, bribery, corruption, unsafe practices, human rights violations, and so on, and in which an effort is being made to correct this situation, sometimes not with full success.

By participating in this kind of process, and indeed, in helping to fund it and make sure it is on a sound financial footing, Canada is having a real impact and a better impact than we could have with any other method.

I want to mention a few other things we are doing here. There is the Canadian International Institute for Extractive Industries and Development, which the parliamentary secretary mentioned earlier. Canada is the largest founding donor of the African Minerals Development Centre, which promotes best practices and mining policy and management throughout Africa.

Canada is a major player. We are a responsible player. Our companies are the players that are most desired, for our skills, our expertise, and our substantial capitalization, by all of the countries in which resource extraction is going on. That means that we have, to a certain extent, the capacity to impose reasonable standards on those countries, and we should take care to do that responsibly.

We should not be shy about the responsibility that entails for us. We should do that in a way that ensures that we move forward on a level playing field, where all other competitors are also working towards those higher standards, and not cause ourselves to be in a situation where we are unfairly hobbled in the competition with those countries. That would not accomplish anything at all.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Mr. Speaker, the arguments made by our colleagues opposite bring back memories. They are telling us that they are doing or are going to do all sorts of things. They are making excuses for not doing the right thing, which would be to agree with referring the bill to committee for further study.

This is a very important bill, especially in the current context. The government is putting more emphasis on natural resource development in developing countries, as part of its international co-operation strategy.

The development of natural resources can certainly be part of the equation, but it has to be done properly to benefit Canadians, particularly the poorest people in the country.

The problem is that the government thinks of itself as a sort of magic wand. I am seeing a growing tendency toward this type of magical thinking. The government says it will develop natural resources and that—just like that, by waving a magic wand—everything will automatically be better and everyone will be happy. I do not think that the Conservatives realize how complex this issue is.

One of the first questions that needs to be asked when we talk about natural resource development is whom does it benefit and what control do the people of a resource-rich country have over the way their government manages the benefits of that development. We know that far too often the elite of those countries has easy access to non-tax revenue, which allows them to eschew accountability and even oppress their own people.

To avoid that, greater transparency is key. That is why, for years now, so many agencies and countries have been working to improve transparency.

In Canada we have the Resource Revenue Transparency Working Group, which includes the Mining Association of Canada, the Prospectors and Developers Association of Canada, and Publish What You Pay Canada. Publish What You Pay is a global network of organizations around the world. Together with the Extractive Industries Transparency Initiative, PWYP is one of the most active organizations when it comes to transparency.

The hon. member was saying that we want to be on a level playing field with the other countries because, otherwise, it would not be fair for Canadian businesses. We know that the other countries have made a great deal more progress than Canada has to date. For example, in 2010, the United States passed the Dodd-Frank Act, which contains measures that are fairly similar to the ones proposed in the private member's bill before us today.

The European Union, Australia and the United Kingdom are also planning to implement similar standards. The G8 also wants to make this a priority at its next meeting, which is scheduled to take place in June.

Canada, the country with the most registered mining companies, is lagging behind. That is why we appreciate the idea behind this bill. The bill seeks to require Canadian mining, oil and gas companies to submit annual reports that disclose all payments provided by them or their subsidiaries to a foreign government for the purpose of furthering mining, oil or gas activities.

[The Acting Speaker, Conservative, Barry Devolin]

The time provided for the consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the order paper. The hon. member for Laurier—Sainte-Marie will have six minutes remaining.

It being 2:30 p.m., the House stands adjourned until next Monday at 11 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 2:30 p.m.)