Bill C-486 (Historical)

Conflict Minerals Act

An Act respecting corporate practices relating to the extraction, processing, purchase, trade and use of conflict minerals from the Great Lakes Region of Africa

This enactment requires Canadian companies to exercise due diligence in respect of the exploitation and trading of designated minerals originating in the Great Lakes Region of Africa in seeking to ensure that no armed rebel organization or criminal entity or public or private security force that is engaged in illegal activities or serious human rights abuses has benefited from any transaction involving such minerals.

Conflict Minerals Act

[Paul Dewar, NDP, Ottawa Centre, ON]

moved that Bill C-486, An Act respecting corporate practices relating to the extraction, processing, purchase, trade and use of conflict minerals from the Great Lakes Region of Africa, be read the second time and referred to a committee.

Mr. Speaker, I am so proud to be standing here today to launch debate on the conflict minerals act, Bill C-486.

The journey to here began five years ago.

Five years ago, I visited the Democratic Republic of Congo, a country equally beautiful and sad. For more than 15 years, Congolese government forces, rebel groups and private militias have been fighting to control the land and the abundant natural resources that have been the cause of this country's misfortune.

I spoke with Congolese government officials to see what was being done to enable a future of peace and sustainable development. The most striking response was not an answer but my question returned back to me. I was asked what I was doing. It was a fair question, because the truth is that the tragedy of the Congo is not merely a Congolese or an African problem. It is our problem, and the reason is in our phones and in our jewellery.

Many people are simply shocked to learn of the scale of the crimes in the Congo and the connection between consumers and the conflict. For the record, here are some of the facts.

The conflict that has been raging in the Democratic Republic of Congo since 1998 is the deadliest conflict since World War II. In 2011, the number of rapes was estimated at 48, not per year, per month or per day, but per hour. Rape is used as a weapon of war. In 2012, 2 million people were displaced. That is approximately the equivalent of the combined population of Manitoba and Saskatchewan.

Conflict minerals generate $180 million per year for armed groups, literally keeping some militias in business.

Up to 40% of those working in the mines are children. These children, who are exploited and abused, are then prime targets for recruitment by armed groups.

The lack of public awareness about this issue might seem like a cause for despair, but for me it is a cause for hope, because when people do learn about the connection between minerals and conflict, they are connected directly themselves. Once they are personally connected to this issue, they cannot help but care.

Since my time in the Congo, I have made it a personal priority to use my role as a legislator to help connect Canadians to this issue and curtail the presence of conflict minerals in Canada.

Last March, I introduced the bill on conflict minerals in the House of Commons.

The drafting process was comprehensive, with many months of positive and fruitful consultations with industry and civil society representatives in Canada and abroad.

The bill was introduced at a time of international action on conflict minerals, and the pace has only picked up since last year.

In May 2011, the OECD, the Organisation for Economic Co-operation and Development, published guidance and made a recommendation on exercising due diligence in this regard. Then, in August 2012, the U.S. Securities and Exchange Commission announced a new regulation requiring businesses to exercise due diligence in using tin, tantalum, tungsten and gold.

The European Union is introducing its own regulations following consultations with a wide range of stakeholders. At last year's G8 summit in Scotland, Canada joined other countries in making important commitments to extractive sector transparency.

In the G8 communiqué, the government specifically pledged to support conflict-free mineral sourcing. I want to read a section of that pledge tonight from section 40 of the communiqué. It states:

As part of our commitment to extractives transparency, we continue to support responsible, conflict-free sourcing of minerals from conflict-affected regions, including gold, diamonds and other precious stones. We will promote positive economic development and responsible sourcing in the artisanal mining sector, particularly from conflict and high-risk areas. We reaffirm our continued support for the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, and the International Conference of the Great Lakes Regional Certification Mechanism as part of global multilateral, multi-stakeholder efforts to combat the trade in conflict minerals through certification, responsible business conduct and respect for human rights.

This bill implements the OECD guidelines mentioned in this communiqué. It is simply a matter of keeping our promise.

Practically every major technology firm, including BlackBerry, Microsoft, Apple and Nokia, is now trying to avoid using conflict minerals in its products.

We have recently seen path-breaking, game-changing commitments to source conflict-free minerals. In January, Intel announced that its microprocessors would be conflict-free, and in February, Apple committed to sourcing the minerals in its products responsibly. Apple has already followed through on this commitment for tantalum and is also doing so for tin, tungsten, and gold. These industry leaders are showing that a better supply chain is possible, and so is a better world.

These companies also realize that in today's market, accountable companies have a competitive advantage. This was the message I received in consultations with Canadian industry representatives. Companies are ready to get on board with regulations so long as the regulations are clear and emphasize the competitive advantage of social responsibility. The private sector will accept clear rules for transparency and accountability. Government needs to be responsible as well. My bill would implement the OECD guidelines in Canada.

The bill requires Canadian companies that use minerals from the Great Lakes Region of Africa to exercise due diligence to ensure that no armed groups engaged in illegal activities benefit from the extraction, processing or use of those minerals.

Companies would have to publish their findings on their websites and in documents filed with the Canadian government. The government would then share the report with the producing countries. This would support local efforts to manage and reform the mining industry, supporting action from the ground up. The bill recognizes that stopping the conflict mineral trade requires collaboration between governments in both developed and developing countries, as well as with civil society and industry. Working together is the only way that lasting results can be achieved.

Collaboration requires leadership. I would like to see that initiative coming from Canada. It is a role that Canada can and should play. Canadian mining companies are market leaders. It is time Canada became a corporate social responsibility leader as well. Canada and Canadian companies should be diligent, accountable, and transparent in their operations overseas, but this is as much about consumer rights as corporate responsibility.

My bill will allow Canadians to know whether the minerals in the technology products they purchase may have funded or fueled war. Consumers will be in a position to make informed choices.

I believe that consumers, if given the necessary information, will hold companies accountable for their sourcing choices. To complement this legislative effort, I also launched the just minerals campaign. It is a grassroots initiative to support action on conflict minerals. We have partnered with a wide variety of groups, from students to environmental campaigns, to Congolese associations, to fair trade advocates. Across the country, online and offline, the campaign is under way and gathering steam. More than 3,000 Canadians have already signed a petition supporting the bill.

This is not about right- or left-leaning politics. It is about what is right and wrong. Together, we have the ability to make the world a better place. It is up to us to take action.

Other countries have recognized this. In the U.S., the Dodd-Frank Act that brought in similar requirements got bipartisan support.

I also believe that change is possible because we have done this before.

The blood diamonds campaign is a fantastic example of how the world, and Canada, can make real improvements in the sourcing of consumer goods. The illegal trade in diamonds was providing substantial funding to warlords and rebels in Africa throughout the 1990s. Separate and joint meetings of diamond producing countries, international organizations, global civil society, and extractive companies led to the Kimberley Process for certifying rough diamond exports.

Today, Kimberley Process members account for nearly all of the global production of rough diamonds. Illegal exports are largely prevented, and legal trade is fostered by the increased consumer confidence provided by certification.

This legal and responsible trade contributes to sustainable economic and social development. We now have the opportunity to similarly transform the trade in the minerals at the root of the conflict in central Africa.

Just as it was the case with blood diamonds, conflict minerals have been attracting ever greater levels of attention from extractive corporations, local governments, and international NGOs.

Corporate interest in social and environmental responsibility is growing.

Local leadership in central Africa is growing. Although my bill would be the first to implement the OECD due diligence guidelines in an OECD country, they have already been enshrined in law in the DRC and Rwanda.

Some exciting projects are now under way to bag and tag mineral exports in the same way that diamonds are now traced. Partnership Africa Canada, for example, a civil society leader in implementing the Kimberley Process, is doing just that right now. Internationally, last year's G8 communiqué reiterated support for responsible conflict-free mineral sourcing and cited the OECD guidelines.

The time is right for significant change.

Minerals are found everywhere in the world, but they need not be blood-stained. Together, we must prevent the war in the Congo from entering our homes.

I sincerely hope we can work together on this bill, demonstrating the co-operation Canadians want and the world needs. Together, let us take conflict out of Canadian homes.

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, I would like to thank the member opposite for his concern over this issue and the intent of the bill. We will have our chance in a few minutes to speak to it, but I wanted to ask him two questions.

The first is: Why did he make such a broad application in terms of the application to the companies? With Dodd-Frank, the application of the act was primarily to manufacturing, the refining and smelting areas. His is much broader and requires too much. It is too broad, and we will talk about this in a few minutes.

The second question is: Why has he been so narrow in the focus of the countries that have been involved? Some of the consequences of Dodd-Frank have been that countries that just do not have the ability to put the reporting mechanisms in place have found themselves with their local area being affected really badly because they just cannot provide that information and so are being punished.

I just wonder if he could address those issues.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I would like to thank my colleague for the question, because it is an excellent question. Because of our consultations with the industry, civil society, and the people in the States—I consulted with them about Dodd-Frank—we actually changed the bill to reflect those concerns about Dodd-Frank.

One of the things I mentioned in my speech, which is in the bill, is that the reporting is done not just for us here in Canada. We would share that with the source countries. That is to address his concern, which is an important concern, about when Dodd-Frank was first implemented that there was no capacity on the ground.

The second part of that, which I mentioned in my speech, is that there are people now working on the ground to source conflict-free minerals. That has changed as well, and it came from consultations.

The other part I want to mention from his question is about the broad oversight of this in terms of where we would require a supply chain. It was actually through working with and talking to industry, particularly mining companies. They did not want to have to be the ones to source the supply chain. They thought it made sense for the end producers to do that, the Apples, Nokias, and others. Why? It is because they are already complying with it in many cases; in the States they are already doing that. This would simply have us come in line.

I hope that, as we go through this debate, we will be able to open up some of these other issues, and I thank the member for the question.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, would my colleague be able to elaborate on what is being done by our partners in the area of conflict minerals? What is being done to help develop a clean supply chain? Which of the initiatives would be good ideas for Canada to be inspired by and for us to implement in our own legislation?

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, if I may just build on that, last August I was invited to Los Angeles to take part in a conference on conflict-free minerals.

It was actually a conference that was set up by industry. It was looking at the implementation of the Dodd-Frank Act in the States. One of the things that is very exciting about this is that it is doing this.

It looked at some of the problems that my friend from the other side talked about, about implementation but also about how to support people on the ground. Two very concrete things that are happening and that we can support more are helping develop a clean supply chain on the ground and identifying it, and also identifying a clean supply chain here in Canada.

There are Canadian producers who are very excited and who are supporting my initiatives. They have a clean supply chain, and they would like to take advantage of this opportunity.

Finally, when it comes to what we are doing and what others are doing, the Americans have already done this. This is not about our doing something that is groundbreaking. This is about doing something that the Americans have done; and it is being done, implemented, and looked at in the European Union. This is just a matter of our getting in line.

If we want to take the money away from these militias that are, right now as we speak, committing horrific human rights abuses to women, particularly, and children, this is an opportunity to do that.

We have an opportunity to make a difference, if we want to work together with our friends in other jurisdictions.

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, it is good to be able to rise to speak to the issue of conflict minerals and the role Canada is playing on the international stage to address this problem.

First, I want to thank the hon. member of Parliament for Ottawa Centre for drawing attention to this important issue.

As outlined in the preamble to his bill, the Government of Canada has been active for many years in advancing initiatives designed to address that nexus between natural resources and conflict. One of his colleagues asked a few minutes ago about the role that Canada has played. One of the places we have played an important role is at the OECD with its due diligence guidance document, which has been put in place and is now gaining international acceptance.

I am pleased to say that this government agrees wholeheartedly with the hon. member that further engagement by Canada is warranted to find effective and efficient ways to address the issue of conflict minerals. However, I have to say that we do not agree that Bill C-486 would bring us closer to this goal.

He talks about establishing clear roles for transparency and accountability in his speech. We do not believe that would be the result of this bill.

Before I outline some of our concerns with the present bill, I would like to talk a bit more about how minerals have been linked to conflict and what is being done about this already.

I am sure that many members are familiar with the Kimberley process on conflict diamonds, developed in response to the use of diamonds to fund violence and conflict in such countries as Liberia and Angola in the late 1990s. Canada was a founding member of the Kimberley process. As a leading diamond producer and exporter, we continue to play an active role in the initiative.

While it is not perfect, the Kimberley process has helped to deprive criminals and armed groups of easy access to capital. However, the illicit use of minerals to fund violence, which is what is meant by the term “conflict minerals”, did not end with the establishment of the Kimberley process. While it is not perfect, it has had an impact in its area.

A new generation of conflict minerals, however, has emerged since, including gold and the so-called 3Ts: tin, tungsten, and tantalum. These minerals are used in a variety of industrial sectors, including the aerospace, automotive and, perhaps most notably, the electronics industries. Indeed, these minerals are present in all of those gadgets that we love so much.

Unfortunately, in some contexts, the illicit trade in these minerals is contributing to violence and conflict. The problem is particularly acute in the eastern part of the Democratic Republic of Congo, or DRC. The lack of state control in that part of the country benefits various armed groups that illegally control mining sites by taxing miners and trafficking in illegally sourced minerals.

Fortunately, the international community is taking action, and Canada is playing a leading role. The OECD, in co-operation with international partners, has developed a due diligence framework, which I mentioned, to foster responsible mineral supply chains. The purpose of that framework, known as the OECD due diligence guidance, is to help companies that are operating in conflict-affected and high-risk areas to identify and mitigate against risks related to their sourcing decisions and practices and to avoid contributing to human rights abuses and conflicts.

The Canadian government actively participated in the negotiation of the guidance, which includes mineral-specific supplements on gold and the 3Ts. We continue to be engaged in its promotion and implementation, and we currently chair the multi-stakeholder steering group that serves as the management committee for this forum.

What is more, several Canadian companies have been at the forefront of efforts to combat conflict minerals and have incorporated the guidance into their management systems. Others are implementing industry-led initiatives pertaining to conflict minerals that are consistent with and build upon these guidelines. For example, the members of the World Gold Council, which includes several Canadian companies, adhere to the conflict-free gold standard. The standard establishes a common approach by which gold producers can assess and provide assurance that their gold has been extracted in a responsible manner.

Several Canadian gold refiners have also been certified under the conflict-free smelter program, which was set up by the electronics industry. I should note here that smelters and refiners have been identified as the critical junction in the mineral supply chain, as traceability becomes extremely difficult after that point.

I would like to emphasize that all of these activities and initiatives are international in scope, because the mineral supply chain is global in nature. In other words, conflict minerals are an international problem, requiring international solutions to bring all the relevant actors—government, companies, and civil society—to the table.

Unfortunately, we do not believe that Bill C-486 aligns with this approach.

The genesis of the bill is clear. In its intent, it mirrors section 1502 of the U.S. Dodd-Frank Act by requiring companies to undertake due diligence activities and to report annually on these activities.

However, in contrast to the U.S. legislation, which, as I mentioned earlier, is focused on manufacturing companies, Bill C-486 is broad. It is not focused. It implicates every stage of the complex mineral supply chain.

Moreover, in contrast with the OECD guidance, which recommends targeted audits of due diligence practices at those key points that I have mentioned, Bill C-486 would require each and every report produced to be audited by an independent third party. The House can see the incredible bureaucracy that would build around this requirement.

What is the anticipated result of the implementation of this bill? It would certainly make a whole lot of companies pay for a whole lot of reports. We would also have some very happy auditors. However, do we think that anything on the ground would change as a result? Would Bill C-486 stop conflict minerals from entering international markets or put an end to the protracted and complex conflict in the DRC, which happens to be the primary focus of the member's campaign against conflict minerals? We do not believe so. The bureaucratic weight and complexity that is required by this bill would make it impossible to realize his goals.

What about the unintended consequences of focusing exclusively on the Great Lakes region of Africa? It has been a huge problem and concern with U.S. legislation that numerous countries have simply chosen to source these minerals from elsewhere, not because there is necessarily conflict where they head their operations but because the countries did not have the capacity to set up the structures that were required to do the reporting. Depriving developing economies of much needed investment and local communities of much needed empowerment would not solve the conflict minerals problem. Rather, it may exacerbate it.

There is no doubt that the ongoing conflict in the DRC has had a devastating impact on the lives of civilians, especially women and children. The prevalence of serious human rights violations in the eastern region of the DRC in particular, including continued acts of sexual violence and alleged crimes against humanity, are of huge concern to our government.

Our efforts in developing peace support operations in the DRC have included funding projects on enhancing the effectiveness of security institutions, strengthening the capacity of Congolese authorities to curtail the illicit exploitation of natural resources, and mediating and preventing conflict.

In October of 2012, our Prime Minister announced a Canadian commitment of $18.5 million over five years to provide legal, medical, and emotional support to victims of sexual violence in the DRC and to assist law enforcement agencies in bringing perpetrators of these crimes to justice.

We have also called for concerted efforts to implement concrete solutions to the conflict and advocated for the engagement of regional actors in particular to protect civilians, including women and children, and to pave the way for peace and stability in that region.

With all due respect to the concerns of the hon. member for Ottawa Centre, a complex situation like the one in the DRC cannot be solved with more red tape for these countries.

I should point out that Dodd-Frank touches specifically on manufacturing. This bill is much broader and would force companies to report at every sector, meaning the extraction sector, the transportation sector, the refining sector, the processing sector, the manufacturing sector, the retail sector, and even recycling. Those products would all require reports to be filed and then audited by third parties. We believe that is an onerous burden that does not achieve the result the member opposite would like to see.

Making progress in the fight against conflict minerals need not come at the expense of responsible investment in affected areas. For example, as I mentioned earlier, smelters and refiners have been identified as a critical juncture in the mineral supply chain. More work can be done to encourage these actors to participate in certification initiatives.

As the member mentioned earlier, this voluntary approach seems to be working. Companies such as Apple and Intel were mentioned by him as companies that have taken this seriously and are applying it.

There is no doubt that further international efforts are required to tackle the problem of conflict minerals, but pursuing a mandatory initiative such as the member has presented is not an approach this government can endorse.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is with pleasure that I rise today to address what I think is a very important piece of legislation. I appreciate that the member has been very diligent in terms of working over the years to ultimately see it surface here this evening. The idea of further engagement and initiatives by Canada in this whole area is something that would be wonderful to see, and at the end of the day we would like to see the bill pass to committee stage.

If amended, we believe the bill could play a very important role in providing leadership at the international level. We would recommend that this be allowed, and at the very least that it pass second reading so that members of the public and stakeholders can contribute to a wider debate. That is quite easily achievable.

The Liberal Party believes that companies must have a social and financial responsibility to our communities. To that end, this legislation could further that social responsibility. As such, with certain amendments brought forward, we would be very supportive of the bill going to committee.

I had an opportunity to get a better understanding of the issue at hand. The first time I was invited to a classroom after being elected in the last federal election, this was the issue that students had chosen to talk about. They were aware of the member for Ottawa Centre's bill and also aware of the member for Scarborough—Guildwood's bill, which is the sunshine bill.

They wanted to ask what I thought about it. At the time, I did not know too much about the bill, so I did more listening than talking in regard to this legislation. After the discussion, they indicated they were doing petitions and asked if I would be prepared to present petitions on their behalf. Of course, I was more than happy to do so, and I have tabled petitions on both pieces of legislation that are before the House today.

I raise that because I do not believe that it is just members of the House who understand and appreciate the importance of this issue. There are individuals of all generations who recognize that what is taking place is wrong and that there is a great deal of merit for us to move forward.

That is why I was a little discouraged to see from the government, what seems to be an unwillingness to see the bill going to committee. My understanding is that the New Democratic Party is open to amendments. Based on that, it would be a mistake for us not to allow it to go to committee. I understand that it is all about money, greed, corruption, violence, murder, and human rights tragedies that have occurred. It has all occurred because of the exploitation of minerals. It has had a very profound impact on a number of countries that circle the African Great Lakes.

I looked up some of the countries we are referring to. There is Burundi and the Democratic Republic of Congo, which is really the heart of the matter of the bill. I understand it is the eastern portion of it. We have Kenya and Rwanda, which is a country that has had a great deal of this sort of exploitation. Tanzania and Uganda are the countries that circle the African Great Lakes.

I recall watching a documentary on these Great Lakes, which are a massive area. I believe that Lake Victoria is one of the top three or four, in terms of size, magnitude, and beauty for a lake.

The potential is great in that region of the world. Yet we have a number of organizations, governments, and I want to be careful how I put this, rebels, warring factions, and private security forces that over the years have taken advantage of the minerals there. We call them conflict minerals. These minerals ultimately end up in consumer products. The minerals and the money made from them sadly have not only enriched very few but have propelled the continual violence in many of those regions.

That is why I believe Canada has a role to play. We can send a strong message. The message at the core of this legislation is the corporate responsibility to recognize that by our standards, there are some things that are just not acceptable. We need to ensure that there is corporate responsibility. It is not good to make money from human tragedy to the degree we have seen around the African Great Lakes, in particular in the Congo area. To obligate corporate responsibility through legislation is a step in the right direction.

I indicated that we have some concerns. For example, the definition of “company” is overly broad and would affect everything from a major mining company in Zambia to a local jewellery store here in Canada. That is due to the bill's general nature. Instead of targeting companies on the ground, it takes a grab at all companies.

The lack of consequences or punishment for failure to implement due diligence or to submit an annual report raises some concerns.

At the end of the day, we can bring forward some amendments that would change the bill to target primary source companies. Those are the companies that first handle the minerals. An amendment of that nature would be of great benefit.

It could make more explicit and consistent references to “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas” throughout the bill. We should specify terms for the audit for an annual report.

There is some merit in looking at other developing countries. Perhaps we could look at expanding the list of countries to include developing countries, as defined by the UN.

There is something we can do. We should be doing it, because I believe, as no doubt the member for Ottawa Centre and all members do, that we would like to see Canada play a more significant role.

When I go back to the classroom discussion we had, they talked a lot about consumer products. The ones that come to mind are the ones they were using. It is the laptops, the cell phones, and the MP3 players. There is so much in terms of electronics. We should listen to what our youth are saying.

We see the bill as a positive step forward. We should at the very least allow it to go to committee, where it can be enhanced and can demonstrate that Canada can play a stronger leadership role on this issue.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, I am very pleased to rise in the House today to speak to Bill C-486 regarding conflict minerals from the Great Lakes Region of Africa.

It is important to point out that, for years now, the NDP has been advocating for an extractive sector that is not only transparent, but also socially and environmentally responsible, both here and abroad.

I wish to commend my colleague from Ottawa Centre for all his hard work on this issue. He has been leading this fight for several years on behalf of those who have been suffering because of this appalling situation. Therefore, on behalf of those people and the NDP, I would simply like to thank him for working so tirelessly on this issue for so many years.

The conflicts plaguing the Great Lakes Region are beyond horrific; they are both a human and a humanitarian tragedy. These conflicts have displaced over 2 million people in the Democratic Republic of Congo alone. We are not even talking about the countries bordering the Great Lakes Region. Some 5.4 million people have been killed. It is very serious. Millions of women and children have become victims of sexual violence as a result of these conflicts. According to reports, 48 rapes are committed every hour.

When I first came to Parliament, I moved a motion at the Subcommittee on International Human Rights to examine the use of rape as a weapon of war in the Democratic Republic of Congo. That report should be finished soon. According to the evidence I heard, the situation is catastrophic.

This human tragedy is not new; it has been going on since the 1990s. The conflicts began in 1998. The UN has adopted a number of resolutions, including resolution 1493, adopted in 2003, which allowed it to increase the military strength of the peacekeeping mission that was created in the late 1990s to protect the civilian population of the Democratic Republic of Congo. There is also resolution 1596, adopted in 2005, which expanded the arms embargo to include all of the Democratic Republic of Congo.

The conflict is so serious that the African Union and the UN have had to adopt resolutions. Therefore, the least Canada can do is get involved, along with our allies, to put an end to this tragedy.

When I say that this is a human tragedy, I am not talking about just the deaths and rapes, but also about the instability and food insecurity. The war is completely destroying the land and the crops.

The Interim Report of the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo, released on May 22, 2002, by a panel of experts commissioned by the UN Security Council, stresses the terrible human impact on the population of these practices, which have humanitarian consequences.

There are terrible conditions marked by rape, violence and death, but there is also food insecurity. Thus, it is both a human and a humanitarian tragedy. It is time for Canada to take action. It is often said that Canada wants to take action on matters of international co-operation, but this is a humanitarian tragedy.

These are armed conflicts, but most of the victims are women and children. It is a humanitarian tragedy. We should do everything we can to prevent these conflicts from creating any more victims.

The illegal mining and sale of minerals are the main source of instability, both political and humanitarian, and also the main source of funding for these conflicts. The exploitation of resources in this region is so problematic that it is important for people to open their eyes. So, too, should the government, civil society and the corporate world. It is very important to realize that we cannot do business in such a vulnerable and unstable region without adopting very strict guidelines to ensure that there are no consequences for the people.

My colleague from Ottawa Centre mentioned that we are talking about $140 million to $225 million in illegal revenue. That is a lot. It accounts for 95% of the revenue of the armed rebel groups that unfortunately continue to commit atrocities.

Half of the mines in the eastern part of the Democratic Republic of Congo are controlled by armed groups. All of the big mines are, except one. That is important to know. Since the people in the Great Lakes Region of Africa rely on mining operations, we need to ensure that they can earn a living in spite of the conflict. These mines need to be operated by the people, for the people, and not to fund conflicts that have absolutely nothing to do with civil society or the Congolese people.

There is certainly no chance for fair trade in a region like this one unless some extremely strict guidelines are adopted. That is what companies are trying to do right now. As my colleague already mentioned, BlackBerry, Microsoft, Apple and Nokia have already adopted measures to avoid using conflict minerals. However, it is important for Canada, as a country that participates in these peacekeeping missions, to send a clear message that we understand the problem, we care about it and we will do everything we can do help the people of the Great Lakes Region.

Canadians want to be able to have confidence in their products, and they also want to have confidence in companies. This is about people having the freedom to benefit from their own resources. They have been suffering for years. Canadians need to be able to have confidence in their products and know that their cellphones have not funded the death of thousands of people. It is only natural. Canadians and companies understand that. It is time for the government to reach out.

By the way, I would like to mention that my colleague from Ottawa Centre introduced Bill C-486 and, following his example, I introduced Bill C-584, which would create an ombudsman for the corporate social responsibility of extractive corporations. The NDP truly wishes to ensure that companies that extract mineral resources in developing countries are both socially and environmentally responsible.

[Deepak Obhrai, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs and for International Human Rights]

Mr. Speaker, it is a pleasure for me to rise and speak to Bill C-486 put forward by my colleague from Ottawa Centre.

I have been working with the member opposite since 2006 in various capacities, on the foreign affairs committee and everywhere. He is extremely passionate about this issue and has been standing up and fighting for a way to stop this conflict. In principle we all agree with him. We agree that the mineral conflict is absolutely atrocious. It is so atrocious that it is unbelievable, and this is the right approach to take. Therefore, his passion for this issue is to be commended.

However, my colleague from Cypress Hills—Grasslands indicated why this particular bill is a problem.

Let me take one step back and tell the House why I agree with the member for Ottawa Centre as to the need to address this issue.

A few years ago, I went to the Great Lakes Region in the DRC. I was leading the friends of the Great Lakes Region who were working toward bringing development into the process.

I landed in Goma in the evening by way of a small aircraft. Goma is in the eastern province where all of the fighting is taking place. Due to the volcanic explosion, the runway was cut in half; it was not cleared and so it was very small. Early the next morning I met with the civil society. I was not far away from the airport, and every 10 minutes I could hear an airplane taking off. Having been an air traffic controller myself prior to coming here, I had to wonder where all these aircraft were going. Half the runway was not there; no commercial flights were coming into that airport. These aircraft were smuggling the minerals out of DRC, what we now know as conflict minerals. They were constantly going out of that country.

I have seen first-hand what a devastating impact this can make to a country's economy. It is up to the international community to settle this issue because of the armed conflicts we have talked about and the horrendous human rights abuses that have taken place in the DRC area a result of armed gangs that are making money out of this illegal business, in co-operation with others over there. Of course we saw that and so we brought in the Kimberley Process as one way of addressing this issue.

We must continue, because the business of conflict minerals still carries on. It has not stopped. Groups use these minerals for money for funding. In Afghanistan, the Taliban use drugs to buy arms, which are creating havoc there. In Colombia, the FARC regime does the same thing. Wherever there is armed conflict, funds are obtained illegally. In this case, the funds are obtained through illegal mining. Henceforth, it is everyone's responsibility.

As my colleague has said, the bill presents a problem for us. Canada has recognized that this was one of the key things that are part of the Kimberley Process. We went ahead and brought in reporting procedures. We worked with the international community and brought in the office of the ombudsman on a voluntary basis. We tell our own companies about their corporate social responsibility. In turn, Canada has a very good record.

How do we address this issue? We address this issue by working together with all the international communities to stop it, but we must also be very careful that our actions do not harm the areas we are trying to help. In this case the bill has the potential to harm the DRC, because its focus on the DRC will stop investment from coming there.

What is important is to try to help the DRC to build capacity, to build a mining industry that is beneficial to their own citizens, as Canada and other countries have said. It is very difficult at this stage, due to armed conflict and regional issues, but as we know, Canada is working with the regional countries, with Uganda and Rwanda as well as the United Nations and the ICC, to stop the war in that part of the region, and there have been many successes.

We are very happy to see that the African Union and the countries of the region have taken dramatic steps by providing soldiers and resources to stop this warring, as well as by working with the United Nations to bring those who are responsible for leading the conflict in those areas to justice before the international tribunal court and through other means.

This is one aspect that we are working on. Once we bring peace into that region, the Government of Canada's role over there is to help these countries build their capacity for their own citizens.

Of course, that does not mean that we will close our eyes and say we will wait until that happens. Of course, we have to do something, and our government has been very clear about what we have done. For example, we have brought in more voluntary approaches through several Canadian companies that are members of the World Gold Council.

We have already taken strong action in DRC by establishing five mineral trading centres in eastern DRC where they can sell the gems. The NGO that came in is working very hard for those miners who are working legitimately. There are small-scale miners in DRC who are legitimately mining over there. We want to help them go through this whole process. We do not want to create a reporting process where this year miners would be penalized.

We are taking these kinds of steps to help them out. We are working with OECD. We are stakeholders, and we will continue supporting this whole process.

I want to say to my friends that yes, we have to do something about it. Yes, we must bring something there. Yes, attention needs to be paid. However, we must also be sure that when bills do come forward, they take the right approach. My good friend bringing this bill has brought out the American side here, but we are still not yet very sure, because the reporting process has not yet been done, whether that is the right approach. However, let us work together on these things.

Although we do not agree on the bill for the reasons mentioned by my colleague, I can assure him that in principle we stand with him in making sure that the mining is done for the benefit of the local people, and not for the armed conflict that brings horrendous damage.

[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 House resumed from April 3 consideration of the motion that Bill C-486, An Act respecting corporate practices relating to the extraction, processing, purchase, trade and use of conflict minerals from the Great Lakes Region of Africa, be read the second time and referred to a committee.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Speaker, I have been waiting patiently to speak to Bill C-486 respecting the extraction of conflict minerals.

As the official opposition energy and natural resources critic, I am especially interested in this bill. The Great Lakes Region of Africa is currently plagued by chronic political and economic instability. Paradoxically, the abundance of natural resources is one of the causes of this instability. In fact, these natural resources should be driving the socio-economic development of the people living in this region. Resources are plentiful and financial opportunities abound, but instead of enabling the community to develop, these resources create instability. That is very unfortunate.

This brings me to the bill. In addition to this situation, it is unacceptable that future profits earned by Canadian mining companies will help fund extremely violent internal conflicts and will contribute, whether directly or indirectly, to the suppression of basic rights. For this reason, Bill C-486, which was brought forward by my colleague for Ottawa Centre, provides for mechanisms to thoroughly monitor the movement of a mineral from the extraction site to its incorporation in the final product for end consumers.

The bill also provides for the participation of an independent third party that would produce a report on the exercise of due diligence. This process would ultimately depend on the co-operation of the companies involved, the expertise of the third party and on Natural Resources Canada’s duty to inform the public.

More specifically in this instance, the bill allows the government to endorse Canada’s traditional position on responsible supply chain management. As a signatory to the OECD's Declaration on International Investment and Multinational Enterprises, the government has, by extension, supported the OECD guide on due diligence.

The bill in fact formalizes the main points of the OECD guide. It is highly contradictory to ratify an international agreement while at the same time refusing to adopt it in the form of a federal bill. Unfortunately, this is not the first contradiction of which this government is guilty.

I would like this government to act logically when it ratifies international conventions and I would like to see it apply these conventions in its bills. This is not the case here and for that reason, we need to take action and to lend Bill C-486 our support.

This bill is in line with the New Democrats’ position that companies should act in a socially responsible manner while allowing consumers to make more informed choices. The government equates transparency provisions with administrative formalities that can hinder investment and impede economic growth in the states located in the Great Lakes Region of Africa.

This rhetoric, central to the Conservative’s position, clearly has no basis in fact. The bill sponsored by my NDP colleague calls for a responsible, progressive course of action.

The House resumed consideration of the motion that Bill C-486, An Act respecting corporate practices relating to the extraction, processing, purchase, trade and use of conflict minerals from the Great Lakes Region of Africa, be read the second time and referred to a committee.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Speaker, as I was in the process of explaining, unfortunately when the government refers to this bill, it often equates these transparency provisions with red tape that will impede investment and economic growth in the countries in question.

Sadly this rhetoric, which is central to the Conservative’s discourse, has no basis in fact. The bill sponsored by my NDP colleague calls for a responsible, progressive course of action and brings to the forefront the issues of human rights protection, the right of consumers to be informed and environmental protection.

Given the Conservatives' refusal to exercise due diligence, their blind partisanship and their belief in the benefits of deregulation, controlling the supply chain of extractive sector companies is a responsible course of action. Conflicts within the Great Lakes Region of Africa, fueled by mining companies, and their repercussions place a heavy burden on a government that, unfortunately, is only concerned about passing legislation that benefits lobbyists.

Some UN experts have called on the federal government to hold an inquiry into mining companies that fail to comply with OECD principles regarding ethical practices. In March 2009, the government announced its building the Canadian advantage strategy, which called for the appointment of an ethics counsellor devoid of any power.

Without a requirement to exercise due diligence, the activities of Canadian extractive sector companies will continue to fund social injustice and human rights violations in conflict areas. In the absence of regulations, companies seeking short-term returns on their investments will be a lightning rod for instability and will hinder direct foreign investment. Long-term investment projects are tied to the stability of political institutions.

However, the proliferation of armed groups chases away foreign investment and isolates this region, which is plagued by serious political unrest and devastating economic stagnation. In terms of foreign policy, Canada has acquired expertise in providing humanitarian aid and managing peacekeeping operations.

The development of this expertise rests on Canada’s faith in strengthening international legal instruments. As a result, Bill C-486 introduces the principle of corporate social and environmental responsibility, as well as legal provisions aimed at protecting civilian populations.

Bill C-486 contains provisions that are consistent with traditional principles of Canadian diplomacy, principles that this government is unfortunately dismantling through the excessive deregulation of the activities of Canadian companies operating abroad. A stable market, one that is conducive to investments, requires a state of law and strong political institutions, at the very least, hence the need for responsible supply chain management.

According to the French organization Coface, the prevailing political climate is one of the determining factors for a company that is seeking to invest. In the absence of regulations, activities will continue to fuel political instability, to the point where this region of the globe will become a region of bankrupt states where anarchy reigns, a region with the potential to become fertile ground for international terrorism.

Finally, when it comes to minerals, we have to understand that Canadian consumers have no way of tracing their movement. For instance, when we buy a toaster made of metals and other substances, we do not know where each of the metals came from. The same can be said for many consumer goods. There is no way of knowing exactly where the metal used was mined or processed. If consumers knew that the goods they were purchasing were manufactured with conflict minerals, and by purchasing them, they were perhaps contributing to the climate of political instability or fuelling unrest in certain areas of the world, I honestly believe they would not buy these products.

For this reason, I believe it is important to require Canadian extractive sector companies to be more transparent and more open about the movement of products. This would help to ease the instability and decrease the incidence of human rights violations in these regions.

[Lois Brown, Conservative, Parliamentary Secretary to the Minister of International Development]

Mr. Speaker, it is my pleasure to rise in the House today and participate in the second hour of debate on Bill C-486.

First I would like to reiterate that the government fully agrees with the hon. member of Parliament for Ottawa Centre on the importance of finding ways to address the issue of conflict minerals. Indeed, the first hour of debate demonstrated that there is a shared concern over how the illegal trade in minerals fuels conflicts. The good news is that Canadian companies, civil society, and government have shown significant leadership and have been at the forefront of creating global consensus on responsible mining and sourcing practices in the gold, tin, tungsten, and tantalum sectors. I know that the hon. member for Ottawa Centre appreciates Canada's active engagement, because he cites many of our activities in the preamble to Bill C-486, such as our participation in the development of the supply chain due diligence guidance at the Organisation for Economic Co-operation and Development.

This government believes that the extractive sector has demonstrated that it can be a positive force not only here at home but around the world by helping create sustainable economic growth and development in countries where it is active.

At a recent event co-hosted by Canada and the World Economic Forum, the hon. Minister of International Development and Minister for La Francophonie stated, “Canada is well known as a world leader in responsible resource development. We have robust strategies that support economic growth and diversification, that promote responsible business conduct, that ensure environmental sustainability and that strengthen community engagement so all stakeholders can benefit from natural resource development”.

Our efforts to stop the trade in conflict minerals are a part of the same narrative. Our engagement at the OECD, where we work with relevant actors in government, the private sector, and civil society, is emblematic of the constructive approach our government has taken to enhance the positive contribution of the extractive sector to social and economic development. Indeed, the Government of Canada is committed to working with partner countries to help them develop and manage their natural resources in a responsible and sustainable way that benefits all of their citizens. It is only by putting the right systems in place on the ground that we can hope to address a multi-faceted problem like conflict minerals.

There is more that can and should be done to curb the trade in conflict minerals. The Government of Canada is actively engaged on this issue, and we are always looking at ways to improve our efforts. However, the approach outlined in Bill C-486 is, in our view, fundamentally flawed. To be more specific, the government believes that Bill C-486 is questionable in its efficacy, overly broad in its application to companies throughout the expansive supply chain, and unduly limited in its geographic focus.

Allow me to elaborate on our concerns in more detail.

First, on the question of efficacy, simply put, there is no evidence to date that mandatory reporting on due diligence activities would actually stop conflict minerals from entering international markets. As noted in the first hour of debate, Bill C-486 is modelled after U.S. legislation, specifically section 1502 of the Dodd-Frank Act. This legislation has been around since 2010, but the first reports were not due until June 2, 2014. Why should we blindly follow a model that has not yet proven that it actually works?

Some may argue that we should not sit around and wait for results in order to take action, but what about unintended consequences? One of the concerns related to the U.S. legislation is that companies have simply avoided buying designated minerals from the Great Lakes region as it is estimated that the region may account for as little as 15% of the global supply of tantalum and much smaller percentages of the other minerals.

Companies can and are sourcing these minerals from elsewhere, which is having a significant economic impact on the region in general and the people of the DRC in particular. The risk of Bill C-486 reinforcing this de facto embargo of minerals from this region is real. Some may argue that this is not a problem. Indeed, they might argue that this will only help the fight against conflict minerals. Unfortunately, the reality is that while investment in the region may have declined dramatically, the illicit trade has continued.

Questionable efficacy is not the only problem with Bill C-486. Our second concern relates to the bill's overly broad application.

According to the bill, any company incorporated in Canada that extracts, processes, purchases, trades and or uses any of these minerals from the Great Lakes region of Africa could be required to provide an audited report on an annual basis. To use the example of the gold supply chain, this could include miners, refiners, bullion banks, gold exchanges, alloy processors, manufacturers, importers, wholesalers, artisans, and retailers. Moreover, gold is used in numerous industry sectors, including jewellery, medical supplies, aerospace, automotive, and of course, electronics.

As a result, an extremely wide range of companies of varying sizes, functions, and sectors would potentially be implicated by the bill and saddled with significant costs associated with reporting. Indeed, if one's dentist has an incorporated company, he or she may be required to submit an audited report on the activities undertaken to demonstrate that the use of gold fillings has not inadvertently contributed to armed conflict in the Great Lakes region of Africa.

Interestingly, the implication of the entire supply chain is not an approach favoured by other initiatives, including the U.S. legislation, which is only focused on companies involved in manufacturing processes.

The requirement of an independent third party audit of the report also differs from the OECD due diligence guidance, which recommends audits at the smelter and refiner level, not at every point along the supply chain. Even the proposed directive by the European Union is focused on one particular point in the supply chain, importers of designated minerals. Moreover, while Bill C-486's proposed mechanism is legislative in nature, the approach the Europeans are taking is a voluntary one.

Imposing a potentially significant reporting burden on the entire mineral supply chain may be great news for auditing companies, but is generating a mountain of reports really an efficient way to address the issue of conflict minerals?

Can we really hope to tackle a global issue if we only focus on the Great Lakes region of Africa? This is the third concern I would like to raise with respect to the bill. Taking a narrow approach that only focuses on a particular region risks stigmatizing conflict minerals as an exclusively African problem, and they are not. Trade in conflict minerals is an issue with a global reach in terms of the repercussions on peace, security, and democratic development, as well as on local communities and multinational companies in countries around the world.

Through our participation at the OECD, we are actively trying to expand the promotion and implementation of guidance, which applies to all conflict-affected and high-risk areas in relevant country contexts.

This government believes in working with, not against, our partners in both the public and private sectors to foster an enabling environment for meaningful engagement and change. It is hard to avoid the conclusion that Bill C-486 would hinder these efforts. Canada's continued involvement in international initiatives related to conflict minerals will help identify the most promising and effective way forward. When that happens, we will undertake the necessary consultation and analysis to ensure we can achieve the desired impact on the ground.