Foreign Affairs Committee on Jan. 31st, 2008

[Paul Dewar, NDP, Ottawa Centre, ON]

Let's put it this way. If a company was doing business in Burma before the most recent use of SEMA in Burma...could we not cover companies that are presently investing in Burma?

[John F. G. Hannaford]

As I say, Mr. Chair and Mr. Dewar, I'm a little limited in commenting on what we might or might not have done.

[Paul Dewar, NDP, Ottawa Centre, ON]

I'm just asking whether it could be used as a tool.

[John F. G. Hannaford]

I'm afraid I have to stick to--

[Paul Dewar, NDP, Ottawa Centre, ON]

So no one here can tell me that? Who could tell me that?

[John F. G. Hannaford]

I think—

[Paul Dewar, NDP, Ottawa Centre, ON]

I'm not asking whether it should have been done. And I really am without prejudice.

[The Chair, Conservative, Kevin Sorenson]

I agree with what Mr. Dewar is saying here, and you know your confines as well. Mr. Dewar is not asking you to say, “Oh, the government should have--”

[Paul Dewar, NDP, Ottawa Centre, ON]

Absolutely not. I'm the son of a public servant. I would never do that.

[The Chair, Conservative, Kevin Sorenson]

He's wondering what boxes in this tool box are available for anyone to do.

[John F. G. Hannaford]

I think part of the problem here, Mr. Chairman, is that it's challenging to give a definitive answer on the scope of these provisions, in part because we would be giving legal advice on that issue.

[Paul Dewar, NDP, Ottawa Centre, ON]

Let me try it this way.

In the case of Haiti and the former Yugoslavia, did we impose special economic measures against investments that had already existed in both Haiti and in the former Yugoslavia when we brought them into force? No, we haven't. Okay.

I hit a bit of a wall there, because we know that there are CPP investments that still exist, notwithstanding Ivanhoe putting things into a trust to sell off. Many people still have concerns about that, and I just want you to note that. In fact, what we're talking about here is SEMA, but also about corporate social responsibility. Perhaps another day we'll have a motion to discuss that.

Many Canadians are deeply concerned that there still are Canadian companies doing business in Burma. My question to you is, what tools do we have for Canadian companies to divest themselves from Burma now? Do we have none?

[The Chair, Conservative, Kevin Sorenson]

Mr. Mank.

[Randolph Mank]

We certainly have some, and not all just legal approaches. We certainly have the moral suasion of the Government of Canada, which has been used over the years in an attempt to dissuade them from doing just that.

But on the legal side, I know your eye has locked onto this banning of new investment, and the word “new”, and you're wondering what about “existing”. But allow your eye to go to the next one, which is the prohibition on the provision of Canadian financial services to and from Burma. That's highly relevant to the disposition of current and existing investments.

[Paul Dewar, NDP, Ottawa Centre, ON]

I understand that.

[Randolph Mank]

If one is to extract profit from investment--and that's what investment is intended for--then presumably this aspect of the new economic measures will have some effect in that area.

This is something that was certainly thought through and considered, and we are as concerned about ongoing investments as you are.

[Paul Dewar, NDP, Ottawa Centre, ON]

I have no question about people's intent and concern. I want to be clear about that.

There are concerns about loopholes. I paid attention to your comments about indirect. You made the comment that indirect investments will be captured by the actions of the government, but you also said, where controlling interests apply. There are concerns about Total Oil, and you'll know that there are Canadian companies--Power Corporation, to be specific--who have investments in Total Oil. Would they be captured—I'm speaking directly about Total Oil—by the measures that have been brought forward by the government?

[John F. G. Hannaford]

We're back into a situation where it's hard to discuss this specific instance, but what I can say is that you're right. The way the measure works, it is a ban on indirect investment, which amounts to a controlling interest in an entity that then would be operating in Burma. That is intended to be the trigger. It's partially for practical reasons that it becomes extremely challenging to have a look at situations in which you're looking at Burma.

[Paul Dewar, NDP, Ottawa Centre, ON]

Who would be privy to that information? Would shareholders be privy? Obviously, I'm not, because I'm hearing that information can't be disclosed for reasons....

In other words, I would appreciate knowing what companies have been captured by the SEMA vis-à-vis Burma. Is that information available to us as a committee? The fact that you brought in SEMA is great. I applaud it. I was hoping it would affect existing investments. I also think many Canadians would hope that it would deal with investments that some would say are a loophole through the indirect....

Is there any way to catalogue which Canadian companies are presently affected by the Special Economic Measures Act? It's good to have these policies, but if we don't know what companies are affected, and catalogue that, then it matters not to many of us, and we kind of say, well, that was nice, but what effect did it have?

So is there a listing of which companies, how many companies, and the net investment or divestment that has taken place to date? Do we have that kind of information?

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Dewar.

Mr. McGovern.

[Peter McGovern]

At this point we don't have an aggregated list of companies in Burma. We have been dealing with our mission in Thailand, which is responsible for relations with Burma. To our knowledge, there are very few companies that are active in the Burmese market. The number of direct investors, with Ivanhoe Mines now going into trust, is probably zero.

We have been in touch with other companies that were doing exploration work in Burma. In light of the situation, they withdrew prior to sanctions being imposed. The expectation of the Government of Canada is that the companies operating will, in and of themselves, be corporately socially responsible. Given the situation in Burma, there's a strong indication that it's not a place they would want to be.

We are always looking for indications of firms that are active, and we work with partners to ensure that we bring those to the attention of the appropriate authorities. But the numbers are very small. If you look at what we import from Burma, it includes frozen shrimp, mung beans, some textiles, and that's it. Our exports were down to about $4,000 until November. So the transactions are of a very limited nature.

I can only speak about direct investment and commercial exchanges. I'm not in a position to know about the indirect activity of Canadian firms that may be present in Burma. Again, I would suggest it is very small.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. McGovern.

Mr. Kramp.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you, Mr. Chair.

The situation in Burma is one thing, but Mr. Mank used some words that I think are very telling, and we need to expand on them. You talked about the transnational regional impact; in other words, Burma is obviously not sitting there in isolation. I would like you to expand on that, if you would, particularly in relation to three or four areas: how isolated Burma is; who the players are in the market; who is supporting their activities; and to what extent their activities are being supported in two particular ways--in obvious ways, but also through the back-door channels.

Can you give us some indication of this?

[The Chair, Conservative, Kevin Sorenson]

Mr. Mank.

[Randolph Mank]

Sure, because it is obviously very relevant. Burma is isolated from the international community. They are behaving in a way that only a very isolated country would, and that has been the case for quite some time now.

At the same time, as you're alluding, they do have some relationships for commercial and other purposes that have allowed them to sustain the regime they've had in place, which is very controlling of their own population's wishes.

The neighbouring countries have been doing most of the trade with the country. We know who their principal trading partners are. Obviously they rely on that trade in order to sustain the economy such as it is. But it isn't much. If you look at the actual size of that economy, their GDP is just under $14 billion. That adds up to about $239 per capita--I'm using some IMF figures here; those are numbers that we often look to when we want to see the state of a country.

There's another statistic I look at when I want to see what the state of a country is, and that is infant mortality. It is a country that has 75 deaths per 1,000 births, which is extraordinary.