Thank you, Mr. Chair. I have provided copies of my remarks in both official languages and I'll present a somewhat abridged version of them.
Thank you very much for the opportunity to speak to you today. My opening remarks will focus on Canada's mining sector and corporate social responsibility, given my responsibilities at Natural Resources Canada as assistant deputy minister, minerals and metals.
There are currently over a thousand Canadian mining companies and exploration companies working in over a hundred countries around the world on well over 5,000 projects. According to Statistics Canada, Canadian direct investment abroad in the mineral and metals sector from 1990 to 2008 was $66.7 billion. There are also another 2,400 Canadian technology consulting service and supply companies that work with the mining sector firms here in Canada and around the world.
As we know from our experience in Canada and from countries around the world, mineral exploration and development can create jobs and other local benefits, including training, business opportunities and infrastructure improvements, as well as contributions to social and economic advancement through local CSR programs.
or CSR in English.
Tax and royalty payments to government may also be generated. Furthermore, mining operations contribute to the local economy through the procurement of materials and a range of services.
The contributions to both local communities and developing countries that can result from mining activities are significant. Chile is a prime example. I certainly acknowledge that there are challenges, including those that stem from past industry practice, poor corporate performers, and a lack of governance capacity and rule of law in developing countries, whether it's at the national, regional, and/or local level. Lack of governance and institutional capacity in terms of legislative or regulatory frameworks and the capacity to implement and enforce these can result in government responsibilities being relinquished to mining companies at the local level.
Recognition of these challenges has led to a number of important initiatives over the past decade or more, including the IFC performance standards and Global Reporting Initiative, the Voluntary Principles on Security and Human Rights, the Extractive Industries Transparency Initiative, the Kimberley Process Certification Scheme, and the UN Secretary General-mandated work of John Ruggie on human rights and the role of corporations, which is still under way.
Canada's mineral exploration and mining industries recognize that their ability to operate in Canada and abroad increasingly depends on the soundness of their environmental performance and social responsibility. Shareholders and investors are increasingly considering CSR performance in their valuation and investment decisions on Canadian mining firms.
Many companies and industry associations are being recognized for their work to improve performance in Canada and abroad. The Mining Association of Canada has developed a mandatory CSR program for its members called Towards Sustainable Mining, which was recently identified as “best in class” by Canadian Business for Social Responsibility.
The Prospectors and Developers Association of Canada developed a set of environmental guidelines, known as Environmental Excellence in Exploration, or e3, a number of years ago to support environmental performance improvement by the exploration industry. And last March PDAC released its e3Plus guidelines, which address CSR performance for mineral exploration firms.
The government not only encourages this approach to doing business, but sees an active role for itself in encouraging Canadian companies to develop and implement CSR practices that meet or beat international performance standards.
Natural Resources Canada has the mandate to promote and support the sustainable development of Canada's mineral, energy and forestry resources in order to contribute to the quality of life of Canadians.
We recognize that the standard for competitiveness today is not only measured by economic performance, but environmental and social responsibility performance as well.
In the area of corporate social responsibility, our activities are the following. We work closely with the Department of Foreign Affairs and International Trade in their comprehensive initiative to improve the CSR knowledge and capacity of their missions.
The Government of Canada has joined both the Extractive Industries Transparency Initiative and the Voluntary Principles on Security and Human Rights. NRCan sits on the board of the EITI. Canada works with developing countries through the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development. Established in 2005, it is a follow-up action led by Canada and South Africa to the 2002 World Summit on Sustainable Development.
The aim of the forum, which now includes over 43 countries, is to improve the contribution of mining to sustainable development through practical sharing of experiences and best practices. NRCan engages as well in regional multilateral government-to-government work to help build governance capacity for sustainable resource development. Canada, through NRCan, is the only non-African country to participate in the annual meetings of the African Mining Partnership and was instrumental in supporting a similar regional mechanism for the Americas.
We also implement programs through bilateral agreements with Chile and Brazil, as well as through bilateral cooperation with many developing countries, including Peru, Colombia, Ecuador, Mexico, Argentina, Panama, the Philippines, and many African countries. These countries are all seeking Canada's expertise related to building governance capacity to support the sustainable development of their mineral resources.
NRCan has also worked with industry, aboriginal organizations, and federal departments to develop an aboriginal tool kit for mining, which is increasingly being adopted and adapted by developing countries, including Peru, Mexico, the Philippines, Ecuador, and countries in west Africa.
In addition to National Resources Canada, a number of government departments and agencies already have in place a number of policies and guidelines to ensure that their clients are good corporate citizens.
Canada already expects that corporations working in Canada and Canadian cooperations working abroad adhere to the OECD guidelines for multinational enterprises that provide benchmarks for responsible business conduct.
DFAIT is home to Canada's national contact point, a senior-level official responsible for promoting awareness of the OECD guidelines and reviewing reports of specific instances of non-compliance with these guidelines. Export Development Canada also established a compliance officer in 2005 to enhance its transparency and accountability. In 2007, EDC also announced its support for Equator Principles, an international benchmark for assessing and managing social and environmental risk in project financing.
Finally, the Canadian Pension Plan Investment Board has a policy on responsible investing.
In addition to the measures noted above, the government has taken further substantive steps regarding the CSR performance of Canada's mining, oil and gas sectors operating abroad, including the National Roundtables on CSR.
On March 26, 2009, the government tabled its new CSR policy in Parliament entitled, Building the Canadian Advantage: A Corporate Social Responsibility (CSR) Strategy for the Canadian International Extractive Sector . The strategy is founded on four key pillars that together provide a multi-pronged, proactive, collaborative, policy-based approach.
The first pillar calls for continuing assistance from CIDA and NRCan for developing-country governments to enhance their capacity to manage natural resources in a sustainable and responsible manner. An example is the PERCAN project in Peru, now renewed to support capacity building in Peru's ministry of energy and mines.
The second pillar calls for the promotion of internationally recognized, voluntary CSR performance and reporting guidelines, including the International Finance Corporation's performance standards on social and environmental sustainability, the Voluntary Principles on Security and Human Rights, and the Global Reporting Initiative. This builds on Canada's adherence to the OECD guidelines for multinational enterprises.
The third pillar of the strategy involves support for the development of a new CSR centre of excellence. This is a one-stop shop, hosted by the Canadian Institute of Mining, Metallurgy and Petroleum, that will provide information to companies, non-governmental organizations, and other relevant stakeholders.
Finally, the fourth pillar of the strategy calls for the creation of a new office of the extractive sector CSR counsellor”. As you are aware, the government recently appointed Dr. Marketa Evans as the first CSR counsellor.
By defining expectations, encouraging transparency in reporting, partnering on capacity building in developing countries and industry, and implementing a dispute resolution mechanism, the strategy will increase the ability of Canadian firms to manage social and environmental risks and encourage them to improve their performance in an ongoing manner. This will not only improve their CSR practices and sustainable development outcomes for developing countries; it also contributes to the competitiveness of Canadian industry working abroad.
In summary, improving the CSR performance of the Canadian extractive industry working abroad is a fundamentally important objective for the Government of Canada as well as for industry. In addition, the government recognizes the key objective of working collaboratively with host countries to improve their governance capacity for the sustainable development of their mineral and energy resources.
To address these objectives, the government, industry, and other stakeholders in Canada and internationally have implemented a number of specific initiatives over the past decade or longer. Complementing these efforts, and responding substantially to the report of the advisory group for the national round tables, the government is implementing a multi-pronged, proactive, collaborative strategy aimed at the continuous improvement of industry CSR performance and the strengthening of governance capacity through partnership in developing countries.
I thank you once again for having heard me here. It will be a pleasure to answer your questions.
