Thank you, Mr. Chair and members of the committee, for sharing your time with me today.
I come as an individual to present my concerns regarding the effects of Bill C-300. OTD is a family business. My wife and I have been working in the mineral sector for the last 20-plus years and have experience in the management and support of Canadian junior exploration companies working as corporate enterprises in Canada, and effective exploration operators in Canada and offshore.
As the Department of Foreign Affairs and International Trade points out on their website, there are about 7,000 to 8,000 mineral exploration projects in the hands of Canadian explorers in over 100 countries. This represents a large globally distributed number of communities where at least one Canadian plays a role in local development. The images from many of these places are striking, whether they appear on an exploration company's website or one belonging to an aid agency or to a civil society. They span the same range of natural environments, from pristine to overstressed, and they span that same range of human conditions. These are places where we would hope the mineral sector, civil society, and the Canadian government would consider mineral development to be part of the solution to improvement in the conditions of a host community and a host nation. They are also places where no other Canadian economic investment or development leadership may be available. They are also places where perhaps no other international or domestic leadership exists.
You might ask why I'm concerned if I work for junior capital exploration companies. Junior companies do not in general avail themselves of the financial mechanisms that are at risk of sanction from the minister. As an exploration geologist, I could work most of my career in mineral development and never see a project that would have to consider the financial facilities that Bill C-300 proposals to withhold. I am concerned because many of the examples being used in public positions taken on Bill C-300 are situations where junior exploration companies are identified at various exploration stages.
Bill C-300 doesn't outline a link between the minister's review of a claim and a candidacy for financial support. Any allegation can be submitted, regardless of the project's potential fiscal relationship to the Canadian government. The sanctions on a bad actor at the production stage are clear enough under Bill C-300. They will come at the end of what will be a long and difficult investigation and a decision by the minister. It also happens at the end of a longer process of development at the mine project. The company has a large historic investment and future measured benefits to defend, as well as its reputation.
A sanction may interfere with a host nation's plans or its development opportunity. It may force the company to abandon its intentions. However, a sanction at this point still will leave a project that someone may develop in the future, within the life of the affected community or that of a future generation.
The effect of what amounts to non-monetary sanctions on exploration projects will be more immediate. In many cases, due process might never reach the planned end in the Gazette. I used the word “project” and not “company” specifically here because the junior exploration company is usually shorter-lived than the project. The company may move on or possibly dissolve. It has component technical, financial, and administrative pieces that will come apart and eventually recombine somewhere else in the sector. This would not be out of the ordinary. It's a function of exploration and of financing exploration. Bill C-300 just provides another catalyst for it to happen. It kind of adds a 300-pound gorilla into the mix. The junior company may not survive the time of the minister's investigation, regardless of the merit of the claim against it. It may decide the dispute is not worth the time and effort, or that the defence will cost more than the current exploration value of the project. Perhaps that is the desired outcome of a claim in the first place.
Regardless, there is still a mineral project there. The minister's decision will be a beginning, and not an end, to a larger Canadian involvement in human rights claims in the resource sector. If Canada has decided that Canada should prevent an activity by a Canadian company or remove it from contention to operate a project, Canada must understand that by doing so it has an obligation to ensure that the situation we leave does less harm than the one we acted against. By taking action against a company, Canada will have picked up the reins of responsibility, and we must see that those we seek to protect are no worse off for our intervention.
The debris left behind after a minister's decision, either supporting or dismissing a claim, will remain with the project, that point on the planet where the company, two nations, civil society, and all those in the host community who took stands and fought for their interests and rights played out. It is hard to imagine that upon resolution the host community will feel the same closure as the minister may in his or her annual report. They may feel further abused by the externality of the process, especially if the adjudicator offers no suggestions or solutions to improve the company's position over its previous situation. If Bill C-300 were about justice, it would contain mechanisms to ensure this.
What would Canada offer to a host community to replace the lost opportunity and guide them to a better outcome once the fight is over?
Claims against Canadian exploration companies and projects at the early stage of enterprise will be numerous, hard to investigate, and often rooted in all-too-human frailties such as greed, ambition, and plain old politics. It is not presumptuous to say that 5% of 7,000 projects have a local complaint that could make its way to the minister. That would be a new briefing note for the minister every day, a new investigation beginning every day.
From my own experience, mining operations, especially those represented by a foreign actor, can attract suspicion and hostility on principle. Companies I have led through exploration projects have been accused of dumping cyanide in a river and exploring with helicopters at night to avoid protesters in El Salvador, stealing gold and damaging water tables in Argentina, and corrupting officials pretty much everywhere. All of these are untrue. I was not undertaking any work where my level of activity matched the accusation, even in theory. Despite the lack of any factual supporting evidence, these accusations appeared on the Internet, linked by Canadian and American sponsors who made no attempt to verify the claims or even speak to me before assisting in the dissemination of the accusations, nor have they since.
This is what the entry point can look like for the minister when a claim is made, if it has merit or it doesn't.
My personal favourite was being accused by the wives of my employees in Madagascar of making 70 of their men impotent. I will admit there was a lack of cultural acumen on my part. I was able to resolve it, but I'm sure it would have made a great sound bite on one of the CBC Radio morning shows.
I've tried to describe what I think are challenges for Canada in the decisions about Canadian exploration companies and host communities under Bill C-300. I'm going to try to be slightly cynical here for a moment.
In my weaker moments, I don't think Bill C-300 is about extractives at all. I think it's about challenging the Government of Canada's policies and actions on the international stage. This is about any member of society from anywhere attacking what they feel is a want in Canada's moral policy. This is about driving the interpretation of subclause 5(2), which was talked about earlier, about what is “consistent with international human rights standards” to where someone thinks Canada should be going. This could be about a weak foreign government sponsoring the removal of a Canadian company to replace it with one of its own, or one from another country with better state-to-state incentives.
In a weaker moment, I would ask the Canadian government if they were satisfied with the results of the previous ouster of Talisman in the case of the Somalis who were involved and what the minister's action would have looked like had Bill C-300 existed then.
Bill C-300 will make Canada liable for the results of the vacuum created by the exercise of our enlightened human rights determinations, while at the same time removing its best available tool, a fully engaged extractive company. Although designed to create another layer of accountability in Canadian actions abroad, this bill neither practically nor effectively accomplishes that, nor does it offer to define mechanisms for assuring justice for host communities.
In closing, members of the committee, I would refer you to the tools that my colleagues in the extractive sector will present to you during these hearings: the Prospectors and Developers Association's e3Plus, the Mining Association's Towards Sustainable Mining, and the Equator Principles. It is my impression that the extractive sector as a whole, including my piece of it, is coming to embrace their operational aspects and, more particularly, the motivations that created them in the first place. In fact, it was the operational aspects that were lacking. I participated in the development of e3Plus, and the shared concern for its design was that it place good operational tools in the hands of field personnel working with our host communities.
Now, e3Plus was designed during the time the industry and civil society waited for the government's CSR position paper, Building the Canadian Advantage, and for its policy, which is now on the DFAIT website. They're both in place. They're both still evolving. Being new initiatives, both are largely untested as bodies of practice or mechanisms to improve CSR. However, they're both aimed at improving performance of Canadian extractives in all aspects of their activities, including human rights. They will persist in doing so, while at the end of the day Bill C-300 will obstruct Canada's and the extractive sector's efforts to successfully resolve societal issues and mediate disputes in communities where they originate. It will do so in places where host communities will need it the most.
Thank you.