Thank you very much.
Good morning, and thank you very much for giving me the opportunity to share my thoughts on this very important topic this morning.
My name is Marketa Evans, and about one month ago I took up the role of Canada's CSR counsellor for the extractive sector overseas. I'm not here to represent any position on Bill C-300; I represent neither the government nor industry nor civil society. I think my priority in my role is to contribute to an informed strategic public conversation that could capitalize on Canada's extractive sector dominance to make a more significant contribution to our human development objectives. I believe this positive potential has been largely untapped in any strategic or integrated manner. But I also believe there's actually a groundswell of support from a wide-ranging cross-section of Canadian stakeholders to make it happen.
In an effort to be most helpful to the committee I'll focus on two main points and then we can get to some questions. The first is who I am and a little bit about my mandate. The second is some issues for the committee to consider as it deliberates this bill.
First, I'll give you a little bit about my background and the role of the CSR counsellor.
I've never worked for the extractive sector in any capacity, nor have I ever worked in government. While I was employed at the University of Toronto, I conducted research on global corporate citizenship in general and on business-NGO engagement in developing countries more particularly. I examined in the course of that research and in some detail two case studies where Canada played a significant role. The first one was Talisman in Sudan and the second was the issue of conflict diamonds, which eventually resulted in the well-known Kimberly Process Certification Scheme. So my views here have been informed by my research work; by literally thousands of conversations that I have had with a very wide variety of stakeholders who generously shared with me their candid views and insights; by my students in a graduate course I taught for several years on this topic; by my involvement in the Devonshire Initiative, which is a co-created platform for NGOs and the Canadian mining industry to build trust and foster partnerships; and by visits to mine sites in emerging markets.
Most recently I was employed by one of the world's oldest and largest aid and development NGOs, one that works in almost 50 developing countries. So perhaps it won't be a surprise to you to hear that my benchmark of success in this role will be very clear: are the people in developing countries better off as a result of the presence of a Canadian company? In particular, the focus should be on the poorest, the women and the children, since not only do they bear the brunt of poverty, hunger, disease, and discrimination, but also because they are the most crucial change agents.
A few points frame my thinking on this. I didn't actually start off looking at the extractive sector. I was looking at business more generally, but I quickly came to realize that mining, metals, and energy are crucial to the realization of the millennium development goals. There is no improvement in basic living standards, no electrification, no water and sanitation, and no infrastructure without those industries.
Second, I realized that developing country governments are increasingly seeking out resource exploitation and investment as well as advice on how to best manage resources and revenue flows.
Third, private sector development is increasingly accepted as a crucial factor in poverty reduction and social development. Global best practice is moving very quickly to multi-party, multi-stakeholder work with, not for, the private sector. NGOs are seeing the potential benefit in shifting both the thinking and the practice of the extractive sector, and this is as evidenced in global partnerships now existing between CARE and Anglo-American, for instance, and Shell and International Alert, BirdLife and Rio Tinto, just to name a few.
But we all know that wealth creation is not sufficient. I believe Canada has an unprecedented opportunity to seize a leadership position in this sector and realize its potential as a constructive development actor. In mining alone, Canadian companies invest sums that are on par or exceed CIDA's investments in developing countries, and they have a long-term time horizon—10, 20, 30 years—conducive to making the kinds of changes that we need to see in developing countries.
The 2005 SCFAIT committee report, the round table's process, the advisory group report—all these contributed to launching what I believe is an important national conversation. The government took a long time to respond to the report, but much constructive progress was made in that two-year timeframe, even in the absence of a formal government response. You've already heard about most of these—the Voluntary Principles on Security and Human Rights, our participation in the Extractive Industries Transparency Initiative, the launching of the Devonshire Initiative, and e3 Plus.
Because many civil society organizations and others have emphasized the special importance of the human rights agenda in extractive industries, it is useful to flag once more the significant work of the UN Secretary General's special representative on business and human rights, Professor John Ruggie. He is now four years into his six-year mandate, and Canada was an early and strong supporter of what I believe has now become a serious and credible framework for moving forward on this crucial issue.
In early November, Professor Ruggie and I were present at a two-day consultation hosted in Toronto by Osgoode Law School. Many Canadian experts participated. My understanding from that consultation is that no state is currently proposing even voluntary human rights standards for business and that no guidelines for business exist at this time. The Ruggie framework, which was endorsed by the United Nations Human Rights Commission last year, concluded that the human rights obligations of a state do not translate literally for business. Business has responsibilities with respect to human rights, but these are different, and articulating them is the project of this phase of the Ruggie mandate.
I have a few quick words about my mandate. I'm appointed through an order in council for a three-year term. I report directly to the Minister of International Trade. Minister Day and I have agreed on the importance of keeping this role at arm's length from the government and from the department, and I take seriously the importance of establishing a credible, constructive office.
The order in council stipulates two elements of the role. The first is to review issues brought before the office by either NGOs or companies; the second is to advise all stakeholders on the implementation of the standards.
Much has been made of the fact that I am not called an ombudsman. I have carefully reviewed the recommendations made in the advisory group report, and I see little daylight between what was recommended in the report and my role.
The criticism that the role is toothless revolves around two elements. The first is the ability to compel participation in a review. The order in council explicitly states that both parties must agree to a review. I'm not sure how compulsory participation would operate in practice, but I have no particular position on such a requirement. My working hypothesis consists of two parts. In the first place, a quality review would be difficult to undertake without both parties' consent—and for such a review you need access to people, files, and premises. In the second place, significant incentives for parties to participate already exist. Being involved in the process means you have some say in the outcome, while the reputational fallout from failing to consent would need to be explained to investors, donors, and the media. Public reports are to be issued in all cases. Nevertheless, I could imagine some reasonable situations in which either an NGO or a company might be justified in declining participation, although I'm not aware of any actual cases right now.
The second critique centres on the lack of automatic sanction. I have no particular view on sanction. What I would need to understand more deeply is how and under what conditions sanctions can be an effective tool in prevention and performance improvement on the ground. In any case, I strongly recommend to the committee that sanctions should be as envisaged in the advisory group report—that is to say, measured, commensurate with transgression, allowing sufficient time and tools for remediation and action plans, as the culmination of a fulsome engagement process, and importantly, incremental to what is already in place. According to the advisory group report, only in cases where there was both “serious non-compliance” and a company that ignored remediation would there be a recommendation around possible withdrawal of financial and/or non-financial support.
I fully understand that some civil society organizations see the review process in the round table's report as a package deal, which is to say, an ombudsman with a tripartite review committee. But there's nothing in the order in council to dictate how the review process under the counsellor's office is to be established, and nothing to interdict the eventual creation of such a multi-stakeholder committee should one be desired or warranted. Indeed, there is a tripartite execute committee currently being established to guide and support the CSR centre for excellence.
I want to emphasize that there is no review process in place right now and there are no preconditions or preconceptions as to how it should be established or how it should eventually function. A serious, credible review process is one of my key priorities, and my commitment is to establish it in an open, fully participatory way, drawing on as much expertise as I can, benchmarking to existing review processes, and learning from those experiences. In my view, that process will be more productive and fruitful embedded in an enhanced conversation on a few other issues, to which I now turn.
The first is to ensure we have a full understanding of the problem. I think we've had some powerful case studies, some powerful indications of what is happening. In some cases these were instances that were quite specific and in some cases they relate much more generally to well-known linkages between resource exploitation and human rights abuses or environmental degradation. Some allegations go back 10 or 15 years.
I suggest we still have significant room for a diagnostic of why these events are happening. Are companies stupid, wilful, blind? Is there evidence to support the notion that the industry still has not gotten the message on CSR? Have they learned nothing? Is there evidence to suggest the problem is getting better or worse? A richer empirical diagnostic of the problem would ensure that we better understand root causes, lessons learned, dissemination techniques. We could get a better handle on our objectives and success indicators. In three, five, or ten years, what do we expect or want to be different? What results do we want and how would we measure progress? Such an approach would allow us, I believe, to chart a productive path forward and align our work on key elements that need to be tackled.
Second, I would recommend we ensure that we have sufficient information to make informed choices about potential unintended consequences. With increasing demand for natural resources globally, it is to be expected that where resources exist they will be exploited, if not by Canadian companies, then quite likely by someone else. Perhaps a Canadian divestment would spur more artisanal mining, which is often characterized by the worst forms of child labour and significant environmental degradation. Perhaps the property would be taken over by a state-owned company, companies that tend to have poor human rights records. Perhaps the concession would simply be purchased by a company that was not subject to media, shareholder, activist, or government scrutiny. Or perhaps the Canadian company would simply be bought by a sovereign wealth fund, as has increasingly been happening.
You heard Amnesty International testify before you that it did not intend for Talisman to pull out of Sudan. I had been told that, off the record, during my research interviews by several of the NGOs that were involved in the campaign against Talisman, but it was the first I'd heard of it publicly. Companies are capable of significant change in attitude and performance, and Talisman is now ranked among the top 50 CSR companies in Canada. So I believe we should make a further investment of what the implications are of Canadian divestment.
Third is to more actively leverage our efforts and, to the greatest extent possible, work in tandem with like-minded countries, donors, agencies, etc. We want all citizens in developing countries to have a voice, not simply those who happen to be located in the vicinity of a Canadian mining operation. We want them to be empowered on all the issues they face, and for that we need to work much harder on citizen empowerment, particularly for marginalized or underrepresented groups, much harder on education, on fostering local government responsiveness, on reducing corruption, enhancing accountability, and so on.
This is one of the main reasons I've long championed a much stronger NGO voice in this conversation, not simply to move the thinking of the corporate sector itself but especially because NGOs are absolutely crucial to the progress on the ground on citizen empowerment.
Finally, I caution that reviews are not a silver bullet. In practice, they can be extremely expensive and difficult to conduct. Rarely do they seem to mark a once-and-for-all conclusion to any debate. Review mechanisms exist today and some sit idle. While we can certainly build a better mousetrap, even a carefully designed mechanism will not necessarily deliver a crisp, clean, easy answer on whether a company is in or out of compliance on any particular standard.
Both the government's CSR strategy and Bill C-300 reference the IFC performance standards that were established in April 2006 and form the basis for banks' Equator Principles. There are eight IFC standards, covering social, cultural, labour, community, biodiversity, environment, and indigenous issues. Each standard is supported by many recommendations covering assessments, management systems, training, community engagement, monitoring, and so on. The eight standards themselves run to 34 pages, and the supporting guidance notes are a further 170 pages.
Because the standards have been created to be used in a wide variety of environments and by a large variety of companies, each requirement contains areas of subjective interpretation. I'll just quickly cite one example to give you a flavour.
