Foreign Affairs Committee on Nov. 26th, 2009

[Francine Lalonde, Bloc, La Pointe-de-l'Île, QC]

A number of companies earned a very bad reputation. Do you not think this growing problem will be much more harmful to the development of Canada's mining industry than would be a legislation like this one which provides that companies should abide by certain standards? Companies are intelligent and know where their interest is. They can adjust swiftly.

[Mac Penney]

Thank you.

I can understand, if you were to believe everything you'd heard at this committee and read in the press for the last two weeks about Canadian mining companies overseas, that you would be thinking that Canadian mining is at a state of war overseas, that we're doing bad things. I can tell you, Member, that any allegations that are made against any company up here we take very seriously.

The other thing I can tell you is that Canadian mining overseas is currently involved in I believe 5,000 different projects. The vast majority of those projects are well and responsibly managed and are fully supported by the local community.

[Francine Lalonde, Bloc, La Pointe-de-l'Île, QC]

Answer my question. I am talking to you about Canada's bad reputation.

[Mac Penney]

I'm just saying that I think we need to have a solution that's commensurate with the problem. Whether you call it a counsellor, an ombudsman, or whatever you want to call it, what this bill lacks and what we require is a clear process, with clear standards, due process, procedural protections, and we would need some sort of assurance that there will be consequences for people who bring absolutely unsubstantiated and untrue claims.

In what the committee heard over the last week—I haven't read the record, but the members were here—I heard a lot of allegations, but I heard no substantiation. Our concern is that it was a preview of what we can expect, as Canadian mining companies, if this legislation is adopted.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Penny.

Mr. Sinclair, were you trying to get in there?

[Peter Sinclair]

Thank you. It was just to reiterate Mac's point.

I think this bill has a potential for much more reputational damage for Canadian mining companies because of the lack of clear, transparent guidelines, standards on which we could make a fair determination, and the resources by means of which we could investigate complaints. It's open to abuse, and we believe that abuse will increase and the reputation of the industry will suffer much greater damage.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Sinclair.

We'll move to the government side.

Ms. Brown.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

Thank you very much for being here, ladies and gentlemen.

I first want to make a comment.

Given the two submissions we have here about the lack of consultation with the mining industry, and given, Mr. Peterson, your and Mr. Chrétien's expertise, both in government service and now in the mining industry, I am horrified that there's been so little consultation.

Both of you say here, “To our knowledge not one...company was consulted with respect of [the drafting of] the bill”, and the executive summary says, “We respectfully submit, however, that the Bill...was proposed without any consultation of any sort with any extractive company or industry association....” I find that disturbing, to say the least.

But what I want to ask is this. The other day we started on this in a way, but Mr. Chrétien, perhaps you can go on. The other day we heard what I would say were some damning accusations about Barrick Gold from one of the witnesses. They said the company was standoffish, resistant, aggressive, and dangerous:

I and my closest staff were personally and physically threatened.... My children were threatened, my office was wiretapped, my staff was bought, and the public officials who once controlled Barrick for me became paid employees of Barrick Gold.

It's inflammatory towards the companies, but my question is, if Bill C-300 were in place, what would happen to a mining industry wherein those accusations were brought forward?

Mr. Chrétien, perhaps you could go on to say what you wanted to say to Ms. Lalonde.

[Raymond Chrétien]

It's a very good point. Let me try to run you through the process of what would happen today.

If a serious complaint were made to the minister's office, whether the Minister of International Trade or the Minister of Foreign Affairs, what would the minister do today? He would turn to his deputy minister, as all good ministers do, and then the deputy minister would tell his minister, “Minister, what are the standards, what are the laws by which a team of inspectors from this department could make proper determination? What are the clear procedures to protect the parties involved? What is the legitimacy? What authority do we have as Canadians, as the Department of Foreign Affairs, to investigate in foreign countries? Minister, I have to tell you, I simply don't have the resources to conduct those investigations. The department is strained, we have our own inspectorate that carries three major trips a year, probably down to two right now. I'm simply not equipped, Minister, to do this.” Finally, he would ask the minister—accountability for those who abuse the system.

That's a very good point. These companies have to be accountable. My view is simply that this bill does not provide this accountability.

In practice, also, I'm worried about the inspections to carry a visit to Sudan or the Kivu in the Congo to investigate a mining company. What will happen? The department doesn't have resources. It would probably have to hire consultants, lawyers, accountants, make them a team, try to give them some kind of proper security clearance, try to get them a visa to go to the Congo. The Congolese would say, “Listen, you're coming here to investigate a Canadian company employing Congolese. We have a say in this. We want to be part of that investigation.”

That takes months, just to get it going. These guys would arrive at the embassy in Kinshasa. What would happen there? Our ambassador would take them to the foreign ministry to meet their counterparts. The Congolese would have to be part of that team. Then they would head towards the Kivu. How do you go to the Kivu? There's a flight a week. There's a civil war there, people are dying. You're going to carry out an investigation in the Kivu, in a mine. Suppose you can do it—I'll give you the credit for this. Then what do you do? You come back to Kinshasa, back to Ottawa. You try to write a report out of the chaotic situation you have faced down there. Then what do you do with this report? The report will go from the inspectorate to the deputy minister to the minister. Then the minister will say, “What's this? I agree.” Or “I don't agree.” If he were to agree with that report, what will he do with it?

All of this, Mr. Chairman, is not at all clear. That's why I'm worried about the huge confusion, the kind of huge snafu that would be created if the guidelines were not much better than they are right now.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

Mr. Lunney.

[James Lunney, Conservative, Nanaimo—Alberni, BC]

Thank you very much. I appreciate your presentation.

Look, this whole CSR thing has been developing over the last decade or so in a significant way, and everybody agrees that there is a need for CSR principles. But we have UN principles for responsible investigating that have been developing. You have the IMF guidelines, out of which come the Equator Principles.

Canada, I think, is recognized as a leader in these realms, but because we are probably the largest participant, we're also, I suppose, a target for those with grievances, shall we say.

But Canada's approach—I wanted to ask you to comment on that. We have the four approaches here that we're taking right now and that we alluded to just briefly here. With the four approaches, there's the new centre of excellence that's being developed; ongoing assistance to CIDA to develop governance in the developing countries, governance capacity and regulatory capacity, which is lacking in many developing countries, obviously. There is promotion of these internationally recognized standards. We're interested in continuing to promote that. And finally there is our CSR counsellor. She was just here at our last meeting, has just been appointed, Marketa Evans, a very skilled, knowledgeable person in this area of CSR development.

But one of the criticisms is that it's voluntary participation in this process. You know, your participation is voluntary, and that somehow is portrayed as a severe weakness. Can you imagine a scenario where a company refused to participate with a conflict, with a situation that was attracting attention, where there is a significant problem? Can you imagine a scenario where a company would not be interested in participating in that CSR process, at the risk of public censure when results of her reports are made public? Obviously that would be a very significant incentive, I would think, to participation. Would you care to comment on that?

[Dina Aloi]

I would like to, yes. Thank you.

We have looked at the government's response. As my colleague stated, it's a workable response. What's positive about the response is that it is multi-stakeholder. It's a collaborative approach to improving CSR. Your CIDA example is a perfect example of a multi-stakeholder approach where industry could work with CIDA, and that's the approach we're looking at, a very transparent, multi-stakeholder approach.

You mentioned the voluntary nature of the counsellor's position. I find it interesting: my understanding is that actually the NGOs were asked if they would waive consent to participate in an investigation, and they said no. So how would this approach be accountable to both sides?

Another interesting point about the whole voluntary aspect of participating in an investigation is that DFAIT, when they actually testified at this committee, made the statement that they did a study, and 100% of companies that were asked to participate in investigations participated. They gave their consent because it makes sense. When there's a clear, transparent approach that's well resourced, there's no reason for a company not to go through with that.

That's what our statement is. Mr. Rae provided a perfect list of the existing CSR standards with the IFC, the CPP, the EDC. They all have standards that we're held to account for, that we're already working through. There's no reason to do away with CSR. In fact, I certainly hope it's not. One of the comments about a developing phenomena, for me, is that anthropologists and social scientists are working with mining companies. Community development specialists are now part of mining projects. That's a wonderful phenomenon.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much.

We'll move now to Mr. Dewar.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you, Chair.

I just want to maybe establish some things about what was said and not said at this committee. I don't recall people suggesting there was a war on, or whatever the indication was from one of the witnesses.

I think it was very clearly established by all witnesses at this committee that by and large, things were going well, but what we need to do is evolve a process. I think one witness talked about a sports analogy and referred to being on the field and whatnot, and I referred him back to the fact that actually our job here is to be referees and set rules. I guess you're a player, and I can understand your need to want to set rules in your favour; that's what you do.

Maybe I'll start with Barrick and Mr. Sinclair. In your intervention there were a lot of coulds, woulds, and maybes in terms of this legislation, but you came to the determination that essentially we shouldn't support it. I want to go to what other jurisdictions are doing.

First of all, I'd like to ask you what the CPP's investment in Barrick is right now, what the dollar value is. Then I'll ask you about what happened recently with the Norwegian government pension fund.

[The Chair, Conservative, Kevin Sorenson]

Mr. Sinclair.

[Peter Sinclair]

I'm afraid I can't answer you. They don't tell me the sort of level of investors when we work in the community relations CSR department.

[Paul Dewar, NDP, Ottawa Centre, ON]

Well, it's $739 million, but that's—

[Peter Sinclair]

Okay, thanks.

[Paul Dewar, NDP, Ottawa Centre, ON]

It's $739 million. I guess I'm a shareholder, so I keep track of these things—with the CPP, that is, and I guess indirectly Barrick.

I just wanted to know what happened recently with regard to the Norwegian pension fund and Barrick Gold.

[Peter Sinclair]

I think that has been discussed at the committee before. It's documented in a submission that we are producing today, which we've submitted to the clerk, outlining some of the allegations and issues that have been made at the committee. I think it's stated there.

[Paul Dewar, NDP, Ottawa Centre, ON]

Which is what?

[Peter Sinclair]

That the Norwegian pension fund divested in Barrick.

[Paul Dewar, NDP, Ottawa Centre, ON]

And why was that?

[Peter Sinclair]

That was their choice. Our shareholders have a choice as to where they put their investments, as do you. We, at the moment, have Norway as one fund that actually.... We weren't very surprised at that decision.

[Paul Dewar, NDP, Ottawa Centre, ON]

Why is that?