Thank you very much, Mr. Chair.
Thank you for inviting the Department of Foreign Affairs and International Trade-- “DFAIT”, as we refer to it--to return to this committee.
Today we would like to build upon previous testimony made by this department and comment on the potential implications of implementing Bill C-300, the challenges of the quasi-judicial process it would create, and the CSR-related activities in which DFAIT is currently engaged as part of our mandate when it comes to fostering the expansion of Canada's international trade and commerce and coordinating Canada's international economic relations.
Officials at the department have been following closely the committee's study of Bill C-300 and have carefully reviewed your comments and questions, as well as the testimony provided by the many witnesses and stakeholders who have appeared since the department last appeared in June.
During that appearance, officials spoke of the new corporate social responsibility strategy tabled by the government in March, the work of the national contact point and the network of foreign service officers around the world. It was also noted during that appearance that departmental officials had some concerns with the proposed implementation of this bill. That appearance was followed with a written submission outlining these concerns and questions.
Since that time, many issues have been raised by the various stakeholders. You have heard from the industry, civil society organizations, Export Development Canada, the Canada Pension Plan Investment Board and some of our partner departments.
Rather than focusing on areas that have already been substantively addressed by others, DFAIT would like to use its time today to raise a number of issues that would have considerable impact on this department and on its work. These issues include the use and operation of the Special Economic Measures Act; the question of applying international human rights standards to non-state actors; the way in which DFAIT provides CSR support to Canadian companies, including those in the mining, oil and gas sector; and the foreign policy implications of the bill.
To highlight some of these issues, it might be useful to undertake a close examination of the implications for this department of setting up and conducting an examination process as it is set out in the bill.
As the department that would ultimately be responsible for implementing and applying many of the provisions of this legislation, we needed to look carefully at what would be asked of us should this legislation pass. In so doing, we felt it was important to carefully examine the provisions of the legislation as it currently stands and to assess the various implications, some of which I will mention here.
Bill C-300 asks the ministers of the Department of Foreign Affairs and International Trade to draft a set of what appear to be mandatory regulations using a number of internationally recognized, voluntary guidelines and one policy that is internal to the International Finance Corporation. This is challenging, because these instruments are currently drafted as guidelines, and not regulations, so that they remain flexible enough to embrace the wide range of complex circumstances and conditions under which firms from Canada and other countries operate in countries around the world.
The bill also asks the ministers to incorporate human rights standards and “any other standard consistent with international human rights standards”. In this regard, Dr. John Ruggie, special representative of the UN Secretary-General on the issue of human rights and transnational corporations and other business enterprises, noted in his report of April 22, 2009, that “human rights instruments were written by States, for States. Their meaning for businesses has not always been understood clearly by human rights experts....” It would be difficult to determine which international human rights standards to apply and how those standards should apply to non-state actors prior to the completion of the work of Dr. Ruggie.
This point also serves to highlight the fact that Bill C-300 would require DFAIT to build or acquire the capacity to investigate and adjudicate claims of human rights abuse and environmental degradation. In addition, ministers would need to take into account not only the legal risk of making a determination, which could be subject to judicial review, but also potential impacts such a determination might have on local communities, host governments, Canadian companies, civil society organizations, and other stakeholders.
As noted in our earlier submission, the link between the actions of a Canadian extractive company and grave breaches of human rights by states is unclear and does not seem to be consistent with the purpose of enhancing corporate social responsibility abroad.
Bill C-300 requires the Department of Foreign Affairs and International Trade to set up a quasi-judicial process. That process would need to meet all the requirements of due process, procedural fairness, and natural justice. Foreign Affairs and International Trade currently does not have the ability to function as a quasi-judicial body. There is no provision within the DFAIT Act to house such a mechanism.
In order to set up a process to accept or reject complaints, conduct examinations, and make decisions based upon those examinations, a carefully drafted framework would be required, firmly respecting the principles of natural justice. This extensive regulatory framework would be required to ensure that rights are being protected.
The issues outlined above also raise questions as to whether or not DFAIT officials have the right skills or will have sufficient resources available to train or recruit individuals with the appropriate professional competencies to do this work.
It may be helpful to review the current practice of the department when DFAIT officials are presented with allegations of wrongdoing by a Canadian company abroad. When the department learns of such allegations, we take these very seriously and try to play a constructive and helpful role. Our heads of missions and foreign service officers in Canada and abroad consult and work closely with companies and the affected communities, and with governments, indigenous peoples, and civil society organizations to facilitate an open and informed dialogue among all parties.
In the event that the territory in which the alleged activity took place is not a signatory to the OECD guidelines for multinational enterprises and does not have their own national contact point, or NCP, we would offer the services of Canada's NCP to the affected individuals, communities or their representatives.
The Department of Foreign Affairs and International Trade currently chairs the interdepartmental committee that is Canada's national contact point (NCP) for the OECD guidelines. These guidelines are a key element of Canada's CSR approach.
The NCP promotes the guidelines, handles inquiries, and can foster a constructive dialogue between stakeholders when issues arise. If the allegations fall outside the scope of the OECD guidelines, the department could offer the services of the newly appointed Extractive Sector CSR Counsellor to the affected communities for issues that fall within her mandate.
The department's approach to engaging with stakeholders in the event of such allegations is one that reflects the principles that guide Canada's foreign relations and the observance of Canada's commitments under international agreements and obligations, including respect for the sovereignty of states.
It is an approach that is consistent with the way states in general work with one another when issues such as these are raised. It also demonstrates a commitment not only to help companies perform better and act in a socially responsible manner but also to work with host governments and local communities to enhance their ability to manage natural resources and benefit from the development opportunity afforded to them by such endowments.
When amending the DFAIT Act to put constraints on the kind of support officials are able to provide to Canadian companies in certain circumstances, it might be useful to note what some of those activities are. It will be challenging to draw a distinction between the activities of DFAIT officials that promote and support Canadian companies, and would have to be withdrawn in the case of a negative determination by the ministers, and activities that could be considered improving overall CSR performance.
These activities include hosting sustainable development and CSR conferences, seminars, and workshops; assisting Canadian delegations of indigenous peoples to meet with groups of indigenous peoples in other countries to talk about CSR and natural resource development; visiting mining sites and speaking with stakeholders; providing information about Canadian policies and programs to foreign governments; assisting in bringing foreign delegations to trade shows, such as GLOBE and PDAC, to meet with Canadian companies and learn about new technologies and approaches to natural resource development; advising companies with respect to the local cultural, political, and social environments and encouraging them to develop CSR best practices; participating in dialogues with civil society organizations and other stakeholders to better understand the range of issues and concerns and to adapt our policies and practices accordingly; sharing advice and information with partners across government and working together to create a whole-of-government approach to promoting CSR; actively supporting the creation of the CSR centre of excellence; and engaging on CSR at the bilateral and multilateral levels in a vast array of fora and through a wide range of instruments.
In summary, the experience of this department has demonstrated the value of seeking to facilitate dialogue to identify shared objectives among multiple stakeholders and build a consensus about how they can be most effectively realized. This requires flexibility, creativity, balance, and readiness to adapt approaches to specific circumstances, particularly in light of the highly complex political and economic situations that exist in many developing countries. This is particularly true if the goal is not only to promote respect for human rights but also to work toward remedy where the potential exists for behaviours inconsistent with the proposed guidelines.
Insofar as the analysis undertaken of the potential impact of Bill C-300 on DFAIT, it could restrict our ability, in areas where we most need to engage, to influence a positive outcome and ultimately limit the ability of this department to make positive contributions in the area of corporate social responsibility.
