Evidence of meeting #44 for Foreign Affairs and International Development in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was company.
A recording is available from Parliament.
9:10 a.m.
Conservative
The Chair Conservative Kevin Sorenson
If that is the case, then I will not proceed with the steering committee report. All right? We'll not pass the steering committee report, and we'll move right on to our witnesses.
Madame Lalonde.
9:15 a.m.
Bloc
Francine Lalonde Bloc La Pointe-de-l'Île, QC
If we look at committee business, my motion on Rights and Democracy funding was discussed and was not carried because my colleagues opposite spoke a long time. What happened at the other meeting enabled my colleague to table his motion. I point out that mine is still there, ahead of his.
9:15 a.m.
Bloc
9:15 a.m.
Conservative
The Chair Conservative Kevin Sorenson
I want to make it clear: the supplementaries will be reported without a minister, because we will not be inviting the minister. We will retract that invitation to CIDA. We checked on the availability of the minister.
Thank you, guests, for attending. Sorry that you had to go through a bit of committee work.
Testifying before us today, from McGill University, we have Daviken Studnicki-Gizbert. I worked on that name before committee. Also, from the Corporate Knights Forum, we have Toby Heaps, the editor-in-chief; and from SNC-Lavalin Inc., Mr. Robert Blackburn, senior vice-president, and Jean-François Gascon, product sustainability and leader of SNC-Lavalin Environment.
Do you have a point of order?
9:15 a.m.
Conservative
Deepak Obhrai Conservative Calgary East, AB
Would you please explain to us at what time you're going to shut this thing down and go into committee business, in light of the fact that we have to go and vote?
9:15 a.m.
Conservative
The Chair Conservative Kevin Sorenson
Let me be clear on why we're doing this. We knew that we had scheduled the first guests until about 9:45. We knew we had to pass this steering committee report. In view of the bells on the other end and the steering committee on the front end, the guests were spoken to—other than Mr. Heaps—and they said that they would all do this together. My intentions are to go until 10:30. I'll need unanimous consent when the bells start, but I have the understanding that they're 30-minute bells, not 15-minute bells. If that changes, then our timelines will change.
Mr. Studnicki-Gizbert, please begin.
9:15 a.m.
Professor Daviken Studnicki-Gizbert Associate Professor, Department of History, McGill University
Good morning. Thank you very much, Mr. Chair and the members of the committee. I appreciate the opportunity to share some of the research we've been doing at McGill with the committee this morning.
The statement I am going to present is based on the collective work of a research group that I coordinate at McGill. It's called MICLA. It examines the different projects across Latin America that are organized by Canadian mining companies. The testimony I'm giving is also based on my personal experience in the particular case of Cerro de San Pedro, which is a mining town on the outskirts of San Luis Potosi, in Mexico.
The issue of proof and documentation has come up a number of times in this committee, so I should say here that our research is based on a broad range of sources. These are documents released by the mining companies, technical reports from engineering firms, press files, legal documents, as well as reports filed by NGOs, international organizations, and national governments. These documents have been supplemented by field interviews with people living near a Canadian mining project, and interviews with community delegations that have come to Canada over the years, and with mining executives, NGOs, and scientists.
My comments today focus on Mexico. Mexico is the host of the largest number of Canadian mining projects in Latin America, and it's the country where the data is the most complete.
I'd like to focus on three points. The first is that Canadian mining in Mexico is a high-risk form of economic activity. The second is that while conflicts have arisen between Mexican communities and Canadian mining companies, these are surprisingly few. And third, the Canadian government, especially as represented by its consular staff, appears ill-equipped to address the growing public backlash against our companies in that country.
I believe it is important to get a better understanding of the context in which our companies currently operate. If you consolidate project data with data on the environments and communities around them, you quickly get a profile of a high-risk industry. It combines a form of operation that has a high impact on its surroundings with the presence from one end of Mexico to the other of a densely populated area characterized by multiple uses, complex land tenure and significant social strife.
Canadian mining companies first entered the Mexican mining sector in the 1990s. They brought with them billions of dollars in equity. Because our companies dominated the sector, they currently own approximately three-quarters of the projects. They have arguably been the main driving force for the recovery of the mining industry in Mexico. Investment aside, they cleared the way for significant modernization of mining techniques. The biggest change is probably “large tonnage, low grade” mines, which are usually open pit.
Most of the projects carried out by our companies are gold, silver and copper mines. The majority of those mines are open pit. I do not want to praise nor do I want to criticize this type of mining, but first off, it is new; second, it has significant long-term impact on the land and water around it; third, there are contamination risks; and fourth, it requires huge investments. We are talking an average of a hundred million dollars for every project. These rural communities, many of which are very poor, are literally awash with money.
There are currently 519 mining projects developed by companies registered in Canada. They hold large concessions of many hundreds to thousands of hectares each--the average is about 15,000 hectares--and when you put this together we get a significant portion of Mexico's national territory.
I put this out because I want to talk about the actual social geography in which these companies operate. It's a social geography that's very different from that of mining in Canada. Mining projects are situated in areas where the average population density is about 49 inhabitants per square kilometre. To give you a reference for that, it's about equivalent to the area around Chelsea, so fairly densely populated but quite rural. The people who live there are predominantly small-hold farmers, which means that they depend on land and water for their livelihoods. In areas like Guerrero, Oaxaca, and Chiapas, many of these farmers are indigenous, which means that they have special rights to consultation under ILO 169, to which Mexico is a signatory. But it also means that they have special liabilities, which means that those rights are often ignored. The majority of the projects that we've surveyed, close to three-quarters, overlap with what are known as ejido lands. This is a collective form of land tenure accorded to rural communities after the Mexican revolution, and the laws regulating ejido lands are very strict. They make ceding land, changing land use, or even renting land very difficult, and this can trigger conflicts within as well as between communities.
Finally, in a general way, the Mexican countryside is currently facing its most serious crisis in generations. The violence surrounding the drug trade is on the rise. There's been an upswing in guerrilla activity and in the militarization of the hinterland. The number of cases of alleged corruption at the local and state level is also growing. So this is the context: a large number of projects that will impact heavily on the resources needed by local communities, competing claims on land use that are legally complex but which must be resolved in the context of deepening violence and recourse to extra-legal means of “getting things done”. And this is what I mean by high-risk enterprise.
Public debates over mining have tended to turn around conflicts that emerge between mining companies and local communities. An important line of our research has therefore been to better understand the factors and dynamics that lead to these conflicts. Surprisingly, in recent years only 13 projects operated by 11 Canadian mining companies have been embroiled in open conflict. We need to compare this with the over 500 projects in development across Mexico. The Mexican pattern generally holds across Latin America as a whole. For some 1,300 Canadian mining projects ongoing across the region, we count around 50 with attendant conflicts.
These 13 cases in Mexico depict a range of trajectories. We have seen communities put up blockades to stop mining operations and force the company to negotiate. In some cases, negotiations was successful in resolving the dispute. In others, the company called in the police to take down the blockades and arrest the organizers, often with excessive violence.
The violence has sometimes taken the form of attacks. These attacks have been perpetrated by people linked to the company against people opposed to the mine. We are talking about assault and, in two cases, murder. The latest one just happened. Last Saturday, November 27, Mariano Abarca Roblero, a manager from the community of Chicomuselo in the state of Chiapas, was gunned down in front of his house by two assailants.
A few days before he died, he requested state protection because he had been publicly threatened. The threats were allegedly made by two representatives of Blackfire, a company registered here in Canada. Before he was murdered, Mr. Abarca organized several public consultations in communities near the Blackfire project. After the communities rejected the mine, Mr. Abarca coordinated a number of blockades. That was in June and July past. He died because he wanted to protect his community.
What is the significance of these findings? I find three.
First of all, while Canadian mining in Mexico is a high-risk enterprise, the numbers show that the Canadian companies are so far capable of managing this risk. I've personally met with people from Mexican communities who recognize the good faith in negotiations of Canadian mining managers and are happy to work with the company. In this respect, the government's existing CSR strategy can only help our companies improve their track record on community relations and environmental impacts. This is the kind of preventive work that absolutely needs to be done if companies and communities are to interact in a healthy and peaceful way.
I find that there's been a false dichotomy that's crept into the debates in this committee, one that pits Bill C-300 against the government's existing CSR strategy. We obviously need both of these things, and they need to work together.
Second, this committee has heard concerns that Bill C-300 would expose the Canadian mining industry as a whole to hounding by communities and their allies seeking redress, that the number of complaints would overwhelm DFAIT's capacity to address them in a satisfactory manner, that the CPPIB would not be able to maximize earnings for pensioners, that the TSX would lose a significant percentage of its equity, that the Canadian industry would lose its reputation and its competitive advantage.
Each of these arguments assumes that Bill C-300 will somehow open the floodgates of woe and complaint. With over 500 projects, Mexico represents a major chunk of the Canadian mining industry's overseas activities. Thirteen cases over the last five years is hardly a flood of problems. I think the industry and the TSX can breathe more easily.
More importantly, Mexicans are pragmatic. If they can find satisfaction through successful negotiations with a company or through appeal to the Mexican courts, they will do so and they have done so. So even though there were 13 cases, most of them are resolved locally, without appeal even to government authorities in Mexico.
Third, there are on occasion serious problems that arise from the activities of Canadian mining companies in Mexico. This needs to be made absolutely clear. We have to stop pretending that every single project and company is beyond reproach, that NGOs are making up vexatious and fraudulent claims in order to save their jobs.
Yes, the conflicts that arise are complex in their origins and in their unfolding. Yes, there are many sides to the story. But there are also certain incontestable and documented facts. People have been killed; people have been physically aggressed; people have suffered damage to their property, their lands, and their water without adequate compensation or redress. People have been dispossessed of their rights.
I would like to lay out in more detail one such case.
9:25 a.m.
Conservative
The Chair Conservative Kevin Sorenson
You're at ten and a half minutes, so proceed very quickly, please.
9:25 a.m.
Prof. Daviken Studnicki-Gizbert
This is the case of Cerro de San Pedro, in the state of San Luis Potosi. I'm going to summarize.
We have a case where we have a company that has been tried in Mexican courts, found to be operating illegally, and has been committing human rights abuses. These things go back to 1998. I think the point I want to bring with that case is that throughout, we have moments when the Canadian government has been continuing to support this company, either through consular support or through continued CPP investment, even when Mexican tribunals declared the company did not have a legal operating permit.
To conclude, there hasn't been a lot of response for Mexicans asking the Canadian government for redress in serious cases like the case of Cerro de San Pedro. People have come to the Canadian embassy on various occasions asking for the ambassador to provide a response. They've come to Ottawa to ask for redress. I'm not saying that the Canadian government has been unwilling or negligent in their response. It's simply that they're incapable of responding to what is a documented and very serious case in Mexico.
9:30 a.m.
Conservative
The Chair Conservative Kevin Sorenson
Thank you very much, Mr. Gizbert.
We'll move to the next group. We have two more groups. We welcome Mr. Heaps here.
We'll go to Mr. Blackburn, and we look forward to your comments.
9:30 a.m.
Robert Blackburn Senior Vice-President, SNC-Lavalin International, SNC-Lavalin Inc.
Thank you, Chairman and standing committee members.
I'm Robert Blackburn, senior vice-president of SNC-Lavalin International, and I'm accompanied by my colleague, Jean-François Gascon, who is the leader of our project sustainability group and environment. We're going to jointly make a very brief presentation.
SNC-Lavalin is one of Canada's largest engineering construction groups. Our key sectors of activity are mines and metallurgy, chemicals and petroleum, power, and infrastructure construction, ownership, and management. In 2008 half of our revenues of $7.1 billion were for work outside Canada, of which, interestingly, only 3% came from the United States, and 13% came from Africa, which has traditionally been our principal geographic market outside Canada. We're currently working on every continent, with approximately 10,000 projects under way in 100 countries. We have an employee workforce of about 22,000 around the world.
I want to make six main points, after which Jean-François will brief you on his experience and observations in dealing with project sustainability issues in Africa and elsewhere.
First, we're sympathetic to the objectives of Bill C-300. However, we have serious reservations about the need for and proposed approach of the bill. Contrary to what seems to be an underlying assumption of the bill, Canadian mining and oil and gas companies generally have a very positive record and reputation internationally. The uncertainties created by the proposed bill would place their activities in jeopardy, and they would be at a severe disadvantage with their competitors in global markets.
Next, Bill C-300 would affect SNC-Lavalin, because although we're not a mining or oil and gas company, we provide services to Canadian and foreign clients in these sectors in developing countries. In addition, we sometimes take small equity stakes in clients' projects, thus aligning our interests with theirs. Our investment in Ambatovy in Madagascar is an example where we're following industry-leading Canadian Mining Association voluntary guidelines—very strict guidelines.
In his testimony, Jim McArdle of EDC—Export Development Canada, that is—referred to 139,000 Canadian jobs sustained in 2008 alone by EDC export support and investments in the extractive industries. Several thousand of these are SNC-Lavalin employees in Canada and around the world.
Thirdly, it is important that the rules affecting Canadian companies be comparable with those observed by competitors based in other countries. Any project that benefits from export credit financing, as well as any project financed by most large banks following the Equator Principles, must meet stringent rules for environmental and social assessment of projects, as set out in the OECD recommendation on common approaches to the environment. They must also observe ongoing requirements during implementation and operations phases as set out by the same OECD and World Bank guidelines. Not only does the project proponent have to meet these criteria, but the financing agency requires that the proponent issue regular progress reports explaining how the commitments are being met. The EDC typically conducts audits for performance as well.
Finally, the EDC and World Bank regimes require the disclosure of a considerable amount of information in the form of environmental and social impact assessment reports, and often ongoing progress reports. The way in which a Canadian mining or oil and gas company develops and implements a project receiving such financial backing is thus very transparent. The same cannot be said for companies from countries that do not adhere to the OECD common approaches to environmental and social policies, and we can think of some, in Sudan and elsewhere.
My fourth point is that complaints and sanctions proposed in the bill would pose significant threats to companies' reputations, since with or without substance, each complaint calls for some level of ministerial investigation. There seem to be no sanctions against frivolous or vexatious complaints that could conceivably be launched not only by individuals but even by disgruntled competitors. Many of the complaints that you may have heard in this committee or elsewhere in print are not only inherently unprovable but cannot reasonably be defended against. The launching of a ministerial investigation would harm a reputation, whatever the outcome. Furthermore, it is not clear what resources and host government cooperation would be necessary for such investigations. These countries do have their own laws, as has just been stated, which are usually very effective.
In any case, the process would seem to be a duplication of the recently announced federal CSR strategy, with a CSR counsellor and the national contact point for the OECD and MNE guidelines .
My fifth point is a comment: that in the past twenty or so years, considerable progress has been made in Canada to bring industry and NGOs closer together and away from the adversarial zero-sum game of old. Examples include the National Round Table on the Environment and the Economy, an EDC consultative process regarding its environmental review directive.
Ultimately, Bill C-300 may well do little good for the environment and local communities where projects are implemented in the third world. It will certainly not boost Canada's competitiveness.
Finally, I think that the burdens and uncertainty of the bill's approach to standards and international enforcement would militate against Canada's hope of expanding into new and fast-growing markets around the world. Our bottom line was well stated by Jim McArdle of EDC, when he said:
If this bill becomes law, we believe that our opportunities to be on the field would be severely limited. Instead, we as Canadian companies and EDC would be on the sidelines hoping that the other companies who remain in the market do the right thing from a CSR perspective.
Thanks for your attention. I'll now ask Jean-François Gascon to share his experience with you.
9:35 a.m.
Jean-François Gascon Project Sustainability Leader, SNC-Lavalin Environment, SNC-Lavalin Inc.
Thank you very much, Robert.
Mr. Chair, I would like to know how much time I have for my presentation.
9:35 a.m.
Project Sustainability Leader, SNC-Lavalin Environment, SNC-Lavalin Inc.
I am going to give my presentation in French. I will leave 15 seconds for those who need simultaneous translation.
My name is Jean-François Gascon. I work for SNC-Lavalin Environment as a Project Sustainability Leader. Through our division, SNC-Lavalin puts sustainable development programs in place during the implementation phases of projects, particularly in mining and other resource sectors.
As my colleague told you, the ultimate goal of Bill C-300 is very commendable. We share that objective, as do many of our clients and partners in Canada. However, I think that the means being used is probably the worst way of meeting that goal.
The biggest problem with the bill is that there is a sense that it is based on three premises which make me rather uncomfortable. The first is that Canadian companies are not good corporate citizens, particularly in developing countries. My experience in more than three dozen countries, especially developing countries—because I lived in developing countries for many years—tells me that the opposite is in fact true. Canadian companies, particularly in the resources sector, actually have a good reputation, especially in comparison to competitors from foreign countries. I am therefore bothered a bit when I see that that is a premise underlying the bill.
The second premise is that the current legal environment is unable to address the problems and meet the objective, which is to encourage companies to be better corporate citizens in developing countries. I do not think there is a need for a protracted debate on that point. The legal environment is more than sufficient today, whether it is banks or export credit agencies like EDC, which are subject to a set of rules, including the Canadian Environmental Assessment Act, which has to be applied to projects outside Canada, especially when there is Canadian funding. I think the current legal environment is more than capable of permitting Canadian companies to manage mining projects in developing countries quite effectively.
The third premise is the one I find the most upsetting, especially for those who have travelled in developing countries. The premise is that developing countries do not have sufficient legal capacity or are not mature enough to solve problems, in particular, problems related to human rights or failure to respect the environment. I think this premise is very harmful. A lobby group or an NGO can say things like that publicly, but when the idea forms the basis for legislation tabled by the Government of Canada, I, as a Canadian citizen, am deeply concerned.
Why is this bill aimed only at projects in developing countries? The answer to that question is obvious. People think developed countries are able to solve these problems and developing countries are not. This is a major issue. Developing countries do not want to be treated like children. I think that paternalism is probably the last approach we as Canadians want to use when it comes to addressing these very significant concerns.
I would like to end with a rather telling example that also indicates a change in the way Canadian companies approach foreign projects, particularly in developing countries. Companies talk a lot about community relations. They talk about the celebrated “social licence to operate”, an approach that on the whole is rather passive. They try to solve problems as they arise. However, Canadian companies are increasingly proactive in their approach. For example, there is a very big mining project, one of the biggest in the world, in Madagascar, the Ambatovy project, in which SNC-Lavalin has invested as part of a consortium that includes a Japanese company, a Korean company and another Canadian company. For the implementation and construction phases of the project, three training centres were set up to train more than 6,000 local workers, which helped maximize local employment for the project. Today, the project employs 10,000 people, 85% of them local workers, which is almost unheard of in the mining industry.
A strategy has also been put in place to maximize local procurement, and to date, companies have bought more than $750 million worth of goods and services produced locally or through a local intermediary. Some of the strategies that have been put in place are designed specifically to not only ensure that project implementation, but also to maximize the local benefits of that type of project. I believe this approach should be promoted ahead of the approach where minimum standards are set and companies that behave badly are punished. We welcomed the Canadian government's announcement of the creation of a corporate social responsibility counsellor position, and I think we have to move toward promoting best practices instead of punishing the worst offenders. Thank you.
9:40 a.m.
Conservative
The Chair Conservative Kevin Sorenson
Thank you very much, Mr. Gascon.
Mr. Heaps, welcome here. You're part of this new way of doing committee this morning, putting everyone together. Welcome.
December 3rd, 2009 / 9:40 a.m.
Toby A.A Heaps Editor-in-Chief, Corporate Knights Forum
Thank you, Mr. Chair.
Mr. Chair and members of the committee, it's truly an honour to be here today, at the heart of one of our country's most important deliberations. Before introducing myself, I'd like to make one point crystal clear: the fact that you might be for Bill C-300 doesn't mean you're against Canadian mining and oil companies; in fact, I think it can mean quite the contrary.
I have a company called Corporate Knights. I'm the president and editor of Corporate Knights. It was co-founded in 2002, and we're founded on the premise that in today's global landscape, companies must be at the heart of our big solutions or there are no big solutions. We also believe there's a strong self-interest for companies to engage in commerce in a way that strengthens social and political stability, because no company can succeed in a society that fails.
In short, we are big supporters of Canadian companies, their leadership and innovation, and their potential to drive Canada's prosperity in ways that can make us all proud. Over the past eight years, we have tracked corporate Canada's performance on social and environmental matters through our annual surveys, such as the best 50 corporate citizens in Canada, the global 100 most sustainable corporations in the world, which is announced each year in Davos during the World Economic Forum, as well as investigative reports assessing Canadian companies' performance against the International code of ethics for Canadian business and other international responsible business standards. Our work has taken me to the bottom of giant open-pit mines in the Congo, to the vast plains of the Gobi Desert, right to the middle of oil pipelines in Ecuador.
Companies by and large respect and give credibility to our trademark, which is fairness. This credibility is something we've earned that provides us access to company executives and company sites. It's also why mining and oil and gas companies have purchased hundreds of thousands of dollars of products from our company.
I would like to use this opportunity to cover two main points. The first point I'd like to cover deals with some of the global currents that define the context of the marketplace in which our Canadian companies operate today. The second point I would like to make concerns the difference that Bill C-300 could make.
On the first point, today the size and power of companies paints a whole new swath of grey between states and enterprises: 29 of the world's 100 leading economic entities are companies, according to the UN Conference on Trade and Development.
The majority of the world's untapped resources lie in unstable states. The quest for resources is increasingly becoming a foreign pursuit for Canadian companies and companies everywhere. As Canada's resource levels recede, our firms have a choice: go where the resources are or go out of business. According to the United States Energy Information Administration's International Energy Outlook, roughly 80% of the world's oil supply will come from non-OECD countries by the year 2025. Many of those countries rest in weak governance zones.
Today, as we're all familiarly aware at this committee, 75% of the world's exploration and mining companies are headquartered right here in Canada. We also have a revolution in information and communications technology, which has put companies under the microscope—or YouTube, as the case may be—and what happens on the other side of the world in a remote jungle in the morning can be beamed onto your computer screen or TV that afternoon.
The fifth thing that defines the global context in which we operate is that the corporate accountability mandate has achieved an increasing traction. Over the past decade there has been a raft of international corporate performance standards and guidances, ranging from the IFC performance standards to the voluntary principles on security and human rights, to the calls for corporate accountability laws by Supreme Court Justice Ian Binnie, to the meticulous work by John Ruggie, special representative of the Secretary General on human rights and transnational corporations.
If you look at these things, you see a consistent pattern of an increasing articulation of what is expected from companies these days, and nowhere is this truer than in Canada. Bill C-300 lands smack dab in the middle of all this.
These are the four differences I think Bill C-300 can make, and these differences are all positive differences for companies, in my view. First, I think it could help clear the air for our most honourable companies. The fusion of NGOs and the ICT revolution produces many allegations. A credible mechanism that would make informed decisions would help to stop false accusations in their tracks, helping to protect the reputations of Canadian companies.
Second, right now it is assumed that if you buy a junior mining company or oil company, you're buying the assets as well as the liabilities, meaning the social and environmental liabilities. These liabilities have a big price tag. The presence of a credible accountability mechanism and administering body would offer tremendous incentive for Canadian junior companies to more closely adhere to international human rights and environmental standards, which would mean less value being destroyed and less time lost. It is a win-win for the juniors, who could sell their assets for higher prices, and for the majors, who would not have to deal with the headaches often embedded in their acquisitions of junior properties.
Third, this bill could offer a maple leaf quality assurance premium to investors. Let me explain. After the recent financial meltdown in which up to $50 trillion of wealth vaporized, investors have become increasingly risk averse. The downside of this risk aversion is that there's less capital flowing to emerging markets, as presently most investors just paint all companies with the exact same risk discount based on sovereign risk no matter what their practices are, but the major liability issues at most sites are related to the way the company operates, not the context in which it operates. This is something that checked out in my experiences and those of other experts I've talked to, who examined hundreds of sites around the world.
The current investment practice, aside from unfairly tarring leading responsible companies that happen to be operating in a difficult environment, leads to suboptimal risk-adjusted rates of return for investors. With a credible accountability standard for companies listed on the TSX, investors could be willing to pay more than, say, for a comparable company listed in the London exchange, because they would have more confidence that they were not buying a poisoned bag of goods.
Fourth, I think this bill could offer a maple leaf quality assurance premium to host countries and their stakeholders. We are the world's miners. Mining is not about technological advantage. Any company can do it. In the scramble for resources, what distinguishes a Canadian company from a Chinese company is that a Canadian company has a competitive advantage when it comes to safety, social issues, respect for human rights, community engagement, contribution to local employment, and environmental protections.
Bill C-300 is not perfect, nor is it enough, but by making a move to a credible accountability mechanism, it sends a strong signal that Canadian companies will be on the winning side of the seismic shifts shaping our global economy.
Thank you.
9:50 a.m.
Conservative
The Chair Conservative Kevin Sorenson
Thank you very much, Mr. Heaps, and thank you to all the presenters this morning.
We're going to move into the first round of questioning and we'll go to Mr. Rae.
9:50 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
Thank you.
Mr. Blackburn, you mentioned in passing the counsellor program set up by the federal government. Do you accept that process?
9:50 a.m.
Senior Vice-President, SNC-Lavalin International, SNC-Lavalin Inc.
It's a very new process, but it's one that looks as though it emerged from consultations between NGOs and mining companies. We weren't involved, so we weren't involved in creating the process, but it looks like a helpful process, yes.
9:50 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
The premise of that process is that there's a problem, wouldn't you agree?
9:50 a.m.
Senior Vice-President, SNC-Lavalin International, SNC-Lavalin Inc.
There have been questions raised, certainly, and I think that was the government's and this consultation's view of a good way to deal with them, yes.
9:50 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
I'm sure you understand that the timing of the legislation is that the legislation was proposed by Mr. McKay before the government told us what their position was on corporate social responsibility. We had a debate in this committee, a discussion in this committee, a report from this committee, and then we had a long period of delay. Then Mr. McKay brought forward his measure and then the government brought forward the counsellor process.
Many of the things that you've described as part of the problem that would be associated with Bill C-300 also apply to the counsellor process. Anybody can complain, anybody can go to the Internet, to the world, to wherever they want to go and say this activity has gone on, it's terrible, it's awful. The company's reputation is affected by that decision of whatever group to come forward.
The counsellor receives the complaint, and the counsellor then asks the company, do you want us to proceed? The company might object. They might say they don't like this, they object to it, so they'll put out a big press release.
The point is that part of what I find in your presentation and also dans la présentation de Monsieur Gascon is we have created a process in Canada now and many other countries are doing the same thing. The reason we've created a process is because there's a perception of a problem.
9:50 a.m.
Senior Vice-President, SNC-Lavalin International, SNC-Lavalin Inc.
What Mr. Heaps has just said is certainly true. These days media is such that any allegation immediately blows up and travels the Internet. I guess the difference I see is that the counsellor process is a little different from a legally framed process that demands a ministerial investigation and then includes a suite of sanctions and legal appeals, rather than a common-sense ability to look into the facts and deal with whatever the allegations are in a practical way.
Presumably if an allegation were raised that the counsellor thought was valid, in making whatever investigations he makes, that would assist in the host country, or whatever. Sometimes there are other international judicial forums where these things can be dealt with.
9:55 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
Do you think it's unreasonable...? You mentioned the EDC, and Mr. McArdle was here. The EDC has developed a policy, along with the World Bank and everybody else, on environmental guidelines. The International Finance Corporation has done the same thing. Those environmental guidelines are well established, and if you don't meet those guidelines you don't get the financing.
Why would EDC not take into account a report from the counsellor that said that from all the evidence she has seen, this company would appear to have been party to serious breaches of human rights obligations under well-established international standards, and therefore they're not in a position to finance their operation?
I hear the statements that are being made, but it seems to me that the statements about the consequences go way beyond the actual effect of what is being suggested.