Foreign Affairs Committee on May 13th, 2010

[Paule Brunelle, Bloc, Trois-Rivières, QC]

You are defending them today, but do you believe what you are saying? If you are promoting and defending the companies, is it because you believe in what they do?

[Carlo Dade]

There is also another aspect to Canada's involvement in the Americas. It is important. Most of the time, we think that the government is the driving force for our involvement. But really, there is only one embassy in Mexico and three or four consulates. But there are 200 branches of Scotiabank. So the private sector is playing a much greater role than the government in Canada's involvement and we cannot help but deal with the private sector.

I apologize for my French, but I have to try to speak it.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Mr. Dade, this whole question of companies' social responsibility did not arise after someone had a nightmare one night. In Canada, we have been talking about it for years, of course. This resulted in the round tables that went across Canada and in which people participated of their own accord. People from civil society organizations did too, and national organizations, and mining companies. There were people from all walks of life, actually.

The consultation was followed by a report providing recommendations that were presented to the government. The consultation even resulted in a consensus.

Bill C-300is very weak in comparison with what was in that report. Wouldn't it be nice if, one day, a member introduced a bill containing all the recommendations...? You come here to tell us that Canadian society wants companies to be made accountable overseas, and there are no tools to do that at the moment because everything is voluntary. That is what came through in all the consultations. There really is a need and Canadian society really feels that companies operating overseas must be made accountable.

Why are these companies so afraid if they are following the rules, if they are responsible and if they are living up to their environmental responsibilities? Why are they so afraid of this bill if they are doing nothing to contravene the principles of social responsibility overseas?

[Carlo Dade]

I was at the round tables too. I spoke and I put forward some ideas. I think it was in Montreal last November, if I remember correctly. I was one of the people invited to the round table. I remember—

there was opposition. What came out of the round tables was the enhancing of the Canadian advantage, the idea for a strong ombudsman, if I remember correctly, who would be well funded and equipped to be able to respond quickly and efficiently to the complaints. That, unfortunately, is not what we see here. There were also discussions about supporting the work that Canadian companies were doing on the ground, and I don't see that here.

I also know that the Prospectors and Developers were here and they were strongly opposed to this. Tony Andrews was one of the heads of the round tables, and I know that they do not support Bill C-300. So obviously something has broken down between the round tables and the submission of Bill C-300.

I understand the frustration, the need to do something, and we support that something needs to be done in terms of not losing competitive advantage, enhancing the positive aspects, and doing more to prevent, limit, and mitigate damage. We're fully in line with that. Our disagreement is that we don't think this will do it. I think in the private sector, from what I've seen of testimony in the committee—I do get the blues and look at them—they also appear to be opposed to it.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're now going to move it back across to Mr. Lunney, for seven minutes, please.

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

Thank you very much.

Well, as you see, there's some polarized debate around this subject, apparently.

I just want to clarify this. In your opening remarks, Mr. Dade, you said that when you look at the bill, you see it as an attempt by the government to put in place new measures. Actually, I hope you understand—

[Carlo Dade]

Well, Parliament. The Canadian Parliament.

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

The Canadian Parliament.... You understand that this is a private member's bill from a member opposite. Certainly, the government....

Well, let me address Mr. McKay's remarks first, who is a member I have a lot of respect for, but I have to take exception to the remarks today, which I think were very intemperate and over the top, with accusations.... I mean, accusing anyone who doesn't agree with your position--on an issue that's very complex--of being in denial, denying the witnesses, the testimony, the truth, and accusing us basically of not being interested in doing the right thing, I think is really over the top and irresponsible.

Every member here is interested in corporate social responsibility and doing the right thing, and I think when you make those extreme remarks.... You correctly identify that there's a lack of governance capacity in many countries. You deny that Canada's working very hard to improve governance capacity in many of those developing countries, and many of the companies are actually contributing that way. You say that there's no place for them to go in their own country, which, again, ignores all of the developing countries—

[John McKay, Liberal, Scarborough—Guildwood, ON]

On a point of order, Mr. Chair--

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

Well, Mr. McKay--

[John McKay, Liberal, Scarborough—Guildwood, ON]

--I'd be more than pleased to sit as a witness and respond to Mr. Lunney's concerns about what I said or what I didn't say--

[The Chair, Conservative, Dean Allison]

That's not a point of order.

[John McKay, Liberal, Scarborough—Guildwood, ON]

If he wishes, I'd be happy to go down there and sit beside him.

[The Chair, Conservative, Dean Allison]

Okay, Mr. Lunney. Continue.

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

Well, Mr. McKay, with all due respect, you went on at our expense and accused us all of being in denial on this, and we sit as your colleagues around this table. I take exception to that.

[The Chair, Conservative, Dean Allison]

I'll just remind you, Mr. Lunney, that you are supposed to speak to the chair and not directly to each other.

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

Thank you very much, Mr. Chair.

Mr. Chair, I regard such accusations of all members as being irresponsible and personally take umbrage at those. This denies the good work that the companies do, as has been pointed out by our witness here, in many cases, and I think you can make examples of good work that is being done.

And you deny what our government has been doing, starting with the work of this committee back in 2006 with a report, extensive consultations across the country, and the creation of a CSR counsellor, all of which are designed to address the issues that are before us.

Now, as our witness has pointed out here, there are options available here to do the responsible thing in complicated issues, and those include the Equator Principles, which are there, the UN guidelines on CSR, and a newly put in place CSR counsellor, all of which we hope will help improve the situation.

In your remarks, sir, you said there are options. You talked about the potential for doing serious damage with allegations. Charges under this bill could be brought by anyone who is not even directly involved in the conflict. They may not even be from the country in question and could bring charges.

While they're being investigated.... Now, I notice the witnesses before us earlier were not legal experts, although they have expertise in other areas. The witness at the back of the room has expertise in hydrology, and he worked for an NGO on water issues and now on this issue, but I don't see that he portrayed himself as a legal expert.

We've had legal experts here saying that allegations could very seriously impair Canada's image and the ability of our companies to work in the world...just by bringing forth allegations. We have serious concerns—I certainly do—about industrial warfare, about spurious allegations coming from a competitor who may want to take advantage of a company that's held up by our investigations.

Could you enlighten us or expound on those concerns?

[Carlo Dade]

That's a very interesting point. You raise something of significance and potential significant impact.

Allegations that are handled at the point of origination of a financing entity or the entity that's working directly with the project, such as the International Finance Corporation or Export Development Canada, are viewed one way on the ground in the countries. This is tied to the project. It's tied to the specifics of the engagement, of the investment, of the company's actions.

When it is advanced to the level of minister, especially in the case of Canada and a government that's viewed abroad as Canada is, the charges take on a whole new realm: that there must be something there if the government is investigating.

We spoke about weak governance in several of these countries. There's an issue. If the local government brings charges, it's always assumed that it's political, that someone's uncle is getting back at someone else's uncle or something. But that's not the view with Canada. With Canada, it's viewed as, “My God, this is good governance, this is the seat and font of good governance, so if the government is investigating, there must be something serious here, and there must be something that rises to the level to change a charge”, It does damage, especially if other countries, our competitors in the U.S. and Australia, are relying on current best practice and current mechanisms, and we suddenly put this in.

The other problem with the bill is that the IFC has 15 people on staff in their compliance unit who investigate cases. The IFC does about 450 to 500 deals a year. Of those, I don't know what percentage are extractive. But the number of projects they potentially have to investigate and move on is handled by a staff of 15 dedicated professionals. With Bill C-300, you're looking at a counsellor who would be splitting her time between looking at what is the best practice and looking at this, with one foreign service equivalent working for her.

You have the potential to have these things drag on and on and on. And the longer they do, the more damage is done. For the activist NGOs, the NGOs that spin the stories we hear, this is a godsend: charges against the minister; this company has been charged 16 times; the minister is investigating 16 charges by this company; or these charges have been going on for years.

You have better mechanisms, more efficient and more effective mechanisms to be able to have people's voices heard, to have their complaints taken seriously by organizations with the resources to address them, to respond and to deal with them effectively.

Again, it puts us in a bad situation, and it doesn't improve things on the ground.

[The Chair, Conservative, Dean Allison]

Thank you.

Thank you, Mr. Lunney.

We're now going to move back to Mr. Dewar for seven minutes.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you, Chair.

Thank you to our guest for his intervention.

I want to start off with the notion that this bill will somehow disadvantage Canada. I want to just put on the table and on the record something that I trust you know, but just in case you don't: that the limitations of a private member's initiative don't allow a private member to bring forward legislation that has money implications.

I think if you were to ask Mr. McKay or people who support the bill—and in fact, we've had this discussion at committee with people who were involved in the round table—we all would like to see this not being with the minister, but in fact with the ombudsperson, which was suggested by the round table.

In fact, what we have seen with the government bringing forward the counsellor is something that is a half measure, and for many of us, it's a measure that is unfortunate. It undermines the whole momentum of having what I think you're putting forward, that is, a consensus, a consensus that says when Canadian mining companies or extractive industries are abroad we want them to be up to the same standard they would have in Canada. I think it's a fair thing to ask.

So I just want to get from you...would you not support a process that was contemplated in the round table where we would have an ombudsperson who would not be seen as biased, who would have resources, and who would be able to look into matters to investigate? We could talk about how the investigations would be done and based on what would prompt them. Would it not be, as a macro policy, something that you would see as the way to go and thus support that? In fact, that's what the round table was talking about.

[Carlo Dade]

I think that is a more constructive and more productive discussion in terms of the possibility to really...taking any of these potential items at random, not signifying preference. But it would be a competitive advantage for Canadian industries if done correctly, adding to best practice around the globe.

There are options. If you're going to have that discussion--and I'd say it would be a good discussion to have--I would urge you to have it in the context of looking at already existing projects, already existing things like the Equator Principles and the new IFC-IBLF human rights standards that are coming out. Look at it in the context of the EDC and the office of compliance.

And if the decision is made that these are the most effective and efficient means, and if you address the issues about not having the resources to do it properly, if that's the consensus, it would be something that would be better than where we are now.

[Paul Dewar, NDP, Ottawa Centre, ON]

I guess that's the point. Where we are right now is this bill and I have concerns with the critique that if we were to bring this forward, somehow we'd actually be going backwards. I don't buy it. I don't see it from your presentation. I don't see how you can provide evidence on something that hasn't actually been brought into force.

You've looked through the bill. Certainly we've heard from people who say that it's not fair-minded and it would undermine.... But when we've had those folks come forward and say there would be a problem, we've also had other folks who say, in their legal opinion, it wouldn't. The point is that we are seized with it now, and for many of us--and I think for Canadians and Canadian companies--the time is now.

And to see this opportunity depart brings concerns that nothing is going to happen, frankly, because the government has brought forward a counsellor.... And I just have a couple of things on that. The counsellor isn't even set up to take in any concerns at this point. You know the process, right? She can take it in, but it takes two to dance. If the company says it doesn't want to take part, it doesn't have to. You're aware of that. So I don't see that as being helpful, and I think you'd probably be of the same mindset. If you're going to have a process, you must have a process.

Finally, on EDC, when we've asked.... I've asked at the committee and I've asked them in meetings if there has been one instance, just one instance, where they have investigated and found there were concerns among their partners, where they've actually said “you'd better do something or we're going to withdraw”, or where they've actually removed the funding. There were none, so apparently we don't have any problems and this is all some sort of weird conspiracy. I don't think you believe that, because you've intimated that there are some concerns and we need to deal with them.

Mr. Dade, if it's not this--and you've put forward what you think it should it be--isn't it possible to actually have a process that would conform with the general architecture we're talking about? You have concerns about BillC-300. Fine. But what about using this opportunity and this infrastructure to actually change it to adopt those principles you mentioned, to have EDC in the game, and to make sure that when Canadian companies go abroad, there isn't controversy?

Frankly, I think we're entering a time where litigation is happening anyhow. If we don't do something, we're going to be like big tobacco was, really. That's happening. It's already happening. You see it. Do you not see an opportunity here to actually take Bill C-300 and frame the architecture such that it would be helpful?

[Carlo Dade]

My coming to CSR--and I'm glad you brought this up--comes from the aspect of companies seeking to gain advantage by doing the right thing. So the companies I've worked with get it. The vast majority of companies get it. There are still some neanderthals out there who will never get it and, God willing, they'll soon cease to exist.

But I think the majority of companies do get it, and they want to work with something that would enhance their competitive advantage and make them more efficient and more effective. Also, I don't think that companies want to harm people. I don't think that anyone on Bay Street wakes up in the morning saying, “What small village in Guatemala can I harm today?”

[Paul Dewar, NDP, Ottawa Centre, ON]

We agree. But what happens when, due to unintended consequences, they do?

[Carlo Dade]

This is what we're getting to. I think that you have a moment. I think that both sides of the table are seized. I think you have everyone's attention and there's the opportunity to do this right, to do something that will....

In the end, you really want to improve conditions on the ground. You want Canadian companies to be more effective. You want them to be more efficient. But you want to improve things on the ground. And you have the opportunity, I think, to do that by looking at some of the suggestions.

I don't think you're going to get that with this and you're going to impose costs. So you have drawn attention with it, but should it go into law you're not going to have the resources to do it correctly. And we know why that is. I take the point.