Foreign Affairs Committee on May 13th, 2010

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

The answer that those who are opposed to Bill C-300 get is that mining companies that have their headquarters here in Canada will move elsewhere.

Do you really think that will happen if Bill C-300 is passed?

[Steven Schnoor]

I'm—

[Prof. Richard Steiner]

If that question is to me, I do not think it would be the case.

I'm sorry, Mr. Schnoor.

[Steven Schnoor]

No, please go ahead.

[Prof. Richard Steiner]

Living in Alaska, a state that is very politically dominated by resource development, there are positive and negative sides to that. We just have to be honest about it.

But we have heard this threat for years that if the state government raises oil taxes, the oil companies are going to pick up and go elsewhere. Well, the fact of the matter is that in any place with rich natural resources where companies want to operate, there is such a profit margin that they're not going to pick up and leave. If the headquarters left Canada, where would they go? They are certainly not going to come to the United States. So I think that's a veiled threat.

Also, regarding the companies who are telling people that Bill C-300 is so egregious they would simply leave if it passes, what does that tell you about their commitment to and confidence in how well they are applying their corporate social responsibility guidelines? It tells me that they know they're not doing it.

So to any company who says they would pick up and leave if Bill C-300 were passed, I would say, please do, because I wouldn't want them in my country either.

[The Chair, Conservative, Dean Allison]

Mr. Schnoor, can you finish this up? We're out of time, but just finish quickly.

[Steven Schnoor]

I concur with what Mr. Steiner has indicated.

Just to follow up on that, I also find it a very curious logic. I see it as nothing more than a red herring and a scare tactic. The benefits of listing a mining company in Canada, including tax laws and relatively lax disclosure requirements, far outweigh any benefits they will find in London or New York, and they're not going to go to Beijing.

I find the whole argument to be somewhat curious. Why would they leave? Is it because they risk losing publicly funded support if they violate the standards they already claim to be meeting and exceeding? There's something strange in that logic.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're now going to mover to Mr. Abbott.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Thank you, I will just use 30 seconds before I pass my time on to Mr. Goldring.

I think the answer to Mr. McKay's concern is that while these gentlemen and all witnesses have the advantage of parliamentary privilege—in other words, they cannot be sued for what they say—on the other side of the coin, these two men in particular have taken the time to make some very extravagant and extreme claims against certain mining companies. Obviously, what is going to have to happen in this process, in the name of fairness, is that those mining companies be given the opportunity, either by video or as witnesses here, to tell their side of the story, because the last thing we want to do is to take only one side of the story.

I am not speaking to the veracity of their comments; I'm simply saying there's a second side to the story. We'll be going through the testimony, taking a look at the names of the companies they have impugned, and we'll be giving them an opportunity to give their side of the story. I would hope that the committee would agree with that.

[The Chair, Conservative, Dean Allison]

Thank you.

Mr. Goldring.

[Peter Goldring, Conservative, Edmonton East, AB]

Thank you.

Gentlemen, I want to mention that the Canadian government has not been in strict isolation on this. It actually announced in March 2009--and incorporated--a strategy for corporate social responsibility and it is in fact working on this actively. The Canadian mining industry has an excellent reputation worldwide and probably has that reputation partially because...and it has built their businesses worldwide.

I have to agree with my colleague that just in the space of a very, very few short minutes, the witnesses commented disparagingly about Goldcorp, Pacific Rim, the ambassador himself, according to these sheets, HudBay Minerals, Skye Resources, and Inco. I'm sure that if we had more time we could add to that list considerably.

My concern here is back towards Bill C-300. I suppose I would ask the following of Professor Steiner, being an American from Alaska. Obviously if this is a highly supported initiative here in Canada, there must be a comparable initiative in the United States, too, so perhaps you could comment on how the United States is looking at this. Then, too, I'd like to point out a couple of the points in here that are of particular concern.

Professor...?

[Prof. Richard Steiner]

Thank you, sir.

First off, to the previous gentleman's comment that the mining companies that we've discussed today, including Barrick and Pacific Rim, etc., have a chance before the committee, I think we can well script.... We can understand exactly what they will say. They will deny any wrongdoing. They will say they have the utmost international best practice.

We know that's what they're going to say, and that's fine, but what I would suggest, sir, is that if you're going to invite them in front of the committee, then some local people living around the mines, who have these issues, should be brought in as well to comment about their perspective about this.

On the second point, the second gentleman's question about the U.S. initiative to increase corporate social responsibility overseas, the U.S. government has been, I think, slower than the Canadian government. I think Bill C-300 would be a step beyond where we are right now, but as I mentioned, the Overseas Private Investment Corporation, OPIC, somewhat analogous to EDC, does have their own CSR guidelines. They are revising them.

As we speak, I think their new guidelines are due out May 20, just a week or so from now. That's exciting. I've been trying to fold some ideas into that, but I don't know what they are.

But again, the only advantage I see currently in the OPIC guidelines is that this applies to all industries, not just extractive industries--fisheries, forestry, pharmaceuticals, investment banking, transportation, and agriculture--all these other international investments that the United States companies have. I think that's an advantage. The disadvantages are, again, that there's really no compliance mechanism; there are no mandatory sanctions within OPIC guidelines right now. They only apply project-specific...so if a company, for instance, has a problem in one project, that's the only thing the OPIC guidelines will focus on, rather than the company's activities as a whole.

So there are disadvantages in regard--

[Peter Goldring, Conservative, Edmonton East, AB]

Perhaps in there, Professor, is one of the problems. When this bill specifically calls for and references access or action to all complaints, and, as it says here, other than “frivolous” and “vexatious”, first of all, they have to investigate all of them to determine that.

[Prof. Richard Steiner]

That's right.

[Peter Goldring, Conservative, Edmonton East, AB]

For example, we just heard words against six different corporations here, and it would take a whole process of investigating to determine whether any of those were frivolous and vexatious at all.

So it compels the corporations and the government to do an awful lot of investigation, legal work, and groundwork, and now you're saying that in the United States, they have left out that component of it. I suggest that perhaps that's too stringent a requirement to have in.

[Prof. Richard Steiner]

I would respectfully disagree, sir. I think the U.S. standards are not up to what Bill C-300 is proposing. I think, again, if the companies have great confidence in their CSR portfolios and profiles overseas, they should have no worries whatsoever with Bill C-300, and likewise the government. If the ministers have great confidence in the Canadian mining companies working overseas, as you have just mentioned--

[Peter Goldring, Conservative, Edmonton East, AB]

Well, leaving that one component alone, we have the additional one in here that is a concern, too. It compels all companies to comply to all international human rights, international laws around the world, and possibly even compels them to comply to laws that the Canadian government doesn't particularly recognize in certain circumstances.

So once again, maybe you could advise us if this type of action is in the American standards, because if it is, then it would be interesting for us to learn, and if it's not, perhaps there's a reason for that, too.

[The Chair, Conservative, Dean Allison]

Professor Steiner, I'll let you answer the question. I'll just let Mr. Goldring know that he's out of time, but do answer the question.

Then we'll move on to Mr. Dewar.

[Prof. Richard Steiner]

Yes, I believe that the American standards do require adherence to the international human rights conventions and best practices. I would also say that the U.S. Ex-Im Bank, the Export-Import Bank in the United States, already uses ISE guidelines. EDC has its own set of environment standards and guidelines, but as we are saying, if there's no problem with that, then they should not have a problem with this additional layer of ministerial review.

That's basically all Bill C-300 proposes. It's very reasonable and prudent and, I think, a quite modest step in the right direction.

So these IFC--International Finance Corporation--guidelines are certainly better than the OECD guidelines, which are also not being adhered to by companies from the United States and from Canada. So it's not too much to ask that we raise the bar on extractive industries throughout the world. We can do better, and I'm confident that when companies are motivated to do responsible corporate behaviour--all companies--it evens the playing field and makes it more competitively advantageous for those that are already doing that.

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Goldring.

Thank you, Professor Steiner.

We'll move to the last questioner of this round.

Mr. Dewar, you have seven minutes.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you, Chair.

Thank you to our guests for their interventions.

Mr. Schnoor, you mentioned the case in Guatemala where there had been concerns around water. Just remind me which mine that was.

[Steven Schnoor]

I was referring to the San Martin mine in Honduras' Siria Valley. I referenced that because in Guatemala the same company was constructing that very type of mine—it's an open-pit gold mine—and the people had concerns from what they heard had transpired in Honduras' Siria Valley at San Martin.

[Paul Dewar, NDP, Ottawa Centre, ON]

We're talking about issues around water quality. What water sources do these people use for their drinking water and to feed their animals, etc.? Are they still able to access water from local sources or do they have to bring in water? If this is an issue of water, where do they get their water from?

[Steven Schnoor]

It's a very good question. The last time I was in the valley was last year. This mine is in the process of shutting down, last I heard. The people were receiving water from rivers and from wells. Apparently, 20 out of 22 rivers had completely dried up, meaning that there were two rivers left, and the wells had also dried up. I met farmers who complained that their cattle would not drink the water that did exist because it had a very red colour and a smell. The cattle smelled that something was wrong there.

What people were doing was that those who had money were purchasing water in large barrels—those who could afford it. Those who could not afford it were still drinking water from wells that existed, and based upon that, they felt that they were experiencing a rash of illnesses. It's quite traumatic. When you visit the region, you do not have to look far for people who tell you that they're very ill and have demonstrable proof to attest to that.

The issue of water is very serious. From what I understand, many respected hydrogeologists say this is a very common problem that emerges with open-pit gold mining; you often see competition for water. These types of mines use tens of thousands of litres of water per hour. They claim they recycle some of it, but that's also debatable.

So what are the people doing? They're drinking...those who can afford to will buy it, but those who cannot continue to drink the well water as it exists, and they feel incredibly frustrated.

[Paul Dewar, NDP, Ottawa Centre, ON]

Were they compensated to buy the water that they needed for their families and for their animals?