Foreign Affairs Committee on May 25th, 2010

[Shanta Martin]

I don't want to discount the possibility of the CSR counsellor having some positive impact, but my main concern is with the entirely voluntary nature of any activities she engages in with respect to companies saying they'd rather not. The second concern is that even if through that process she has recommendations as to what goes forward, those are entirely voluntary. There are no teeth. There's nothing to back up the recommendations.

I understand there is some concern among civil society in Canada regarding the way in which that counsellor will go forward. What I think is quite interesting is that Bill C-300 is hardly proposing much beyond what is already in play. What it does do is say there will be ramifications if a Canadian company does not respect human rights overseas. Now those ramifications are entirely within the capacity of the state to withhold or to provide, and in that sense it seems to me that it entirely makes sense that Bill C-300 is trying to regulate the extent to which public support will be given to companies when they may not respect human rights. And again, going back to the CSR round table--the ombudsman process that was proposed within the CSR round table, which had the consensus, the agreement of all parties to that round table, including industry--I think that what was proposed and what has since come out in terms of the CSR counsellor are quite different things.

[Paul Dewar, NDP, Ottawa Centre, ON]

I couldn't agree with you more on that.

Mr. Hodge, there's an expression here in Canada, “all hat”. There's concern about the complaints commissioner being “all hat”--in other words, what's underneath is of question. I'm just curious as to your point of view. If we have a commissioner who is not able to do more than take in information, and there's a requirement, as you probably know, that they have two to play with--in this case it's up to both players to decide whether they're going to participate in the process--then it's very difficult to make any headway with these limitations. So the commissioner takes in information, and if she determines they can go ahead, that's predicated on the participation of both parties. As you know, if there are complaints or concerns of one over the other, you could easily say no thank you.

In terms of the people you work with, isn't it important to have “fair play and daylight”, that the rules apply to both sides equally, and that both would have to participate in some form? We can argue around what the rules of engagement are, but isn't it important to have those who have concerns and the companies responsible both involved? If they're not involved, then there are questions about due process.

[The Chair, Conservative, Dean Allison]

Mr. Dewar, that's all the time we have.

Mr. Hodge, if you'd like to answer that question, then we're going to start our second round.

[Robert Anthony Hodge]

Thanks very much, Chair.

I have just a quick comment to clarify something. ICMM companies are all committed to EITI. It wouldn't require anything in this legislation to change this situation in Canada. What it requires is a decision on the part of the Government of Canada. The Government of Norway has recently committed to participating in EITI. The Government of Canada could do that tomorrow if they so choose.

In terms of the points you raise, Mr. Dewar, there is no question, and I've said very clearly, there is a need in the system to be looking at the broader sense of CSR, of which the complaints mechanism is one part. There is a need for rules to ensure fairness in that playing field. I have no doubt of that. Our concern, and the one I have articulated and emphasized, is that Canada should not be doing this unilaterally. There is a role in Canada for part of this, just as there is a role in other countries. We should be doing this in partnership, not on our own.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Dewar.

We're going to start our second round. I know we told our witnesses we'd be going until half past, with the possibility of a few extra questions. I still have a couple of questions around the room, so we'll go for at least another ten minutes, if that's okay with the witnesses.

[Karin Lissakers]

I'm at your disposal.

[The Chair, Conservative, Dean Allison]

Perfect. Thank you very much.

We're going to start with five minutes, and we'll get two or three rounds in before we wrap up. I'll go to Mr. Lunney, Dr. Patry, and then maybe back to Mr. Van Kesteren or Mr. Goldring.

Mr. Lunney, the floor is yours.

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

Thank you, Mr. Chair.

We enjoy the participation of the witnesses and appreciate all of your contributions. We are having a discussion of this. It's a discussion that's going on around the world on these important matters of CSR. But I think it's important to state, for some of our international participants, that we have a process in Canada. We've been in part of these discussions. We've had an extensive round-table consultation with stakeholders--people from the industry, as well as NGOs and other interested parties. We've put in place a mechanism that should contribute positive outcomes. Some of us would like to see that process have a chance to have an impact.

I have some concerns about what has been expressed in terms of Canada projecting our influence onto other countries. We are actually known more as a nation that works cautiously and in collaboration with international partners.

As a member of the defence committee, I was in Afghanistan about a year ago, and one of the other members of this committee was there with us. Our approach in Afghanistan is quite different from some of our international partners. We dialogue with the local officials in Kandahar: we don't tell them what we'd choose as projects to help them economically; we work with them to decide what would help them.

But when you talk about complicated issues--we're worried about frivolous or vexatious concerns--I think there's a better way to describe them, because they're very serious allegations. An example was raised about police actions in Papua New Guinea. You alleged human rights abuses that were corporate-related, but you went on at great length about the police involved in burning houses, rapes, and all kinds of misconduct. That is alleged to be corporate-related.

For Canada to project and go in to sort out failures of governance capacity and authorities in other nations is quite a significant challenge. We need to think this through carefully. I'm don't know if people imagine that we just go in and tell another nation that frankly their governance capacity just isn't there and they are doing it all wrong, and therefore we're going to send in--I don't know, armed forces? What do you have in mind here?

I think we do have a responsibility to act, and that's what the discussion is about. But allegations that are very serious could withhold funding from Canadian companies that do not have a chance to defend themselves and are basically guilty by accusation. That could have very serious ramifications.

I'm not sure who to direct that question to, but I think it warrants some discussion here. I'd be interested in hearing how either side wants to respond to that.

[The Chair, Conservative, Dean Allison]

Ms. Lissakers, why don't you start, and then maybe Mr. Hodge.

[Karin Lissakers]

I was involved in the legislation of the foreign practices in the United States, which made it a criminal offence for U.S. corporations to bribe foreign government officials. The U.S. law actually preceded the OECD decisions and the Canadian law by some 20 years. We heard many of the same arguments about bribery: “Well, this is us imposing our own cultural and social norms on other countries. It will put our companies at a disadvantage.” But the fact is that the wisdom of that legislation and the direct benefit to corporations are now widely recognized and accepted.

Bill C-300, if I read the text correctly, would not impose standards on other countries. It would simply impose the standard for the use of Canadian government support for investments. It says we will not support, directly or indirectly, practices by corporations that are guaranteed, insured, or funded by us that violate international norms of human rights and environmental best practice, even if the country where they are operating has vast human rights abuses, or doesn't have effective enforcement or even laws for environmental protection. I think this is a very common approach by the home states of corporations that provide the capital and political risk insurance or export credits.

I don't think this breaks any new ground in terms of the principles, including the review and enforcement action. In the U.S., the anti-bribery statute is enforced by the U.S. Department of Justice.

[The Chair, Conservative, Dean Allison]

That's all the time we've got. I'm going to ask Mr. Hodge to reply quickly. We're over our time.

Mr. Hodge, could you make maybe one final comment before we move on?

[Robert Anthony Hodge]

Thank you, Chair.

Just to make a short comment, indeed, my sense is different from yours on this one, Karin. My sense is that as I work in countries around the world and meet with people and talk with people, in fact they will see this as an imposition on what they would see as their sovereign right to govern the activities within their own borders the way they see fit.

However, what we're really saying is that the way forward on this is not to deny that strict rules or systems need to be in place, but rather that Canada should use this as an opportunity and take the time to think about how to do it collaboratively with other partners. That's the point I'm trying to make.

[The Chair, Conservative, Dean Allison]

Thank you very much for that.

Thank you, Mr. Lunney.

We're now going to move over to Dr. Patry for five minutes.

[Bernard Patry, Liberal, Pierrefonds—Dollard, QC]

Thank you very much.

Ms. George, I have great respect for the Canadian Chamber of Commerce, but I have to say that your testimony this morning is a lot more negative than other representatives of your organization have given before this committee.

The Canadian Chamber of Commerce participated in the Interdepartmental Working Group on Corporate Social Responsibility. One of the working group's conclusions was to create an ombudsman position with investigative powers. I have to say that there is no punitive intent. It is important that that be said. But the Corporate Social Responsibility Counsellor position that has just been created is just an empty shell, in my view.

Has the Canadian Chamber of Commerce already done any research in developing countries on companies' social responsibility? From whom do you get your information, apart from the companies themselves? Have you already talked to civil society representatives in some of those countries? I am not talking about NGOs, but about real civil society representatives. For example, representatives from the conference of bishops from the Democratic Republic of Congo came here to see us.

Right at the beginning of your remarks, you said that Bill C-300 “would leave the problem unresolved”. So I gather there is a problem. Can you tell me how you see the problem?

[Shirley-Ann George]

Thank you for that question.

Actually, the Canadian chamber was not invited to be part of that consultation, so we were not involved in that process. There were others that were involved, and there were some recommendations made to the government, which the government reviewed, and it put the vast majority in place.

You asked how I define the problem. Of course there is much more work to be done on improving human rights around the world. There's no argument on that. The argument is whether this is the right process. Our position, very clearly, is that it is not the right process. This is a process where anybody can come forward with an allegation and the company's reputation is damaged immediately, before there's any opportunity for it to respond, before there's any opportunity for these claims to be put aside. This is unlike the counsellor process—which you think has no teeth, and we would disagree—where there is a discussion and an annual report and companies that are found to have done wrong are reported publicly and will pay the price. This is for those that have done wrong, not for those that are just alleged to have done wrong. That is where the fundamental difference is.

[Bernard Patry, Liberal, Pierrefonds—Dollard, QC]

Ms. George, can I ask you another question? You didn't answer my first one. It was concerning your sources. Where do you draw your sources if you've never been on the ground in the other country? Where do you draw your sources? I'm not talking about NGOs; I mean local NGOs, let's say from any country—I don't know, Congo, Peru, Ecuador, any of these people. Have you ever met these people?

[Shirley-Ann George]

No, we have not met these people.

[The Chair, Conservative, Dean Allison]

Thank you.

We're going to move back over to finish off with Mr. Van Kesteren and Mr. Goldring, who are going to split their time.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

To follow up on Mr. Abbott's statement, I'd really like to protest. There are so many questions that need to be asked that I don't know where to start.

I could maybe mention to Ms. George that we were talking somewhat about the mining. We haven't even touched on the service sector yet, which is such an important factor in our government and in our economy too.

I have a letter here from Goldcorp protesting allegations, and we need to hear from these people too. This is such an important issue. This is something we need to study much more deeply. I think we've only scratched the surface, so I too am very concerned about the mix of witnesses. I appreciate them all very much.

I want to talk to Mr. Hodge. We've met on another occasion on another committee as well. There is so much more we need to ask you as well. I don't know where to begin, but the one nagging question I have is to Ms. Lissakers.

Forgive me, but who are you, who funds you, and what is your organizational statement? We don't have this information here. We're hearing lots of testimony, but maybe you could just give me a Coles Notes version, please.

[Karin Lissakers]

I apologize to the committee. I was trying to abbreviate my remarks and left out the introduction.

The Revenue Watch Institute is an independent, not-for-profit organization devoted to promoting effective, transparent, and accountable management of oil, gas, and hardened mineral resources in resource-rich countries.

We are funded by the Soros Foundation, the Open Society Institute, the Bill and Melinda Gates Foundation, the Hewlett Foundation, and the Government of Norway's Oil for Development program.

We provide capacity-building to both governments and civil society. We do a lot of research on extractive research policies. We provide technical assistance to governments. We provide grants for training to civil society and--

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Excuse me. What is your annual budget? What is your mission statement? I want to hear that.

[Karin Lissakers]

Our annual budget is almost $12 million.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

What's your mission statement? You must have--

[Karin Lissakers]

It is to promote effective, transparent, and accountable management of extractive resources for the public benefit in the resource-rich countries.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair. I'm going to pass--