Thank you, Mr. Chairman.
My thesis will be that Bill C-300 will create some serious issues for the government and will not be of net benefit to Canada.
To begin, I want to clarify that there are not 4,000 mining projects abroad. There are likely fewer than 200 in developing countries; I received this information the other day from a consultant friend of mine. In his case, he shows about 182 as of 2007.
The second point I would make is that exploration companies can be quite small, as you've just heard, and these companies, as far as I know, do not draw on EDC funds, nor do they receive investments from the pension plans. As a result, they're probably outside the context of the bill.
Therefore, the real target of this bill is mining companies with projects abroad, but there are some questions about that.
To what mining projects will the bill apply? Does it apply to foreign companies investing from their Canadian subsidiaries? Does it apply to foreign companies that happen to be listed on the Toronto Stock Exchange? Does it apply to joint ventures where Canadian mining companies have a greater, equal, or minority interest in the joint ventures? Will the joint venture partners also be investigated if you decide to pursue it?
To undertake a case-by-case review can be costly and lengthy. It could require in-depth, technical, on-site expertise, and obviously the cooperation of the host government, which may take time for a decision, as well as a fair and transparent process, with oversight, to ensure that the investigative and administrative processes are carried out properly.
Without sufficient resources to investigate and to meet the famous Treasury Board guidelines for contracting, it could take some years to resolve a complaint, given a significant number of complaints, which is likely with the passage of this bill. The longer it takes to decide, the greater the likely negative impact on the company's reputation, its market value, and its ability to move forward on other projects that do generate some community benefits.
What happens if the minister cannot meet the eight-month deadline? And even if it's extended, what then, in terms of the negative impact on the company? Will there be need for an investigation to determine if the complaint is frivolous, especially if the criteria are not specific enough to avoid this need?
With the announcement of a review, the public will generally assume that the company is guilty. The fact that the minister publishes in the Canada Gazette the decision of innocence or that the complaint is frivolous is of little value. Who reads the Gazette in the general public, in Canada, or abroad? And do journalists in the implicated countries or here always follow up on the story? If so, do they get it right? You must have some experience with that.
Ministerial decisions also provide an opportunity for politically biased decisions in accepting to review a complaint or possibly deciding that the infraction wasn't significant enough to inform EDC, because you will run into those types of things. Each situation can be said to contravene procedural fairness, and you've heard from a constitutional lawyer on this. To minimize bias, should not the parties implicated be allowed to comment on the information and analysis received by the minister, obtained during the review, and prior to the minister's decision? Should they be allowed to appeal the decision?
There is no provision for protecting a complainant from local interests that might be negatively affected by a guilty decision of the minister, and I can give an example of a circumstance like that. In some countries, it is possible that a complainant might be at risk not only from affected local interests, but also from his own government, if he were to write a letter of complaint to the minister. This is possible if the government favours the mining operation or if the government was complicit in ignoring the infraction or rejects the right of any foreign government to interfere in its domestic matters.
What is the implication for the Canadian government should the complainant be killed? And what about instances where corruption or blackmail is prevalent? Threatening to complain might be used to gain additional funding or a bribe from the company. How will the minister determine the real basis of the complaint or an interest that encouraged the complaint?
What about the corruption of judges in some developing countries? We know of some. What if the minister finds that the complaint was unfounded, but the judge, possibly as a result of corrupt practices, finds otherwise? If, as a result, the consequences for this company are serious, then will Canada intervene in support of the company?
As far as corruption is concerned, complaints might be used by the government in the country concerned to withdraw a mining licence from a mining company. I can give an example. Should this occur, especially if the minister gave credence for the complaint, what are the consequences for the Canadian government? Will the minister seek and obtain the agreement of that government before undertaking a review? If that government opposes a review by the minister, will the minister then dismiss the complaint? If not, what will it mean in terms of the relationship with that country?
If Parliament approves a bill that provides for extraterritorial application of Canadian law, what are the consequences if it conflicts with the provisions of the developing country's law or regulations—and there are examples—and if the domestic law was legitimately not intended to accord with international standards or guidelines?
How will the government react if another government also decides on a bill that allows it to undertake reviews of complaints against its mining companies? As you know, Canada has a good number of foreign companies operating, from South Africa to China, India, and Russia, etc. Would the Government of Canada welcome the involvement of the United Kingdom or China in such a review of a complaint against their companies in Canada? It opens up a real issue if many countries decide to copy this bill.
Suppose that a mining company obtains a court decision in the country of concern in which it is found innocent of an environmental infraction. Then, suppose that certain persons in that country, or even in Canada, are not satisfied with the court's decision and submit a complaint to the minister. Would that complaint be accepted for review or just automatically be rejected? The bill does not provide for that.
If the minister finds the company guilty of an infraction and the infraction was known but ignored by the company, could the minister's decision lead to criminal or civil charges against the company in that country?
If the Canadian government decided in favour of a Canadian company, it might create some political opposition to Canada and to other Canadian interests in the country. If it favours the local or other interests and not the company, then, as you know, the government will have helped to injure the reputation of that company and its potential access to other opportunities that could have provided additional trade and benefits for Canada.
Also, since companies prefer certainty with regard to funding and insurance, this will encourage the company to seek support from other than EDC. This could cause a bit of embarrassment to the company, particularly given the fact that EDC often encourages the use of Canadian suppliers of goods and services.
The bill provides for complaints of a social/human rights nature, which need to be defined. Are we talking about family breakup, crime, working conditions, and hiring practices? But on the social side, to assess the impact on social changes in the community, a baseline study is required to know whether there is an increase in social problems that can be related to a mine. If there is more than one industry in that area, how will the minister distinguish who is at fault?
Overall, what will be the measurable standards based on human rights principles or guidelines? John Ruggie, Special Representative of the Secretary-General of the United Nations, has been working on this for nearly five years, and he is still working. Bill C-300 allows 12 months for the minister to establish corporate accountability standards pertaining to human rights guidelines. As you know, a guideline can have a number of different measurable standards.
As an alternative, I would agree with the prior advisory committee to the round tables that many issues need clarification and a proper analysis, some of which is detailed in my larger paper. An expert group could be established to consider the complications raised in the paper, as well as the necessary standards, procedural guidelines, and decision-making roles to improve corporate performance that maintains a positive image of Canada abroad. Again, details are in my paper.
Thank you, Mr. Chairman.