Foreign Affairs Committee on June 3rd, 2010

[Sarah Knuckey]

I would say that it's both.

A government of course has the obligation, both under its domestic criminal law and under international human rights law, to investigate all allegations of abuses like gang rape, beatings, or killings. But especially in this case, as Mr. Albin-Lackey mentioned, where the government has literally no capacity and apparently no willingness to actually investigate transparently and comprehensively these allegations, the company itself has taken on a state responsibility in this particular area and has the obligation to investigate independently the allegations that have been made.

[The Chair, Conservative, Dean Allison]

So in countries where there's poor governance, you're suggesting that these mining companies actually need to take on more of that role themselves when the government hasn't really stepped up to the plate and when there are allegations and concerns.

[Sarah Knuckey]

It would certainly be ideal if they did step up to the plate, but any attempt by any security force to entirely internally investigate itself will always be susceptible to allegations of bias.

On behalf of the United Nations, I investigate killings by police forces in countries all around the world. Any serious police force has external oversight, and usually civilian external oversight, because, of course, internal mechanisms are always susceptible to internal corruption or bias. It's the same here.

[The Chair, Conservative, Dean Allison]

Thank you very much.

Mr. Lunney, sir.

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

Thank you, Mr. Chair.

I thank the witnesses for appearing today. All of us around the table recognize that it's an issue on which there is a variety of opinions. We heard them at the table today.

I think it's clear that we all recognize Canada's major role in the world in this regard. Canada has played a role in the development of the guidelines that exist around the world--voluntary guidelines. We have participated in many of the processes and we've encouraged Canadian companies to be involved in all of these: the Equator Principles, OECD guidelines, and IFC guidelines. I believe that EDC was one of the first organizations worldwide to sign on to the OECD guidelines.

We've been working in this direction. We've been through an extensive consultative process here in Canada, a round table process that was collaborative and brought everybody to the table, and we've come up with a strategy. The government has already announced the strategy, out of a collaborative process, to address some of the concerns out there and to enhance our capacity in this area.

Mr. McKay himself was involved in or aware of this round table process that was collaborative and called for an independent counsellor to address these issues. One of our objections with this Bill C-300, one of our concerns here, is the politicizing of this whole agenda by putting it in the hands of a minister.

Regrettably, we would find the kinds of allegations that are not easy to sort out from afar, or to investigate quickly, given the legal uncertainties, and we would be in a position where members could use parliamentary privilege to bash away at a minister, to make unfounded allegations under the cover of parliamentary privilege, with no legal consequences, and at the expense of the Canadian economy and the well-being not only of extractive companies, but of our economy itself.

That is one of the fundamental flaws that I see in the bill. I'm very concerned about it. I think Mr. McKay and others would be wise to consider that. Regardless of which party is in power, that would create a very untenable situation for something that may not be resolved quickly, given the legal uncertainties in the bill.

Having said that, I note that some of the people at the table here have been involved in the collaborative process and have some extensive experience in developing cooperation from conflict, even in British Columbia, my home province, where we have a number of issues with communities, first nations communities in particular.

You made reference to that, Ms. Whyte.

Canada has been developing tremendous expertise in trying to sort out these things. They're not easy to solve domestically, and are certainly even harder internationally, but I wonder if you'd care to expand on the B.C. experience, your organization's experience--it's been around since 1912--your participation in the collaborative process, and some of the lessons that have been learned that might be beneficial.

[Laureen Whyte]

One of the most important things we've learned in working with first nations in B.C. in particular is that where there is a great deal of fluidity in terms of jurisdiction, decision-making, issues management, and all kinds of things--and we have been working in that area for quite some time now--what has become quite apparent to us is that only in partnership can we succeed in anything that we do in the communities.

I think there are also a couple of other considerations to take into account here.

When people say there would be some credibility attached to a Canadian company that would be regulated by the Canadian government overseas, people question that statement and whether or not the fact that the Canadian government is regulating something means it's going to provide a solution for a community that's going to address its needs. Specifically, first nations here have pointed to that in conversations about Bill C-300. I don't think we can say internationally that we've figured this out in a way that keeps communities whole and protects their human rights and their dignity.

So there are questions to be asked in that regard, but I think the other thing that's really important is that our experience, certainly with first nations, is that there are components that are done on a collaborative basis, where we learn from each other, and there are components that have a legal element to them, and they're both at play. They're effective together. We work with that.

The problem I have with Bill C-300 is that we've been working very hard on this issue for quite some time now and we're very close to seeing the results of John Ruggie's work. Our CSR counsellor is consulting with us extensively to try to build some kind of Canadian framework that makes sense for us, that does have that operational detail. I really don't think you can regulate things effectively without looking at the operational detail.

We've been doing this for only a few years. This isn't an area of practice that we have a lot of experience with in terms of managing it to a good outcome. It does take some time. That's what we spend a lot of our time on as an association: helping people to understand how they manage this stuff on the ground.

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

Following up on consultation, your organizations were part of the consultative process that led to our CSR strategy and the counsellor.

Was the Canadian Council of Chief Executives involved in those discussions as well? Were you consulted? Were you involved in those round table discussions...?

[David Stewart-Patterson]

Just to be clear, I'm sure we had member companies who were involved, but probably through their sector associations. We, as a council, were not directly involved.

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

Thank you.

But were you consulted? Mr. McKay's bill has come forward here. I'm not sure there was any consultation with anybody, frankly, on this issue. Were you consulted regarding this bill before it was brought forward?

Can you answer that, Ms. Whyte, or any of you...?

[Laureen Whyte]

We were not consulted.

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

[Inaudible--Editor]...if they want to.

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

Thank you, Mr. McKay--on your own time.

There has been speculation that if the measures that have been discussed a little bit already come in, the measures in Bill C-300, which really start with a punitive approach, it might take a while, given the time and the legal uncertainties, for anybody to sort out exactly what's happened in the extraterritorial setting.

First of all, let me just ask simply, is the possibility that companies might reconsider relocating headquarters something that you might see on the horizon?

[The Chair, Conservative, Dean Allison]

That's all the time we have, but go ahead and answer the question.

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

Let me ask my follow-up question, then, really quickly.

[The Chair, Conservative, Dean Allison]

Be very quick.

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

I want to say that it's been implied that the voluntary process with the CSR counsellor would be useless because it's not mandatory, but it seems to me that a company that's being investigated or being asked for information from the CSR counsellor would have a very strong motivation to comply fully.

I just wonder whether or not that would be the case. Because there will be public reporting and public censure and an effect on stock markets and so on, for not complying, it seems to me that it would be quite profound.

Would you care to comment?

[Laureen Whyte]

My experience has certainly been that, given support and offered a constructive space for dialogue and solution and resolution, companies that I have worked with would choose that every time. It doesn't make sense for them not to avail themselves of a process like that. They take their social licence very seriously, and we are experiencing that as a significant political risk in B.C. because of the uncertainty with first nations. We have a number of companies leaving because they cannot obtain social licence to operate.

[The Chair, Conservative, Dean Allison]

Thank you very much.

Mr. Rafferty, welcome back. The floor is yours, sir.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Thank you very much, Chair. Thank you to the committee for asking all the really good questions already, but I have a couple that I would like to ask also.

Professor Simons, I guess you're first, because you were last in and everybody's asking you first anyway.

You talk about the court of public opinion and about the positive aspect of actually having things dealt with for the companies. I agree with the logic, and I also agree with what you've said, but because you know how governments are, are you concerned that there won't be enough resources to deal with things in a timely and fair fashion?

You hear complaints from overseas. I'm just thinking of some of the expenses. People will have to travel and so on. Each complaint could tend to be not only a lengthy affair but a very expensive affair.

[Dr. Penelope Simons]

Yes, it could be expensive. Court cases are expensive as well; they're even more expensive.

With regard to this issue of being under-resourced, the counsellor's office is already under-resourced. She certainly doesn't have much money in her budget. I think that having something under Bill C-300 would be much better.

It doesn't have to remain that it's a minister; I take the point that having it as a minister might compromise its independence. But that is there because it's a private member's bill that can't request resources of the government. As Mr. Dewar pointed out a few weeks ago, that can change with the stroke of a pen, and you can create something that is more independent. I think the argument that it is not independent is a bit disingenuous.

Could you just repeat the last part of your question?

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

I was wondering whether you were concerned that the necessary resources wouldn't be allotted, either as part of this bill or otherwise in the future, to deal with complaints in a timely and fair manner that in fact does exactly what you think should be done, which is to have it dealt with in a legal manner so the air is clear.

[Dr. Penelope Simons]

I assume that if this bill comes into law the government will resource it properly. I would have to assume that. I can't speak for what the government will do, but if you create a mechanism that is actually enacted into law, and it's actually supposed to do this, then they will have to provide a certain budget for it to do this. It would probably be better resourced than what we currently have with the counsellor.

I'd just like to make one more comment quickly about Bill C-300 and the lack of consultation. That point was just raised. The bill implements the core remaining proposals of the round tables, on which there was excessive consultation, so I think it's disingenuous, again, to say that there was no consultation on the substance of this bill.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Okay. Thank you.

Ms. Whyte, you represent smaller mining companies and mining interests. One of the things that people have talked to me about, and that I've heard critics argue, is that in fact the real problem with Canadian companies working overseas is the small companies. It's not the large companies. I wonder how you would respond to that.

[Laureen Whyte]

Certainly, smaller companies don't have the capacity themselves to manage the multiple kinds of things they have to manage now. Not only do we need people who understand geology and some of the basics of the business, but we need anthropologists and environmental specialists. It's becoming very challenging for small companies to resource the capacity that's required for them to meet the various tests.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Okay.

Did you want to add something?