Evidence of meeting #21 for Foreign Affairs and International Development in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was company.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

David Stewart-Patterson  Executive Vice-President, Canadian Council of Chief Executives
Laureen Whyte  Vice-President, Sustainability and Operations, Association for Mineral Exploration British Columbia
Gary Nash  As an Individual
Tyler Giannini  Lecturer on Law, International Human Rights Clinic, Harvard Law School
Sarah Knuckey  New York University Center for Human Rights and Global Justice, Harvard Law School
Chris Albin-Lackey  Senior Researcher, Human Rights Watch, Harvard Law School
Penelope Simons  Associate Professor, Faculty of Law, Common Law Section, University of Ottawa
John Dillon  Vice-President of Regulatory Affairs and General Counsel, Canadian Council of Chief Executives

12:45 p.m.

Associate Professor, Faculty of Law, Common Law Section, University of Ottawa

Dr. Penelope Simons

Well, that would certainly be better than what we have now, which is a counsellor with the capacity to investigate only where the parties agree, meaning that a company can state that it doesn't want any investigation into a particular situation.

Having an ombudsman would be better than what we have now, but I still think that having this type of mechanism to engage an investigation with regard to allegations, with sanctions, makes much more sense. Because if you don't have sanctions, then there's not much incentive to comply, apart from the reputational incentive, which then you have to investigate to make sure they're actually complying.

12:45 p.m.

Conservative

The Chair Conservative Dean Allison

Thank you.

Mr. Pearson.

12:45 p.m.

Liberal

Glen Pearson Liberal London North Centre, ON

Thank you, Chair.

Ms. Simons, the committee knows about my own past history and involvement in Sudan. This conversation about Talisman always drives me a little bit crazy. I've been there a lot. It's no worse under the Chinese than it was under Talisman. I think that's a specious argument.

Without Bill C-300, what Talisman went through was gruelling. It went through a 7% share drop. It divided the country as a result of its own lack of expertise in knowing what to do in the country. It didn't heed the government's advice when the government of the day gave it advice not to do it.

My concern is not so much with what everybody is talking about here, but that within Canadian society we had teachers' federation groups delisting from Talisman. We had all sorts of other NGOs and we had companies speaking out against Talisman. It actually created a rift within Canadian society, and I am concerned about that.

We had no place to go to in the end to actually find out what was going on, to find out who was actually obeying the standard and who wasn't. I wonder, since you were part of the Harker report--and I'm aware of its work--if you could speak to that comment about its effects on Canada.

12:45 p.m.

Associate Professor, Faculty of Law, Common Law Section, University of Ottawa

Dr. Penelope Simons

Do you mean the effects it had on Canadian society?

12:45 p.m.

Liberal

Glen Pearson Liberal London North Centre, ON

Yes.

12:45 p.m.

Associate Professor, Faculty of Law, Common Law Section, University of Ottawa

Dr. Penelope Simons

I think you're right. There was a huge campaign. As you've said, it did divide people and it did have a negative impact. Had we had standards in place beforehand, like the ones that we have in Bill C-300, and some sort of mechanism to investigate these things, it could have been dealt with in a much different way.

Talisman would have had guidelines on how to deal with it. If they had decided to go in, as they did, and what happened had happened, I think it would have been concluded that it was not a good investment and that there was no way you could go in there and not be complicit in the human rights abuses that were going on. I think that if there had been a regulatory mechanism to prevent that type of engagement in the first place, to give companies that got into situations guidance about what they needed to do, and to provide for some sort of complaints mechanism, it would have completely changed the impact on Canadian society.

12:45 p.m.

Liberal

Glen Pearson Liberal London North Centre, ON

Thank you.

Thank you, Chair.

12:45 p.m.

Conservative

The Chair Conservative Dean Allison

Thank you.

We're just going to finish up with Mr. Braid.

Welcome to the committee.

June 3rd, 2010 / 12:45 p.m.

Conservative

Peter Braid Conservative Kitchener—Waterloo, ON

I'm honoured to be here. Thank you, Mr. Chair.

Thank you to all the witnesses for being here.

Ms. Knuckey, I will start with a question for you, please. You mentioned that you have participated on behalf of the UN in investigations of human rights abuses.

What punitive mechanisms, if any, are there under UN authority? Once you've assessed that there has been an abuse, does the UN have punitive mechanisms that can be applied against the state, a company, or an individual?

12:45 p.m.

New York University Center for Human Rights and Global Justice, Harvard Law School

Sarah Knuckey

In the particular system in which I work, it's a special procedures system that reports to the Human Rights Council of the United Nations. When a report is submitted to the Human Rights Council, it can make a public statement or pass a resolution about violations by the particular state that the report is addressing.

12:50 p.m.

Conservative

Peter Braid Conservative Kitchener—Waterloo, ON

Thank you.

Mr. Stewart-Patterson, I'll turn to you, sir. Can you assess what costs, if any, Bill C-300 would have on business or what costs there would be to doing business? Can you comment on that at all?

12:50 p.m.

Executive Vice-President, Canadian Council of Chief Executives

David Stewart-Patterson

I don't think you can really quantify that, because part of the problem with the bill is that essentially it creates a new layer of uncertainty. We were just talking here about the impact of public opinion and other marker mechanisms in reaction to what happened in the Sudan.

The fact is--and I've said this for many years--that anything a company does anywhere in the world, for better or for worse, now affects its reputation everywhere in the world. And reputation, as was the case in the Sudan, has a direct impact on the share price, on the viability of the business, on the jobs and incomes that flow from that business, and on people who invest in that business. The reality is that you can't hide bad stuff in today's world. There are very effective responses out there that don't require the Canadian government to step into place and tell Canadian companies to override the rule of law or the lack of rule of law in another sovereign state.

So I can't tell you to what extent this bill is going to add additional costs, but it certainly adds an additional layer of uncertainty. It certainly creates another vehicle by which anybody, whether prompted by a competitor or otherwise, can smear the reputation of Canadian companies. As we've already said, smearing a company's reputation can have very real impacts on that business, the people who work for it, and the people who invest in it.

12:50 p.m.

Conservative

Peter Braid Conservative Kitchener—Waterloo, ON

I think Mr. Pearson helped, in fact, to answer this question. In your mind, do you believe that the court of public opinion in and of itself is sufficiently powerful?

12:50 p.m.

Executive Vice-President, Canadian Council of Chief Executives

David Stewart-Patterson

I think we had an example of that in the Sudan, didn't we?

And again, I'm still curious. There was a statement that there is no way you could go in there without being complicit in human rights abuses. Well, Canadian companies were not the only ones in there. Are all the other companies being condemned in the same way? And if not, why not?

12:50 p.m.

Conservative

Peter Braid Conservative Kitchener—Waterloo, ON

Mr. Stewart-Patterson, here is a final question for you. Right at the end of your presentation, you indicated that Bill C-300 could “also imperil the brand of many other Canadian companies operating in developing countries, beyond those in mining and oil and gas” sectors. Could you just elaborate a little bit on that?

12:50 p.m.

Executive Vice-President, Canadian Council of Chief Executives

David Stewart-Patterson

Again, it's a spillover effect. Canada's brand basically is built upon the individual reputations of all Canadians as individuals and of Canadian companies as actors on the global stage.

So if we do our best to kind of shoot ourselves in the foot and smear our own reputation and help others smear our reputation in the mining sector, that's going to spill over onto Canada's brand more broadly. For example, if there's has been a campaign against a mining company in a particular country, well, maybe another company in another industry is going to have trouble doing business in that same jurisdiction.

12:50 p.m.

Conservative

The Chair Conservative Dean Allison

Mr. Saxton, do you have one quick question?

12:50 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

I have a quick question for Mr. Nash. I'm trying to get my head around this. What we're looking at are some very heinous and awful crimes that have been committed, but to my knowledge, from what I've read, most of them are committed by locals. These are not Canadian citizens. They are employed by Canadian companies, but they are locals.

So how are we supposed to police them when they are locals in their country committing a crime? They happen to be on the payroll of a Canadian company, but they're not Canadians committing crimes abroad, which is very different from the examples that this lady, the legal expert here, mentioned.

We have extraterritorial laws, but those extraterritorial laws are for Canadian citizens committing crimes abroad, not for locals committing crimes in their own countries. I'm trying to understand how we are supposed to police locals committing crimes in their own countries.

12:50 p.m.

As an Individual

Gary Nash

I'm not a lawyer, but I would say the only way that... Well, there are two institutions that can react. There is the local government: in other words, within their own system. Or alternatively, the company could make a policy decision that if certain acts do occur, along whatever lines, that appear to be criminal or whatever, it will not engage those people again or whatever. I can see only those two alternatives.

But I can't see the Canadian government going in and investigating the complaint about whether or not a security guard raped somebody. I see that as problematic. I really do. I wouldn't recommend it, because there could be so many other situations where local people cause problems. Are you going to have the Canadian government go in every time somebody complains that the company hired so-and-so, who caused the problem?

I think from a practical point of view... Legally, if this bill goes ahead, maybe they could look at it. And you know my position on the bill. I think a lot more work needs to be studied, with a lot more understanding of what some of the issues are. So I would just say that from a practical point of view, it's not the way to go. I'd leave it up to the local or whatever...

12:55 p.m.

Conservative

The Chair Conservative Dean Allison

I'll give the final comment to Ms. Simons.

12:55 p.m.

Associate Professor, Faculty of Law, Common Law Section, University of Ottawa

Dr. Penelope Simons

Thank you.

Just on that point about the Canadian government regulating local citizens of another country, this regulation is for Canadian citizens, for Canadian companies; it's for Canadian companies that hire or otherwise engage security forces, for example, to protect their businesses. So whether or not those security forces are local people, the Canadian company has a responsibility to ensure it does adequate screening, to ensure it hires and trains the security forces, or hires security forces that don't have backgrounds in human rights and abuses and trains them with respect to proper conduct in terms of protecting the activities.

So it's not quite what it is. I don't think we can say that this is regulating locals in other countries. That's not what this bill is doing. It's asking companies to take responsibility for those they engage to protect their business enterprise in a certain place.

12:55 p.m.

Conservative

The Chair Conservative Dean Allison

Thank you.

To our witnesses, I just want to thank everyone today. I thought there was some good discussion and some good dialogue today. Thanks to all of you for being here.

I'm going to let the witnesses go. We need to go in camera just for a little bit of committee business. I'm hoping it won't take too long. I will thank the witnesses and let them step back.

We'll suspend for one minute and then come back just for a little bit of committee business.

[Proceedings continue in camera]