Foreign Affairs Committee on Oct. 28th, 2010

[Steve Saunders]

I know when I'm outclassed.

To respond to your question, in our observation, Canadian companies that do business in Mongolia have been scrupulous from the beginning in pursuing community relations practices and corporate social responsibility standards of the highest nature.

If it were not in their nature to do so anyway, which in fact it is, they would do it simply because mining has been such a political football that it required the support from the grassroots. It required the support of the village or soum mayors and the aimag or provincial governors.

In fact, in the Oyu Tolgoi project, one of the largest factors that helped sway Mongolian public opinion and then parliament was the fact that the entire political leadership of the province in which the project was located was unanimously in support of it.

There have been reports from about a year ago about a job action against a Canadian company that operates the largest gold mine in the country. We looked into this, and even government authorities found that, to a very large degree, it was engineered from the outside, that it had little or nothing to do with substantive corporate practices.

[The Chair, Conservative, Dean Allison]

Mr. Dorion.

[Jean Dorion, Bloc, Longueuil—Pierre-Boucher, QC]

My question is for Mr. Saunders.

Mr. Williams, Mr. Saunders, I thank you for being with us today.

You both dwelled on the importance of an honest public service, independent from government, for a healthy society. However, in a democratic society, the government governs.

How does the Mongolian government operate? Is there an opposition in Mongolia? Are there several political parties? I know that there is a coalition in power at the present time. In any event, that was the case not long ago. How did the government organize itself after the collapse of the communist party in Mongolia?

[Steve Saunders]

I'm going to give you the light answer, because time and the chairman are staring me in the face.

The dominant political party in Mongolia is the Mongolian people's revolutionary party, which is the former Communist Party. Fifteen years ago, they renounced their communist heritage. They apologized for 70 years of communist rule. In fact, the top item on the agenda at the MPRP congress next month is to change the name, to make it into the Mongolian people's party and drop “revolutionary”.

Mongolia has had free and open presidential elections and parliamentary elections since 1992. The presidency of Mongolia has switched back and forth between the democratic party and then to the MPRP, and then back to the democratic party, peacefully and without very much rancour. In terms of parliament, in the election of 1996, the democrats won. In the election of 2000, the MPRP won. In 2004, MPRP won, but it was so tight that they made a coalition government, and that was the first coalition government that you're referring to. In 2008, the MPRP won a solid majority.

However, there was a very uncharacteristic seven-hour civil disturbance in Ulan Bator. The then MPRP prime minister made what most observers thought was a sensitive and good, intuitive judgment. There was a lot of unhappiness in the country about the way things were going, about lack of transparency, and other things. He voluntarily, even though he had a solid majority and did not need the support of any other party to govern, invited the next largest party, the democratic party, into a coalition. MPRP has 60% of the cabinet seats and the independent agencies; the democratic party has 40%.

Now, some Mongolian critics have said that the problem of the two largest parties, which together have 74 out of 76 seats in parliament, essentially means there's no opposition. The next parliamentary elections are in 2012, and the expectation is that the coalition will get a divorce sometime in 2011.

[Jean Dorion, Bloc, Longueuil—Pierre-Boucher, QC]

I now give the floor to my colleague.

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

Thank you. I do not know if I have very much time left, but I would like to make a comment.

Mr. Williams, I certainly do not purport that I have your vast experience. For the information of the people who are listening, I would note that you were formerly a conservative member of this government, but I did not have the opportunity to work alongside you.

I would like to come back to one of the last statements you made. As you have noted, there are very few women around this table. I find it odd that there are not more women. Ms. Brown, a colleague from the Conservative Party, comes here once in a while. In my opinion, if there were more women in the Department of Foreign Affairs, there would perhaps be a different sensitivity with regard to the heaviness that characterizes the department.

In all parties, men and women have been elected. I imagine that some members are convinced that they will be able to make changes and move our society forward, whereas others have different convictions. They are probably here in the pursuit of their own interests. Whether it be in advanced nations such as ours or in developing countries, I believe that this is part of human nature. Even if we would like our public service to be without reproach, it is a fact that it is impossible to control that which motivates human nature.

We obviously are confronted with exceptions. Even here, we are in the pay of the governments that succeed each other. The public service remains, but it is under the yoke of the government in place. It must agree to change its orientation, to new policies or to programs that will be adjusted. We can hardly pretend that this public service will rise up and denounce the government. I believe that you do not bite the hand that feeds you.

[John G. Williams]

Thank you, Mr. Chairman.

And thank you, Madame Deschamps, for the question regarding women in politics. I will not comment on women on either side of the House, but in general, it's great to see women participating in politics.

In a democratic society there is a loop between the governed and the governors. Those who are governed have to be happy with the governors or else they're going to find a way to change the government. Since 50% of our population is made up of women, and they have a voice, I would like that voice heard loudly and clearly in the political sphere. That is how you're going to find more women in the political process, where they exert the influence and the opinions they have.

Within the public service, I'm glad to see, for example, Madam Barrados, president of the Public Service Commission. I've known her for many years, since I came here, first as Assistant Auditor General. And of course we have Ms. Fraser, the Auditor General, and others in senior ranks. This is good. We recognize the role women can, should, and must play in the governance of our society. These are the issues I'm glad to see we are addressing as a mature and developed nation.

On your last point, about whether the public service can exert their opinion on the government on public policy, no, they cannot come out publicly and criticize the government. That is not their role. As I said, they have an allegiance to the population and to the citizens at large, not an allegiance to the government of the day. They have an obligation to implement the policies of the government of the day, but they do not owe their allegiance to the government, because the governments change. Society doesn't. And that is where we find a public service that is professional, efficient, competent, trained, with both genders delivering services and feeding information into the government as to what public policy should be.Then we're going to enhance the values provided to our government and enhance our society.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move back over here to Mr. Van Kesteren, for seven minutes, sir.

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

Thank you, Mr. Chair, and thank you, Mr. Williams and Mr. Saunders, for showing up.

John, I suppose I'm still somewhat of a rookie, but five years ago when I came here, I was one of those new MPs. If I were to think back to those who I've learned most from and sat at their feet, I would have to say that you, sir, are right up at the top. It's great to see you back. It's great to hear you talk about those things that we had so many discussions about.

I've got two questions. I want to say too at this point that we're really fortunate to have both of these gentlemen here. Again, I don't think anybody has to speak about John. We all know your background, your credentials, and what you've contributed to this Parliament.

Mr. Saunders, sir, I read your resumé, and it's profound, quite frankly. So I'm going to ask you two questions; actually one to you, John, and then one to you, Mr. Saunders.

The first one is to you, John.

I firmly believe, and I know around this table many of us--or hopefully all of us--share this belief, that when we go out we are ambassadors; we're not simply members of Parliament. Again, you and I have talked about this a number of times. When we get the opportunity to travel to different countries, we have the profound privilege to go out and represent, as both of you have stated, probably if not the best, then one of the best systems in the world. The message we bring has to be one that points citizens from around the world to a system that, as Reagan used to say, is a light on the hill, a beacon.

My question to you--and before you answer it, I'm going to give the question to Mr. Saunders too so you both have your questions--is on training. Again, I was privileged to sit and talk with you, and I've had many discussions, but there's very little training in the way of that mandate for our members of Parliament. I want to just have you comment on possibly that type of a program.

Then, Mr. Saunders, the question I wanted to lay at your feet is this. I appreciate American diplomacy and I appreciate the way the Americans...they've done an outstanding job through the years. We may not be parallel, but I guess when we go out and administer our foreign policy, we understand that to do so there has to be some type of benefit. The Americans have always done that in the past when they laid out their foreign policy.

What is the benefit to Canada? The obvious benefit is that we have some mining interests in Mongolia and others, but what can be some of the other benefits we see? I really firmly believe that. Sometimes I wonder--I look about at what's taking place in China--if we are getting those benefits. I wonder if, when we give them great advice, when we give them great knowledge--such as what we've just heard from the last witness, that type of sharing in information--we shouldn't be more demanding and expectant on the end results.

If that makes sense to both of you, then maybe, Mr. Williams, you could start.

[John G. Williams]

Thank you, Mr. Van Kesteren. Again, thank you very much for the compliments you expressed. I appreciate them very much.

On the question of training for parliamentarians, I think of the illustration I have sometimes used. Imagine you are on the operating table and the anesthetist is about to put you out. The surgeon shows up and he's got a big scalpel in his hand. He leans over and says “I haven't done this before. How do you feel?” Nervous, of course.

Think of us, as parliamentarians. When I was a parliamentarian and we first showed up here, we were untrained. We were not familiar with the rules. We didn't understand this institution of parliament and how it works as an institution to hold a check and balance on the government. We ran on public policy and the party policy. We said vote for me and I will implement whatever is in the party policy.

Then after the votes are counted, you find yourself on the opposition side. Whatever you said about implementing party policy is largely irrelevant because it's not going to happen. It's the governing party that says their agenda won and their agenda is to be implemented, subject of course to convincing the other parties it's a reasonably good idea.

The concept of the check and balance of a parliament is never discussed in the elections. Nobody has ever said during an election, “Send me down to Ottawa to be a parliamentarian and I will hold the government accountable.” Nobody has ever said that, but that is the role of parliament. Therefore, we need to have a methodology where we elevate the competence and understanding of parliamentarians as to their real role. Primarily and fundamentally, the parliament, on behalf of the people, is a check and balance on the executive. When parliament is accountable to the people through open and fair elections, with an independent media that keeps them informed, so that they can decide whom they want to represent themselves, then we have a functioning democracy. When ballot boxes are stuffed, when the media is controlled, when parliamentarians are blindly following the leader because he buys their vote with a bucketful of cash, you will not have a democracy. It's game over.

Unfortunately, in far too many countries in the world, that, or something similar, is how democracy is run. It is no democracy. That's why people are poor. They do not have the capacity to pull the chain of the people and say they didn't vote for poverty and government has an obligation to deliver prosperity to them. They can't do it. They can't pull the chain.

I've been to far too many countries and seen far too many rules that prevent the people from holding the parliamentarians and government accountable. That is the problem.

[The Chair, Conservative, Dean Allison]

I'm sorry, Mr. Saunders, he's on to you again. You've got a little bit of time. If you could keep your comments quick, then we're going to move on.

Paul, do you have to go?

[Paul Dewar, NDP, Ottawa Centre, ON]

Yes. I'm sorry, I have to go.

Thank you for the presentations.

[The Chair, Conservative, Dean Allison]

Thanks, Paul.

Mr. Saunders, you just bought yourself a bit more time--a little more.

[Steve Saunders]

I think what Mr. Williams has said is a lot more interesting than what I have to say, and I'm delighted and honoured to be on this panel.

You ask a perfectly legitimate question: what's in it for Canada? In the short term, the mining investment obviously repatriates income, and those economic benefits don't need discussion here.

This is why Canada is so well positioned now to take advantage of an opportunity that is created as a result of Prime Minister Batbold's visit to Canada. Prime Minister Stephen Harper made it very clear that the incentive for Mongolia to move ahead more expeditiously than they have over the last six years with a FIPA in order to provide some guarantees of asset protection for Canadian investors is that at the end of that rainbow, we start negotiations on a free trade agreement.

Canada will, as it has for the last 10 years, once again be ahead of the United States on the FTA. The American Congress has refused for several years to renew the trade negotiating authority of the President. This applied to President Bush; it applies to President Obama. He does not have trade negotiating authority, and Congress has an uncertain appetite for future FTAs. My impression is that the Government of Canada has no such reluctance and is in very many ways eating the lunch of the United States on moving ahead on its FTA program. It is likely that Canada can have an FTA with Mongolia much faster and much sooner than any other country, with the benefits that would produce.

Education exports: if a Mongolian is educated at one of Canada's fine colleges and universities, for the rest of his life, when he thinks of needing a major construction company, he's going to think of Lavalin, not necessarily Bechtel. If he needs to buy a plane, he's going to think of Bombardier and not of an American producer or Embraer or Fokker. If they get to the point of mass transit, he's going to think again of Bombardier and not an Italian manufacturer.

There is an awareness among very senior private sector Mongolians that an education in Canada is qualitatively different, and to many of them better, than in the United States simply because of the social environment. The president of MCS Holding Company, which recently had an IPO in the Hong Kong stock market, which established the capitalization of their company, which owns a piece of the Tavan Tolgoi coal project at over $5 billion, asked me for advice on where to send his sons. He wanted a small college in a safe environment where they were going to get a good education and where he didn't have to worry about them every day. I said Simon Fraser. I'm sure I've offended everybody else at this table who has a pet college or university, but he had two of his sons go there. The NAMBC has organized a Canadian Alumni of Mongolia organization, and we are about to hand it over to a self-governing board of landed Mongolian immigrants in Canada.

Finally, on the Toronto Stock Exchange, this mining company went to Hong Kong, and if there is a greater visibility for Canada, then more of them are going to come to Toronto. This is globally competitive now, and it's important to persuade foreign mining companies to list in Toronto and not in Hong Kong, Shanghai, London, New York, Chicago, or wherever. It is important to preserve the status of the Toronto Stock Exchange.

That's just a quick answer to a very good and very deep question, and those are some of the advantages I see.

[The Chair, Conservative, Dean Allison]

You can have one very quick question, Mr. Lunney, and then we're going to wrap up.

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

Thanks for the opportunity.

I thank Mr. Dewar for sharing his time that way with us.

I just wanted to pick up on one thing you guys mentioned, and thank you so much for your very helpful comments.

We're talking about how you train public servants in Mongolia, and I think you mentioned a public service institute. I just wanted to pick up on how we're seeing this Canadian participation with their public service over there. Is that the institution we would engage with? Is that one way you might see our Canadian expertise impacting things over there? Also, you mentioned that the pay over there was something like $2,300 a month, if I heard you correctly.

[Steve Saunders]

That's per year.

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

Excuse me. I meant to say “per year”.

Now of course in some of the countries, even that would seem high compared to what it would be in some of the nations we deal with, but things must always be looked at in context. Is that a living wage over there? One of the problems we see in many parts of the world is that when you give people authority and they don't have a living wage, you're giving them a formula to extort money.

[The Chair, Conservative, Dean Allison]

Do you have a quick question?

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

How do you deal with that?

[John G. Williams]

You deal with corruption. You can't guarantee you'll catch everybody, but you need to have two things in place to stop corruption. You have to think you're going to get caught, and if you are caught, you're not going to like the price. It's just that simple. That is how you stop corruption.

So you need a professional civil service. You need audit functions. You need police. You need the courts. You need the entire structure of it with a professional civil service in place so that you're going to get caught, and you're not going to like it. You'd rather stay honest. That's how you stop corruption.

[The Chair, Conservative, Dean Allison]

Thank you.

Gentlemen, thank you very much for taking the time to be here.

With that, I'm going to adjourn the meeting.

Thanks again. The meeting is adjourned.