Foreign Affairs Committee on March 21st, 2011

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

Thank you, Mr. Chair. How much time do I have? Five minutes? That's not much.

I would very much like to react to what you just said. I have looked into the whole issue of the social responsibility of companies. There was a huge debate on the issue during this session, and even before. But my perspective is not as rosy as yours. People came to testify before us last week. We must give some credibility to organizations like Amnesty International and Human Rights Watch. The last universal periodic review, which dates from January 4, 2011, states that "Canada noted allegations of intimidation, harassment and death threats against members of civil society. Canada expressed concerns towards the sharp increase in murders of women and journalists, and its negative impact on freedom of expression in Honduras."

I can believe in your great theories that the companies there are following a framework of social responsibility. As a believer, I, too, can also apply good theories, but from time to time, I am greedy or commit some small sin. Even though these companies are abiding by the country's laws, we know that there are problems in the Honduran government, that it's corrupt. I didn't make this up. Witnesses have told us so on many occasions, and civil society organizations there have told us about it. It was also mentioned in the periodic review.

I don't know what stage the free-trade negotiations between Canada and Honduras are at. Nor do I know if anyone is taking into account the repercussions of these negotiations on human rights. If they are, I would like to know what measures are going to be taken to ensure that those rights are respected and so that impunity stops. Nothing has been resolved since the coup d'État. The Honduran government is committed to trying and sentencing people who have committed abuses, but nothing has been done.

[Neil Reeder]

We are still putting pressure on the Honduras government. As part of the universal periodic review, Canada was very clear on this. We are, too. I spoke earlier about the dynamic surrounding Canadian mines. That's one of the issues. The other is the human rights situation, which is still very complicated in that country. As for the Canadian mines, you are fully entitled to invite representatives from Goldcorp or other Canadian companies to appear before you.

I visited the Gildan mines. Mr. Rafferty was there with the delegation from the OAS summit. That was in June 2009, three weeks before the coup d'État. There was Mr. Rafferty, a senator and Hedy Fry. What we saw of Gildan's presence was very impressive. I'm not here to defend Gildan or the other companies, but we need to have a balanced perspective of these operations. Gildan employs 15,000 people in Honduras. It's the largest private company. They are offered very good health conditions, and there's a maternity program for the women. Every day, between 100 and 200 people gather outside the Gildan factory, trying to get a good job. Gildan's salaries are 20 to 25% higher than the average in Honduras. It isn't black or white. I find that Canadians have made good investments and that this is also to the advantage of Honduras.

Thank you, madam.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We'll now go over to the Conservatives, and we'll give Mr. Van Kesteren five minutes.

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

Thank you, Chair.

And thank you for appearing before us. I want to keep on going. I want to talk about free trade agreements. They are being initiated in the western hemisphere. In Costa Rica, I think we've finished that. There is also Colombia, Chile, Peru, Mexico, and I think there are some others too.

These agreements benefit the middle class. Mr. Goldring and I went to an African country just a few months ago. We saw the spinoff, what happens when companies are allowed to move and are encouraged to sell their products and get an opportunity to move beyond their own boundaries. It grows, and it encourages people to involve themselves in the economy; it generates wealth and a spinoff in employment.

Small and medium-sized businesses obviously are the first and probably benefit the most from this. I know that on this side of the House...I think even our Liberal friends would agree for the most part that these are methods by which we can certainly grow GDP.

You mentioned Gildan. I don't want to correct you, but I don't think it's 15,000; it's 16,000 employees. Gildan is a Quebec company, and they weren't here to defend themselves, of course. Neither were the mining companies when we were told that Canada—and I was frankly just incensed when I heard the charge that Canada makes off with countries' natural resources without any concern for society. Again, we didn't have the opportunity.

We really need to set the record straight. I think one of the things we have to recognize, and I don't know how far we want to get into politics...but the very fact that the coup took place was because the country was drifting toward Hugo Chavez, that type of a regime, and the influence that he's exerting on a lot of southern.... Let's make no mistake about it. A real power struggle is taking place, and it's what we believe in as a free society; that's to have freedom of goods, what we call the unguided hand, as opposed to total government control or freedom versus totalitarianism, prosperity versus poverty. I feel very strongly about that.

I feel very strongly about free trade agreements. As I said, they don't necessarily influence me as an individual; they influence us as a nation, and they influence other nations. There's a real war going on I think throughout the globe. There's a disagreement as to what free trade does and where free trade leads.

I wonder if you could explain to us the process involved in constructing a free trade agreement and perhaps outline for us the free trade agreement with Honduras and how we go about that.

[Neil Reeder]

I'll just make a very quick comment first, sir, and then ask Jean-Benoit to speak.

I think these are important agreements. We wish to pursue them in the Americas. I would point out that we have considerable trade with Asia-Pacific, but if you look at the web of free trade agreements, they're heavily in the Americas, interestingly enough. Our foreign direct investment in the Americas is three times what it is in Asia-Pacific. Trade promotes exports up to Canada, which is good for the economies, but it also attracts investment.

What I see in the region is that once we've signed free trade agreements...investment tends to follow trade. Now we're seeing, in the case of Chile and Costa Rica, which are mature free trade agreements, huge Canadian investments: Scotiabank, the mining sector. We have $75 billion in direct Canadian investment in the mining sector in the Americas. These are big numbers. We're the miners of the world, essentially. We're not here to defend the miners, but my point, as I was saying to your colleague, was that there are some serious benefits, and I think we monitor our Canadian companies very carefully. We expect them to have a good code of conduct, and if they don't, we follow up with them. We're engaged with the community, and these are important investments we want to sustain. It also reflects the image of Canada, and if they don't respect our expectations under corporate social responsibility, then it affects our image and our interests as well. So we certainly monitor their presence very closely.

[The Chair, Conservative, Dean Allison]

Just a final comment. You're out of time.

We're going to move over to Mr. Rafferty, but go ahead, Mr. Leblanc.

[Jean-Benoit Leblanc]

Thank you.

If I may, I will just offer you a bit on the status of where we are in these negotiations to bring you up to speed. As you probably know, we launched free trade negotiations with the four Central American countries in 2001: Honduras, Guatemala, Nicaragua, and El Salvador.

After nine years of talks we decided to pursue this with Honduras alone. Why? Because we thought that of the four it was with Honduras that we had the better chance to close in the short term. That's why we focused on Honduras.

We had a first round with Honduras here in December, in Ottawa; another one in February in Tegucigalpa; and now our officials are in close contact to try to resolve the remaining outstanding issues.

[The Chair, Conservative, Dean Allison]

Thank you.

We're going to move to Mr. Rafferty for the last five minutes.

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

Thank you very much, Chair.

I have a question for each of you, or maybe more if I can fit them in.

Let's just stay on trade for a second.

Mr. Leblanc, I wonder if you can answer a question for me. Contrary to what many people around the table might think, New Democrats do believe in trade and think it's important, absolutely. But there's a problem with this free trade agreement and others, and I wonder if I could have your professional opinion on this, Mr. Leblanc, and perhaps yours, Mr. Reeder, very quickly. There are these two side deals that happen in all the free trade agreements with this government, one on labour and one on the environment. One of the things we've been calling for, and that I believe in firmly...why should they be side agreements? Why are they not in the body of the agreement where they'll have a mechanism for enforcement, some teeth, instead of being side agreements? If you could answer that it would be wonderful, because I can tell you that there would perhaps be more cooperation from other parties if those two things were not continually side deals, which we feel are not enforceable.

[Jean-Benoit Leblanc]

Thank you.

I think what is key as we look at these labour, environment, or trade agreements is that we try to focus on the substance. Whether they are as a chapter or as a part of the agreement, the substance of what we do and what we've done in the past would be the same.

You would note that both the labour and environmental agreements have their own mechanism of enforcement. They are different. I'm not personally the expert because these agreements are done by Environment Canada and by Human Resources and Skills Development Canada, which are the departments that negotiate these, but I would say they have enforcement mechanisms. But obviously the question you might ask is if you want in the future to have them within or without the free trade agreement, which is a fair question. But I think the question is more, what is the substance, not so much the placement.

I'll give you one example. In our free trade agreement we often have investment chapters, just talking about investment. We also have stand-alone foreign investment protection agreements, which are negotiated with many countries. Essentially, although sometimes they are part of a free trade agreement as a chapter, and sometimes they are outside, the substance is the same. So I think that is more the key we have to focus on.

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

It just seems to me that it would be a fairly easy thing to do. And I understand that both of those issues are contentious in many of these countries. But if they were put in the main body, where the mechanisms for enforcement have teeth, it seems to me you'd have a much stronger agreement. That's just my comment.

I have a quick question for Mr. Reeder. You talked about the truth and reconciliation commissions and that there are reports coming soon. How would you characterize the progress on those commissions, and what can we expect in the report?

[Neil Reeder]

I'm not certain I can say what to expect in the report. But essentially what they're going to tell us is a good sense, as best they can, of what transpired before the coup; what took place at the time of the coup; who said what to whom, which led to President Zelaya being forced out of the country; and then what was the situation in what we call the de facto period under Roberto Micheletti, which was an interim government until President Lobo was elected.

That's basically what they're going to look after, including the human rights situation, especially under the de facto period. That's their intention in terms of what they want to look at.

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

Before the coup, one of the issues that came up was not so much the security issues with the commissions and so on, but it was the question of funding. There was a question of actually having those commissions work, and so on. Is it your sense that--and I know you're not going to know what we're going to see--we can trust what we're going to see when we--

[Neil Reeder]

I think we can.

On funding, I should mention that Canada has given about $400,000 to the official commission to help them out, including covering Mr. Kergin's costs. We're expecting a very solid, transparent document. Michael Kergin is well known to our department. If he is sitting on that commission, I expect them to come forward with a very good document.

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

Do you have a non-governmental side?

[Neil Reeder]

The problem we have is that we have a non-governmental commission, which has never accepted, as you heard, a whole series of premises that we accepted. They've created a non-governmental commission that isn't recognized by the Honduran government and, I would say, by significant numbers of the Honduran public.

Honduras is a very stratified society. It's divided by differing views of what took place during the coup. It's divided by class. It's divided by rural and urban. There are many tensions in the country, and the non-governmental commission does not have full, broad support in the country, I would say. And the official one may not either. They're both playing a certain role. Unfortunately, they're not talking to each other. I made this point to the NGOs. I said if you create your own commission, why can't you engage with the official one? They said, oh no, because they're from a government they don't recognize. They do not accept the Lobo election as legitimate, and therefore they've completely disengaged from the government. We've said that it's not the best approach.

[The Chair, Conservative, Dean Allison]

Thank you very much for keeping the second round on much better time than the first round.

Mr. Reeder, thanks for coming back. I know you had to reschedule to be here today, so it worked out that you were on the first panel as well.

Thank you, Mr. Leblanc, for coming. I think a lot of these questions are trade questions. But we'll see you at the trade committee, I'm sure, on some of these other issues. Thank you.

The meeting is adjourned.