Foreign Affairs Committee on Nov. 17th, 2011

[Peter Goldring, Conservative, Edmonton East, AB]

From the aspect of the mines themselves, I'm very familiar with all the safety standards we have in Canada, with mine safety equipment, gas sensors, breathing apparatus, etc. Are all of these Canadian, I guess you could call it, safety levels or safety standards maintained in foreign countries for the employees' benefit?

[Ross Gallinger]

Absolutely, and it gave you a bit of an insight in terms of the evolution in the proving experiences.

It's very interesting. I've had this question on whether the safety standards in whatever developing country are the same as in Canada, and my response is “Look at the safety statistics of the operations in foreign countries.” In fact in the companies I work in, the injury rates were far lower in the developing countries than in some of our Canadian operations.

[Peter Goldring, Conservative, Edmonton East, AB]

I knew there would be a statistic, but we hear of the odd third world country where they have mining disasters and it comes back to lengthy employee working hours that might tire the employees, and lesser levels of standards.

You characterized that you would maintain the superlative level of safety standards of Canada in your mining operations in other countries.

[Ross Gallinger]

Yes. The ultimate goal is to not injure people, so whatever you need to do in order to do that--

[Peter Goldring, Conservative, Edmonton East, AB]

It's your responsibility.

[Ross Gallinger]

--whether it's European technology or Canadian technology, that's what needs to happen.

[Peter Goldring, Conservative, Edmonton East, AB]

I have a final question. On the turnover, for example, of open pit mining, do the Canadian corporations actively get involved—we know not all corporations do—in redoing the environment after the mining and extraction process, in other words, as little environmental impact as when you started?

[Ross Gallinger]

There is a closure plan. All of the operations I've been involved with in developing countries have a closure plan. It's part of the accounting process to account for the costs to reclaim those sites. On the projects I've been involved in, we've looked at the post-closure land use aspects of what the place is going to be at closure so it can be integrated as part of the development. Whether it is going to be new grazing areas for agriculture or new wildlife areas or tree plantations, those are the kinds of things that are included. Those are costed and the companies follow through on that.

[Peter Goldring, Conservative, Edmonton East, AB]

Very good.

I understand that Canadian mining operations are the most substantial in the world, but you do have competition from certain other countries. Would you characterize that your major competitors also follow this type of environmental integrity and guidelines and safety standards, or do you have a problem competing on that basis and maybe get the nod to do the mining development because of your high standards?

[Ross Gallinger]

Everybody is following a set of rules in terms of best practice, I guess you would say, such as following the International Finance Corporation's rules and guidelines that dictate a number of these aspects. My experience in terms of working on the community development aspect is trying to promote that component within the country and differentiating yourself from your competitors in that regard.

[The Chair, Conservative, Dean Allison]

You have 45 seconds.

[Peter Goldring, Conservative, Edmonton East, AB]

Absolutely. All of this is relative when we're talking about poverty worldwide and increasing the well-being of employees. I think 50 years ago, when we lowered the working hours from over 48 hours to 40 hours, it was said it had a beneficial effect because employees were more productive. It resulted in a win-win all the way around.

Would you characterize the work you are doing on improving people's living conditions to be good for business as well as helping the people in these communities?

[Ross Gallinger]

Absolutely. As we know, when your employees are content and happy and want to come to work, you're going to have a much more productive aspect. Whether it's working conditions, hours of work, your contribution to the community, all those things are positive aspects for people who want to come to work and contribute to the company as well as to what they're doing.

Thank you very much.

[The Chair, Conservative, Dean Allison]

We'll move back to Mr. Eyking, sir.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

A few years ago I was in Yemen. One of the major companies in Yemen was a Calgary oil company. I think they are called Nexen. Anyway, I was very surprised and proud of the job they were doing with the government. They were doing everything. They were not only going there and getting oil. They were the number one producer of oil in Yemen, but they were helping schools, schools for girls, they were helping everything, promoting seat belts. It was amazing at how good a job they were doing at being a corporate citizen and helping that country move along, and even helping the government, because you know what Yemen's like. Its a pretty rough and tumble country for them to be in there doing that job and also having a corporate responsibility.

I left with the impression that it's pretty cool that we have a Canadian company going in there, not simply taking resources out but also leaving quite a bit in the treasury there, as well as having a major corporate responsibility and taking the lead, more so than I think they had to do. I think it was very good they were doing that.

It concerns me when I see these reports. There's a report here that came out in 2009; I think it's from the Canadian Centre for the Study of Resource Conflict. I guess it was a leaked draft report. In this draft it stated that of most violations by Canadian mining and exploration companies, 60% had to do with poor community relations.

I don't know if you are familiar with this report. That's not good. Why can't these mining companies be more...? You know, they are sometimes carrying the first Canadian flag into these countries. You would hope they would be doing a better job than the Australians, the Europeans. You would hope it would be said “The Canadians are here, they have the best record, they do the job right. They work with the governments on making lives better for the people.” We don't want to be compared to maybe the way the Chinese are dealing in Africa and we're doing a little better. I think we should be the best, and we should all be proud when we go into these countries as a foreign affairs committee knowing that Canadian companies are doing their best.

You're putting on a good defence here, but what more can we do to get that standard up and be the best corporate citizens, best corporate mining citizens in the world, to beat the Australians, to beat the Europeans in that corporate responsibility? Should we have more protocols? Should CIDA be involved with you people going in and helping you understand what's happening in these countries? I mean, should we have a different Canadian approach?

I would prefer that we don't have rules and regulations that are going to force companies to do something all the time. You would sooner have this understanding that this is the way we act when we're in these countries. This is how we treat the people, we treat the land, we are going to be better than anybody at the end of the day. So what can we do to improve that image and have a country that would say “Great! Canadians will be coming here to do the job, not the Aussies or somebody else. Canadians are coming.” You know, similar to World War II, when the Canadians were coming everybody liked to see that flag. We would hope that these countries would think the same when Canadian mining companies are coming.

[Ross Gallinger]

First of all, let me address that report and give you some context as well, because it aggregates a number of incidents.

There are 1,600 Canadian companies listed on the TMX; there are probably 700 listed on the Australian Stock Exchange and somewhere around 200 on the New York Stock Exchange. Because you have 1,600 companies, just because of the sheer volume, if there are going to be incidents, there are going to be more from that subset. If you actually equate those into percentages, it equates to three incidents per 100 companies for Canada, for Australian companies about four out of 100, and for those listed on the New York Stock Exchange, it's 14 out of 100. So look at not the gross numbers but the breakdown.

Nonetheless, engagement is a constant challenge with communities. When expectations are mismatched, in terms of community expectations and the reality of the situation, that's where you can have conflict at any point in time. Companies are constantly trying to work through that. Sometimes within those engagement processes some people are missed—some groups are missed—and they will identify themselves through various means.

I can remember working in Argentina some 10 or 12 years ago and a community saying its water had been poisoned; there was a pollution problem, etc. As the environmental expert, I sat down with members of the company and they said no, they knew there was no environmental problem. So they sent the environment guy to deal with this, to tell them it was impossible for a problem to be there. They said yes, they understood that, but they wanted to talk about economic development, they wanted jobs, they wanted other things.

So there will be things that will come up in controversy because you've missed that conversation. It's a matter of trying to bring those groups in again. That's a constant aspect that we have to go through. Ones that work really well have great engagement programs, but there's still always going to be something that might come up, an incident that occurs. It's how companies deal with that, moving forward. It's always going to be a challenge. Communities will change as well. Generational aspects will change. The youth will come in and their expectations will be completely different.

We constantly have to have this conversation. We constantly have to figure out how we can work together with those communities so they can truly feel they're also benefiting from the development that's going on. That's what I talked about, this inclusive kind of development component, when we get to that aspect: rather than our saying “I'm going to build you a school” or “I'm going to build you a hospital”, we should say “How can we work together so that you can build your livelihood, your capacity, and you can use this operation and what we're doing as a springboard to going forward?”

It's not an easy process, I can tell you from my experience, but it's one we're constantly working on, going forward. There will always be learning opportunities and there will always be these bumps in the road as we go through this process.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I understand sometimes it's difficult. In these countries you're sometimes dealing with corrupt governments and with security for your employees. I know it's a big challenge. There should be a bit of a template or some course for CEOs or the people who are going into these countries, on how you deal with stuff—how you deal with these governments and how you deal with a lot of the issues you're dealing with.

Even your group would have more self-discipline among members, right? I don't know if you can or can't do that within your association: say “Okay, buddy, you're doing a bad job over here in Tanzania. Look, it's kind of giving us a black mark here if we're going to go in with other projects.” Is there a way you can kind of do that?

I don't believe governments should always do the job and police and enforce rules. It doesn't really work at the end of the day. It's better if an industry does its own thing, right? We see this with the agriculture industry. If it does its own thing, sometimes it has a better impact than governments coming down hard on it.

I'm wondering if your association can do more or can work more with the CIDAs of the world and the development groups to have a better understanding going into these countries.

[Ross Gallinger]

One of the things the PDAC has done was to develop e3 Plus, the guiding principles for corporate social responsibility. What had been missing for the junior sector is some guidance on how to do engagement, how to do community development, and how to do best practice in terms of environmental aspects for the exploration sector.

There are a number of programs available for the operating sector, such as the Mining Association of Canada's “Towards Sustainable Mining” program. Some Canadian companies are members of the International Council on Mining and Metals, and they have a program as well. But for—

[Mark Eyking, Liberal, Sydney—Victoria, NS]

That's a mentorship, so no junior companies can get—

[Ross Gallinger]

Correct, so what we've developed are the principles and the tool kits, and we're now looking at how we can embed these much more into our company members as we go forward. So it's always an evolving aspect, but the first step is to have the guidance and have that available. And it's available to anyone; you don't have to be a PDAC member to access that. It's on our website, so we encourage anybody, anywhere in the world, to access that and use it.

We've seen schools actually picking this up now as well. Northwest Community College in northern B.C. has now picked up the e3 Plus to use in its curriculum, in terms of teaching people who are going into the industry what the proper principles are to use in this sphere.

We're seeing universities in Chile actually picking up e3 Plus as well. It's translated into English and French currently, and the principles are in Spanish. We're looking at getting the frameworks in other languages as well, so they can be used by anyone, anywhere in the world.

We've got a lot more work to do in terms of embedding that kind of aspect in the education component, but it's little by little.

Thank you.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you.

[The Chair, Conservative, Dean Allison]

Thanks, Mr. Eyking. I let you go on a little bit longer because I think it's sort of the essence—

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I wasn't talking.

[The Chair, Conservative, Dean Allison]

I know. It's always a short question followed up by a very long answer, so it's always.... No, it's good.

I think the train of thought we're trying to find out is how do we partner, because when you start looking at a lot of what forced you to do this.... But we do believe it's a role that the private sector can play, and that's why we're having these conversations, so there are some very good thoughts there on that.

We're going to turn it back over here for the second round, starting with Ms. Brown. Five minutes, please.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you very much, Mr. Chair. Hopefully I'll have some time to give to my colleague, Dave Van Kesteren.

Mr. Gallinger, thank you very much for being here—most interesting.

I had the opportunity to be at your association conference last February or March in Toronto at the Convention Centre. I must say—if there's any indication to me of the value of Canadian investment by the mining companies in other countries, it was the incredible number of countries that had booths there, trying to woo or entice Canadian mining companies to come and look at their countries as opportunities.

I think the reverse is actually the truth: Canada is doing such a good job that we are making some really good impressions on these countries, and governments are looking to have us there.

I want to make one quick comment about an observation. When I was in Bangladesh, I happened to see some of the constructors who were there, and I know that there's a long way to go in health and safety. I'm watching these construction companies put up bamboo scaffolding and the guys are up there, three and four stories, and they're wearing flip-flops. There are some real challenges in the world we are going to have to overcome.

I had the opportunity, a year and a half ago, to be in Burkina Faso and visit the Essakane mine, which is in the very northeast corner of Burkina Faso, for those of you who are not familiar with the geography. There are tremendous amounts of conflict going on in that area—political conflict that's happening. The Iamgold mine that has gone into Essakane is of particularly good repute in Burkina Faso. In my observation, what they have done for the community is to build foundations for their homes, so that the people actually have more time for other productive causes. In Essakane, Iamgold has built a school. They've built a hospital. Most importantly, they've put in a job skills training centre.

I wonder if you can speak to what's happening in communities around there. First of all, when the time is freed up for more productive pursuits than taking care of their houses all the time, but also with these job skills that are being given to the indigenous people, what's happening with that as far as private sector enhancement?