Evidence of meeting #29 for Foreign Affairs and International Development in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was responsibilities.
A recording is available from Parliament.
Conservative
The Chair Conservative Dean Allison
I call the meeting to order.
Pursuant to Standing Order 108(2), we'll commence our study on the role of the private sector in achieving Canada's international development interests today.
We want to thank and welcome Dr. Sabine Luning, professor of cultural anthropology and development sociology at Leiden University, who has joined us via teleconference from the Netherlands today.
Can you hear us on the phone?
Dr. Sabine Luning Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
I can hear you perfectly well. Good day to you.
Conservative
The Chair Conservative Dean Allison
Excellent.
Thank you very much for taking the time to join us. I'm just curious: what time is it where you are right now?
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
It is 9:30 in the evening.
Conservative
The Chair Conservative Dean Allison
Thank you very much for arranging your schedule to meet with us today.
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
You're welcome.
Conservative
The Chair Conservative Dean Allison
Why don't we start with the opening statement that you have for us, for around 10 minutes? We'll do that, and then we'll take the opportunity to go back and forth across the table here to follow up with some questions.
I believe that you have set an hour aside for us. Is that correct?
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
Yes, absolutely.
Conservative
The Chair Conservative Dean Allison
Excellent. Thank you very much.
Why don't we start, then, by having you give us your opening statement?
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
Thank you very much.
I want to thank you for inviting me.
Let me be a bit precise about what my background is. I'm a lecturer in the anthropology department of Leiden University in the Netherlands, and over the last 20 years my research has mainly focused on west Africa and on Burkina Faso in particular.
I've live in Burkina for several years, working as an anthropologist in a bilateral development project, and over the last five years I've done research on artisanal mining and company community relations, with particular reference to Canadian exploration companies operating in Burkina. I've also done field work in Mali, Ghana, and Guinea.
In west Africa, large-scale explorations for mineral wealth and mining almost always occur in rural areas where access to land for agriculture and artisanal mining are crucial for livelihoods of poor local populations.
I'm focusing my research on the tensions, opportunities, and expectations these—
Conservative
The Chair Conservative Dean Allison
Professor, I'm just wondering if you could slow down a bit. We have to have translation here, and the translators are—
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
Okay. I'm sorry.
Conservative
The Chair Conservative Dean Allison
I'll give you a few extra minutes if you need them, so go right ahead.
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
Fine, all right. I'm not going to repeat. I'm going to carry on. Do you think I should I recapitulate briefly?
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
The mining sectors of countries like Mali and Burkina Faso have undergone substantial changes over the last 20 years. Burkina Faso has made a shift from dominant state intervention to a sector giving ample room to private companies.
In this process of liberalization, tasks of the state, NGOs, and private corporations have been redefined. I think that a marriage of the public-private partnerships between CIDA, NGOs, and Canadian mining companies has to be assessed in relation to the institutional setting in which the mining operations and development initiatives are taking place.
I fully agree with Professor Bebbington, who made a statement in your committee on February 29 that the link between mining and development cannot be determined on the basis of individual projects. Exploration and large-scale mining operations in countries such as Burkina Faso trigger complex processes of social change. Whether these social processes can be seen to help or hinder development is a major issue. This question is at the heart of the debate about whether resource endowment is a curse or a blessing for developing countries.
Even researchers collaborating closely with the International Council on Mining and Metals, the ICMM, emphasize that structural arrangements are crucial to preventing developing countries from getting trapped in the resource curse. Dr. Dan Haglund, working for Oxford Policy Management, portrays the situation for a country like Burkina Faso this way: “In Burkina Faso, the mining sector accounted for 2% of exports in 2005, but by 2010 its share had risen to 41%.”
This resource dependence is, of course, a challenge, and may generate wealth, but it is also risky. A rapid surge of revenue can only lead to development if, first, state institutions have sufficient capacity and discipline, and second, if mining can be connected to other economic activities so as to trigger multiplier effects. This would prevent, say, Dutch disease and real exchange rate problems.
In this situation, development is foremost a matter of institutional development, and this entails proper strengthening of state structures and strategies for spinoff into other sectors of the economy. These requirements force us to think about partnerships and mining companies in relation to two issues: first, institutional development and division of responsibilities, and second, the relationship between mining and economic development.
I'll talk about institutional development and division of responsibilities first.
The current trend in foreign direct investment in mining in developing countries has changed the relations and tasks of corporations and host states. As owners of subsoil resources, states are the authorizing instance. The state organizes access and monitors mining—ideally, that is. A report by Dr. John Ruggie called “Protect, Respect and Remedy: a Framework for Business and Human Rights” makes a convincing case that many developing states have weak governance structures. They often lack capacity to regulate and survey the corporations they host. There is a governance gap between the weakness of states and the impact of strong economic forces and global actors that has to be accommodated in the country.
In many cases, reinforcing these structures is far from simple and is hindered by political cultures marked by corruption and patrimonialism. In a recent report on the political economy of the mining sector in Burkina Faso, Oxford Policy Management again gives a rather gloomy image of the political elite of Burkina Faso. The mining sector is linked by control, co-option, and corruption into the hegemonic government, a category into which the World Bank labels this situation in Burkina.
I think the current discussion in Canada on public-private partnerships should pay special attention to how these initiatives affect the relation with, and the position of, the host state. If we agree that development is institutional development, then capacity-building for the host state should remain high on the agenda. In my view this could require, first of all, a clear division of tasks and responsibilities.
In particular, in countries such as Burkina Faso, in which the history of large-scale mining is still young, governance capacity-building should be centre stage.
However, mining companies that have to be authorized and monitored by that same state cannot do this. Support for institutional capacity-building should be organized in bilateral public-public partnering. In this light we have to ask whether the current forms of partnering between CIDA, NGOs such as Plan Canada, and mining companies do not risk being counterproductive. If institutional development is the central goal, these partnerships may blur boundaries, responsibilities, and identities even further.
So far I've argued that mining companies should keep a distance from responsibilities assigned to public authorities of the host state. In what follows I will emphasize that such a distance should be matched by the closest possible commitment to their responsibility in and for the local setting in which they operate.
Now I'll turn to my second point, which is the relationship between mining and economic development. Here I will turn to the partnerships in Burkina Faso and in Canada.
The partnership of CIDA, Plan Canada, and IAMGOLD in Burkina Faso and the public-private partnership in Ghana deserve to be elaborated upon, but for time reasons I will confine myself just to the latter.
In Ghana, CIDA works together with World University Service of Canada and Rio Tinto Alcan in a project to train community members to strengthen governance structures. In the meantime, however, the Rio Tinto Alcan mine associated with this project was sold to a Chinese company. In a question and answer leaflet given out by the World University Service of Canada, it is argued that this situation proves the partnership's integrity. It states that Rio Tinto is no longer working in Ghana and does not stand to profit financially from its support to this project. However, this situation implies that the current partnership is disconnected from responsibilities directly linked to the mining operation, which is now in new hands.
This broadening of involvement—
Conservative
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
Oh, I'm sorry.
Conservative
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
I'm going to slow down a bit.
The broadening of involvement in development initiatives is risky. This situation of partnership creates a disconnection from the responsibilities directly linked to the mining operation, responsibilities that are now in Chinese hands. This broadening of involvement in development initiatives is risky. It adds to vagueness about responsibilities and it allows companies to move away from commitments related to their mining operations.
We should not forget that CSR was primarily developed as a response to resistance against mining operations. Loss of livelihoods, ways of life, and threats in local communities triggered resistance, and CSR was a response to this. CSR is an acknowledgement that companies have responsibilities beyond their employees; they are also responsible for people who may be negatively affected by mining operations. Issues of compensation, redistribution of wealth, and offsetting are based on the idea that mining inherently disturbs social and ecological environments. It's the company's responsibility to mitigate social and environmental damage caused by its operations, a responsibility that I think should be mandatory, regulated, and monitored.
The public-private partnerships should not open doors for mining companies to walk away from these on-site responsibilities. Therefore, I would like to argue that the goals set by the public-private partnership can be achieved only by, first, assigning the different partners clearly distinct tasks and responsibilities, and second, maintaining an awareness that the first job is to prevent resource curse and negative adverse effects.
The goals formulated by the Canadian public-private partnerships set pertinent benchmarks for this task. CIDA has singled out three areas of intervention: children's rights, food security, and livelihoods. These goals imply that companies have to organize mining without menacing local food security and livelihoods. This makes land use into a major issue. In a poor and largely rural country like Burkina Faso, food security and livelihoods are primarily related to agriculture, rearing of livestock, and artisanal mining.
I would argue that Canadian mining companies such as IAMGOLD and SEMAFO take their responsibilities for their mining operation as their main focus for development targets.
In the mining operations of both these companies in Burkina, lessons can continue to be learned. In 2008, SEMAFO paid cash to compensate farmers for loss of agricultural lands. How this has changed the subsistence economy and the social relations within communities made headlines at the time. SEMAFO did abide by the rules, but these rules need to be looked into.
The report of 2002 by the MMSD warns of the negative effects of monetary compensation for land—unsustainability of livelihoods and social relations. For instance, these cash inflows have adverse effects on the position of women.
I think development efforts of companies should remain focused on on-site subsistence issues, with food security and livelihoods as a benchmark. “Land matches mouth” in countries like Burkina.
Of course, mining operations also generate jobs and can create livelihoods beyond the traditional subsistence activities. Indeed, with about 2,200 employees, the IAMGOLD mine is the biggest private employer in Burkina Faso. Moreover, the company has initiated activities for market gardening.
However, this did not prevent tensions building up around the mine. Just this week the roads to and from the mine were blocked by youth demanding that IAMGOLD live up to the job promises they made.
I am fully aware that these issues of job promises are complex, but they show the importance of firm commitments and strategies in the field of job creation and procurement. Local populations and national host countries rightly demand that mining have a tangible link with development. In my view, this gives all partners involved a strong incentive to urge mining companies to stay put, so to speak, and focus their efforts on land issues and economic spinoffs directly linked to the site where they mine.
I'm particularly concerned that the current trend for Canadian public-private partnerships, together with a broadening of a form of offsetting, may allow for moves away from the real tasks, responsibilities, and sites of social and environmental challenges.
In conclusion, I recognize that currently public-private partnerships are only part of the CSR programs of companies. In fact, the amount of company money involved in these initiatives is rather marginal. These initiatives are, however, presented as a trend for the future. With that in mind, I've tried to argue that the new public-private partnerships risk blurring responsibilities. Moreover, responsibilities of mining companies risk becoming disconnected from the sites and issues that really matter to local populations.
The new public-private partnerships should not lead attention away from two central tasks, one for public actors, the other for private enterprise. For the public actor, the Government of Canada, the tasks should continue to be focused on bilateral public-public partnerships that are crucial for institutional development, in particular in young mining countries such as Burkina Faso. For the private enterprise, for Canadian or other multinational large-scale mining initiatives, the focus should be on proper processes of negotiation with local populations and a focus on social and environmental mitigation in order to prevent economic exclusion and development deficits.
Thank you.
Conservative
The Chair Conservative Dean Allison
Thank you very much. We're going to start with the....
Go ahead.
NDP
Professor, Cultural Anthropology and Development Sociology, Leiden University , As an Individual
Yes, I do have translation.
Conservative
The Chair Conservative Dean Allison
Thank you.
We're going to start with the opposition. Ms. Sims, please, you have seven minutes.
NDP
Jinny Sims NDP Newton—North Delta, BC
I want to thank you for taking the time to share your trip with us, especially this late into the evening. I also want to thank you for the very reflective and informative presentation that you have made to this committee.
I heard you talking about the need for that separation between the public and the private that is necessary if we are not to blur the lines between our developing of institutions and building capacity in governments, compared to our need to invest in order to mitigate social and environmental harm that could occur or the enrichment that we need to do in order to diversify.
On February 29, 2012, Anthony Bebbington appeared before this committee. He stressed that any effort made by mining companies to foster development cannot simply focus on projects and must focus on institution-building and regulation. Do you agree with this statement?
