Foreign Affairs Committee on March 28th, 2012

[Dr. Sabine Luning]

Well, I agree with the fact that we should not equate development with simple projects. We should, indeed, look at development as a part of a wider social process. That's also something that Professor Bebbington emphasized very strongly in his comments and statements to the committee.

Of course, I do agree that companies should sit together to organize frameworks like the EITA, the extractive industries transparency initiative, and sit together with multilateral organizations, as well as governments, in order to set up frameworks. That is also in Burkina now visibly having an effect.

In that sense, I would agree with Professor Bebbington that these initiatives playing out in Burkina Faso at the moment put some pressure on the Burkina Faso government. I said earlier that Burkina Faso is to, a certain extent, a difficult country to work in due to patrimonialism and elite networks.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you.

I'm going to carry on, because we have very limited time.

[Dr. Sabine Luning]

Okay.

[Jinny Sims, NDP, Newton—North Delta, BC]

One of the things that Anthony Bebbington said, and I think you alluded to it too—though not that issue of the need to separate the public and the private, and also the need for the public-public partnerships in order to grow institutions—was that a Latin American minister told him, “I don't know if Canada has been quite so discredited in its history.” Another official told him, “As far as I can tell, the Canadian ambassador here is a representative for Canadian mining companies.” You alluded a little bit to that need for separation.

In your opinion, what are the most important measures or actions that should be taken in order to ensure that mining activities contribute to the economic and social development of the regions where these activities take place? Is there a logical or specific order or sequencing in which these activities or measures should be taken?

[Dr. Sabine Luning]

It's not so much in terms of sequencing as it is in levels, I think. I would absolutely, if mining is to contribute to development, insist upon my second point: first of all, mitigation. Before we start talking about development, we have to ensure that companies are organized in such a way that they can prevent damage, right? I think on that level, that is the first step to be taken.

I think the second issue, also alluded to by Professor Bebbington, is that we should look into the fact that the streams of money that come into the country—and in a country like Burkina, quite massively now—are organized by state organizations in such a way that they set up proper public institutions and benefit the population.

In that respect, strong regulation of mining companies to control them in their activities, with a strong framework and control on the host country on the other hand, would make sure that the revenues coming in, which are quite massive, can enter into the public domain properly.

[Jinny Sims, NDP, Newton—North Delta, BC]

I think there is agreement that what we're all looking for is long-term sustainable development.

[Dr. Sabine Luning]

Of course. Yes.

[Jinny Sims, NDP, Newton—North Delta, BC]

It is in long-term sustainable development, as you will know, that the public sector, like CIDA, has a critical role to play. How important are both capacity-building and regulations for achieving this long-term sustainable development?

[Dr. Sabine Luning]

I think they are very important.

Also, let me make clear that I'm arguing for the separation of tasks, right? I'm not arguing against some of the tangible development projects that are now being carried out. Indeed, I was referring to the initiatives being taken in Ghana as an example. For instance, WUSC is now working toward training people for community representatives and governance structures; that is exactly the sort of initiative that is necessary if we want to work towards more sustainable development as a spinoff of mining.

I'm not arguing against the type of activities being proposed there, but I'm arguing that it might be very sensible to not have this blurring of partnerships that occurs when the tasks of mining companies, NGOs, and government and CIDA are mixed together.

Indeed, I think what is happening in Ghana could be a very good example of an activity that could take us further into a proper way of organizing mining in a sustainable way by organizing civil society also in its capacity to negotiate.

[Jinny Sims, NDP, Newton—North Delta, BC]

Okay. Thank you.

One thing you have clarified for me very clearly, and have reinforced, is the need to keep separate the mining interests from building institutions and building capacity. You don't want there to be that kind of pressure or conflict that could develop there, because it could be seen that people are being driven into...or institutions are being developed only to serve the mining company.

I like the way you explained all of that, and the need to have distinct tasks with clear lines. I especially liked your comments about land use. As you know, monetary compensation is not always enough, because land use and food security, and also developing a diversity of industry, become really critical.

[The Chair, Conservative, Dean Allison]

Thank you. That's all the time we have.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you.

[Dr. Sabine Luning]

Thank you very much.

[The Chair, Conservative, Dean Allison]

We're back over to the government side now, and I'd like to welcome Ms. Brown.

You have seven minutes.

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

Good afternoon, Dr. Luning, or rather good evening, where you are.

[Dr. Sabine Luning]

Good afternoon.

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

Thank you very much for your commentary today. I really appreciate it.

With the exception of Mali.... I have been in Burkina Faso, Ghana, Togo, Nigeria, and Benin. I've spent some time there. As part of the Canada-Africa parliamentary delegation that went there, I had the opportunity to visit the Essakane mine in Burkina Faso.

I'm going to refer to a report that was tabled in the House of Commons a year and a half ago. I'm going to commend that to the committee. I know it's been written in both official languages, Mr. Chair, so I will ensure that copies are spread.

We had the opportunity to visit with President Compaoré and have a lengthy discussion with him about the things going on in Burkina Faso. With regard to the $450 million investment that IAMGOLD had made in Burkina Faso, he told us, first of all, that they had found suitable conditions to invest. He said that procedures had been cleaned up and a framework had been arranged to encourage that kind of investment.

We also had a meeting with the Minister of Mines, Quarries, and Energy, His Excellency Abdoulaye Abdoulkader Cissé. He told us that the country had gone from issuing 12 mining permits in 2000 to 430 mining permits today. Canadian companies lead with 15 permits, and they have seven mines in production.

During our visit to the IAMGOLD mine, we were told that the mine is 90% owned by IAMGOLD and 10% owned by the Government of Burkina Faso, so when we're talking about capacity-building, what I saw that IAMGOLD had done there was nothing short of remarkable.

In order to accommodate the people of the village of Essakane, they purchased property, and the Essakane community participated in that discussion. They have built a whole village. The most important thing I saw that they had done was to build slab-on-grade foundations for the residents to have their homes built on. That meant they were no longer confined to spending much of their day rehabilitating their houses; they had time for more productive activities.

We learned that there are now some 1,800 contract workers. Priority is given to local hires. Over 1,000 young people have been trained in areas such as construction, carpentry, welding, and plumbing. Mr. St-Pierre, who gave us the tour of the mine, pointed out that as a result of the demand for skilled workers in the mining industries, salaries for them are higher than the national average. Whereas the average salary in Burkina Faso is $1,200, workers at the mine are paid between $4,000 and $30,000, depending on their trade. They're giving literacy programs. We saw the hospital or clinic and the skills training facility they've built.

In building public-private partnerships with these corporations, first of all the country is not only getting tax dollars from the corporation itself but is now able to get tax dollars from the individual workers who are now contributing to their country.

I saw some remarkable things in Burkina Faso. It gives me great hope for that country and for their process in becoming an independent, self-reliant country. They're still looking for CIDA involvement; I know that. I think Canadians would relish the opportunity to help with that capacity-building, because we see real results happening there.

Do you have any comment on that?

[Dr. Sabine Luning]

Thank you very much for your description of the visit to the IAMGOLD mine. Of course I'd like to comment on it.

First of all, I think I would support a lot of the initiatives you are referring to. I've argued very strongly that mining companies have a very strong commitment to on-site mitigation. I think that IAMGOLD, in a lot of the examples you are giving, is doing jobs at the mining site. I think in that sense that a lot of things that have happened and that also have been reported on are going okay.

One of the things that is now appearing is that there is a lot of resistance still. It's not just simple, and we all know that. People from IAMGOLD must have told you how complicated the processes are, with the strong and fast influx of wealth. That's why I refer to the issue of compensation for land. These influxes of wealth have to be catered to. They may attract a lot of people to that place. That's why I'm saying that one of the things IAMGOLD has to continue to do is mitigation. Taking care of problems that occur is a continuing process.

They've now put in place facilities, which they've done well, and a lot of housing facilities. I'm familiar with that story. Reprom has done that for IAMGOLD. What you were just referring to is very well documented.

However, we should really bear in mind that this is the start of a big mine. There's a large amount of money coming in, and a big effort is made in the beginning to relocate people and give them compensation and new housing. However, I'm arguing that IAMGOLD should move away from doing general development initiatives that are portrayed as just doing altruistic things, such as the schooling of people. I'd rather see mining companies continue to monitor very carefully the processes around their mines, because problems will continue. It is a difficult situation that they have to address. That is something I want them to continue to focus on around the mine.

Now in the papers it's clear that there are big protests around the IAMGOLD mine. The mine is cut off at the moment, so cars can't get to it. That is an indication that social development will be accompanied by problems and inequalities. People from the mining company will have to continue to really focus attention on doing this in a manner that will not exclude large groups. That's why I'm emphasizing procurement. That's why I'm emphasizing job facilities around the mine.

Also, don't make promises you can't keep. That's why I'm insisting that these very vague sorts of associations of mining companies with development initiatives may also trigger expectations the companies cannot live up to. They should be very careful with that.

However, I'm not contesting a lot of positive news you're giving.

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

Dr. Luning, I know we're out of time, but I just wanted to stress that President Compaoré told our delegation that Burkina Faso had a phenomenal relationship with Canada. Many Burkinabés have been educated in Canada, with many of them taking that expertise back to Burkina Faso. I think that's one of the most positive things.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move back to the opposition side.

Mr. Eyking, you have seven minutes, please.

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

Thank you, Mr. Chair, and thank you, Dr. Luning.

I myself am the son of Dutch immigrants, and I always admire Holland's international influence, for such a small country and population. It seems to engage its public very well in participating in international initiatives. I admire your country for doing that.

What we have here with the present government is a shift. We previously had hundreds of NGOs, and now there are going to be a lot fewer carrying the ball for our international aid. As we see, we're embarking on using more companies and mining companies to carry that ball. That's what our debate is all about here today.

At the end of the day, the nature of companies, especially mining companies, is to make a profit for their shareholders. Many times, it's a very fickle industry. Commodity prices come and go, and you have alluded to the fact that sometimes they are bought out by other companies, which could be Australian or Chinese.

There is concern about who is left holding the ball when they leave or go bankrupt. We have instances even in North America—in Canada—of companies having left communities with a mess or employees with no pension plan.

As we embark on getting companies to carry our foreign aid, what should we be watching out for? It's not just what we're hoping they will do, but they're dealing with the taxpayers' money. How do we set benchmarks for transparency? How do we make sure that if something goes bust—a commodity price or a company—and communities are relying on something to happen where land has been transformed for different things...? Should we not have our own watchdog to make sure that these communities are protected?

The worst thing is that some great big initiative might happen with this company—it all sounds good, and ribbons are cut—and five or ten years later there is a community sitting there asking what happened.

[Dr. Sabine Luning]

You're asking me whether this public-private partnership would not allow more control over companies. Is that what you're saying?

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

I'm wondering how we can make sure as Canadians that these communities are protected, if these companies go bust or are sold—something you alluded to—to a Chinese owner with a different philosophy on aid. Do we need to have these companies post a bond?

I'm just thinking overall. We've had this problem with pension plans from mining companies when they go bust. Now we have public money doing these initiatives. How do we protect the communities to ensure that they are being taken care of? Should there be a bond by the company to make sure they fulfill the commitment they said they were making?

[Dr. Sabine Luning]

There are the long-term commitments that companies have to make. One of the problems you see occurring in countries such as Burkina Faso is the contingency of the mining sector as such. I said in my introduction that I have been working particularly on Canadian exploration countries in Burkina Faso. We have known, in particular over the last few years, that this is a sector with a lot of failing and buying of companies and joint ventures.

This is a very tangible problem on the ground. Communities are confronted with an exploration company coming in and making big promises that they're going to build a mine and that the communities are going to get jobs and water facilities, etc. Of course, they only explore in the beginning, and then they may move on if they do not find any possibility to going to the stage of building a mine. That happens more often than not.

In that sense, I think you're very rightly pointing to the fact that the sector is one that has many changes and changeovers, in the sense that they make promises and then people just disappear, which I've seen happening a lot, and they don't know where they have gone. Then another company comes in at one point and starts making new commitments, but perhaps to the neighbouring village. You can see all sorts of conflicts easily building up.

In that particular context, I think it's very important that companies that enter a particular site and make promises should be controlled, or at least should formulate what these promises are and should be able to live up to them. That also refers to what will happen after they leave. There should be something like a rehabilitation bond or an institutional way of organizing things such that it is assured that livelihoods that were there prior to their arrival are still in place or at least guaranteed after they're gone.

I think that would be a very good—

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

Doctor, I'm sorry, but I have one more question for you. It deals with companies.

We can only expect so much from them because they're mining companies—