Thank you very much for the opportunity to address the committee. Greetings to you.
My contribution will be centred on the relationship between mining and promoting economic and social development. It draws on several decades of research in this area. It draws as well on my participation as a member of the advisory group to the national roundtables in 2006-2007 and as a member over the last four years of the international study group named by the Economic Commission for Africa, which in December 2011 put out a report, to which I will refer, called Minerals and Africa's Development.
I will say at the beginning that my brief presentation will make three points and come up with six recommendations. There's a text I brought, in English and in French.
First, I would like to question a central premise of much of the ongoing discussion. The thinking and strategies, whether abroad or in Canada, concerning developing mining activities have rested on a hypothesis that the investment in the mining sector will drive growth, which will bring development and reduce poverty. In Canada this problematic assumption is illustrated by what Mr. Pierre Gratton wrote:
Long-term sustainable growth and prosperity are driven by the private sector, and forward-thinkers in the development aid policy field recognize that the effectiveness of aid can be enhanced when aligned with private sector investment.
This affirmation is at the root of the erroneous formulation of arguments put forward to justify certain strategies. It illustrates a lack of awareness of important debates going on, notably in Africa. And more deeply, it suggests a clear misunderstanding of what is at stake when one faces issues related to international development.
Let's begin with a fact. Investment in the private sector of itself does not translate into sustainable economic and social development. There is in fact no historical example anywhere on earth where sustainable growth, social and economic development, and poverty reduction took place through private investment in the absence of appropriate public policies and state interventions needed in order to plan, to regulate, and to monitor investment so that the presence of private investment would be harnessed to meet development objectives determined by the countries themselves.
My second point is that it is essential that Canada be listening to where policy discussions and proposals are at now in Africa. If we're concerned about the policy relevance and effectiveness of current Canadian initiatives with regard to mining and development, it is absolutely essential to pay attention to the recommendations coming out of leaders and experts on the African continent, and notably the economic commission.
What has the commission been saying? One thing is that the problems confronting the field of natural resource development 30 years ago are very much present today—that is, the colonial “enclave nature” lack of local transformation. Consequently, past strategies are now outdated—inappropriate in the present context because past strategies have failed to deliver development. What is needed is a fundamental change of paradigm.
But there's more. The manner in which the mining sector was opened up to investment has brought stringent forms of liberalization. But more than the disappointing results with regard to development, it has brought a stringent withdrawal of states, a transfer of what were considered state functions to private actors. Whether service delivery, clinics, schools, roads, security, or rule-setting implementation, what used to be of the state's domain, we now are looking to companies. This pattern of sidestepping the state has created many problems, not just for the development of communities, but for companies and for the countries themselves.
For companies, because of this transfer of responsibility, it has blurred the lines of responsibility and accountability between companies and countries. It has left communities looking to companies. It has created weakened states, incapable to monitor, incapable to do follow-up, and in case of conflicts, companies and communities are pitted against one another.
This sidestepping of the state, by suggesting companies can gain better social licence or legitimacy for their operations by offering social services, runs the risk of undermining—and this is a key point—a precondition for building responsible governments and the basis for democratic practices; that is, the need for governments to offer social services to their populations and to be held accountable by their populations.
The heritage of these past patterns, deficient development implications, and asymmetrical relations between companies and countries is now contested on the African continent. Thinking now is that mining must be driving industrialization. Nowhere on earth is there historical experience of industrialization without appropriate policies.
The Economic Commission for Africa in its report talks about building linkages and pushing regional integration. None of this, of course, is the domain of companies. The model of the past, driven by industry, is considered outdated. Policies now are calling for more strategic intervention of the state.
I'll now speak on Canada, which is my third point. How are we contributing? Where are we in this conversation about the mining sector's contribution to development?
Current partnering strategies of CIDA, which propose to use aid budgets to reinforce corporate social responsibility, run the risk of further blurring lines of responsibility and accountability, and aggravating problems of legitimacy for companies. Such externally initiated CSR strategies could reduce the motivation of governments to fulfill their responsibilities. This is what the Economic Commission for Africa is saying.
At present there is not sufficient coordination between state planning and investment and corporate strategies. There are many grey areas, which make it very difficult to monitor to know who is bringing what, under what terms, and how this can be evaluated. So before companies go in, there must be appropriate frameworks in place.
I will conclude very briefly with three recommendations that summarize more generally what I have said.
First, it is absolutely urgent and essential that in Canada we distinguish between policies that promote commercial and economic interests—CIDA's mandate—and those that promote sustainable development. We should be looking at and listening to what is coming out of the African continent. It is imperative to make sure that CIDA's mandate is aligned with what African leaders of the United Nations Economic Commission for Africa and the African Union are calling for.
Another key point is that everyone here recognizes that Canada is a leading country in terms of the number of mining companies, not only in Africa but in Latin America. But to date—and this is extremely important—we do not have mechanisms to monitor the behaviour of the companies. Sweden does, Norway does. I could speak of that.
The present situation is very problematic. Companies are going into situations where there are not necessarily frameworks in place. There's not the capacity to enforce. There's likely to be ambiguity about responsibilities, and there is every possibility—we know this is going on in many corners of the world and in increasing numbers—of violent conflicts taking place.
I can give you examples that I know first-hand. I have studies from Africa where I have been. I can also give you examples of where this is happening in Latin America, Colombia, Peru, and Mexico. You know these. These are not individual cases; these are systemic problems, because there are structural origins, and Canadian responses at this point are not at all adequate. In terms of what this means for Canada's reputation, we are now being faced with mounting accusations of violations with no mechanisms to follow up on these problems.
It is absolutely indispensable that we have an overall framework and strong mechanisms to monitor behaviour, to ensure compliance, and to ensure that the obligations are respected. Canada's reputation depends on this.
I could develop more if there are questions on these points.
Thank you.