Evidence of meeting #82 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 companies.
A recording is available from Parliament.
11:40 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
You have 20,000 employees in Honduras. What would the average wage be of an employee in Honduras?
11:40 a.m.
Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.
We pay our employees...when you look at the benefit.... First of all, we pay them significantly above the industry minimum wage—
11:40 a.m.
Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.
As a percentage it could range anywhere from 10% to 30%. Over and above that, we—
11:40 a.m.
Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.
It's above the industry minimum wage. Over and above that, we will provide benefits to these employees. We have on-site medical and clinic staff, with doctors and nurses who operate 24 hours a day, seven days a week, so if there's a problem they're serviced on site—
11:40 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
Not to interrupt, but I've read the material.
In Bangladesh, do you know what the average wage would be there?
11:40 a.m.
Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.
Again, I don't have the specific numbers, but we do provide wages significantly above the minimum wage and benefits over and above that.
11:40 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
That's understood.
Is there a reason why you operate your facility in Bangladesh as a...I take it that it's a wholly owned subsidiary?
11:40 a.m.
Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.
It's our own owned manufacturing—
11:40 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
It's your own manufactory.
In relation to the point that was made by Madame Brisebois, the reality is that most supply chains are not achieved by owning facilities in Bangladesh. We could be talking about anywhere; Thailand, China, there are a whole bunch of places. You don't have to just go to Bangladesh to see bamboo being used in the construction of big buildings. You can go to China. It's all over the place. That is what's used.
I'm just wondering if there's a reason you haven't used subcontractors.
11:40 a.m.
Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.
We typically develop our supply chain around our own owned manufacturing. We have direct control over their operations and it allows us to implement the highest level of standards, so we're not in a situation where we're dealing with sourcing goods from another manufacturer. From our perspective, this allows us to ensure we have the highest level of control over the standards that we can implement and over the quality of product that we can provide our customers. We really believe this is a key advantage for us in terms of servicing our clients. It is a part of our success factor in terms of ensuring that the standards we provide our employees, regardless of where we're operating, are at the highest level.
11:45 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
Thank you.
Mr. Chapman, how does Canada compare internationally, if you were to do a ranking of how we're doing with respect to CSR and reporting disclosure accountability? I was very interested in your comments about Denmark. Do you guys have a ranking system where you look at what the comparable numbers or standards are around the world?
11:45 a.m.
Executive Director, Shareholder Association for Research and Education
We don't have a formal ranking system.
A few years ago we did a study for Environment Canada, looking at how different jurisdictions were helping incent pension funds, particularly, to take greater accord with environmental, social, and governance factors in the investment process. We did a survey showing that many OECD countries now require pension funds to disclose how they take environmental, social, and governance factors into account. In Canada, we do not have a similar regime.
The Ontario government, actually, in a budget speech in the previous year, indicated it will bring that in. That is certainly a very positive step that could be implemented in Canada federally, as well as provincially.
With regard to CSR reporting by corporations, Canada has a definitely strong record in the resource sector, but as you move away from the resource sector it's less consistent.
11:45 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
On that point, it would be both a federal and a provincial effort if we were to formally ask either larger companies or companies above a certain size to indicate exactly what they were doing to ensure the integrity of their products, the integrity of their supply chain, and the level of accountability that would be required. Is that right?
11:45 a.m.
Executive Director, Shareholder Association for Research and Education
In regard to corporate law there are options that would cover federally incorporated companies, which would deal with most of the large companies in Canada, but something could also be done through the Canadian securities regulators or from the pension fund disclosure point of view through CAPSA, the Canadian Association of Pension Supervisory Authorities.
You're right. It is a mix of federal and provincial responsibilities and we have bodies that help coordinate.
11:45 a.m.
Liberal
Bob Rae Liberal Toronto Centre, ON
To be clear, Madam Brisebois, you were saying that you disagreed with Gildan's proposal to increase tariffs on Bangladeshi products?
I want to be clear that I understand this. If we have a bit of a disagreement it would be interesting to know that clearly.
11:45 a.m.
President and Chief Executive Officer, Retail Council of Canada
Yes, we do in fact have a disagreement. We don't believe that we should be adding tariffs. In fact, we believe that would make the work we are now initiating more difficult and it would be a burden on the workers in Bangladesh. The fact that they can, in fact, export their products without tariffs in Canada is allowing us to be more active in the country and ensuring we can help with worker safety as well as building safety.
11:45 a.m.
Conservative
The Chair Conservative Dean Allison
Thank you very much.
We will start our second round of five minutes.
Mr. Williamson, five minutes, please.
11:45 a.m.
Conservative
John Williamson Conservative New Brunswick Southwest, NB
Thank you, Chair.
Thanks for being here today everyone.
Peter from Gildan, I'm going to start off with you because you mentioned the role of government and I'm concerned about this. I want to challenge you a little bit on that and particularly in terms of the Canadian government. Don't get me wrong, I think the responsibility for workers' rights and construction quality does rest with the government, but it's not the Canadian government. I don't think we want to be in the position of policing the actions of nations around the world in a global economy.
Frankly, this sounds like business, which generally looks for greater freedom to conduct its business, now scurrying for government protection to double-check or review when things do go horribly wrong. I think labour organizations, and workers, and politicians in Bangladesh have to do their job to improve their safety. I don't see the need or the value for the Canadian government. This begins, depending on how far it goes, to sound more and more like a non-tariff barrier that would potentially protect some at the expense of others from bringing in goods from overseas. At home I think it's up to consumers.
I want to challenge you on that because it's opening up quite a role for the federal government, and if you follow some of the other arguments that are made here, potentially the provincial governments as well. I'm happy to hear from others on this, but I do want to bat that right back at you. Why is it the responsibility of government to review the actions of your firms and others that are choosing to operate in these countries?
11:50 a.m.
Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.
The perspective we're coming from is that given all the recent tragedies that have happened in Bangladesh and given the level of exports that Bangladesh has into Canada—as I mentioned it's the second largest after China and it has reached over a billion dollars in 2011—our perspective is that there is a role the Canadian government should play to ensure that the manufacturers that are supplying this product into Canada for Canadian consumers....
There's a role for Canadian consumers to play as well. There's no question. I'm not proposing at all to pin this on just the government's responsibility. The responsibility is partly on consumers. There's a responsibility on government. There's a responsibility on corporations that are sourcing goods from Bangladesh or manufacturing goods from Bangladesh and other countries to ensure that the products that are brought into this country are—
11:50 a.m.
Conservative
John Williamson Conservative New Brunswick Southwest, NB
Okay. It's your responsibility. If you're not pleased with the level of infrastructure in Bangladesh, go to another country.
Earlier we mentioned bamboo. That's true in Bangladesh. It's also true in mainland China. It's also true in Hong Kong. We see flip-flops, which are in Asia jokingly referred to as Chinese workboots. There are different levels of development around the world, but if your company wants to source from Bangladesh, it's your responsibility to ensure workers there are being well treated, in conjunction with labour organizations in Bangladesh and the government of Bangladesh.
It's not the role of the Government of Canada or any level of government in this country to police your actions or to sign off on what you're doing and be held responsible. There are just too many actors in a free and open market to source products from around the world to suggest that at the end of the day your company is off the hook if something goes wrong and the Canadian government is partially liable.
11:50 a.m.
Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.
From our perspective, certainly with respect to our operations in terms of where we manufacture, be it in Bangladesh or Honduras or Dominican Republic, we ensure that our strict standards and our strict code of conduct—
11:50 a.m.
Conservative
John Williamson Conservative New Brunswick Southwest, NB
Yes, I'm sure you do. But you're also there, just to follow up on a question from Mr. Rae, because it is a low-wage manufacturing centre. The fact that you can't even provide us with the wage rates—if it's $1 a day, $1.50 a day, or if it's less—I think indicates a reluctance to tell this committee the average wage for your employees there. You are there for a reason. But there is a downside to that as well, and that's not having the infrastructure that will safeguard workers' rights.
It troubles me that business then comes to this committee and suggests that government should be doing something to take the heat off decisions that are made by businesses that are there doing work on their own free choice.
11:50 a.m.
Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.
Again, we're saying there's a role not simply on the part of government; there's a role for.... As you mentioned, there are a number of actors. We think there's a proactive role that the Canadian government can play as one of the actors.
Ultimately, we're a manufacturer in Bangladesh. We ensure that we offer the best possible working conditions for our employees, at the highest standards. That's paramount to our CSR program, be it in Bangladesh or whatever other country in which we operate.