Thank you, Mr. Chair.
Responsible natural resource management is essential to generating sustainable economic benefits. Many countries in Latin America are actively promoting investment in the natural resources sector as a means to generate important domestic revenues and create significant direct and indirect employment opportunities. Latin America has tremendous potential, but challenges remain, including in the areas of corruption, human rights, and environmental management.
Canada has a long history of engagement with the countries of Latin America. Our relationship with the region is dynamic and multi-faceted and spans the expanse of political engagement, robust commercial relations, significant development assistance, and important security programming.
We will continue to work in partnership with the region to advance common interests such as defending human rights, promoting democratic principles, fostering strong and inclusive economic growth, and improving safety and security for all.
Several of Canada's institutions are playing a role in this process, including government, civil society, and the private sector.
Canada's private sector is playing a big part—even if sometimes it does not recognize this—Canadian mining and oil and gas companies, in particular. By its significant presence, which I will describe in a moment, the Canadian private sector has taken on responsibilities that go far beyond simply “doing business” narrowly defined. The Government of Canada wants to see the Canadian private sector make a positive contribution to the development of the countries where they are invested. We have a number of tools to guide this. We make active use of these tools.
It is a journey, not a destination. We can be proud of what Canada is doing, even as we recognize that much more could be done. The subcommittee chair has invited Global Affairs Canada to speak about Canada's extractive sector specifically, in particular its impact on human rights in Latin America.
First, Canada's extractive sector has over $90 billion invested in Latin America, approximately 340 companies with 930 projects in almost every country in Latin America.
Spending by Canadian extractive firms in Latin America on local salaries, purchases from local businesses, local taxes, and royalties is vastly in excess of Canada's total worldwide development assistance spending. Some firms are by far the largest taxpayer in the country where they operate, and they provide large numbers of some of the best paid jobs in that country. There are individual Canadian firms whose total local spending rivals Canada's total development assistance spending. It becomes difficult to count employees and subcontractors, but there are probably in the hundreds of thousands.
That is to say that, if a Canadian mining company operating in Latin America thinks that all it is doing is moving rock, it is mistaken. Given the weak local governance capacity in many countries, Canadian companies are often expected to contribute to the delivery of basic services such as roads, water, electricity, health care, and education. This of course raises their profile and the expectations put upon them as they are pulled into the web of local governance relationships. But companies cannot replace local governments, which need to be responsible for the delivery of public services, as well as other areas of governance, including the administration of justice, local democracy, and public security.
Our development assistance programs in many of these countries are helping to build local and national capacities to manage resource extraction responsibly and in full accordance with human rights norms. This is where our ambassadors, as well as our political, trade, and development staff at our embassies, work together to make a difference. You will not meet a more dedicated group of people than Canada's diplomats working in our missions in Latin America and the locally engaged staff who work shoulder to shoulder beside them. It is our task here in Ottawa to provide them with the support they need so that Canada plays its part to support the development of Latin America.
While our diplomats work with local governments, civil society, and the private sector, the committee is asking specifically about Canadian extractive firms. We carry out our policy toward Canadian extractive enterprises as follows: First, we encourage best practice. How companies should operate to provide peace, order, and good government around their projects is intensely studied and increasingly well understood by both us and the business community. There are numerous useful and helpful sets of standards and guidelines about how to do this in a wide range of areas.
Firms that adopt such practices do provide good governance. Their projects are also more successful.
We provide training to our diplomats on how to recognize good projects, healthy governance, and early signs of trouble. We expect our diplomats to speak up when they see something they think is not right.
While our individual missions in Latin America are small, they can call on support from Ottawa when needed. We have experts to provide advice not least of whom is our extractive sector counsellor for corporate social responsibility, Jeffrey Davidson. Canada is the only country in the world to have such an office.
Canada has a good reputation across Latin America. With this reputation comes convening power. We expect our diplomats to use their convening power to help bring polarized factions together. This helps build muscle memory in the practice of politics: arguing, disagreeing, understanding, and compromising. We provide and have provided financial and technical support for hundreds of mini-initiatives that bring such parties together to practise and build these essential skills.
This approach also explains our second objective. We try to catch problems early, while they are small and before they become big problems. In our experience, we can catch the small problems. Unattended, the small problems can become big problems and much harder to remedy.
When there is a big problem, we have the capacity to work with all involved parties to reach remedy. Our primary mechanism is the national contact point, a Canadian obligation as a member of the OECD. The national contact point, NCP, supports the OECD Guidelines for Multinational Enterprises and deals with issues that may arise. These guidelines are the result of extensive multilateral discussion and consensus and there is considerable peer support for their proper implementation.
Canada's NCP brings together experts from seven government departments to handle tough cases. This approach gives us access to a broad range of resources, expertise, and experience, whether it is on issues of environment, labour, human rights, tax, or indigenous rights.
While our processes are voluntary, Canada is unique in the world in having a sanction for firms that do not act in good faith to work with our processes to understand a situation and reach remedy. A sanctioned firm is named publicly and loses access to Canadian diplomatic support. We make aggressive use of our sanction to lever and encourage good faith efforts by firms to work with impacted parties to remedy problems.
Though best results are achieved on the ground, one project, community, and company at a time, we also recognize that the best solution is that these countries themselves develop effective governance capacity. Helping governments in the region build this capacity for the sustainable management of natural resources is a priority for us and in line with Canada's new feminist foreign policy agenda.
In closing, I hope this has been helpful to the subcommittee in understanding Canada's approach to these issues. Along with my colleagues, I would be happy to respond to questions.
