Subcommittee on International Human Rights Committee on March 23rd, 2021

[Surya Deva]

I think the UN guiding principles provide general guidance, but as I reminded subcommittee members, we visited Canada in 2017 and issued a report in 2018 to the Human Rights Council. In this report we made very specific recommendations on what powers the CORE should have, and I don't think the current mandate and the powers tick the boxes we recommended as independent experts.

Based on my knowledge and engagement of Canadian mining companies operating elsewhere—I will not name these companies—I can say with confidence that many companies are not willing to co-operate with remedial mechanisms. This is not unique to Canadian companies, so I don't want to say that only Canadian companies behave like this. Many companies from all over the world are not willing to co-operate, and that is where states have an obligation. It's an obligation under international human rights law to ensure that Canadian companies respect human rights, both within Canada and outside Canada, and this is non-negotiable. Promoting trade should not be done at the cost of undermining human rights.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Logically, in your view, the Canadian government should consider adopting human rights due diligence legislation.

[Surya Deva]

Yes. My position, as I recommended in my opening statement, is that the government should adopt comprehensive human rights due diligence legislation that covers labour rights, human rights and environmental rights.

These companies are operating anywhere in the world, and Crown corporations like EDC have a higher responsibility under the UN guiding principles. As such, the mandatory human rights due diligence legislation should apply to all these companies, and if they do not follow those practices, there should be consequences, with effective remedies as well. This legislation would make the CORE more effective because otherwise it would not have those bases.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Let's take the example of the Uighurs in China. Based on your previous answer, we can't really count on companies to look at their supply chain and help us with all this. The companies won't co-operate.

[Surya Deva]

I'm not fully sure if I understood the entire question. Maybe something was lost in translation.

Were you talking about a Uighur issue in the supply chain?

[The Chair, Liberal, Peter Fonseca]

That's correct.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

We were talking about the supply chain. You said that most companies don't want to co-operate. You're telling us that we can't count on, for example, companies in Xinjiang, China. Right now, we're trying to look at the supply chains that reportedly use forced Uighur labour. You're telling us that we can't count on companies to do this. We need government legislation.

[Surya Deva]

I was not saying that in reference to the Uighur situation in Xinjiang, but I think my response would be that if a company is unable to conduct meaningful human rights due diligence, whether it is Xinjiang or Myanmar or anywhere else, then that company has to stop doing business there. I think the UN guiding principles are very clear on that.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

I think that there was a slight misinterpretation between you and me, but it doesn't matter.

Ms. Lavery, what's wrong with the due diligence process at EDC, which continues to support companies involved in serious abuses?

There's definitely something wrong.

[The Chair, Liberal, Peter Fonseca]

You have about 15 seconds, please.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

If you add the interpretation time and the time that Mr. Reid had earlier, I think that a good 45-second answer is possible.

[Mairead Lavery]

At EDC the due diligence process is working as planned. It is highlighting where there may be issues and where there may be the potential for severe risks. That is leading us to have conversations with the customers before we support them or we support a transaction, to ensure that they can mitigate that risk or they can provide appropriate remedy thereafter.

I can't speak in general for companies, but at EDC it's working.

[The Chair, Liberal, Peter Fonseca]

Thank you.

You got your 45 seconds, Mr. Brunelle-Duceppe.

Now we will move to Ms. McPherson from the NDP.

You have seven minutes, please.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair.

Thank you to the witnesses for joining us today. It's an important conversation to be having. I appreciate your insight and your input.

Ms. Lavery, you just spoke about the fact that the EDC is working as planned. Your response to my colleague from the Bloc is that it is working as planned. Unfortunately, we have seen examples, as I think my colleague Mr. McKay has also pointed out, of where companies that are acting in very bad faith, that are not acting environmentally and socially responsibly, have received large sums of money from the EDC.

You know, just last month Oxfam Canada released a feminist scorecard. It noted that Export Development Canada provides billions of dollars to support the oil, gas and mining industries [Technical difficulty—Editor]. Will the EDC call for changes to the Export Development Act to include the prohibition of business activity that violates human rights or exacerbates gender equality?

You say that it's working as planned. We have all of these examples where we're actually funding some pretty bad actors. What will you do to make sure that stops? How will we make sure that doesn't continue?

[Mairead Lavery]

Perhaps I could break it down into a couple of different components. There is the component with respect to the gender element to your question. We absolutely agree; in our due diligence with respect to human rights, we are very clear that our due diligence covers vulnerable people, those sections of the community who are either protected or who are at greater risk of severe human rights risks. Women and children are included in protected communities, as are human rights defenders who may be subject to severe risks. Those are categories that we do cover in our due diligence activities.

As it relates to our support for the oil and gas industry and the mining industry, they are absolutely industries that EDC does support. They are very significant contributors to the Canadian economy. I would suggest that not all members of those industries are bad actors. That's what our due diligence process is out to identify.

Now, we also have to recognize that when EDC does enter into relationships, particularly financing relationships, they can be very long-term financing relationships. We have seen instances whereby in financing we have done in the past, our due diligence procedures have changed over time. There is a time element to this, as we continue to augment our procedures in line with international best practices. Whether that's the OECD with respect to their due diligence practices on supply chains, or whether it's clearer principles forward, which have brought in the concept of free, prior and informed consent, we continually add to that, yet there are some transactions that we did many years ago, when those pieces of legislation did not exist.

I do believe it is working properly. We will continue to support all Canadian companies with respect to the sectors of Canadian GDP.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you.

Just to clarify, for some of these examples I have in front of me, it was in fact not very long ago. There are examples as recent as 2018 of Canadian companies not acting ethically abroad. It is not something that happened far in the past.

I just want to clarify, as well, that the process would then be that you will ask for documents, evidence and risks. If the companies don't give those to you, that's where that review ends. You can implement enhanced monitoring but, for the most part, if you ask a bad actor to give you documents they don't want to give you, is that the end of that?

[Mairead Lavery]

No, I would not say that. That is one of the points we use as a point of reference. Of course, that would be the person we're transacting with, so we want to get his or her perspective and details on it.

We will also continue to scan the media. We will work with some of our civil society organizations to understand. I would say we also watch for risk flags.

We're very conscious that there are areas EDC and Canadian exporters participate in that are more susceptible to human rights, whether it is with respect to oil and gas, mining or the garment industry.

I would say one of the emerging sectors is with respect to telecommunications and technology and the ability there to deal with privacy matters or withholding of information or subversion of populations using communication technology. My team is continually looking at those things.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you.

I'm sorry to interrupt; we have such limited time.

I have one last thing. We have examples of companies, such as the oil company where 190 workers and contractors were killed in accidents. We have massive hydro dams that have almost ruptured. We have really serious human rights abuses happening around the world with Canadian companies.

I wonder if you could talk about the impact you feel these bad actors are having, these companies that do not adhere to human rights law or to environmental law. What is the impact on Canada's international reputation, and how does that impact companies that are following the rules and acting in good faith?

[Mairead Lavery]

In my opinion it does affect the brand. Certainly in my discussions at international fora, the question is often raised to me with respect to the legacy that some Canadian companies have left around the world. Therefore, they're asking me what is different and what is EDC doing to ensure that the companies they support today are not participating in those practices.

If I were to give you a general response, I do believe it impacts negatively the Canadian brand.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Members, we're going to be moving into our second round. Just based on the time and splitting it up, I'm looking at about three minutes per questioner. We'll commence with Ms. Khalid, from the Liberals, for three minutes.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you, Mr. Chair.

To our witnesses, I do have two questions, so I hope you'll answer them as succinctly as possible.

I'll go to Mr. Deva first, if that's okay.

Mr. Deva, the CORE appeared before our committee a couple of weeks ago. She stated that there is no office like the CORE in the world and that this office was the first of its kind.

With your vast experience, do you know of any other oversight body that has a similar function? If you do, what's the difference?

[Surya Deva]

I think the CORE is in some ways a unique institution, but it is not unprecedented to have an institution like this. There are national human rights institutions that have the power to investigate and the power to compel witnesses and evidence. I can give concrete examples. If the committee would like, I can send some documents. There are countries—

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Do they not have the same mandate?

[Surya Deva]

They have a wider mandate. They can deal with human rights abuses, including by businesses. They can compel evidence and witnesses. They can also enforce their recommendations.

We can draw inspiration from those institutions that are there. The CORE is somewhat unique, but it is not unprecedented such that this has never happened. There are institutions that are already doing something like this.