Subcommittee on International Human Rights Committee on April 20th, 2021

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair.

I'd like to thank the witnesses for joining us today. This is a very important conversation we're having, and I really do appreciate their insight.

I'm going to start with the United Steelworkers.

Mr. Olthuis and Mr. Neumann, you spoke about the good actors, those mining companies that are strong with regard to protecting human rights and strong with regard to protecting the environment.

What is the impact of those companies that aren't protecting human rights, that aren't taking care of the environment? What is the impact of the bad apples on the good companies when we don't have a system to hold them to account?

I'll pass that to either of you.

[Ken Neumann]

Doug, do you want to take that?

[Doug Olthuis]

Thank you for the question.

As we've heard tonight, there are many different allegations of Canadian companies not respecting human rights. If anybody spends an afternoon on the Internet googling Canadian mining companies, they'll find all kinds of allegations of harm, of environmental degradation. Do I know if all of those are credible? No. Does anybody on this committee know if they're all credible? No.

I think that's exactly the purpose of a credible ombudsperson, to be able to investigate specific complaints and to investigate them properly so that Canadian companies that are behaving well can get out from under the cloud of these lingering allegations.

The situation we have now is that the allegations linger and linger and they're never really addressed because there is no credible CORE to investigate.

To answer Ms. McPherson's question, I think the impact is that all Canadian companies are dragged down. Investors are starting to look at the ESG factors more and more carefully, and we don't want the good Canadian companies to be tinged with the negativity—and there is a lot of negativity out there.

The whole point is to try to separate the real from the complaints, because many people have complaints, but not all of them are on human rights violations, by any stretch of the imagination. As we speak, we just don't know, so that's the reason we need a really empowered CORE. I think it will be good for all of us. It will be good for the financial industry, which will be able to make reasoned judgments on which companies are really respecting human rights. It will be good for companies that want to raise money. It will be good for workers, and it will be good for communities.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

That's perfect. I have travelled around the world. I've seen the impacts of those bad actors in a number of different countries, and I completely agree with your assessment, Mr. Olthuis.

Knowing that this is actually really good for good mining companies or good extractive companies, why do you think there are members or associations within the sector that are not supportive of a CORE who has the powers to compel testimony and witnesses?

I'll pass that to either of you.

[Doug Olthuis]

I think you'll have the opportunity to ask representatives from MAC and PDAC later on tonight. I can only speculate and suspect—I mean, they're speaking up for their members, as we would speak up for our members—that at the end of the day, they don't want more oversight, to be frank about it. They would prefer a voluntary approach to all of these human rights issues.

We do want companies voluntarily to take their human rights obligations seriously. Many of them do, as you said, but some don't. We can't rely on a voluntary schema to address the companies that don't. Let me just give you one example, without naming any names.

There's a Canadian mining company in Mexico where last year workers voted to join a truly democratic independent union, Los Mineros. What's remarkable is that the Canadian company, a silver mining company, refused to recognize the results of that election. That's despite the fact that the Mexican regulatory authority gave representation rights to Los Mineros and despite the fact that the President of Mexico insisted publicly that the company comply with the law. The operations of that mine are suspended right now. The company is losing money each day.

The question in the context of the CORE is what does that matter. Well, when I look at that, I see a Canadian company that's willing to stare down the President of Mexico. I can't imagine a company like that being willing to voluntarily co-operate with the CORE. This is a mining company that plays hardball. A CORE that is in that kind of situation needs to be armed. It needs to be ready to be able to engage with that company from a position of strength. That's not the CORE we have right now.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

I completely agree.

I'm running out of time here, but I have one question for you, Ms. Cépeda. Knowing what's happening in Peru, knowing what's happening with Frontera and how they've stopped their obligations and have not provided an abandonment plan, have you submitted a complaint to the CORE?

[Aymara León Cépeda]

No, we haven't. We considered that option, but given what we were informed of and what we saw in terms of the lack of power the ombudsperson has right now, we didn't believe that putting the indigenous organizations through that effort without knowing the result would be the most useful way to approach the situation.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Basically, just to clarify—

[The Chair, Liberal, Peter Fonseca]

Thank you.

I'm just looking at the time. We have about three and a half to four minutes maximum for each questioner in our second round.

We will commence with MP Iqra Khalid from the Liberals.

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

Thanks, Chair.

I'll continue down the same line of questioning that Ms. McPherson had on what your experience has been. I know that the CORE is relatively new. You indicated that you didn't want to put the communities through that experience, not knowing the outcome. I'm wondering if you have had any experience with a national contact point or the corporate social responsibility counsellor.

I'm really looking for what kind of challenges an organization like yours would face going through that process.

[Aymara León Cépeda]

We have not contacted the national contact point for this case. We are doing that for the case with the previous operator, which is a Dutch company. The complaint that the indigenous federations addressed has just been accepted by the Dutch national contact point. We are trying to see what comes out of this effort and experience with our complaint to Pluspetrol to evaluate whether we should do the same in the case of Frontera Energy, because the two cases have really similar situations.

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

Thank you very much for that, Ms. Cépeda.

Just very quickly—I have such little time left—you mentioned, Mr. Neumann, that the Steelworkers Humanity Fund published a report in January 2021. The report noted that Canadian companies are not always aware of where garments specifically come from and any human rights violations that may occur, because they're not directly involved with the procurement or the manufacturing of those garments.

I wonder if you can maybe shed some light on some tools that the CORE could use in dealing with supply chains specifically with regard to the garment or any other industry that may be impacted.

[Ken Neumann]

Thank you very much for that question.

Bangladesh is very close and dear. Doug Olthuis, who is with us here tonight, is the executive director of our humanity fund that was involved in the investigation. I personally travelled to Bangladesh. I was there for the one-year anniversary of the Rana Plaza collapse, and I always tell people when I come back that if the suppliers that purchase procurement from Bangladesh had seen what I've seen, I just don't know how they'd be able to go to bed with a clear conscience. That's why the CORE process is so unique, which is one of the things that we found through this investigation.

I've had the opportunity to meet with families. I've had the opportunity to meet with many of the people who have lost an arm, lost a leg or lost a family member. It is one of the things that I'll take with me for the rest of my life, to witness what I've witnessed.

I can't stress more forcefully the need that these places have. We have a lot of Canadian companies that are over there. We're trying to leverage them. We're trying to work with them to make sure that during this COVID period, they sign on to a fund that helps these people get paid.

If you have a minute left, Doug should probably jump in because he's the one that shepherded that very important study that we did.

Doug.

[Doug Olthuis]

There are two answers to your question.

Specifically in the case of the garment sector, the CORE needs strong powers to compel documents and witnesses to untangle a supply chain like that.

The other thing, though, that the Government of Canada could do, which we'd encourage you to look at, is legislation on mandatory human rights due diligence, which would require Canadian companies to undertake a due diligence process looking at their entire supply chain. That's separate from the CORE, but that would be a really important thing to do.

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

Thank you.

Thanks very much to all the witnesses.

[The Chair, Liberal, Peter Fonseca]

Thank you. That's right on time.

Now we're moving over to the Conservatives and MP Scott Reid for about three and a half to four minutes.

[Scott Reid, Conservative, Lanark—Frontenac—Kingston, ON]

Thank you, Mr. Chair.

Maybe I could go back to you, Mr. Olthuis, for a second, to follow up on your most recent comments. You talk about the use of the powers of compelling witnesses to testify and compelling the production of documents for the purpose of untangling supply chains. I have to admit, I don't see how you could do that if the problem is a supply chain that is entirely located in another country. Presumably, the whole problem is that the Canadian company has not done due diligence, and therefore, its supply of compellable testimony is going to be pretty limited.

Am I wrong on that?

[Doug Olthuis]

I can't say, Mr. Reid, that you're ever wrong on anything.

It's true that some Canadian companies haven't paid attention to their supply chain, but it's also true that the global supply chain is such that power rests at the top, which is the companies that purchase. Those companies actually have a lot of power throughout the supply chain. They sometimes try to hide behind suppliers and say that suppliers did it, but they're controlling the purse strings.

If the CORE had the ability to compel documents from a Canadian company, that Canadian company would very likely have the ability to get those documents on a voluntary basis from their suppliers, because those suppliers really want to keep the Canadian companies happy.

[Scott Reid, Conservative, Lanark—Frontenac—Kingston, ON]

I'm going to suggest, since I have so little time here, that the CORE, it sounds to me, is not the right way of doing this. You suggested another alternative, a piece of legislation that would effectively require you to do due diligence on a proactive basis. Could you talk for a second about that? That does sound like a more promising avenue to go down, from my humble and only partly informed perspective.

[Doug Olthuis]

You're correct. The CORE will work together with mandatory human rights due diligence legislation. The CORE is typically backward looking for complaints and you're right that we want to avoid issues arising in the first place. If companies were required to do a due diligence process and make sure that the impacts of their business operations don't have negative consequences, then ultimately, the CORE, even an empowered CORE, would have no business because there would be no complaints.

Forward-looking legislation that would address the problems before they start would be a very good complement to the CORE. It doesn't replace it, but it would be a good complement.

[Scott Reid, Conservative, Lanark—Frontenac—Kingston, ON]

Do I have any time left, Mr. Chair, to continue with this?

[The Chair, Liberal, Peter Fonseca]

You have one minute.

[Scott Reid, Conservative, Lanark—Frontenac—Kingston, ON]

In that case I'll stick with Mr. Olthuis.

It sounded like there is some existing legislation somewhere that fits the model you were describing. I wonder if you could fill us in on models you think are useful.

[Doug Olthuis]

As you may know—I think this committee has looked at some issues—many jurisdictions in Europe are looking at grappling with that question right now, following the United Nations guiding principles on business and human rights. Governments have to take those obligations seriously. We certainly have ideas about how to do that. In the five seconds we have, I don't think we can do that justice, other than to say that yes, Canada is not yet a leader in that area, but it could well be. There are examples from Europe that we should build on, but Canada should do even better.

[The Chair, Liberal, Peter Fonseca]

Thank you. That's it for your time.

Now we're moving to the Bloc for three and a half to four minutes, with Monsieur Alexis Brunelle-Duceppe.