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

[The Chair, Liberal, Peter Fonseca]

Welcome, colleagues, to meeting number 16 of the Subcommittee on International Human Rights of the Standing Committee on Foreign Affairs and International Development. Today we meet to hear from witnesses in view of our study on the role of the Canadian ombudsperson for responsible enterprise.

To ensure an orderly meeting, I encourage all participants to mute their microphones when they are not speaking and address all comments though the chair. When you have 30 seconds left in your questioning time, I will signal you with a paper. Interpretation is available, in English or French, through the globe icon on the bottom of your screen. This is for those who are using the platform for the first time. Please note that screen captures or photos are not permitted.

I would now like to welcome our witnesses for the first panel. From the Platform of Amazonian Indigenous Peoples United in Defense of their Territory, we have Ms. Aymara León Cépeda, sociologist and human rights coordinator, Peru, subgroup of oil spills. On behalf of the United Steelworkers, we have national director Ken Neumann, whom I've known for many years, and department lead Doug Olthuis.

Now we will invite our guests to make their opening statements of five minutes. We'll begin with Ms. Cépeda and then we will have, I believe, Mr. Neumann.

Ms. Cépeda, you may begin.

[Aymara León Cépeda, Sociologist and Human Rights Coordinator, Peru, Subgroup of oil spills, Platform of Amazonian Indigenous Peoples United in Defense of their Territory (PUINAMUDT)]

Thank you so much.

Good evening, ladies and gentlemen.

My name is Aymara León. I'm part of the technical team of four indigenous organizations from the Peruvian Amazon area. As such, I'm also part of the subgroup of the National Coordinator for Human Rights regarding oil spills.

Today I will address the case of Frontera Energy, a Canadian oil company that has impacted the territory of several indigenous communities. With that purpose, I will use some of the information that has been collected as part of an investigation supported by Oxfam.

Last, I want to say that Aurelio Chino, one of the indigenous leaders whom I work with, was supposed to be here, but he's attending another very important meeting, so I apologize for his absence.

To begin with for some context, Frontera Energy is a Canadian oil company that operated a Peruvian lot from September 2015 until February 2020. This oil lot is located in the northern Peruvian Amazon area on the border with Ecuador. The lot overlaps with the territory of 25 indigenous communities that belong to the Achuar, Quechua and Kichwa nations.

What I want to focus on today is the environmental degradation that has been caused by Frontera Energy's operations. In these five years, Frontera Energy showed a general non-compliance with environmental regulations and sectoral regulations. They have constantly refused to give proper maintenance to the infrastructure of the lot, and they also have shown a lack of proper and fast response to the environmental emergencies that occurred in these past five years. As a result, we had more than 90 spills in oil lot 192.

This is an unbelievable record in our oil industry. Most of these spills were caused due to corrosion, that is, lack of maintenance, and also due to operational failures that could have been easily avoided if Frontera had complied with the environmental regulations.

This increase in oil spills has been, as I said, outrageous, and has doubled the average of the spills recorded in this same lot with the previous oil operator. If we look at the increase of corrosion spills, we can see that they increased 650% during the time that Frontera Energy operated the lot. It is important for us to mention that these spills do not occur in empty spaces in the Amazon region, but in the territory of these communities that are being impacted by them. In some cases, some communities have been impacted by almost 20 spills in the past five years, meaning that they have been highly exposed to pollutants such as hydrocarbons and heavy metals.

It is also important for you to know that the livelihoods of these indigenous communities depend heavily on the rivers, streams and lagoons and the forest, because they are dedicated to fishing and hunting activities. They depend on these lagoons for water, bathing, cooking and drinking. Their rights to health, to access water, to food and to access their livelihoods have been deeply affected by Frontera Energy's operation.

The current situation of their lot is that Frontera left without presenting and implementing an abandonment plan that aims to remediate all the environmental impacts that were caused during the operations of Frontera Energy. They have also left with several social commitments pending with the communities.

The indigenous organizations have taken several actions to try to stop these human rights violations, but they have not been able to do so. That is why indigenous organizations want the Canadian government to provide mechanisms to support their search for truth, justice and reparations for those affected by the Canadian companies. Indigenous organizations require neutral and independent entities that can surveil and investigate the human rights violations that have occurred in their territory. They want their voices to be heard directly and their testimonies and the evidence that they have of these impacts to be taken into account when conducting investigations.

Indigenous organizations currently do not feel that the CORE provides a fair and sufficient mechanism for them to report the violations that have occurred. We believe that the CORE should be strengthened and should incorporate intercultural principles for this to be a safe and useful space for those who have been affected by Canadian companies.

Furthermore, we believe the Canadian government should also develop other mechanisms or instances that not only investigate or sanction Canadian companies that violate human rights but also contribute to the reparation of such violations.

Finally, we believe there should be a full compliance of the Maastricht principles regarding extraterritorial obligations, for indigenous peoples to feel supported by the Canadian government in their search for reparations and justice.

That is my initial presentation. Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Cépeda.

Now we'll hear from—is it Mr. Neumann who will be speaking?

[Ken Neumann, National Director for Canada, National Office, United Steelworkers]

Yes, that's correct.

Thank you very much, Peter.

[The Chair, Liberal, Peter Fonseca]

It's good to see you.

[Ken Neumann]

Yes, it's good to see you. Thanks for having me.

My name is Ken Neumann. I'm the Canadian national director for the United Steelworkers. I'm accompanied today by Doug Olthuis, who is the department leader for global affairs in my office.

I would like to bring this committee back to January 17, 2018. I happened to be in Ottawa that day, standing beside the Minister of International Trade, who at that time was François-Philippe Champagne, as he announced the creation of the Canadian ombudsperson for responsible enterprise, the CORE. I was happy to be there. Those kinds of press conferences are sometimes a bit of a celebration of a milestone or an achievement, and that's what this was.

That 2018 announcement signalled a real change, a change from the failed policies of the Harper Conservatives, a change that would benefit communities and workers around the world that are impacted by Canadian mining companies. It is also a change that would benefit the mining industry by ensuring a credible way to investigate allegations of abuse and to call out those individual companies harming people. This formed the basis for a better global reputation for Canadian mining.

Minister Champagne and his government were very clear: the CORE would have the ability to independently investigate complaints, including the ability to compel witnesses and documents, but as we all know, this is not the case.

Knowing what I know now, I would not have joined Minister Champagne on the podium in January 2018. Without the power to compel witnesses and documents, there is no breakthrough; there is no good first step. Instead, we are stuck with what the Harper government put in place, just under a new name.

It is true that there is more funding. However, an ineffective office, even with more money, is still an ineffective office. If the Liberal government had followed through on its commitments, we would not have been stuck in the middle of a pandemic going over old ground and again making the case for the creation of an effective office.

A few weeks ago, the Steelworkers Humanity Fund released a report entitled, “Not Even the Bare Minimum” that linked poverty wages to the supply chains of Canadian brands and retailers in Bangladesh. That report amplified the voices of women and men in Bangladesh, where the women sewing our clothes earn between $6 or $7 per day—that’s per day, not per hour. To earn living wages, garment workers’ wages would have to be tripled. The right to a decent life, to a living wage is a basic human right.

The UN guiding principles on business and human rights are clear that companies must respect human rights throughout their supply chains. Companies have responsibilities that extend to workers employed by the supplier factories.

The CORE mandate includes the garment sector. An ombudsperson's office with effective powers could have a role to investigate allegations of human rights harms caused in garment supply chains and point the way to change, but not the CORE as it stands. We have no confidence that a complaint brought by Bangladesh workers would result in any meaningful investigation. An investigation that depends completely on the co-operation of the company being investigated is hamstrung from the start.

Keep in mind that many Canadian retailers appear intent on refusing to take the simple step of publicly disclosing their list of supplier factories. They prefer to continue to operate in the dark. Privately owned Canadian retailers that do not publicly release financial data have no inclination or incentive for transparency. The CORE as it stands can’t begin to untangle the complexities of the global garment system.

As Canada’s main mining union, the steelworkers are convinced that mining can make an enormous contribution toward the equitable social and economic development of communities in Canada and globally while minimizing the impact on the environment and meeting our climate goals, but for the potential to be realized, the mining industry must respect human rights. That is not often the case, giving Canadian mining a bad name in many parts of the world.

A strong and effective CORE could also give Canadian mining industry a leg-up on global competition. Communities impacted by mining are likely going to be more receptive to Canadian investment if they have a credible avenue in Canada in cases where they feel their rights are violated.

Financial markets and purchasers such as Microsoft are also becoming sensitive to issues of climate and human rights along supply chains. They will increasingly favour companies whose social licence to operate appears solid and is not tainted by lingering allegations of corporate malfeasance.

For all of these considerations, Canadian mining will benefit from a credible CORE. I can’t say it more clearly than this. A strong CORE is good for the Canadian mining industry. Rather than resist and lobby against the office and the powers that are needed—

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Neumann. I would ask you to bring it to a conclusion.

[Ken Neumann]

My last point is that the Canadian industry would do well to embrace it as a cornerstone of a global pitch. My final sentence is that the Canadian industry would be fully committed to human rights and the Canadian government would have in place an effective office that will hold our feet to the fire. The committee could—

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Neumann.

We're going to proceed to questions from members. The first questioner is going to be a Liberal member, MP Maninder Sidhu.

Welcome to our committee.

He is new to our committee. He is also the parliamentary secretary.

Congratulations on your new role in international development, MP Sidhu.

You will have seven minutes of question time.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Mr. Chair. I'm happy to be part of this amazing committee and among this amazing group of people here.

I want to thank Ms. Cépeda, Mr. Neumann and Mr. Olthuis for being with us today and for providing their valuable insights.

Mr. Neumann, you finished off by touching on how industry can partner in our goal of ensuring that Canadian companies operating abroad are holding themselves to a high standard. What do you think industry can do to ensure that human rights violations can be avoided in countries where Canadian companies are operating?

[Ken Neumann]

I'm sorry. I missed the last part. What can Canadian companies do...?

[Maninder Sidhu, Liberal, Brampton East, ON]

What can Canadian companies do to ensure human rights violations don't happen in the countries that they function in?

[Ken Neumann]

Well, I think they should rely on the government. Basically, if you bring in strong CORE standards, as was initially contemplated in 2018 when Minister Champagne made that announcement, I think that is the deterrent, and companies will live up to their standards.

More recently, you've heard the news that for several companies—without naming them—there's a whole bunch of allegations being made where they're outside of Canada. That just gives us, as Canadians, a bad reputation.

We represent a good portion of the mining industry. I'm proud of our mining industry, because we probably have somewhat of an advantage. We have a much better social society. We have stronger trade unions that basically have a working dialogue with companies to make sure they live up to environmental standards and treat employees with dignity and have safety and health standards and all those things. The fact of the matter is that there's a lot of evidence—and there have been a lot of cases around the globe—where that has not been the case.

This is an opportunity, as Minister Champagne laid out in 2018, where we can bring forth that change to make sure that all these companies live up to a standard and that they're held accountable. If they're just allowed to do as they see fit, we're going to continue to hear what our sister talked about earlier in regard to what has happened with the oil spills and so on. There has to be accountability, and the government has to have the ability to subpoena and to do the things that we've asked for in the initial CORE.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you for that, Mr. Neumann. There are definitely a great number of companies in the mining sector that are responsible as well. I came from the natural resources committee and I've spoken to many of them during testimony. Thank you for mentioning that.

Mr. Neumann, the Government of Canada and industry are partners in ensuring brand Canada, which you just spoke of, and we want to make sure that it remains strong and is well applied. How can the CORE further support these sectors in ensuring that human rights are upheld and the environment is protected? This is again touching on the first question, but more so on the environment angle now.

[Ken Neumann]

Maybe I'll turn that over to Doug, who has been working with some of that.

Doug, maybe you want to take that one.

[Doug Olthuis, Department Leader, Global Affairs and Workplace Issues, United Steelworkers]

Thank you so much.

The question from Mr. Sidhu is interesting. The Canadian government certainly can partner with private business in many ways to support those businesses, but the role of the CORE is not necessarily that.

The role of the CORE should be to investigate complaints. Now, that will be good for Canadian business, because it will be a credible way to clear the allegations. Either they'll be shown to be not credible or they'll be shown to be credible and there will be a path to remedy.

The CORE's job, in my view, isn't to make the world a better place for Canadian business. The CORE's job is to make sure Canadian companies take their responsibilities to human rights seriously. I appreciate the fact that we want to support Canadian businesses, which we absolutely do, but the best way to do that for this government, I think, is to have a credible way to investigate complaints to clear the air.

I hope that comes close to answering your question. Thank you.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Mr. Olthuis.

I'm going to move to Ms. Cépeda on this.

Ms. Cépeda, I'm not sure what time zone you're in or what hour of the day it is where you are, but thank you for being with us today and providing your valuable insight.

How have state officials in your country been involved in facilitating the operation of Canadian companies? I am very interested to know that.

[Aymara León Cépeda]

I would say that state officials try to give partial facilitation for any kind of international or national company that is interested in the oil lots.

We do have regulations that give better points or facilitate the acquisition of oil lots for companies that have shown better environmental practices previously, but it's not directly to Canadian companies. I wouldn't say there are specific mechanisms for that.

[Maninder Sidhu, Liberal, Brampton East, ON]

Even in the domestic mechanisms you don't see any there. Okay.

Could you describe the policies and legislation surrounding corporate responsibility within your jurisdiction, or what you've seen?

[Aymara León Cépeda]

Yes. Unfortunately the regulations are not as strong or as effective as we would like them to be. The operator of the lot, the same lot as the previous operator, Pluspetrol, a Dutch company, also left the lot in 2015 without presenting an abandonment plan.

What we're seeing is that companies are repeating the same kinds of practices as in the past, and unfortunately our regulations, or the enforcement of them, are not enough to protect the rights of indigenous populations, or the environmental rights in general.

There has been some progress, especially promoted by indigenous organizations. For example, in consultation processes we try to make the regulations better, but as I was saying, I don't think the enforcement capacity of our state officials is enough to stop these kinds of human violations. That's why lately indigenous organizations have tried to seek these international spaces for investigations or for justice, as sometimes their only means to have this justice and reparation. That's why we think it's so important to strengthen these kinds of spaces.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Cépeda.

We're moving now to MP Chiu for seven minutes.

[Kenny Chiu, Conservative, Steveston—Richmond East, BC]

I want to thank the witnesses for coming and testifying.

I have a question for Ms. Cépeda to start with.

I have learned that your organization and the United Nations Development Programme have released a joint report under PVTI, which has registered more than 1,200 reports of extractive industry impacts.

First of all, could you provide the report and submit it to SDIR for distribution in English and French, please?

Of the 1,200 impacts, I was wondering how many of these originated from Canadian companies.

[Aymara León Cépeda]

Yes, I will send that report for you to be able to access it.

Regarding your question about how many of these impacts have been caused by Canadian companies, because Frontera Energy hasn't presented their abandonment plan, we don't have all the official data that would allow us to know all the impacts that they've had. The only official data that we have regarding Frontera Energy, which is the only Canadian company in the oil industry in the Amazon area, is the number that I mentioned earlier. They've had around 90 spills during the five years they operated lot 192.

Frontera also operates on other lots that are outside the Amazon area. The data from that case I would not be able to provide right now.

[Kenny Chiu, Conservative, Steveston—Richmond East, BC]

So Frontera is the only Canadian company or the only company operating in the oil industry.

[Aymara León Cépeda]

It's the only Canadian company operating in the oil industry, yes.