International Trade Committee on Nov. 29th, 2010

[Jamie Kneen]

I have to say this is not a new problem, but it is significant, and apparently it's not a problem that's going away any time soon. My trade lawyer friends call it “jurisdiction shopping”, and most large corporations have a sufficiently complex corporate structure to allow them to do this. They can look for whichever combination of jurisdictions actually suits their interests, whether it's for the purposes of taxation or for the purposes of investment and of suing a government under the investor-state provisions.

Pacific Rim is the current example. There's another American company that's using the same--

[Peter Julian, NDP, Burnaby—New Westminster, BC]

What is Pacific Rim?

[Jamie Kneen]

Pacific Rim is a Canadian company that is using its U.S. subsidiary to sue the Government of El Salvador for failing to provide it with the mining permits that it was seeking.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Even though normally, in the old days, investor-state provisions wouldn't have covered them, by opening a post office box in the U.S., they're able to access the investor-state provisions to go after the Government of El Salvador?

[Jamie Kneen]

Yes, much as Glamis Gold previously used the NAFTA provisions to sue the U.S. government. Even though the company itself was based in Nevada, it had a Canadian affiliate and used that route to go after the U.S. So as I say, this has been going on for some time, and I don't see that it's going to stop.

The problem is I think not entirely with the agreements themselves, because the problem with the definition of what constitutes a Canadian corporation is a bit more complex. For better or worse, we're not looking at the Corporations Act. We're not looking at the securities commissions' requirements and the requirements for Canadian ownership, Canadian domicile, Canadian directorship of any of these companies. A company can be Canadian, have an office, a lawyer, a post office box, pay some taxes—preferably not too many—and be a Canadian corporate citizen.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Could I just summarize? I also have a couple of questions for Mr. Clarke.

What you're saying is, even though this committee does have the right to change the implementing legislation—in fact, we've done that with two agreements, the last two agreements that were brought before the committee. Prior to the Jordan agreement, there were amendments made. So we have the right to do that. But if we rejected this agreement, what we would avoid, even though trade will continue, is making a bad situation worse, where you have an environmental override that any company can use by using these investor-state provisions. Do you think there's any link between this and the environmental assessment not being released?

[Jamie Kneen]

I have no idea why the environmental assessment isn't available. Looking at the environmental assessment of other trade agreements, I have to say they're not terribly educational. They don't provide very much material at the best of times. So even if it were there, I don't know if it would be that helpful.

I think the problem is that we're not—

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I'm sorry, I'm going to have to cut you off.

[Jamie Kneen]

Okay.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I'm watching my time very closely.

I'd like to go to Mr. Clarke. Thank you for being here today, Mr. Clarke.

I have two questions for you. First off, how much money have you and your company invested in social development and environmental stewardship? I think you were starting to answer that question when you were cut off. Perhaps you could give us the exact dollar figure of how much money has actually gone—

[The Chair, Conservative, Lee Richardson]

Peter, what does that have to do with this treaty?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

—to the Ngöbe people.

Thank you, Mr. Chair.

And then secondly—

[The Chair, Conservative, Lee Richardson]

No, not at all. Mr. Julian, we're here to talk about a free trade agreement, not about a private company's business.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

The second question, Mr. Clarke—

[The Chair, Conservative, Lee Richardson]

Mr. Clarke, you answer whatever question you care to answer.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

—is around the investor-state provisions—

[The Chair, Conservative, Lee Richardson]

You don't have to get into your personal finances for Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

—that we were talking about earlier with Mr. Kneen. There are a lot of aboriginal organizations in Canada and in Columbia that are concerned about Canada's investor-state provisions. Do you see a concern among the aboriginal people in Panama about those provisions? It would allow, of course, companies to override decisions made locally by aboriginal peoples in their community. Do you see any concern there?

[Donald-Fraser Clarke]

Let me answer your second question first. Obviously in the comarca there are a number of concerns. You have to appreciate that the comarca is the final frontier here in Panama. Seven of the 13 largest rivers in the country are located in the comarca. The comarca has a number of copper...[Technical Difficulty—Editor]

[The Chair, Conservative, Lee Richardson]

We lost the signal again.

[John Cannis, Liberal, Scarborough Centre, ON]

He was probably so offended, Mr. Chairman, with the question that he cut it off.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

That's a very legitimate question.

[The Chair, Conservative, Lee Richardson]

It's not a legitimate question at all, Peter.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

It is, absolutely. He was talking about it. They said they invested resources. I just wanted to know how much. It's very legitimate. We have a truce.

[Donald-Fraser Clarke]

I'm sorry, but we were disconnected.

Cerro Colorado is a very historical and important project to Panama. It goes way back to the 1970s, back to the Omar Torrijos days.

Our work in the comarca has been very simple. We have an agreement to do training. We've trained in responsible mining. My established colleague, Mr. Kneen, talked about IBAs. We do training on IBAs. We share a lot of different examples of the good, the bad, and the ugly in mining with the people, because at the end of the day, Cerro Colorado is going to be a 70-year project. And appreciate that it's surrounded 100% by Ngöbe people, 160,000 strong, and there is only one road in. So if the people feel they've been lied to or haven't been given the facts, or if they don't feel they're a part of or don't participate in this particular project, at any given time they can shut down the project. They're going to sit on the road, and that's something we've talked to them about.

We want to make sure, if it's a Canadian company that comes in as the developer, that they are a good corporate citizen, and we teach the people what to look for in Canadian mining companies.

We didn't just go in and say, we're going to develop this thing. First of all, we had to teach the people what this mining thing is, and not only teach them in Spanish but in their own traditional language. We have a huge population out there that can't even read and write, so we have to draw pictures, make diagrams. This has been two and a half years of training, week after week after week with people, making sure they have the right information and also informing them of what a failed project looks like, such as the Greenstone Resources project, and why the Greenstone project failed.

We've had our stakeholders go out to the Petaquilla gold mine. They've come back and they're very excited by what they've seen there.

So we've taught them what to look for in terms of bad projects, what to look for in terms of how to deal with large mining companies, and we believe that now we have an informed population.

We're hoping in the future that they will want to advance this project. But appreciate that they have a very powerful law that says they have to be informed, they have to be advised, and they have to participate. And they're pushing the Panamanian government right now to participate and they want a percentage of this concession.

As for the second part of the question, we've probably invested almost $1 million in training so far—only training.