International Trade Committee on March 29th, 2012

[The Chair, Conservative, Rob Merrifield]

I'd like to call the meeting to order.

We have with us today, in our further study of Bill C-23, the Canada-Jordan free trade agreement, two witnesses in the first hour, and I'd like to introduce them.

From the International Trade Union Confederation, actually from Brussels, Belgium, we have Mr. Jeff Vogt. He is a legal advisor from the Department of Human and Trade Union Rights. Thank you for being with us.

Are we coming through okay?

[Jeff Vogt, Legal Advisor, Department of Human and Trade Union Rights, International Trade Union Confederation (ITUC)]

Yes, fine. Thank you.

[The Chair, Conservative, Rob Merrifield]

Very good.

We also have, from Toronto, from the Canadian Environmental Law Association, Theresa McClenaghan, executive director and counsel.

Theresa, are we coming through all right for you?

[Theresa McClenaghan, Executive Director and Counsel, Canadian Environmental Law Association]

Yes, just fine. Thank you.

[The Chair, Conservative, Rob Merrifield]

Very good. You're coming through on this end as if you were sitting in the room, so thank you for taking part in this.

We'll give you each opening comments, and then we'll move to questions and answers.

Jeff, the floor is yours.

[Jeff Vogt]

Thank you very much.

Good morning. My name is Jeff Vogt. I'm the legal advisor to the Department of Human and Trade Union Rights at the ITUC. The ITUC is a global confederation of 176 million workers worldwide, including workers in Canada.

Again, thank you for this invitation to testify before the Standing Committee on International Trade on the subject of the proposed Canada-Jordan free trade agreement.

While there are many aspects of this trade agreement that deserve careful consideration, as they impact workers both in Canada and in Jordan, I'll focus my remarks today on whether the Kingdom of Jordan currently complies with the commitments it must undertake under the bilateral agreement on labour cooperation. From our view, the simple answer is no.

Article 1 of the agreement on labour cooperation provides that each party “shall ensure that its labour law and practices embody and provide protection” for eight categories of principles and rights, the first four being the ILO core labour rights as set forth in the ILO declaration on fundamental principles and rights of work, as well as four additional categories, including: acceptable minimum employment standards; compensation, such as minimum wages and overtime pay; the prevention of occupational illnesses and injuries; and non-discrimination in respect of working conditions for migrant workers.

While the Kingdom of Jordan has instituted some reforms in recent years, their labour code still falls short of the requirements of article 1. For example, article 98 of the labour code requires a minimum of 50 workers to form a union. According to the ILO treaty on freedom of association, the establishment of a trade union may be considerably hindered or even rendered impossible when the minimum number of members of a trade union is fixed at obviously too high a figure, as in this case, where the legislation requires that a union must have at least 50 founding members.

Second, article 98 of the code also authorizes a tripartite committee to define those industries in which workers may form trade unions and prevents workers from forming more than one union in each of them. Again, the treaty on freedom of association states that establishing a limited number of occupations with a view to recognizing the right to associate violates the principle that workers of any occupation whatsoever should have the right to establish organizations of their own choosing.

Section 10 of the code requires that the treaty set up the general confederation of trade unions. However, the question on whether we need to form a federation or confederation as needed is to be determined solely by workers and organizations. Moreover, a monopoly situation imposed by laws is at variance with the principles of freedom of association.

Although a 2010 amendment eliminated language that specifically forbids migrant workers from joining trade unions, the law includes language that forbids migrant workers from forming unions of their own choice. The law maintains the requirement that founding members be Jordanian nationals. Thus, the right to organize foreign workers is not fully guaranteed; they are not authorized to participate in the establishment of a trade union or participate as leaders.

Further, the ILO recently noted this year that while the labour code forbids accident interference, fines for violations of this provision remain between 50 and 100 Jordanian dinar, which is between $70 and $140 U.S., and which the ILO considers to be far too small to have any decisive impact.

Those are just some of the highlights of the ways in which the current legal framework does not comport with the first article of the agreement on labour cooperation.

Moreover, under article 3 of the agreement on labour cooperation, the Kingdom of Jordan has an obligation to effectively enforce its laws. In the garment sector, conditions have improved somewhat since 2006, when there was an exposé by the national labour committee—and I think the head of that organization will be testifying later today—as well as trade complaints filed by the AFL-CIO over the U.S.-Jordan bilateral trade agreement, which brought attention to horrendous working conditions in the qualifying industrial zones.

Since 2008, the ILO has established the Better Work program, which covers a number of factories in the QIZs with Jordan. However, their third synthesis report, which was issued just a couple of weeks ago, revealed several serious problems in the QIZs.

With regard to forced labour, the ILO noted in a report just a couple of weeks ago:

The issue of recruitment fees to a third party remains a serious concern. Migrant workers often are required to pay substantial fees to recruitment agents and sub-agents in their home countries. Workers in over 40% of factories indicated that this debt adversely affects their freedom to leave their jobs. There are no provisions in Jordanian law to ensure that workers have not been recruited under such circumstances.

...

Better Work Jordan has [also] observed a practice in some factories under which workers who terminate their contracts are required to stay on the job until a replacement is found, sometimes for a period of several months.

With regard to work hours, Jordanian law does not impose a general limit on total overtime or maximum number of total hours per week and thereby tolerates excessively long work days and work weeks, with excessive work hours and compulsory overtime remaining a major concern of Better Work Jordan.

[Another] area of concern is disciplining workers using physical punishment or humiliating treatment. In six factories...

—which was 25% of those reviewed in the report—

....it was found that workers were either subjected to verbal or physical abuse, or were threatened if they did not complete their production targets.

With regard to dormitory conditions, there are no minimal standards in Jordanian labour law, and inspectors do not regularly inspect dormitories.

The report found that there were serious issues with regard to ventilation, bathing facilities, sewage, protection against heat or cold, insects, and fire. These issues persisted in nearly half the factories assessed.

The report also noted that “in one factory, thirty-two workers were denied allowances and bonuses for having participated in a strike”.

“In recent months, Better Work Jordan has refined its assessment of freedom of association especially [with regard to] interference and discrimination”, and it noted in its report that it anticipates that in the future there will be many more findings of non-compliance as a result.

The problems are, of course, not limited to the garment export sector. We find violations of the labour code throughout the Jordanian economy, but I think as an initial assessment of the situation, I'll leave it there.

I'm happy to take any questions you have with regard to Jordanian labour law practice.

Thanks.

[The Chair, Conservative, Rob Merrifield]

Thank you very much for that.

Now we'll move on to Theresa McClenaghan. The floor is yours.

[Theresa McClenaghan]

Thank you very much.

Thank you for this opportunity to attend and make a presentation to the committee today.

The Canadian Environmental Law Association is an environmental law legal clinic, one of the specialty clinics in the Ontario legal aid system. We're 41 years old, and we're a federally incorporated ENGO. In addition to representation of eligible groups, families, and individuals, we also have a mandate to pursue environmental law reform and public legal education.

We've had an opportunity to review the Canada-Jordan bilateral free trade agreement and the agreement on the environment between those parties, the subject of your committee's study today.

Some of my comments today will echo comments I have made before this standing committee in earlier parliaments in reviewing other free trade agreements—for example, the Canada-Peru agreement and the potential Canada-European Union comprehensive economic and trade agreement.

Our analysis is generally premised on advocating that each level of government in Canada can and must act to protect the environment in diverse ways. We've argued this before the courts, and the courts, including the Supreme Court of Canada, have agreed that we have a strong system in Canada of action on environmental matters by municipal, provincial, and federal governments, and of course first nations, in addition to strong action at the international level.

So when we, as CELA, look at the proposed trade agreements and make recommendations, we're primarily concerned with ensuring that those diverse levels of jurisdiction and ability to act in the aim of strong environmental protection is flexible, well-recognized, and protected.

I'll turn now to specific topics under the Canada-Jordan free trade agreement.

The first one is the national treatment provision. In the proposed Canada-Jordan free trade agreement, there is, as is usual, a proposed national treatment provision. It imports the provisions of the GATT providing for an exception for that national treatment provision relating to environmental measures necessary for the “protection of human, animal or plant life or health”.

We have a recommendation that in this agreement it should be broadened beyond the GATT so that it's not limited just to measures that are necessary; it should include measures “intended” or “relating” to environmental and health objectives.

The second point is that of course there's the agreement on the environment, which is in front of you, as a side agreement. Again, this is not unusual, as I've noticed with various bilateral agreement regimes that I've looked at.

We've reviewed that chapter as well. The definition of “environmental laws” in the environment agreement explicitly excludes public and worker health and public safety. We submit that the environment side agreement should not be limited only to those laws whose primary purpose is environmental protection, but should include other laws that also relate in part to environmental protection. We also think the exclusion of laws relating to public health and worker health and safety, from that side agreement, is not reasonable.

For example, as many of you may know, one of Canada’s major environmental protection statutes, the Canadian Environmental Protection Act, equally protects human health as well as non-human health in environmental matters. Another example is the recently enacted Canadian Consumer Product Safety Act, which has important elements of public health and safety as well as implications for environmental safety in indoor environment contexts.

Other improvements to the environment agreement would include requiring the parties to take account of scientific and technical information and of the precautionary principle, which CELA strongly endorses. The precautionary principle, along with scientific and technical information, is also an important element in occupational health and safety, and should be included in the side agreement—as well as, I might suggest, although I haven't studied it, the labour cooperation agreement; I did notice that there was no language like that there.

This type of language was recently proposed by the EU in the current CETA negotiations, for example, and we commended it to your predecessor committee in our prior appearance.

CELA also would prefer more explicit language obliging the parties to implement in their domestic laws and practices the requirements of multilateral environmental agreements, as listed here—the Stockholm, Basel, and Rotterdam conventions, the Montreal protocol, and the endangered species trade convention—rather than, as it does, merely providing that the multilateral environmental agreements would prevail in case of an operational inconsistency. We'd like the agreement to go further and oblige implementation of those commitments between the parties.

We also have a point on procurement, which is that we advocate the inclusion of provisions allowing for green procurement, for example, to allow for market transformation and in aid of more sustainable practices, products, and services, as well as green jobs in the domestic economies of the parties.

I have a point as well on expropriation. Your study apparently doesn't include the Canada-Jordan investment agreement, but in terms of environmental impact, we don't think we can testify at the committee without mentioning what we think that would do. We would suggest that at the first opportunity the provisions of that agreement that allow for claims of indirect expropriation in any case involving environmental regulation be disallowed, both procedurally and substantively.

The agreement limits such claims—in the terms it provides—in extremely rare circumstances. But this committee, and some of you, may have heard me say before that we think the better approach is that contained in the U.S.-Australia bilateral free trade agreement, which doesn't contain any such provision over and above the regular domestic laws of each party.

More to the point, Australia released a trade policy statement in April 2011—so quite recently, in the scheme of things—stating that it would not negotiate treaty provisions “that would confer greater legal rights on foreign businesses than those available to domestic businesses” or that “...constrain the ability of Australian governments to make laws on social, environmental and economic matters in circumstances where those laws do not discriminate....”

We think that's an extremely sound policy for Canada's context. So we would strongly encourage the adoption of that type of policy for this agreement and all other bilateral trade negotiations. We think that eliminating investor-state provisions beyond the remedies under Canada's domestic law would be a significant improvement here.

We don't argue against appropriate provisions for direct expropriation in domestic and international law. The common law and often statutory law provides strong protection. On the other hand, we've long disputed that public interest regulation amounts to expropriation or that any compensation is due when activities are curtailed because of public interest regulation. We would suggest that if expropriation is provided, it be limited to direct expropriation.

Before I finish that point, the fact that the claims may be brought, even if we don't think they will succeed on the language of the agreement, is, in itself, a problem. It raises the potential for regulatory chill on the domestic, national, and subnational governments; that is, they have to pause and think about whether the regulation they're planning to take could be the subject of such a challenge.

The last point I want to make before concluding and opening it up for your questions and discussion is that as more and more of the agreements are entered into on a bilateral basis, we're starting to see a real patchwork of rules pertaining to the protection, or sometimes the lack of protection, of the sovereign rights of Canada and the provinces and other nations that we're entering into agreements with to establish environmental, health, safety, and labour rights as each of those governments sees fit. Each of these agreements constrains in some way the ability of those governments to act in these areas, even while providing language that purports to protect it.

The fact that those claims can be brought at all we see as highly problematic. We also find very problematic the fact that these claims would be evaluated on a case-by-case basis and that the reasonableness of the government action to protect the environment or its legitimacy or its good faith, for example, might be in play.

To conclude, we strongly encourage that there be improvements in the language—as we've said with respect to other agreements that we've looked at—of the entire agreement and the side agreement to ensure the most beneficial provisions and strong environmental protection and regulation by the parties, and the most sustainable approaches.

We recommend that the committee advise the government that it should return the agreement to negotiation to take into account the above recommendations, including the more preferred expressions of the ability to provide for environmental regulation domestically without hindrance. We think it should extend to strong, precautionary, and protective language in the side agreement and the main agreement, as well as the similar provisions that I noted are contained in the investment agreement.

We also, as I said, recommend that the government adopt a trade policy statement similar to that of Australia's, whereby it would not accord to non-domestic investors any greater rights than domestic investors have.

Thank you once again for the opportunity to present our views.

[The Chair, Conservative, Rob Merrifield]

Thank you very much for that.

We'll move right to questions and answers.

Mr. Masse, the floor is yours for seven minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for being here today.

One of the things we sought to do when we started this was to examine the Jordan deal to see whether or not there had been significant improvements to the labour and environmental laws since the last time this came through Parliament. We heard testimony from the Jordanian ambassador the other day that suggested that there had been some significant labour improvements.

Mr. Vogt, I'll start with you with regard to clarification on some issues. There seems to be some discrepancy between our research and that of another presentation that was made. I want to get some clarification here.

Do all Jordanian workers have the right to form a union? If not, which groups do not? As well, can they form independent unions, too, or working associations?

[Jeff Vogt]

There's a number of issues there. One, I think there the law requires a monopoly union confederation, the GFJTU, the General Federation of Jordanian Trade Unions, which on its face is a violation of the principles of freedom of association.

There's also legislation stating that there can only be trade unions in certain designated industries, and in those industries you have one federation.

With regard to the kinds of workers who can join unions, I think there was an important change. It used to be the case that migrant workers were excluded from the coverage of the labour code. Now they can join a union, but it is clear from...[Technical difficulty--Editor]...that the founders be...[Technical difficulty--Editor]....

It also appears that there are limitations on the leadership of the unions—

[The Chair, Conservative, Rob Merrifield]

Just one second: can you repeat part of that?

We're losing the feed there, and you're breaking up a little bit. Can you repeat that last sentence just slowly? Let's see if it comes through that way.

[Jeff Vogt]

Sure.

I'm saying that the legislation was changed. There used to be an exclusion of migrant workers from trade unions, and that has been changed. Migrant workers can now belong to a trade union. However, they cannot be founders of trade unions. So they can't actually create a union; they must join a union.

It also appears that there may be some limitations on their ability to be an officer or a leader of a trade union.

[Brian Masse, NDP, Windsor West, ON]

So you have to join one of the designated existing unions.

Maybe you can clarify this point as well. Those unions, if I'm correct, have to get permission for the right to strike or to engage the government when work practices are problematic.

Then I want to move on quickly to another question, to something that I thought was very disturbing in your testimony. I'll mention it right now, and you can follow up. I just wanted to highlight a little bit more of this.

You talked about the agents and sub-agents, and that literally people could not leave their jobs for several months. I mean, this is indentured servitude, and I'd like you to expand upon that issue. If workers literally cannot leave their place of work, that's nothing more than slave labour, at the end of the day.

[Jeff Vogt]

On your first question about strikes, there is a lengthy notice requirement to undertake a strike, and it's longer if it's in a public service. In practice, essentially permission is required to undertake a strike. The law also allows the government to intervene and undertake mediation and conciliation, at which point a trade union cannot undertake a strike.

So there are clearly limitations on the right to strike, which contravene principles of freedom of association and collective bargaining.

With regard to the issue of forced labour, again this is drawn from an ILO report written two weeks ago. It is not a problem that's unique to Jordan. We see it throughout the Gulf, but there are a couple of issues there. One is that in order to be able to get to Jordan in the first place, some have to take out quite sizeable loans at very high rates of interest, and then they are basically stuck in situations they may not want to be in because they have to continue to work to pay off an unsustainable debt in order to freely leave.

The other issue the ILO flagged was that even after a contract of employment is over, some workers have to wait until a replacement is found in order to be able to leave their employment. That, again, is offered very clearly in the Better Work Jordan report from March of this year.

[The Chair, Conservative, Rob Merrifield]

You have one minute.

[Brian Masse, NDP, Windsor West, ON]

Very quickly, for the Canadian Environmental Law Association, I'm really curious. Can you highlight a little bit the green procurement clause you're advocating for?

Thank you.

[Theresa McClenaghan]

First of all, under NAFTA, the subnational governments are not bound by the restrictions on procurement. Second, their government procurement is protected. So we have an ongoing concern as subnational governments start to be bound by these agreements, and there is provision here that that could happen if provinces agree down the road; Canada could indicate that to Jordan.

As well, globally we have a lot of competition for green jobs and a green economy. Domestically we want to see that strengthened as well, and it takes time to build up that capacity. So during that time and going forward, we want to make sure that the agreements don't constrain that kind of ability of governments to set requirements for green procurement, especially for their own government procurement.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

Welcome to our witnesses here today.

Ms. McClenaghan, you had a fair amount to say in a short period of time, and I had a little bit of difficulty following it all. In your comments you went into environmental measures and how we should have subnational treatment and a strong system of environmental protection. I think all of us at the table here agree with that.

Then you went on to some discussion about the precautionary principle. What I understand you're advocating for is to have some environmental policies actually apply to labour regulations and investment regulations, and to always have that environmental principle. You're against investor-state provisions, but you're asking for essentially the same thing that investor-state provisions have. So you're looking at individual requirements under the law and saying there should always be a protection there for the environment. What the investor-state provisions provide for, quite frankly, is protection for the investor and for that state; they don't preclude the other country from contesting that and going to court. If they are in disagreement, they're not forced to apply those laws, but they are forced to provide compensation.

Can you explain a little bit more the difference between these two issues?

[Theresa McClenaghan]

Yes, I will. The written notes that the committee will get from me this afternoon are lengthier on this very point.

Our contention is not so much on the two states taking issue with each other if they think they've breached the agreement, and then taking that forward for resolution. Our contention on that point is the fact that an investor, a corporation or a person, a legal person, can itself bring a claim against the state for something it did by way of regulating environment, health, or labour. That is the problem.

We don't have that provision here domestically for our own companies. If the Province of Ontario or the Government of Canada passes an environmental regulation, our domestic companies could make submissions and say it's not a good idea; it's going to impact them and there might be unintended consequences. That's all fair enough. At the end of the day, the government weighs everything and says, “We think this measure is very necessary for environmental protection and we've weighed everything.” A Canadian company doesn't get to go to court and say, “My company has now been damaged by that environmental regulation, so you have to pay me money.”

But these trade agreements are putting in that right for the foreign investors to do that. That's starting to create what I call a regulatory chill problem, whereby governments have to think twice, not only in balancing all the interests, but if allegations are made that there are going to be these kinds of claims, do those claims have merit? Might they win? Will the government have to pay compensation?

Even though, as I say, I think the language goes some distance about that, they nevertheless still allow the claims to be brought. We saw that with Dow bringing a claim against Quebec's pesticide code, which was just resolved in recent months, and that was done explicitly because Ontario was thinking about doing a pesticide ban on cosmetic pesticides at the time.

I think it's a very real problem. As for addressing it, Australia and the United States don't have this provision between them. I don't think it's necessary. I think that allowing this kind of provision is going way beyond what's necessary in terms of looking at all of the other interests the government is trying to balance.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I appreciate that. This is just a statement and not a question, but certainly on the pesticide ban in Quebec, it didn't prevent Quebec from bringing in a cosmetic pesticide ban. So the municipalities still have the right to the enforcement of environmental regulations.

I want to move on to Mr. Vogt.

Mr. Vogt, I want to drill down a little further into what Mr. Masse was talking about in regard to the labour unions. I hear what you're saying, but when you appeared before us the last time, you stated that in 2008 Jordan updated its labour law. I believe foreigners are now allowed to join unions; however, they do not have voting rights and they therefore may not vote in favour of a strike.

Our understanding of the changes that have been brought in—and a bit of clarity needs to be brought to this, I believe—is that under the new laws that have been brought in, they are allowed, since I believe 2010, to join unions. They have to join a union that already exists in Jordan, and my understanding is that they may not be able to hold office, but they certainly have voting rights. Can you clarify that?

[Jeff Vogt]

Yes. I have the 2010 amendments here. They clearly state that a Jordanian national must be the founder of a trade union. Foreign workers cannot create their own unions. That is a violation of freedom of association. It also does not appear that they can be in the leadership of a trade union, which is also an issue. What is different between now and then is that then foreign migrant workers were excluded from being in trade unions, period. Now that has changed.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

And to be clear, they have voting rights.

[Jeff Vogt]

I would assume so if they can be members of a trade union. Yes.