International Trade Committee on April 24th, 2012
A recording is available from Parliament.
On the agenda
- Bill C-23, An Act to implement the Free Trade Agreement between Canada and the Hashemite Kingdom of Jordan, the Agreement on the Environment between Canada and the Hashemite Kingdom of Jordan and the Agreement on Labour Cooperation between Canada and the Hashemite Kingdom of Jordan
- Committee Business
The Chair Rob Merrifield
I call the meeting to order.
I want to thank our witnesses for coming forward.
Before we get to our witnesses, I especially want to thank and welcome our new members to the committee. We have Don Davies, Madam Papillon, and Monsieur Morin. Congratulations on your appointments and welcome to the committee.
Some hon. members
April 24th, 2012 / 11 a.m.
The Chair Rob Merrifield
I know that Raymond has a new and improved team with him. It's great. I congratulate him.
We'll now go to our orders of the day, the Jordan legislation, which is Bill C-23. We're planning to do to clause-by-clause on Thursday, but prior to that we want to hear from the witnesses we have before us today.
From the Council of Canadians, we have Garry Neil, the executive director. From the United Steelworkers, we have Mark Rowlinson, a labour lawyer. Thank you both for coming in.
We have had some very interesting testimony on this piece of legislation to this point. We look forward to your presentations. Then we'll follow up with questions and answers. Thank you for being here.
We'll start with you, Mr. Neil. The floor is yours.
Garry Neil Executive Director, Council of Canadians
Thank you very much, Mr. Chairman and members of the committee.
My name is Garry Neil. I am the executive director of the Council of Canadians, Canada's largest social justice organization with roughly 75,000 supporters from coast to coast to coast. Since 1985 the Council of Canadians has brought Canadians together to act for social, economic, and environmental justice here in Canada and around the world.
The council supports more balanced global trade, freer movement of people, and more robust exchanges between world cultures. But we reject the trade and investment agreements that have been negotiated by Canada, both bilaterally and multilaterally, because they create arbitrary limits on government policies designed to create jobs, protect public health, lower greenhouse gas emissions, or otherwise protect the environment.
It's pretty hard to support these agreements when we see Ontario's Green Energy Act under threat from the WTO and when we've seen Canada pay out millions of dollars to corporations under the investor-state dispute settlement provisions of investment treaties arising from challenges to legitimate Canadian public policy decisions.
We would note that just last month the United Nations Conference on Trade and Development reported that Canada has attracted the sixth-largest number of such cases of investor-state dispute settlement. UNCTAD also pointed out that governments are now wary of regulating in certain fields out of fear of lawsuits. The UNCTAD report states that “...the [investor-state dispute-settlement] regime reaches far beyond its original intention.” And UNCTAD urges “policy makers around the globe...to bring the system back to its original role of promoting good governance and fostering the rule of law.”
Free trade agreements and the WTO have been enormously successful at removing public policy barriers to corporate profits. They have been less successful at distributing wealth equitably, integrating poorer countries into the global economy, improving labour standards, or encouraging truly sustainable development.
In the free trade era, economic inequality has grown in Canada. Average real incomes, after inflation, have been stagnant. And we continue to shed high-wage and innovative manufacturing jobs in favour of resource extraction and export. Canada's balance of trade has worsened with four of the five countries with which we have fully implemented free trade agreements—Mexico, Chile, Israel, and Costa Rica. Our balance of trade with the fifth, the United States, has improved only because we are racing to the bottom with them, and they are winning at the moment. Their balance of trade has been steadily declining for a long time.
Let me turn now to the specifics of the Canada-Jordan free trade agreement.
First, with respect to the agreement on environmental protection, the council supports the position put forward by the Canadian Environmental Law Association that the GATT exception for measures necessary to protect human, animal, or plant life or health should be amended to expand the scope to include measures relating to environmental or health objectives. There are a whole range of public policies that have an important impact on environmental or health objectives even if they are primarily addressing other issues. These should be covered by the exception.
Thus, with respect to the Canada-Jordan environmental side agreement, we believe it should not be limited only to those laws the primary purpose of which is environmental protection, but should include other laws that also relate in part to environmental protection. We also think the exclusion from that side agreement of laws relating to public health and worker health and safety is not reasonable.
On the Canada-Jordan Agreement on Labour Cooperation, I won't make many comments here, since we have Mr. Rowlinson with us. With respect to the Agreement on Labour Cooperation, we share the concerns expressed to you by a number of other witnesses. In particular, we note that Jeff Vogt, legal adviser to the Department of Human and Trade Union Rights at the International Trade Union Confederation recently made the case to the committee that Jordan is not in compliance with the requirements of article 1 of the agreement, given its ongoing violations of core ILO conventions.
We would like to see a human rights impact assessment of this agreement. We urge you to recommend that a human rights impact assessment be undertaken before the FTA is approved and on an annual basis when it is in force. One of the conditions this committee set on the passage of the free trade agreement with Colombia was the inclusion of a mandatory annual human rights impact assessment of economic impacts of the agreement. We suggest that you go one step further: we recommend that one be undertaken before the FTA is implemented.
While Jordan seems to be in transition from a monarchy to a democracy, there are serious human rights concerns. According to the Freedom in the World 2011 report, Jordan had a “not free” status. Concerns include: the limitations on the ability of citizens to change the government; inequality of women and minorities; limitations on free speech and free media; restricted labour rights; and cases of arbitrary detention, torture, and loss of life. The assessment should cover labour conditions and workers' rights as well, of course.
Over the past year, under a UN Human Rights Council mandate, the Special Rapporteur on the Right to Food has developed a set of guiding principles on human rights impact assessments of trade and investment agreements. The purpose of preparing such a document prior to signing free trade or investment deals is to ensure that they are not inconsistent with a country's pre-existing treaty obligations, including those to respect, protect, and fulfill human rights.
For example, the UN report says that certain human rights may preclude a country adopting certain measures, including lowering tariffs or strengthening intellectual property rights in a way that deprives people of their rights. Also, countries should not be blocked from controlling private actors “as a result of an excessively high level of protection of foreign investors established on their territory or because of a broad understanding of the prohibition of imposing performance requirements on such investors”.
Of particular concern with respect to Jordan, of course, would be the recently implemented human right to clean water and sanitation. Jordan is one of the 10 most water-scarce countries in the world. It is dependent on the Jordan and Yarmouk Rivers for its surface water, and most of these are taken by Israel and Syria. Jordan's groundwater resources are being over-exploited. What the FTA and FIPA will do is essentially lock in existing corporate expectations, which include water intake for mining and manufacturing.
I want to add a few words about an area that I feel particularly close to, which is culture. For close to 30 years, before I became the council's executive director, I worked as a cultural policy consultant, and I've written and spoken internationally about culture and trade issues. I want to use this opportunity to make a few comments about the cultural exception, which of course I am pleased to see in the Canada-Jordan agreement.
Unfortunately, we continue to use the definition of cultural industries as it was understood in the late 1980s, when we concluded the Canada-United States Free Trade Agreement and for the first time included the cultural exception. But as these agreements have evolved, the definition needs both to be updated—to include, for example, new media and video games—and to be expanded, to include visual arts, performing arts, and crafts.
I note that the expansion language in fact is contained in Canada's free trade agreement with Colombia, and it was introduced at the insistence of Colombia. Frankly, they're correct. It needs to be in these agreements.
It is also appropriate to adopt language for culture in the FTAs that is similar to article 1-5 of the Canada-Jordan free trade agreement, which covers the relationship of the free trade agreement to the multilateral environmental agreements. In case of inconsistencies between the FTA and the MEA, the obligations under the environmental agreement prevail. Bilateral and multilateral free trade and investment agreements should now begin to provide that obligations that parties may have to each other under multilateral cultural agreements should similarly prevail over those in the free trade and investment treaties.
Just as a brief conclusion, as I think my position is pretty clear, with all that said, Mr. Chairman, we really do not believe that it is good public policy for the government to be pursuing trade and investment agreements that are economically basically meaningless with volatile and undemocratic nations like Honduras, Colombia, and Jordan.
The Chair Rob Merrifield
Thank you very much. We look forward to the opportunity to question you on some of your remarks, but before that, we'll have Mr. Rowlinson's comments.
The floor is yours, sir.
Mark Rowlinson Labour Lawyer, United Steelworkers
Thank you very much, Mr. Chairman, members of the committee. Thank you for having me.
My name is Mark Rowlinson. I'm the assistant to the Canadian national director of the United Steelworkers. I'm also a practising labour lawyer, and I'm on the International Affairs Committee of the Canadian Association of Labour Lawyers.
The United Steelworkers is an international trade union with approximately 220,000 members in Canada. Through our international work we have built strategic alliances and close working relationships with unions around the world. As a union we take a strong international perspective on the importance of workers' rights, and we are intimately familiar with the struggles of workers in the Americas and throughout the African continent. Through our ongoing work with global union federations and our own international union partnerships, we are actively involved in advancing workers' rights globally, and we are committed to ensuring that the benefits of trade are distributed to all workers. Our commitment to these issues is not merely abstract or rhetorical. Our union is involved in grassroots workers organizing around the world, and we have a deep understanding that our members' jobs here in Canada are linked to the rights and working conditions of workers outside of Canada.
Our union is also one of the few Canadian unions that has actively sought to use the labour side agreements to NAFTA to advance workers' rights. Specifically, our union was the lead petitioner in the first major case filed in Canada under the North American Agreement on Labour Cooperation in 1998, a case involving labour rights abuses in an auto parts plant in Mexico. We are also currently the lead Canadian submitter in a 2011 case under the North American Agreement on Labour Cooperation involving the plight of 44,000 members of the Mexican Electrical Workers Union. I have been involved as counsel on all those cases with which we've been involved.
We continue to be concerned that trade agreements are not written to improve labour standards, and there is little evidence that such agreements can become vehicles for the enforcement of labour rights. There is a consensus among the trade union movement in Canada that labour protections found in trade agreements thus far negotiated by the Canadian government have left a great deal to be desired. First, many of the current agreements focus exclusively on the enforcement of existing domestic labour statutes rather than on raising labour standards. Second, the enforcement mechanisms in the agreements are uniformly unsatisfactory.
The dispute resolution mechanisms are premised upon a model of political cooperation amongst the signatories, and hence the complaint process is not independent or transparent. Complaints are not investigated and evaluated by independent judicial or even quasi-judicial bodies, and further, complaints generally end with ministerial consultations. This stands, of course, in stark contrast to the investment chapters of current Canadian trade agreements, where parties are entitled to substantial, effective remedies imposed by independent quasi-judicial bodies.
As a result, the labour rights climate, for example in North America, has not improved for trade unions since the ratification of NAFTA. In Mexico in particular, where our union has been active in building relationships with our trade union colleagues, it is apparent to us that the labour rights situation is as dire as ever.
Now let me turn quickly to the labour rights situation in Jordan.
This committee has already heard from several witnesses on the labour situation in Jordan, most notably Jeff Vogt from the ITUC and Charles Kernaghan from the Institute for Global Labour and Human Rights. There's no need for me to repeat their testimony to this committee; however, I want to make a few notes regarding the labour issues at present in Jordan.
There are substantial barriers to the formation of unions in Jordan that violate ILO core labour standards. This is particularly the case with respect to migrant workers in Jordan, who are still prohibited from forming a union of their own choice. Specifically, migrant workers are not permitted under Jordanian law to participate in the establishment of a trade union or to participate in their union as leaders. Further, Jordanian law does not establish sufficient fines with respect to violations of key provisions of their labour code. There is a great deal of evidence...and you heard chilling testimony from Charles Kernaghan regarding excessive and unregulated hours of work, forced labour, terrible working conditions, and pervasive gender discrimination, particularly for migrant workers in the Jordanian garment sector.
Substantial portions of the Jordanian economy depend on a low-wage migrant workforce that works without the benefit of adequate legal protection or adequate terms and conditions of employment. The question this committee must consider, and that I wish to address, is whether the labour provisions of the Canada-Jordan FTA are sufficiently robust to meaningfully address these issues.
The Canada-Jordan FTA labour provisions follow the pattern of the most recent generation of Canadian hemispheric trade agreements, notably Canada-Peru, Canada-Colombia, and Canada-Panama FTAs.
The labour provisions of the trade agreement itself, found in chapter 11, contain very general provisions in which the parties reaffirm their obligations as members of the International Labour Organization and their commitments to the ILO Declaration on Fundamental Principles and Rights at Work.
However, the body of the trade agreement, chapter 11, only sets out general affirmations and objectives. These general statements do not, of course, provide the parties with enforceable rights. Rather, as with all previous Canadian trade agreements, the substance of the labour rights and obligations are set out in a separate labour cooperation agreement, or LCA, often called a labour side agreement.
Article 1 of the LCA affirms that each party—Canada and Jordan—shall ensure that its laws provide protection for the internationally recognized labour principles contained in the 1998 ILO declaration and the ILO's decent work agenda. These rights include freedom of association and the right to collective bargaining, the right to strike, the elimination of forced or compulsory labour, and, perhaps most significantly given the situation in Jordan, non-discrimination in respect of working conditions for migrant workers.
As such, this article does contain substantially greater labour rights than those found in, for example, the NAFTA labour agreement. Unlike NAFTA, the Canada-Jordan FTA requires the signatories to ensure that its statutes comply with ILO standards. As I said, this represents a significant improvement over the NAFTA labour side agreement. However, article 2 of the Canada-Jordan labour cooperation, the so-called non-derogation clause, only prohibits the violation of ILO standards where it can be demonstrated that this violation was done “as a means to encourage trade or investment”. This is, in our view, a significant limitation on the substantive obligations found in article 1.
The remaining obligations under the Canada-Jordan labour cooperation agreement are very similar to provisions found under, for example, the current NAFTA provisions, and largely focus on the enforcement of existing laws and the protection of procedural rights.
I want to now turn to a few observations about the enforcement mechanism under the labour side agreement.
Because labour rights are again relegated to a side agreement under this trade agreement, the enforcement of those labour rights is not subject to the same enforcement mechanism applied to all other rights in the agreement. Article 9 of the labour cooperation agreement provides for the submission, acceptance, and review of public communications. This is the only mechanism in the Canada-Jordan labour side agreement by which non-state organizations, such as unions or individuals, can file complaints under the agreement.
Under the Canada-Jordan labour side agreement, the primary complaint mechanism appears to in fact commence through ministerial consultations between the parties, which is found in article 11. In other words, the party that files a public communication has no right under the agreement to push a matter to a review panel if it is not satisfied with the ministerial consultation process.
Articles 12 and 13 provide for the review panel process, which concludes with the issuance of a further report, followed by the issuance of monetary assessments if a party refuses to comply with the report of the review panel.
It should be noted that this enforcement mechanism does contain certain significant advances over the existing NAFTA process. First, the process is less cumbersome. Second, the scope of the review panel is substantially broader.
However, many flaws remain. First, the Canada-Jordan labour side agreement is dependent upon the willingness of state signatories to pursue complaints. The complainants themselves cannot advance matters to a review panel.
Given the experience under the NAALC, in which, I would note, after 18 years no case has yet gone before an arbitration panel, it seems highly unlikely that any complaint under the Canada-Jordan labour cooperation agreement will ever get beyond the level of ministerial consultations. Again, under NAFTA, no case has ever gotten beyond the level of ministerial consultations.
Second, the Canada-Jordan labour side agreement provides every opportunity for the offending nation to negotiate a resolution to the complaint.
Finally, the penalties under the agreement are limited to relatively modest fines. There is no possibility for trade sanctions, trade tariffs, or the revocation of the trade agreement itself as a penalty for the repeated and systemic violation of the labour rights set out in the agreement.
The failure of the enforcement mechanisms stands in stark contrast to the investor-state arbitration procedures—for example, found in chapter 11 of NAFTA—that have been typically found in the free trade agreements negotiated by the Canadian government.
In conclusion, it's been our experience that labour protections found in existing trade agreements negotiated by the Canadian government have not provided real, enforceable rights for workers. Our review of the labour provisions found in the Canada-Jordan agreement reveals that while improvements have been made over the existing structure of NAFTA, the essential structure of the labour clauses found in previous agreements remains unchanged.
Given the magnitude of the labour rights issues in Jordan, we submit that simply issuing fines against the offending government is not an acceptable sanction. Moreover, it will provide little or no incentive for the Jordanian administration to meaningfully address the current issues.
In our view, the labour provisions in the Canada-Jordan FTA are not sufficiently robust to begin to address the serious labour and human rights violations that occur regularly in Jordan.
It is sometimes alleged that unions such as ours, and the Canadian labour movement in general, uniformly oppose all free trade agreements. The reality, however, is that our union understands that trade is essential to the Canadian economy. However, our experience has been that too often these trade agreements have pernicious effects on workers. Our view is that free trade agreements must raise the living standards for all who are covered by the agreements. Too often trade agreements provide great benefits to investors and corporate elites while at the same time creating downward pressure on wages and curtailing workers' rights. As such, so-called free trade agreements often lead to greater economic inequality and increasingly precarious employment for workers.
In our view, increased trade must improve the living standards for all working people who are covered by the agreement. This can only be done if trade agreements provide real, enforceable transnational rights for workers. Thus far, Canada's trade agreements have failed to provide these protections.
Thank you very much for the opportunity to address you. I look forward to your questions.
The Chair Rob Merrifield
Thank you very much for your presentation.
We'll now move to Mr. Davies for your first round of questions at this committee.
Don Davies Vancouver Kingsway, BC
Thank you, Mr. Chairman. I want to express my thanks for your welcome and to tell you how much I look forward to working together on these important files, which are so important to our country and our future economic prospects.
I would also like to thank the two witnesses for being with us today.
I would like to direct my first question to Mr. Neil, if I could.
Mr. Neil, the council, along with many other organizations, has been critical of investor-state provisions in free trade agreements. There are no such provisions in this free trade agreement, but there is a separate, stand-alone investment agreement, the foreign investment protection and promotion agreement. I'm wondering if this changes your critique or concern with this trade agreement, and if you can give us the benefit of your opinion as to which of those two models is superior, if any.
Executive Director, Council of Canadians
While I did make reference to the investor-state provisions, I'm fully aware that they're not in the free trade agreement. But we see it as a package. We see that what is happening here is a negotiation of rights for corporations, whether those be related to their investments abroad or to the export of products or the importation of products. So we see it as a package.
It's true that the issue before you is not the FIPA, it's the free trade agreement, and there are no investor-state dispute settlement provisions in it. We are very concerned, though, about the investor-state dispute settlement provisions. As they have rolled out, it has been a major problem for Canada. We've seen the Canadian government spend hundreds of millions of dollars settling cases, primarily under the North American Free Trade Agreement, and we believe that in almost every one of those cases the actions that were being disputed by the foreign investor were entirely appropriate actions on the part of governments in Canada. That's where our concern comes from.
Don Davies Vancouver Kingsway, BC
Mr. Rowlinson, we've done a bit of research, and if our figures are correct, the apparel industry in Jordan accounts for some 17% of their total exports. It's our understanding that most of those exports are produced in factories in what are called “qualified industrial zones”, which employ about 42,000 workers. Two-thirds of those workers are migrant workers, and 60% of those workers are women. Our research indicates that there have been three minimum wage increases in Jordan within the last five years: one in 2009, one in January of this year, and one slated to come in 2013. To give some perspective, the minimum wage was $155 per month in 2009. It was raised to $212 per month in that year. It was raised to $240 per month just this year, and it's going to go to $269 next year.
However, the legal minimum wage explicitly is excluded for people who work in the garment sector, which leads me to believe that minimum wages in the garment sector are probably below $155 per month. We've also heard testimony at this committee that there are concerns with issues like forced labour, excessive hours of work, physical discipline in some cases, and people not being paid their promised wages.
If that is indeed a fair description of the working conditions in the qualified industrial zones, I'm wondering if you have any suggestions as to how a free trade agreement that we would sign with Jordan might properly address those concerns.
Labour Lawyer, United Steelworkers
Certainly. Thanks very much for the question.
I think your description of the situation in the qualified industrial zones, from my knowledge, is entirely accurate. Again, I would refer you to the testimony and the report that I think was filed with you by Charles Kernaghan.
I think there's some reason to believe that these substantive rights that are listed in the labour cooperation agreement, the ILO code labour standards that Jeff Vogt referred to, do address some of the issues you're speaking about.
The problem, however, is again that the enforcement of those rights is entirely up to the states themselves, so it doesn't provide any vehicle or any mechanism for the workers or for their organizations or for any other organizations to try to enforce the rights, the discrimination, the unequal application of Jordanian law in those sectors under the labour cooperation agreement.
What's really needed is a more robust enforcement mechanism. Again, if we refer to the evidence of Mr. Kernaghan, his work and the work of other NGOs in bringing the working conditions in the Jordanian garment sector to light has been quite important in making limited progress in terms of addressing those issues. That could potentially take place by filing a complaint under the labour cooperation agreement. But unless the parties themselves are able to advance that case and unless the investigation and enforcement mechanism is more transparent, then again our experience is that these agreements don't provide enforceable rights for those workers.
If you look at the experience of the U.S.-Jordan FTA, which also contained labour rights provisions, the experience has been that the U.S.-Jordan FTA, which I think was passed in 2001, if memory serves, hasn't served to improve the working conditions of those zones to which you referred. That answers your question.
Don Davies Vancouver Kingsway, BC
Mr. Chairman, how am I doing for time?
The Chair Rob Merrifield
You've got less than a minute, and that's for the answer as well.
Don Davies Vancouver Kingsway, BC
I'll try to be quick then.
Mr. Rowlinson, do you have any information about the current status of recent labour reforms in Jordan? Is there any evidence to demonstrate that these reforms are being implemented or adequately enforced?
Labour Lawyer, United Steelworkers
I must confess I'm not an expert on Jordanian labour law, but in Jordan, as with so many other countries, there's an enormous gap between the statutory protections and the enforcement of those protections. I think that often with respect to matters of discrimination, and particularly with respect to matters involving migrant workers, the enforcement of Jordanian law is flawed.
I have no evidence to suggest that the recent reforms to which you refer—for example, the 2010 reform regarding workers organizing and migrant workers organizing—have led to an enormous increase in the organization of unions in Jordan.