International Trade Committee on April 8th, 2014

[The Chair, Conservative, Rob Merrifield]

So thank you for your team, and for all of the others who were here as support.

With that, we will suspend as we set up our next panel.

[The Chair, Conservative, Rob Merrifield]

We want to call the meeting back to order.

We have in this hour two individuals that will testify before us and then we'll get into questions and answers. We have from the Committee of Relatives of the Detained and Disappeared in Honduras, Bertha Oliva.

Ms. Oliva, the floor is yours.

[Bertha Oliva, General Coodinator, Committee of Relatives of the Detained and Disappeared in Honduras]

Thank you very much for giving me 10 minutes to speak. I will try to make the best possible use of those 10 minutes. I will tell you what we are concerned about as human rights defenders and about my organization, COFADEH.

I'd like to give you a bit of context about the situation in that respect. For COFADEH, the situation in Honduras is of great concern. There has been a great deterioration of the human rights situation and that is why we're here. The fact that you are listening to us sends a good message that human rights should not just be a matter of words on paper. They must be made a reality. It is also necessary for you to know that, after the coup in 2009, the situation has gotten worse. It is also important for you to know, and I'm sure that you already know this, that democracy cannot be sustained if there is no full support for human rights.

That is why I would like to tell you what we've been doing and why we're concerned. We have been busy and because of greater and greater human rights violations we are obviously becoming more and more alarmed.

State institutions in Honduras exist, but in fact they do not work. There is no institutional sphere. I'm giving you this as part of the context because investors might think that if the institutions in a country are so weak, how can it be possible to invest? How can there be guaranteed returns on investment?

Another essential element to my mind is that in a country like Honduras and with people like you, how can you believe that the human rights situation is not the priority? It has to be the priority. That's what we have to say.

We have data on human rights violations that scare us. In recent times—and when I say times, I mean since last year—more than 600 women have been murdered. That's not just because they're women. It's because women have devoted themselves fully to defending the rights that have been taken away from them. Over 30 journalists have been murdered. That was not the case in our country. We did not suffer from that phenomenon before. This is a clear message that freedom of expression and the right to information are being violated.

Over 400 young people have been recently murdered. Over 120 peasants in the Bajo Aguan region alone have been murdered. The state and the agents of the state are showing absolutely no interest in investigating these murders. When there is no serious, independent, responsible investigation in a country, what you have is impunity.

We are not here to talk about the state of insecurity and the violence in the country, because Honduras is one of the most violent countries in the world. We are here to talk about serious human rights violations because violence is generalized. There is even more than what I've given you in the data that I presented, but there is also the fact that work is being done and those who speak out and who try to change things are countered by a culture of fear.

Those who defend human rights face a situation in which we are being paralyzed. In the corporate media those who defend human rights are called destabilizing elements. We help victims. We help the people. We speak out about our concerns and we try to consolidate and strengthen the rule of law in Honduras.

Right now there is a formal rule of law, but it is not there in essence. This worries us. There has been a profound worsening of the human rights situation. We are also concerned about something else. According to the work that we've been doing for years, we thought that we had overcome political intolerance and militarization.

Furthermore, we must deal with poverty. When people are poor, militarization will not solve the problem. Military intervention exists throughout the country. That is a very serious situation and we want to draw attention to that fact. We are worried because we want to strengthen this state. We want to guarantee a country with full enjoyment of human rights for the Honduran people and we have not achieved that yet; we do not see that. We have seen a consolidation of power for the party in power and that makes it impossible for the powers of the Honduran state to be independent. When power is consolidated, the logical result is necessarily harmful for human rights, and that is the situation now. It is striking and I want to draw your attention to it.

Those who want to invest in Honduras must know that the situation does not make it possible to guarantee your investments. The conditions are not there to strengthen the people either—quite the contrary. Communities are trying to put on as much pressure as they can because they are not consulted, and that leads to human rights violations.

I would also like to tell you about the internal displacement of communities, of people from one community to the other, due to the reigning state of terror. Since the elections there have also been murders among the political dissident community. We are not making this up. This is actually happening.

I would also like to draw your attention to the exodus of people from the country, not because they want to leave their country but because they are afraid of being murdered. The exodus of Hondurans continues, be it for political reasons or because they do not agree with what is going on, because when they speak out they are persecuted, threatened, and they face hostility.

Right now there is another worrying phenomenon that is a product of the concentration of state power. Most people are being persecuted through legal means. That makes it impossible for people to exercise their right to disagree with what is going on in Honduras.

I'm not sure whether I've used up my 10 minutes, but I will finish now. If you want to ask questions, I will be pleased to answer them.

[The Chair, Conservative, Rob Merrifield]

Thank you very much for your testimony.

That was very interesting. I'm sure it will stimulate some good discussion in the questions part.

Before we get there we have, from Gildan Activewear Inc., Peter.

I could try your last name, but please share your testimony with us.

[Peter Iliopoulos, Senior Vice-President, Public and Corporate Affairs, Head Office, Gildan Activewear Inc.]

Thank you, Mr. Chair.

Let me begin by expressing my sincere gratitude for the invitation to appear today. We have tremendous respect for the work of your committee. In particular, we are excited to contribute to your examination of the Canada-Honduras economic growth and prosperity act.

My name is Peter Iliopoulos and I am the Senior Vice-President, Public and Corporate Affairs, at Gildan.

I would like to start by giving you a brief overview of Gildan's operations. Gildan was founded in 1984 by the Chamandy family and is a publicly-traded company on both the Toronto Stock Exchange and the New York Stock Exchange with its headquarters based in Montreal, Quebec.

The company employs over 34,000 people worldwide and distributes its products in over 30 countries. We pride ourselves on our ability to deliver a high-value quality product to our customers, leveraged against our leading social and environmental practices and Canadian corporate governance profile.

We are a vertically integrated apparel manufacturer with our manufacturing headquarters located in Honduras. Our manufacturing operations include facilities in Honduras, the Dominican Republic, and Nicaragua. We also recently acquired a small vertically integrated manufacturing facility in Bangladesh.

As part of our vertical integration business model, we also conduct yarn-spinning operations in the United States. We distribute our products in two primary markets, namely, the wholesale channel in Canada, the United States, and other international markets, and more recently, the retail channel in the United States. We sell T-shirts, sport shirts, and fleece products in the wholesale distribution channel. For the retail channel we have expanded our product line to include socks and underwear in order to provide a full product line offering.

With respect to our operations in Honduras, they first started in 2001 and they represent the most significant piece of our overall manufacturing production. We operate four textile manufacturing facilities, two integrated sock manufacturing facilities, four sewing facilities, and a screen-printing facility, which are responsible for producing active wear, hosiery, and underwear product. In total this represents a capital investment of over $700 million. We have over 24,000 employees in the country, which makes us the largest and most important private sector employer in the region.

We established our manufacturing operations in Honduras given its strategic location in servicing our primary market in the United States. Our experience has shown that there's a very skilled workforce in Honduras, resulting in the development of a strong decentralized local management team to run our operations in the country. In Honduras we can also leverage the CAFTA-DR trade agreement, which provides goods manufactured in Honduras and the Dominican Republic duty-free access into the U.S. market.

The negotiations for the Canada-Honduras free trade agreement were completed in the summer of 2011 and the subsequent signing of the agreement occurred in November 2013. Accordingly, we are now looking forward to the upcoming ratification of the agreement that, once implemented, will allow us to effectively service the Canadian retail market, particularly against competing Asian imports.

Our corporate social responsibility program, the Gildan genuine stewardship commitment, has been evolving for over a decade and is based on four core pillars: people, environment, community, and product. CSR represents a key component of our overall business values and strategy and we believe our practices position us as a leader in the apparel industry. Our social compliance program includes a strict code of conduct and ethics based on internationally recognized standards and encompasses a very thorough audit process that includes the conducting of both independent and third-party audits at each of our facilities on a regular basis.

In 2007 Gildan became the first vertically integrated apparel manufacturer to be accredited by the Fair Labor Association, which was a stepping stone to what is now our comprehensive and robust corporate social responsibility program. In addition, each of our sewing facilities has been certified by the Worldwide Responsible Accredited Production program.

Since 2009, Gildan has been annually recognized by Jantzi-Macleans as one of Canada's 50 best corporate citizens. Furthermore, in 2013 Gildan was included in the Dow Jones Sustainability World Index and is one of only two North American companies, as well as the only Canadian company, named to DJSI World under the textiles, apparel, and luxury goods sector. The annual DJSI review is based on a thorough analysis of corporate, economic, environmental, and social performance, which covers issues such as supply chain standards and labour practices, environmental management systems, corporate governance, and risk management.

Specifically, in Honduras, Gildan was awarded for six consecutive years the seal of the Foundation for Corporate Social Responsibility, which recognizes our high standards and strong commitment to CSR in the country.

The working conditions that we offer to our employees at our worldwide locations include competitive compensation significantly above the industry minimum wage; 24-hour access to on-site medical clinics, staffed with a team of 22 doctors and 37 nurses; free transportation to and from work; and subsidized meals. We are also currently in the process of implementing a best-in-class ergonomics program in collaboration with the Ergonomics Center of North Carolina, which we expect to complete in Honduras by the end of 2014 and subsequently at each of our other locations. Most recently, we inaugurated three schools for back health in Honduras, which was a first for our industry in the country.

Overall, the working conditions that we offer our employees, who represent our greatest asset and success factor, are of paramount importance to us. After almost 15 years in the region, we have undertaken numerous initiatives in order to contribute in a meaningful manner to our employees' well-being and their communities' well-being. The following are just a few examples.

Since 2003, Gildan has partnered with the Honduran ministry of education and the U.S. Agency for International Development to offer primary and secondary education to underprivileged regions in Honduras, which has also benefited 900 of our employees. In 2010, Gildan facilitated the opening of a drug store adjacent to our on-site medical clinics at our facilities in Honduras, which in 2013 alone, provided medicine to fill more than 57,000 prescriptions issued by our on-site doctors. In 2011, one of the nurses at our on-site medical clinics developed a workshop to benefit all pregnant employees, in which close to 500 employees have participated.

From an environmental perspective, we have a strict environmental policy, an environmental code of practice, and an environmental management system. Similar to our labour compliance program, we conduct regular environmental audits at each of our facilities. We also operate highly efficient biological waste water treatment systems as well as biomass steam generation facilities, to produce energy resulting in a significant reduction of our greenhouse gas emissions.

From a community perspective, our emphasis has been on partnering in the communities in which we operate, with a focus on youth education and humanitarian aid. As one example, in 2005, we spearheaded the development of an industry-wide initiative for the creation of a technical school in Honduras. To date, this represents an investment of over $1.6 million and has resulted in 7,000 students graduating from the school.

With respect to product sustainability, all Gildan-branded products are OEKO-TEX Standard 100 certified, thus assuring consumers that our products are safe and that no harmful chemicals or materials are found in their composition.

Unfortunately, due to our time constraints, I can only present a brief summary of Gildan and our CSR practices.

I would like to conclude by addressing the importance of the Canada-Honduras free trade agreement to Gildan and its operations in Canada. Once implemented, we, as a Canadian company, will be able to compete on a more level playing field in our home country, in particular against competing Asian imports, some of which already enjoy duty-free access into the Canadian market. More specifically, this agreement will provide us with the opportunity to seek entry into the Canadian retail market, which we have not yet penetrated up to this point. Today our sales into Canada account for only 3% of our total consolidated sales.

Our entry into the Canadian retail market will also benefit Canadian consumers, by providing them with a more competitive pricing option for apparel, hosiery, and underwear products. More importantly, the presence of our product in the Canadian retail marketplace will provide Canadian consumers with the option for a competitively priced, high-quality product that will be manufactured based on leading recognized standards in the area of corporate social responsibility and Canadian values.

In closing, we look forward to the ratification of this agreement and its subsequent implementation. We have been waiting for free trade between these two countries for over a decade, and accordingly, we do hope to see a rapid implementation.

I would like to once again thank the committee for this invitation, and I look forward to your questions.

Thank you. Merci.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll start with Mr. Davies.

The floor is yours.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chairman.

Señora Oliva, welcome to the committee. I note that you have been nominated for a Nobel Peace Prize. We are honoured to have you testify before us today in Parliament.

Ms. Oliva, I think you were in the room when we heard the Department of Foreign Affairs officials testify. They essentially left the impression that the Honduran government is not responsible for the human rights situation in Honduras, that it's civil society or the narco-traffickers, or simple crime and violence that is going on in Honduras. They've even said that they can engage with the Honduran government.

I'm interested in your point of view on that. Specifically, is the Honduran state itself responsible for any of the human rights abuses or political oppression going on in Honduras?

[Bertha Oliva]

Thank you.

We would like to state something categorically. First, poverty is something that we don't understand, insofar as it is so severe in our country. When we hear Peter talking about all that is good, there are a number of serious violations of labour rights. We are working on that, because we are not getting a reaction or a response from the internal legislation. We have presented our concerns to the Inter-American Court of Human Rights. That's with regard to the Gildan enterprise. For us, it is a basic fact that young women make up the bulk of the workforce. There is never a clear vision of the health impact on these women in terms of the work they do. We wish to deal with that issue legally and with due process.

With regard to your question, I will answer it this way. We cannot deny that in Honduras there is drug trafficking and generalized violence; that is why the country has been called the most violent country. But what we are talking about, in the area in which we work, is not linked to organized crime or drug trafficking. It really has to do with human rights violations generated by state authorities against political dissidents. So we want to be very clear here.

It is difficult to work in the area of human rights right now in Honduras, because the level of crime has gone beyond what can be done. But we know that the number of deaths and arrests, with the political persecution and the accusations that have been generated within the legal system, are factors that discourage the population from making demands.

We are talking about deaths that follow a pattern. It is clearly established that the pattern is there, because there is a squad leading those murders. There is a state agent that either by omission or agency allows it. Our reiterated denunciations are that there are clandestine places, like in the old days, when COFADEH was born, where people are taken and where they are tortured. If they're lucky, they are then set free. In most cases, however, they are killed.

So yes, we cannot deny what has been said here. There is drug trafficking, and there is activity linked to drug trafficking. But we cannot allow serious human rights violations to take place with the excuse that in fact the drug trafficking problem is creating such a problem for us. In the community of Ahuas, we saw what happened there. Four people were murdered: two pregnant women, one minor, and one man of about 40 years old. The attack was important not only because there were four people killed; four people were also injured, two of whom were minors. They cannot now have a full life because of the damage caused by the attack.

So there are human rights violations, serious human rights violations, being committed under cover of drug trafficking. These attacks are against political dissidents.

We are here to ask you to consider ratifying this treaty. Think about it, look into it, go to the areas, go to Honduras, and meet with the different social groups that make up Honduras, not only with the groups that agree with this project. Don't only speak to them.

There must be an exercise to include and to create democratic stability in Honduras. It's not something that can be done in four years because what we see are fierce violations of human rights.

[Don Davies, NDP, Vancouver Kingsway, BC]

I have a quick question.

[The Chair, Conservative, Rob Merrifield]

Very quick because time is running out....

[Don Davies, NDP, Vancouver Kingsway, BC]

We've heard about the truth and reconciliation commission. Can you tell us, have the recommendations of the truth and reconciliation commission actually been implemented?

[The Chair, Conservative, Rob Merrifield]

I'll allow a very short answer.

[Bertha Oliva]

The farce of the truth and reconciliation commission, which was also supported by the Government of Canada.... We had to create a truth commission, an alternate commission, and the report is here.

But your question is a concrete question and I will answer you concretely as well. The recommendations are not being implemented fully because if they had been, we wouldn't have human rights violations. There is no state policy with regard to human rights violations and that's one of the recommendations from the truth and reconciliation commission. There is no national commissioner for human rights who is independent and represents the different social groups.

[The Chair, Conservative, Rob Merrifield]

Mr. O'Toole, you have seven minutes.

[Erin O'Toole, Conservative, Durham, ON]

Thank you, Mr. Chair, and thank you to both of our witnesses today.

Thank you, Ms. Oliva, for appearing and from your biography I've seen your extensive work in this area for several decades.

I see you helped found the group in 1981 along with other family members who lost people through death or disappearance, and your husband was a professor. Prior to that time in the 1980s, he was a professor at one of the universities. What subjects did he teach and was the economy functioning better then, so that people could pursue university and then go on to participate in the economy? Was it a different time then?

[Bertha Oliva]

Well, that's one of our concerns. We have gone back to that horrible time when COFADEH originated. COFADEH was created because of human rights violations by the state. When there is no tolerance, and that political intolerance leads to a military presence throughout the country, the logical result is human rights violations.

In the eighties when we began our work, that was the situation, political intolerance and persecution of political dissidents. That's why there were forced disappearances as a practice, and as we know, it is a crime against humanity.

We're back in that very same situation and that is why we are here. That's why we are so concerned. There is talk of democracy, but in essence, there are attacks against dissidents, against those who want to speak out, who want to talk about what's going on to improve things. We are making proposals, we want to make proposals, but we cannot. It's not possible.

COFADEH has been working for many years and after all of that work, we have collected so much evidence about what is being done against the people. For example, people who protest against mines and there are the garment factories as well. There are over 600 young women who have presented their cases over recent years. We are studying it in COFADEH because their social rights have been violated and their right to help has been violated.

We are working on all of those issues and we are showing it here, so that you can learn about this situation so that it won't surprise you if a claim about this is issued by our organization. Our organization also supports the people in the Siria Valley.

[Erin O'Toole, Conservative, Durham, ON]

Ma'am, I only have limited time. If you would allow, I will narrow down my final question to really a quintessential issue we face. We have heard it already in the first hour today.

Canada has a choice. In our own hemisphere we can either trade and engage nations—not just trading but helping build capacity—or we can choose isolation. I'm not sure how isolation helps a single Honduran. Would it not be fair to say that positive engagement through trade, diplomacy, and capacity building is really the answer to solving some of the issues your group is raising?

I do not see how isolation helps assist any of your efforts. What are your thoughts on that general topic, please?

[Bertha Oliva]

We are not proposing isolation for Honduras. We don't want that. We don't want Honduras to be isolated from Canada or from the world. What we are saying is that we want the governments of the world and the Government of Canada to monitor the situation more regularly—and not only monitor the situation but also engage, have debate, and go to people in the communities where there are companies that have violated their rights, for which we have proof. We have proof that they have committed human rights violations.

Where those human rights violations have taken place and when Canadian companies are involved, we want there to be an attempt to repair the damage. There can be no claim that poverty and problems are being fought when, essentially, we have people who are ill, when there is no right to health care.

[Erin O'Toole, Conservative, Durham, ON]

In my last minute, if I can take from what I am hearing you say, you feel there is more of a role for Canada in an engaged way than through diplomacy, trade, or development, like our work in justice system improvements, than there is in isolating and not engaging, not trading. Is that fair to say?

[Bertha Oliva]

No. What I am saying is that businesses cannot be placed above development and the protection and advocacy for human rights and respect for human rights. Things cannot be that way. There cannot just be economic progress if at the same time there is a violation of human rights.

What I am saying is that all stakeholders have to sit around the table. You have to sit with the communities, discuss issues, and repair the damages that have been done in places like el valle de Siria.

[The Chair, Conservative, Rob Merrifield]

Thank you very much. I think you made your position on that well known.

Mr. Pacetti, the floor is yours.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chair.

I was going to ask my own set of questions, but I guess I better let you, Peter, in on this. A direct question, what do you feel about what Ms. Oliva is saying?

It seems to be a little bit contradictory to what you're saying or what you're feeling. Do you have any comment?

[Peter Iliopoulos]

What I can talk about is the experiences that we have. We have been in Honduras for over 15 years. We have made a significant investment. As I mentioned during my opening remarks, our CSR program is really an important part of the overall business strategy of the company.

When we go into a country and operate, be it Honduras or any other country in which we operate, we ensure that we export the Canadian values and have a very robust corporate social responsibility program that's based on internationally recognized standards. We really believe that we are the leaders in our industry with respect to corporate social responsibility. We audit our facilities on a regular basis. Audits are done both internally, externally, and independently.

We have been recognized by many organizations in terms of our corporate social responsibility program. As I outlined, we were just listed on the Dow Jones—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Sorry to interrupt, but the community that you're in or the people who work for you, are they subject to some of these human rights? Do you see it first-hand? Is the government in your face? I don't know which examples I can give you, but do you see any of the things that Ms. Oliva has?

[Peter Iliopoulos]

We employ over 24,000 people in Honduras. We have had a very positive experience in the country and with our employees. The best example that I can give you is that when we have a job fair to hire people in the country, there are literally hundreds of people lined up outside of our facilities wanting to come work for us. That's because of the reputation that we have as an employer in the country. That's because of the investment that we've made in the communities in which we operate in Honduras. We offer extensive benefits to our employees to ensure that we have the best working conditions.