International Trade Committee on April 8th, 2014

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

Sorry to interrupt again, but I would just ask you one question.

The vertically integrated aspect, you mentioned it a few times. What is vertically integrated in your industry? Is it because you're buying the raw materials and producing a finished product?

[Peter Iliopoulos]

Essentially what we do is we buy our raw materials, then, through our own controlled facilities, we manufacture the product.

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

So where are raw materials coming from? Are they coming from Honduras?

[Peter Iliopoulos]

It could be local suppliers in Central America. Our biggest raw material is cotton, in fact, in the making of our product. That comes primarily from the United States, where we have our yarn-spinning operations. Depending on the raw material that you're referring to, there are various—

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

Okay. I just want to get a question to Ms. Oliva.

Thank you, again, Ms. Oliva.

Is it possible that certain industries, sectors, or communities, certain people, are preferred and are not affected by some of the items that you referred to in terms of human rights abuses? Or is the government saying, a Canadian company is doing a good job, so let's leave them alone? Is that maybe what's happening?

What is your comment, and I'll let the chair interrupt you.

[Bertha Oliva]

I repeat that regulations have to be created with the full respect of human rights. Those regulations have to be implemented, and that's what is not happening.

I'm not here because I am angry at anyone. I am here to present the testimonies of people who have been affected by a situation in which there are no measures to guarantee the human rights of the workers in garment factories.

For example, in this company at San Pedro Sula there are over 600 women who have presented their claims about labour rights violations. We're examining those claims so that we can avail ourselves of the Inter-American Commission on Human Rights. We want to ensure that there is a guarantee with regard to the health and the lives of these people. We're not saying that we want immediate action. We want people to think about what will be approved in the long run and we want it to be thought through.

I'm also here to encourage you to strike a commission and to not just work through diplomacy and investors. Speak to the different social groups, those that are organized, and unorganized civil society as well. Speak to the workers and to those who work within human rights organizations, because we are working for full respect for human rights. I cannot understand how, in this case, investors and companies can talk about fighting poverty when we can see the clear results in the illness rates and in the violations that workers have suffered. I can't understand it.

I think that strengthening human rights is based on a respect for human rights and ensuring their practical implementation, but it hasn't to do with imposing anything.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move to Mr. Cannan.

I believe you're going to split your time with Mr. Hoback.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I am, indeed. Thank you, Mr. Chair.

The hard-working Mr. Hoback was also the chair of ParlAmericas, so he has some first-hand experience he'll share in a moment.

Peter, just from your company's perspective, I believe it was 2001 when you entered into business, so you invested in Honduras. The close proximity to the U.S. was one of the reasons.

Can you share a little about since 2001? Obviously, you're still there. What have you done to expand your operations and why are you still there?

[Peter Iliopoulos]

As I mentioned, we've had a very positive experience in Honduras. We have grown our operations from what started in 2001 as an initial investment in a sewing operation in the country to the point now where we've put in over $700 million, represented by four textile facilities, two sock manufacturing facilities, four sewing facilities, and a screen-printing facility. We employ over 24,000 people in the country, and the biggest most distinguishing factor is that we have really been able to develop a very strong, decentralized, local management team because of the excellent quality of the expertise we have found in the country.

In addition, as part of our operations, as I mentioned, CSR is a very important business strategy for the company, and exporting Canadian values in each of the foreign countries in which we operate is of paramount importance to us. We've made a significant investment in partnering in the communities in which we operate, and we've made a significant investment in terms of developing a robust, corporate social responsibility program, which has been recognized by many international organizations. We believe—again as I mentioned—that we are really a leader in our industry with respect to this practice.

It's been a very positive experience for us in Honduras, and we hope to continue to build on that.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you.

I have a question for Ms. Oliva.

Thank you for being here as well, and thank you for continuing on in your caring, compassionate way. I've read some of your background, and it's just such a horrific situation. Your husband disappeared, and I know that none of us around the table can understand or empathize from that perspective. We want to help those people who are in Honduras.

My question to you today would be a follow-up to Mr. O'Toole's comment about whether we turn our backs and isolate or we engage the Honduran people in social development, social justice, human rights initiatives, and economic development. Do you think that's the correct direction in which we should proceed?

Supplementary to that, within the agreement itself.... We talked about rights of workers. Canada and Honduras have negotiated both a labour chapter, within the free trade agreement, and a parallel agreement on labour cooperation, including extensive enforcement obligations and associated penalties.

Under the agreement on labour cooperation, Canada is dedicated to working with Honduras to promote labour standards and better protect workers. Canada is providing labour-related technical assistance to help Honduras meet its obligations under this agreement. Do you think that is a positive initiative in addition to lowering the prices of beef and pork? Or should we just turn our backs, leave Honduras, and not engage?

[Bertha Oliva]

We feel that first the idea is to debate and arrive at agreements, but not between local businessmen and international businessmen, and not between governments. The debate and the agreements should really take place among the various social groups, among the people. Here we have Peter with a company that is fruitful and that does not have human rights violations, but we have found a different result. I think that's a good starting place.

We have to see who is telling the truth, and what can be improved and what we must do. Here, isolation would not be the best strategy. It would not be a good idea to cut off diplomatic ties either. I think it's better to forget major gains in exchange for dealing with the sacrifices and human rights violations in the garment factories, the maquilas.

I can tell you that I will await you with open arms, and I will show you the cases that show there have been human rights violations and that women who work in the garment industry have mentioned those human rights violations repeatedly. We will provide all of the information you need with regard to those human rights violations.

[The Chair, Conservative, Rob Merrifield]

I don't mean to cut you off, but I need to give a little more time to Mr. Hoback.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Gracias. Thank you very much.

[The Chair, Conservative, Rob Merrifield]

You have a minute and a half.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Mr. Chair. A minute and a half almost doesn't do it justice.

Mr. Iliopoulos, I did have the pleasure of touring your facility in Honduras with the Prime Minister, going through it and seeing how you conduct your business there. I commend you on that. As are other Canadian companies that are doing business around the world, you are doing so with good corporate social responsibility.

Can you just give us an idea of the wages you pay, the impact those jobs have on the local community, what those jobs mean to the local people there in Honduras, and what things would be like if you weren't there?

[Peter Iliopoulos]

As for what we do from a labour standpoint, first and foremost the wages that we pay are significantly above the industry minimum wages, but we don't stop there. We offer extensive benefits to our employees, and we keep building upon that year over year.

As I mentioned, we have in-house medical clinics at each of our facilities, staffed with doctors and nurses. If something were to happen, there's on-site medical support for checkups or whatever the case may be. We offer subsidized transportation for our employees so they can get to and from work, back and forth, in a safe manner. We offer subsidized meals for our employees. Working with the Ergonomics Center of North Carolina, we're in the process of developing a best-in-class ergonomics program.

We have 39 employees dedicated specifically to health and safety. We have a health and safety committee as well as an ergonomics committee. We take what is really a root-cause analysis approach, look at our manufacturing processes and practices, and conduct the review in that respect to determine whether there are any root-cause problems and address them before an injury occurs.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay.

What would the 24,000 people do if you weren't there?

[Peter Iliopoulos]

I don't know. What we're focusing on, really, is providing jobs in the country. We think that's what's most important, and obviously it would have a negative impact on the employment level if we weren't there—for sure.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

I have just one follow-up question.

Is there a minimum salary in your plants or in Honduras?

[Peter Iliopoulos]

There's an industry minimum wage.

[The Chair, Conservative, Rob Merrifield]

There's a minimum wage. Do you know what that is? Or I guess it's hard to relate it to....

[Peter Iliopoulos]

The industry minimum wage, I believe, is about $250 per month. That's what I understand. We pay wages over and significantly above that, and as I mentioned, offer significant benefits.

[The Chair, Conservative, Rob Merrifield]

Do you know what the average salary is?

[Peter Iliopoulos]

For competitive reasons, we typically don't disclose that information publicly.

[The Chair, Conservative, Rob Merrifield]

No. I mean the average salary in Honduras.