Evidence of meeting #25 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pork.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Vincent Taddeo  Vice-President International, International, Cavendish Farms
James Bannantine  President and Chief Executive Officer, Aura Minerals Inc.
Wayne McDonald  Senior Vice-President, Corporate Relations, J.D. Irving Limited, Cavendish Farms
César Urias  Director, Latin America, Canada Pork International

12:05 p.m.

President and Chief Executive Officer, Aura Minerals Inc.

James Bannantine

At the micro level, there are lots of examples in the areas we operate: health clinics, schools, road maintenance, jobs. There are the taxes we pay to the municipality, that the municipality uses to do those things as well; our direct projects, plus the indirect projects that go through the municipality. Obviously for Hondurans we're one of the best places to live in Honduras.

On the CSR side, there are lots of examples on the ground. A couple of million dollars a year go to the local community. It's all based on community needs assessment and then community implementation of the greatest needs. The needs are quite large. The average education level in our population is the sixth grade. The per capita income is $1,000. So we're a drop in the bucket, but we still have quite a large impact.

12:05 p.m.

Conservative

Devinder Shory Conservative Calgary Northeast, AB

In terms of investments with regard to your companies, we were talking about engagement versus isolation. How practically do you think the engagement helps Hondurans on the ground?

12:05 p.m.

President and Chief Executive Officer, Aura Minerals Inc.

James Bannantine

It helps hugely to have.... In recent events that we've had, we've needed the federal government, the federal government's environmental ministry, the federal government's mining ministry, and the federal government's attorney general for human rights. We see all of these people on a regular basis, because obviously human rights and security are tied together. We see those ministries.

I don't personally have quandaries here; in my three years on the job, I have not had a personal quandary over whether we have a human rights question in terms of enforcing security at the mine. It's been pretty much law and order around our mine. That's not the case in the country at large, but we haven't personally had any human rights issues around the mine or with our workforce or with our contractors.

12:10 p.m.

Conservative

Devinder Shory Conservative Calgary Northeast, AB

Thank you.

Mr. Urias, in a statement released last November, Canada Pork International praised the signing of an FTA with Honduras. I'll quote what they said:The Canadian pork industry is very dependent on export markets sales as more than 60 percent of its production is exported outside of Canada and our industry needs to have an improved access to all possible markets to remain competitive.

So with this Canada-Honduras agreement, what do you expect the gains would be to your industry, and is there any room for the market in Honduras to expand for our Canadian pork industry?

12:10 p.m.

Director, Latin America, Canada Pork International

César Urias

Definitely. Thank you for the question.

Yes, the FDA has allowed us to expand the number of meat plants that become eligible to export to this market. We used to have a very limited number of plants that were able to do so. With this agreement, it is all the CFIA-inspected plants that can manufacture products and export them to this market. Second of all, it would represent an immediate opportunity for us to dramatically increase our market share, our participation in the market, vis-à-vis mostly the U.S.,but also other regional exporters like Costa Rica.

Overall, I think it represents probably 6% to 7% participation of our exports.

12:10 p.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much. Your time is gone, Mr. Shory.

We'll go to Mr. O'Toole next, then Mr. Caron, and we'll finish it off with Mr. Tilson.

Go ahead, Mr. O'Toole.

12:10 p.m.

Conservative

Erin O'Toole Conservative Durham, ON

Thank you, Mr. Chair.

I think Ms. Liu clarified that we were both sort of quoting Ms. Bertha Oliva who appeared before the panel, so I thought for clarity I'd actually read the transcript.

Her quote before this committee was as follows:

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 [closely]....

She then goes on to talk about rights, human rights,and engagement.

This question is for you, Mr. Bannantine, and then anyone who would like to add their perspective. Certainly we're having the debate about our free trade agreement, both in the House and here at committee. We've talked a lot about engagement. In your experience, have you been able to see, and not just through the jobs, the positive benefits of a country like Canada trading with Honduras but also engaging with Honduras on a broader level?

As part of our government's economic diplomacy, we don't just trade with these nations, we also make sure they're a country of priority on a development basis. So we help build capacity with their justice system, we work with training and improving investigations and prosecutions for the murder rate that we've heard about. We've seen the benefit in Colombia to this approach. Do you feel there is the potential to see a stronger Honduras as a result of Canadian engagement?

12:10 p.m.

President and Chief Executive Officer, Aura Minerals Inc.

James Bannantine

I definitely do. It's an eager audience with open ears, and Canada's very highly respected. I mean, for CSR, Canada is more respected than the United States. It's very balanced. They have a good track record. We work very closely with the embassy. We work very closely with ITC. When we see problems or issues on the ground, we're in a back-and-forth with the government. So the government is engaged as well. It's not just us. The administration is engaged.

There are problems that have to be fixed. Again, you have a very open set of ears to work on problems in the Honduran case. I would just reiterate also that we're into bilateral now; it would be great if it was multilateral, because Central America is a multilateral play. Logistically, politically, regulatorily, economically, the more you can get....

As Mr. Taddeo already mentioned, it's a snowball effect. Knock down Honduras and then get the rest of them, because they fit together so well and it's 50 million people as a whole. For us, it will have a big.... There's a Canadian mining company in Guatemala and there's another one in Nicaragua: we're divided as well.

12:15 p.m.

Conservative

Erin O'Toole Conservative Durham, ON

Are there any other perspectives on trade?

12:15 p.m.

Senior Vice-President, Corporate Relations, J.D. Irving Limited, Cavendish Farms

Wayne McDonald

The big issue here is that if you're not in the country doing business, you can't impact it whatsoever. As Canadian companies go, whether or not they're ambassadors of the government intentionally, they're ambassadors in those communities where we trade and where we operate.

So we have a history of being involved in other nations with other partners in business where we impact things on the ground locally.

12:15 p.m.

Conservative

Erin O'Toole Conservative Durham, ON

In your experience, in the 50 countries you're in, have you witnessed the development of those countries over the course of your commercial dealings and trade? Is it actually raising the standard of living in some of those countries?

12:15 p.m.

Vice-President International, International, Cavendish Farms

Vincent Taddeo

Without a doubt it is. Free trade is exactly that. It's a bilateral exchange where they gained, and they start shipping some of their products to us, and we also do the same. So whenever—Mr. Bannantine has suggested it—you create jobs, people tend to move away from the negatives, from the drug trade, from the stealing, from whatever is negative in that society.

Whenever we do this, we see an improvement in the lives of the people on the ground.

12:15 p.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much.

Monsieur Caron.

12:15 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Merci.

I'm an economist. I'm not opposed to free trade on the basis that...and I think it's clear from our position. I heard Mr. Hoback, for example, saying that for some reason the opposition is opposing this agreement. It's clear that we're not in favour of agreements that detract from human rights.

I heard from basically all of you that we need to be in the country, as I think Mr. McDonald just mentioned, to actually make a change. I think at some point the burden of proof needs to be on those making that claim.

Honestly, I would like to actually see, besides the anecdotes we can see in any countries with human rights problems with which we have signed free trade agreements, what type of substantial changes happened in those countries. What type of changes happened in Colombia since we signed it, or since any major industrial country signed it? There might have been a slight change in terms of the standard of living; on the other side, in terms of governance, in terms of corruption, in terms of the respect of human rights, not much has changed since then.

I'd like for us to reflect on this. The federal government has, by all the treaties it has signed, committed to actually promote the rule of law, promote good governance in other countries. How can we actually use trade agreements for that purpose? It's clear that Honduras wants this agreement, which will be beneficial in economic terms. I don't disagree with you. But we're not trying to use the interest they have in this to actually intervene and help them, to give them an incentive to raise the level and the quality of their governance, and to ensure that these human rights will actually have larger value than what they have right now.

I would like you to comment on this. I understand the main argument you've brought, and I can see why you're thinking like this. On the other side, I haven't seen any evidence that any change has occurred in the past.

I would like each of you specifically, perhaps starting with Mr. Bannantine just because we actually discussed this, to say whether you would see that in future the government should take it as its own responsibility to include those elements—promotion of good governance, elimination of corruption, and respect for human rights—within the parameters of the deals we are negotiating with countries where there are such problems.

12:20 p.m.

President and Chief Executive Officer, Aura Minerals Inc.

James Bannantine

Maybe starting at the micro level in economic terms for our company, we employ, as I said, 700 to 800 people, depending on the particular phase of production. Beyond that, there's a whole contracted community that's probably three times that. We enforce on that entire ecosystem of let's say 4,000 people, but they all touch another 10,000 people, anti-corruption. We spend $80 million in Honduras buying services, paying people, and we enforce our anti-corruption policy through that entire supply chain. We have 700 people on the job, plus the contractors.

The biggest human rights impact in the mining sector is safety. We enforce our safety standards across all 700 of those people and all 3,000 contractors who work for them. We are one of only two mines in Honduras. There should be 20 mines in Honduras. If there were 20 mining companies doing the same thing we were doing, it would spread.

We are basically, in a way, propagating the faith of CSR.

12:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

I don't deny that within the environment of the mine you're operating it might be that way, but we're talking about the whole country. We're talking about the whole system, the whole structure. It goes above and beyond what's happening around your mine. We're negotiating not with the area or the region where you are; we're negotiating with the full country, where there are some major problems.

Shouldn't government actually use the negotiations to try to raise—

12:20 p.m.

President and Chief Executive Officer, Aura Minerals Inc.

James Bannantine

I think the free trade agreement will spur more mines because of the investment protection.

12:20 p.m.

Conservative

The Chair Conservative Rob Merrifield

I'm wary of the time, Monsieur Caron, but I don't want to cut off the other witnesses. You gave the question to all of them, and I want to give them the opportunity to answer, if they would like.

Go ahead.

12:20 p.m.

Senior Vice-President, Corporate Relations, J.D. Irving Limited, Cavendish Farms

Wayne McDonald

We don't have any specific examples that we can cite here for the benefit of the committee today, but I think there is a hierarchical order whereby, if the Government of Canada is seeking a trade agreement with a global community or a country, for some of the basic issues that are being debated around human rights and social responsibility and such other major issues, there is almost a clearing house of orders. Are they a country we're prepared to do business with or not? If they are, then to use the mining example, one company will come, others will follow, and there will be a natural transgression of business in that country. But to put it on the back of the first company that wants to do business in that country, or one or two companies, is somewhat unwieldy for that individual company.

For example, if we pick a company in the world that we would like to do business with, should we sort out their political and social and economic situation, or should the Government of Canada first say that this is a country we're interested in dealing with?

I'm not sure it's fair to put on the backs of one or two companies the question of whether it is fair to do business in that country or any others.

12:20 p.m.

Conservative

The Chair Conservative Rob Merrifield

That's fair enough.

Does the pork industry want to comment on that?

12:20 p.m.

Director, Latin America, Canada Pork International

César Urias

I will, very quickly, just to mention the case you brought up of Colombia.

With Colombia—correct me if I'm wrong—the balance of trade wasn't very close to what we were selling or what we were exporting to that country and what they were sending back. Isn't it a direct representation of the opportunities that the FTA has created for them as well? Colombian companies are also making profits out of an agreement and thus also creating opportunities to create jobs locally.

In the case of Honduras, I haven't read the agreement, per se, but I know that there is a section on labour rights. Our contacts on the ground indicate that they are looking for access for affordable products precisely because that would give them the opportunity to expand their facilities, their operations. Once again, we see that thanks to an FTA we help the cause of creating jobs and also revenue and of improving the social standards of the countries we have agreements with.

12:20 p.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much.

Mr. Tilson.

12:20 p.m.

Conservative

David Tilson Conservative Dufferin—Caledon, ON

Thank you.

I'm not regularly a member of this committee—

12:25 p.m.

Conservative

The Chair Conservative Rob Merrifield

You are welcome.

12:25 p.m.

Conservative

David Tilson Conservative Dufferin—Caledon, ON

Thank you very much. It's a pleasure to be here.

This does give me an opportunity to ask you a question, Mr. Bannantine, on your involvement with the San Andres mine. The question has been asked to me not often but a number of times by constituents in my riding. It has to do with the environment; that Canadian companies go to Central America and South America and they may meet the standards of Central American companies, but they don't come close to meeting the standards of Canadian companies.