International Trade Committee on Feb. 6th, 2023

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Ms. Coumans, as they say, things come in threes.

My last question is for you.

If you will, let us talk about the dispute resolution mechanisms between an investor and a country. We know that those mechanisms have been incorporated into a number of free trade agreements, enabling foreign multinational companies to take legal action against countries in relation to democratically adopted measures that could affect the profits of certain companies.

In 2021, this committee conducted a study, which I led, pertaining to the consequences of this. The Bloc Québécois and the NDP did not have the same positions on this matter as the Liberals and Conservatives.

According to an article published in 2019 by the Canadian Centre for Policy Alternatives, this is now the primary avenue of recourse for mining companies. Dispute resolution mechanisms are being used more and more frequently to resolve issues between investors and countries. Forty-three Canadian companies have apparently filed complaints under this mechanism, taking legal action against governments outside North America. In 70% of those cases, the investors are in the mining and energy sectors, and 86% of the countries involved are developing countries.

And yet Canada continues to sign free-trade agreements that include those mechanisms, with the exception of the Canada-United States-Mexico agreement.

What do you think of that? Is it advisable to continue doing so?

[Catherine Coumans]

I'm afraid I'm not entirely clear on what the mechanisms are that you're talking about. Are you talking about the ISDS cases?

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Yes, precisely.

[Catherine Coumans]

Okay. Great.

This aspect is really important, because we heard earlier that Canadian mining companies could possibly have a competitive disadvantage if they were held to a higher standard by Canada. Mr. Thomson very clearly said, in fact, that they would have a better chance of accessing ore bodies if they were held to a higher standard in Canada.

What we're starting to see is that countries are trying to get rid of Canadian mining companies because of the harm that they've caused. In Papua New Guinea, for example, there's a Canadian mine there called the Porgera mine. It's another Barrick gold mine. Barrick operated there for over 20 years. When the lease came up for renewal, the Papua New Guinean government said no. There have been so many human rights abuses and there's been so much environmental damage. The waste from that mine goes directly into a river system. There's no impoundment; there's no containment at all. There also have been egregious human rights abuses at that mine, so the Papua New Guinean government said, no, it was not going to renew the lease.

You would think that a sovereign government would have the right to decide not to renew a lease when the lease has come up and has been finalized. Barrick fought this first in the courts in Papua New Guinea and then filed an ISDS case with the World Bank. Thereby, it forced the hand of a very poor government. When the Papua New Guinean government finally said, “Okay, fine; we'll renew your lease”, it actually said that it didn't have the resources to fight this legal battle. This is very problematic.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Dr. Coumans.

Mr. Cannings, you have two and a half minutes, please.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I'd like to follow up on that with Ms. Coumans.

In my years of being here sitting on the natural resources committee, we did a study on the involvement of indigenous communities in natural resource extraction here in Canada. We repeatedly heard from mining companies, who brought up, I think with some pride—in fact, a lot of pride in many cases—the advances they'd made in Canada regarding impact benefit agreements with communities, making sure the communities were involved from the start, making sure that those indigenous communities benefited from the activities on their territories. However, we have this disconnect with how these same companies seem to be operating abroad, or at least we have a disconnect with their concern about having this same amount of oversight on their activities abroad.

Ms. Coumans, can you can talk about this? Where does that concern come from? You would think that these companies would want to carry that pride to all their activities.

[Catherine Coumans]

Yes, certainly, that's what we would hope and that's what we would wish for.

I've heard mining companies respond to this kind of question by saying, “Well, we just follow the laws of the country where we operate, and if we don't have to do these things, then we don't have to do them. We just follow the laws.” In fact, that is all that Canada has required of our mining companies. All that Canada does require is that our mining companies follow the laws of the country where they're operating, not live up to a higher standard.

The only way to address this problem from Canada is to implement something like mandatory human rights and environmental due diligence, because that's something we have control over. We can't, obviously—and we wouldn't want to—control the laws of other countries.

Many of these are developing countries. Many of these are very poor countries. We're talking about places like Papua New Guinea, where our Canadian mining companies are operating. We can't tell the Papua New Guineans what standards they should put on our companies, and often our companies get around those standards anyway, for various reasons. What we can do, however, is require—mandate through legislation—that our companies do environmental and human rights due diligence, that they assess the risk that their operations and the operations of their subsidiaries are putting to people and the environment, and that they then report on that risk and tell us what they've done to stop that harm from being done. If that doesn't work, then people can sue in Canada.

Quite frankly, when lawsuits are filed, it does sharpen the attention of the lawyers in the corporations and the managers of the corporations, because now they're actually being sued, and this could have real consequences.

That is something that Canada can do and that we should do.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I don't know if the official opposition has any questions.

Do you have a question? We have time to do another round of questions.

Mr. Virani, go ahead.

[Arif Virani, Liberal, Parkdale—High Park, ON]

I have two questions for Mr. Thomson and Ms. Coumans.

Thank you very much for your detailed work and your commitment to this issue. I'll ask them both at the same time.

Ms. Coumans, you've outlined a lot of the litigation that's already taken place. You have my legal brain thinking.

You also outlined that under a more rigorous due diligence standard, you would want an entrenched cause of action. If litigation has already been commenced many times, including against specific companies on repeated bases, are there already enough established causes of action, or is this forum non conveniens argument the one you're seeking to supersede with legislation?

That's the first question.

The second question is literally on a brainstorming lens.

Let's take Mr. Canning's point at face value, and I do, about indigenous communities. We've passed legislation that relates to UNDRIP in this country. UNDRIP is obviously a UN protocol that relates to indigenous people around the planet. The UNDRIP legislation that we passed calls for annual reporting. Could one interpretation of the annual reporting requirement be to compel reporting about what's happening with indigenous communities abroad that are being affected by Canadian companies?

I'm not sure if this has been thought about, or whether that even fits squarely with the legislation. I just put that out there for your thoughts.

That's for either Mr. Thomson or Ms. Coumans.

[Catherine Coumans]

I'll start with the court cases question.

What I really wanted to emphasize by mentioning these court cases is how few cases have been brought, given that those cases that have been brought are the tip of the iceberg of the actual harm.

Since 1997, we've only had eight court cases brought. Two of those were dismissed on the forum non conveniens issue. Three are ongoing at the moment. Two were settled out of court. The Nevsun case on slave labour in Eritrea was settled out of court. The Tahoe case was also settled out of court. Now the Barrick case has just been filed.

We definitely have seen the issue of forum non conveniens being the reason two cases were dismissed. They were dismissed to Guyana, where the case never went ahead, and to the Congo, where the case also never went ahead. These were both quite serious cases. They weren't heard on the merits of the case in Canada because they were just dismissed on forum non conveniens. This is a serious hurdle.

[Arif Virani, Liberal, Parkdale—High Park, ON]

Is there any comment from either of you on the UNDRIP point about the protection of indigenous folks abroad?

I appreciate it's not just indigenous communities in various parts of the world, but sometimes it is. Does that have any connection here, do you think?

[Ian Thomson]

I'll go first, and then Ms. Coumans.

I would say that the UN human rights bodies have repeatedly taken Canada to task over the impact of Canadian mining companies on indigenous peoples in other countries. If Canada were to report on that under the new legislation, I don't know if that would be anything new. I think what we're hoping for is that some of the recommendations that have come from those UN human rights bodies to actually take action and bring in stronger human rights frameworks in Canada to regulate that activity would be more significant than reporting under the new act.

To get back to the point around the foreign investment protection agreements that Canada is signing with other countries, these agreements often preclude governments from introducing more robust environmental or human rights standards and lock in legislation at the time of the agreement or when a mining contract is awarded. They really prevent governments, as Ms. Coumans alluded to, in Papua New Guinea and other countries from actually raising their own standards. This is highly problematic. I think Canada reviewing its foreign investment protection agreement template that we use again and again to entrench and strengthen corporate rights would be a significant step forward.

[The Chair, Liberal, Judy Sgro]

Did you want to make a comment, quickly?

[Catherine Coumans]

I'll just add one thing to what was just said.

In this mandatory human rights and environmental due diligence that we've been talking about, one of the requirements would be that companies would report on how they are treating indigenous peoples in their global operations. UNDRIP would come in. It would be one of the things that they would have to report in their global operations.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Thank you to our witnesses. I think we've completed the questions.

We have to go in camera for a discussion about possible upcoming travel.

Again, thank you to our witnesses. Mr. Thomson and Dr. Coumans, thank you very much.

I will suspend while we go in camera.

[Proceedings continue in camera]