Thank you.
Honourable members, thank you for inviting Oxfam to address you today. My name is Lina Holguin, and I work for both Oxfam-Québec and Oxfam Canada. We are members of a confederation of 70 organizations working in over 90 countries. We work with partner organizations to end the injustices that cause poverty.
Oxfam cares about this legislation that is in front of you today, because for 15 years we have been working with communities impacted by the mining sector, the extractive sector. We know that by keeping communities in the dark, not knowing how much the companies are paying to their local governments, it's keeping them from seeing the positive development outcomes. This is why we're here today.
Oxfam-Québec and Oxfam Canada are both members of Publish What You Pay, and we welcome the proposed extractive sector transparency measures act. However, the point I want to make here today is that for this act to be effective and deter corruption, it must require disaggregated, company-by-company, project-level payment disclosure. I'm asking you to seriously consider the amendments put forward by Publish What You Pay Canada today, which have the full support of Oxfam.
Here are four reasons why Oxfam considers disaggregated, project-level reporting to be critical.
First, communities must know how much each company is paying their governments for each mining or oil and gas project so that they can hold their governments to account for the responsible management and use of those scarce resources. Allow me to present you with the example of Peru. It is a priority country for Canadian foreign policy and mining investment. The district of San Marcos, where the Antamina mine is located, receives large royalty transfers from the national government. The Antamina project sponsors are said to have spent $314 million between 2007 and 2013 on infrastructure and social projects in the region. But poor communities in San Marcos are not seeing the results. The district has no hospitals, no water treatment plants, and no paved highways. Nearly one third of toddlers suffer from chronic malnutrition.
If citizens in San Marcos knew specifically how much this project generated each year in payments to the government, they would be able to demand investment in their community and determine whether the amounts of transfers to the local government were actually what was legally due.
Second, we all know that corruption is not inevitable. If citizens, parliaments, and oversight institutions were empowered with project-level information, prosecutions for corruption could proceed. The transparency would serve as a powerful and cost-effective deterrent to malfeasance.
Allow me to present a second example. This is Burkina Faso, the fourth-largest producer of gold in Africa. It also ranks among the ten poorest countries in the world. With the recent overthrow of the government, transparency around the lucrative mining industry will be crucial to contribute to stability in the country during this transition. Today the people of Burkina Faso are asking their parliament to double the country's contribution of mining revenues to communities. This contribution will pay for health, for education, for clean water.
Members of Parliament, by amending the act to specifically require project-level payment disclosure, you will demonstrate your commitment to ensuring that mining revenues are properly used to tackle poverty in countries like Burkina Faso.
Third, transparency at the project level is essential to prevent conflict with communities. Furthermore, in a recent study, the University of Queensland in Australia found that delays caused by conflict with project-affected communities can incur costs of roughly $20 million per week for larger mining projects.
Fourth, Canada should not be left behind. We can and should be a leader. Project reporting is explicitly required by the U.S. Dodd–Frank Act, and the EU transparency and accounting directive. This has maybe been mentioned by the industry and by my colleagues here. Also, it is required by the global standard of the Extractive Industries Transparency Initiative and by the World Bank. It is also considered a best practice by the International Monetary Fund.
Members, you have an historic opportunity to make a low-cost contribution to fighting corruption and improving the lives of thousands of communities around the world. Our legislation should clearly require disaggregated company-by-company project-level payment disclosure now. It will establish a practical tool to tackle corruption and improve governance in the extractive sector.
Thank you.