Madam Speaker, it is a pleasure to rise in the House today to speak to the issue of corporate accountability as it relates to the activities of Canadian mining and oil and gas companies operating in developing countries.
I would like to thank my hon. colleague, the member of Parliament for Scarborough—Guildwood, for introducing Bill C-300 today, and with regard to the opposition party, for their continued interest in this very important issue.
The Conservative government attaches a great deal of importance to the question of corporate social responsibility, often referred to as CSR. We encourage and expect Canadian mining and oil and gas companies working around the world to respect all applicable laws and international standards, to operate transparently and in consultation with the host government and local governments, and to conduct their activities in a socially and environmentally responsible manner.
Canada is, after all, a major player in the international extractive sector, a sector that has significant investments and operations in developing countries. Canada is a world leader in mining.
Between 1998 and 2008, the share of worldwide mining exploration attributed to Canadian companies increased from 30% to 43%. Canadian mining companies invested over $60 billion in developing countries abroad, including $41 billion in Latin America and Mexico and almost $15 billion in Africa. Total foreign direct investment in all developing countries is $80 billion.
The economic downturn that started in 2008 will likely decrease or delay further Canadian mining investments. However, the projected figures remain very impressive. For 2009-10, Natural Resources Canada estimates additional Canadian investments in Africa to be between $10 billion and $12 billion.
These investments play a very important role in Canada's economic development. Our companies not only drive prosperity here at home, they also provide jobs, opportunities, and other benefits in what are often small rural, indigenous, and isolated communities abroad. In many cases they bring vital infrastructure to communities that are without roads, hospitals, or even clean water.
As a member of the international trade committee I have had the honour of travelling to some of these communities, whether in Yemen, or last May, in Colombia, seeing the shanty towns and the displaced individuals, working with them, and seeing the Canadian companies and how they are bringing the corporate social responsibility method to the communities' tables, to bring the philosophy that a rising tide lifts all boats and all ships, and every individual has an opportunity to be a better individual with a more prosperous future.
Through global investment, this sector is making its presence and Canada's felt throughout the world in helping other countries to develop their own mining industries.
As Canadians, we recognize that with this presence overseas comes numerous social responsibilities for our corporations towards local communities and stakeholders. That is why our government actively supports CSR best practices for corporations based on internationally recognized CSR standards and principles such as the International Finance Corporation, otherwise known as IFC, and performance guidelines and the voluntary principles mentioned in the bill.
However, our Conservative government goes beyond that. We also look to the Organisation for Economic Co-operation and Development, otherwise known as OECD, the United Nations, the International Labour Organization and other leading standards around the world for inspiration. Indeed, Canadians want our companies to be a positive force in the communities in which they operate.
In fact, adopting CSR practices can be an important benefit to Canadian companies. It can improve their situation and facilitate the business climates in which our companies operate. It can promote trust and goodwill in communities and with host governments. It can also send a powerful signal to the world that Canadian businesses are upholding CSR principles and should be partners of choice around the globe.
Many Canadian companies from every sector already recognize these benefits. They have put in place voluntary CSR practices to help them manage the social, economic and environmental issues they encounter in their daily operations. They recognize that a commitment to CSR is a commitment to their own success. It makes them more competitive by giving them an enhanced social licence to operate in communities. It enhances the brand and reputation they have and helps them manage risks and therefore improve their access to capital and other financing and insurance opportunities.
Unlike these voluntary practices, Bill C-300 mandates ministers to issue guidelines that articulate corporate accountability standards but leaves the legal effect of these guidelines unclear. Therefore, our government does not believe this bill is the right approach to take. As mentioned, we support the voluntary nature of the internationally recognized CSR standards and principles.
Several Canadian industry associations and companies have been globally recognized for their leadership in CSR.
Our Canadian companies are doing their part, and the Conservative government is there to help them. Our trade commissioner service provides counselling and advice on local market conditions including local laws, risk assessments and advocacy through more than 150 offices across Canada and around the world.
The Canadian International Development Agency does tremendous work building the capacity of host governments to support economic and social investments aimed at promoting the sustainable development of rural populations within the areas of influence of the extractive sector operations.
Our partners at Export Development Canada, otherwise known as EDC, and the Canada Pension Plan Investment Board also believe that working with Canadian business to foster CSR best practice is more effective than creating a rigid and punitive legislative regime. The Canada Pension Plan Investment Board already has a policy on responsible investing by which it engages the companies in which it invests. In defining this policy the CPP investment board has taken a broad view of the impact of environmental, social and governance factors on long-term investment performance.
Let me also say that while our companies clearly recognize that CSR is an inherent part of doing business, they have indicated that there is a limit to what they are capable of providing in the area of support for the social, health and educational concerns of the communities within which they operate abroad.
Responsible business conduct cannot substitute for host government responsibility for, and therefore governance of, social and economic policy.
It can already be quite challenging for our companies to do business overseas. Unpredictable business environments, limited services and protection for investors, ill-defined or unevenly applied regulations, legislation and property rights, and weak host government institutional capacity to manage extractive sector development and associated social and environmental considerations are only some of the challenges they face, particularly in developing countries.
In that sense, while environmental stewardship and successful community involvement is a shared responsibility, and Canada can certainly offer a range of assistance to help developing counties build their own capacity to manage CSR issues, host governments ultimately remain responsible for the transparent development of legislation that meets the needs of their citizens.
Following a 2005 report on mining and CSR by the parliamentary Standing Committee on Foreign Affairs and International Trade, the Government of Canada organized the 2006 national round tables on CSR and the Canadian extractive sector in developing countries. The national round tables provided a unique opportunity to encourage a practical and solutions-oriented dialogue on ways to expand the knowledge and capacity of Canadian companies to conduct their operations in a socially and environmentally sustainable manner.
The government shares the view that more can be done to enhance the ability of the Canadian extractive sector to manage the social and environmental risks of its operations abroad and at the same time enhance the benefits arising from their investments for the local communities and the countries in which they operate.
While I know that some hon. members would prefer to address this issue by creating a punitive legislative regime and broadening the scope of our sanctions legislation, we believe it is far more effective to work with our companies and host governments to achieve these goals. Where efforts to work with host governments fail, we do have tools at our disposal. Canada has the ability to impose sanctions against foreign states in response to a call of an international body or when a grave breach of international peace and security has occurred.
In closing, I ask for the support of all hon. members, from both sides of the floor, as we continue to take steps to ensure that Canadian companies can make the most out of global opportunities while setting a high standard for CSR excellence in the communities in which they operate.
Since our government will soon be introducing and announcing a more comprehensive CSR approach for the Canadian international extractive sector, I trust that this bill is redundant.
Thank you, Madam Speaker, for giving me the opportunity to address the House on this important issue, and I look forward to discussing it further with my colleagues.