Debates of April 3rd, 2009

Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act

[Ken Dryden, Liberal, York Centre, ON]

Mr. Speaker, the members for Scarborough—Guildwood and Dartmouth—Cole Harbour have already spoken very eloquently to this question, as have others I will just add a few brief comments from my own perspective.

Once we lived in a disconnected world, protected by distance, geography, oceans, mountains and deserts. Once governments and corporations could do anything they wanted, wherever they wanted to do it without any real consequences. That is no longer the case.

Now we live in a very connected world. Economic problems do not respect borders or distance nor do greenhouse gases, disease or security. What we do in one place as governments and corporations affects all of us at home in our place. That is the reality of the global world in which we live.

As to the impact of corporations on international relations, let us look at the history of the last 50 years, at the last century and more in Central America, South America, Africa and the Middle East and at what some companies have left behind. As the member for Ottawa South has said, they have left tailings and environment degradation, but some companies have also left a resentment toward the home countries of those companies that many years and decades later still define the relationship between those two countries, still define the understandings that those citizens have of those foreign countries.

Those are immense consequences for all of us, not just the companies, to deal with. It is those realities that are behind the need for Bill C-300.

About two years ago, I was in Sudan and Darfur and, like everyone else, I was haunted by Darfur. I tried to imagine what possible resolution there might be to its ongoing tragedy. What was so clear and so frustrating was the capacity of a country, Sudan, and its president, no matter the vehemence of world opinion, to do what it wanted to do if it wanted to do it with no real transforming consequences, to bog down, to distract with false hope, to wear out the patience, whatever, to do what it wanted to do.

Every governmental representative I spoke with from Canada and from other countries and every NGO said the same thing, that they were having no real impact on changing President Bashir's direction.

Only one country and one company could have an impact if they choose to do something and that country was China and the company was the state company of China Petroleum. Almost 80% of Sudan's GDP came from oil and the great majority of its oil goes to China Petroleum.

With China and China Petroleum's ongoing support, despite other sanctions and despite being charged by the International Criminal Court, Bashir knows he can continue on. What will be the results for Africa, for the world and for China's future in Africa? There are consequences of our global and corporate actions halfway around the world, and big consequences for the future.

One other thing I heard again and again in Sudan and Darfur was, “Where's Canada?” Beyond the aid offered, where was the voice, the diplomatic voice with those of many other nations that was needed to help bring this situation toward a human resolution?

What I kept hearing was that Canada had no idea how influential it was, that we had no history as a colonizer, no history of intervening or imposing on other nations, militarily or economically, and that we had no real history of exploiting and taking advantage of local governments and local populations. They trust us and know they can work with us. They know our reputation and it is a well-earned reputation. Our reputation is precious and it matters. It matters now and it will matter in the future.

In this global world, nobody is really the big guy. Even the United States, with all of its power, economically and militarily, nobody is truly that big and that powerful in a global world.

Our challenge for the future, even more than economic, environmental or security, is the challenge of getting along, and that means working with others and talking, listening, negotiating and compromising. That means trusting and being trusted.

That is our history and our instinct. That is our reputation and we cannot put it at risk. What Canadian companies do outside our borders matters. It matters to Canadians and it matters to the world, which is why Bill C-300 matters.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Mr. Speaker, it is my great pleasure to rise in the House today to speak about our Conservative government's commitment to promoting corporate social responsibility, or CSR practices, for extractive sector companies operating abroad.

I am very encouraged by the progress our government has made over the years with regard to CSR. This government not only encourages this approach to doing business but sees an active role for itself in supporting companies to develop and implement CSR practices.

In this regard, we share the goal of this bill in ensuring that Canadian companies follow the best possible practices at home and abroad. However, I am concerned that legislating corporate activity forces companies to follow a bureaucratic set of rules rather than to be innovative and create best practices that respond to a particular circumstance. The CSR best practices for one company in one region may not be suitable for another company operating elsewhere.

Not only would Bill C-300 limit the scope of CSR activities for Canadian companies by being too prescriptive, it would severely impair the ability of this government to provide the necessary guidance and assistance to avoid or mitigate potential problems. I should also point out that Bill C-300 is unnecessary.

The Canadian government's departments and crown corporations, implicated in the legal framework proposed by Bill C-300, already have in place a number of policies and guidelines to ensure that their clients are good corporate citizens. The Department of Foreign Affairs and International Trade is undertaking a comprehensive initiative to improve the capacity of its trade and diplomatic offices in Canada and abroad, so that they will have the information and tools that they need to provide timely and effective CSR counsel, advice and advocacy to our companies operating abroad.

A key element of this government's CSR approach has been adherence to the Organization for Economic Co-operation and Development guidelines for multinational enterprises, which recommend voluntary benchmarks for responsible business conduct. The Department of Foreign Affairs and International Trade is home to Canada's national Contact point, a senior level official responsible for promoting awareness of the OECD guidelines and for reviewing reports of specific instances of non-compliance with these guidelines.

In addition, Export Development Canada, or EDC, established in 2005 a compliance officer to enhance its transparency and accountability. Much like an ombudsman, the compliance officer operates independently from EDC management, reviewing complaints from stakeholders and promoting dialogue.

Withdrawing the support from these organizations provided to Canadian companies, as Bill C-300 proposes, would restrict access to vital services and financial capital. It would be counterproductive to promoting CSR best practices within the extractive sector and would put Canadian companies at a serious competitive disadvantage.

Furthermore, the proposed legislative changes would not have their intended effect. Cutting companies off from government assistance after they encounter a problem overseas is precisely the wrong thing to do. It would only serve to exacerbate the issue, further damaging Canada's reputation and that of our companies operating abroad. The preferred approach of this government is to give them the tools and information they need to avoid these problems in the first place.

As we know, in 2006 the government hosted a series of national round tables on CSR and the Canadian extractive sector in developing countries. Following these round tables, the advisory group presented their recommendations on how Canadian companies could meet or exceed leading international CSR standards and practices. Since the conclusion of the round table process, the government has met with representatives of the extractive industries and civil society in a variety of fora to continue the dialogue on a number of issues related to trade and development, including CSR.

On March 26, 2009, the Conservative government tabled its new CSR policy in Parliament, entitled “Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the Canadian International Extractive Sector”. This new strategy was developed through consultations undertaken with a number of stakeholders, including the national round tables, as well as recommendations raised by the former Standing Committee on Foreign Affairs and International Trade.

“Building the Canadian Advantage” will improve the competitive advantages of companies in the Canadian international extractive sector by enhancing their ability to manage social environmental risks. This strategy is founded on four key pillars, which I would like to outline today.

The first pillar calls for continuing assistance from CIDA for developing-country governments to enhance their capacity to manage natural resources in a sustainable and responsible manner.

The Conservative government recognizes that resource governance, transparency and accountability in developing countries are critical to ensuring that the extractive sector contributes to poverty reduction. These factors are also essential for creating a business environment that is conducive to responsible corporate conduct in countries where Canadian companies operate.

The first pillar builds on existing initiatives where CIDA has played a key role. For example, in Peru, CIDA has worked extensively with the government, mining companies and affected communities to develop regulatory requirements for social and environmental management. CIDA has also assisted Bolivia to establish a tax collection unit for hydrocarbon, generating over $1 billion in annual revenues that have been reinvested in public services for impoverished Bolivians.

The second pillar of the strategy calls for the promotion of internationally recognized voluntary CSR performance and reporting guidelines. Building on Canada's adherence to the OECD guidelines, the government will promote the following international CSR performance guidelines.

First is the international finance corporation performance standards on social and environmental sustainability for extractive projects with potential adverse social or environmental impacts. This is the de facto performance benchmark for projects in developing countries that require substantial financial investment.

Second is the voluntary principles on security and human rights for projects involving private or public security forces. At the 2009 plenary in Oslo, Canada was welcomed to this process as the first engaged government under the new participation framework.

Third is the global reporting initiative, or GRI, for CSR reporting by the extractive sector to enhance transparency and encourage market-based rewards for good CSR performance. The government will work with stakeholders to develop GRI supplements for oil and gas and junior mining companies. These widely-recognized international standards will form the basis for Canada's commitment to increasing the quality and quantity of voluntary CSR reporting by Canadian companies operating overseas.

The third pillar of the strategy involves support for the development of a new CSR centre of excellence.

The government is currently discussing with the Canadian Institute of Mining, Metallurgy and Petroleum in Montreal to provide a home for the CSR centre of excellence.

Finally, the fourth pillar of the strategy calls for the creation of a new office of the extractive sector CSR counsellor. This office would be responsible for providing assistance in the resolution of social and environmental issues related to Canadian companies operating abroad in this sector. The counsellor will review and document the CSR practices of Canadian extractive companies operating abroad and advise stakeholders on the implementation of CSR performance guidelines.

Requests for review by the counsellor may originate from an individual, group or community, or their representative, that reasonably believes that it may be adversely affected by the activities of a Canadian extractive company outside Canada. The counsellor will undertake reviews with the full consent of the involved parties. The counsellor will issue a public statement after each review and submit an annual report to be tabled in Parliament by the Minister of International Trade.

The strategy calls upon all Canadian companies working internationally to respect all applicable laws and international standards, to operate transparently and in consultation with the host government and local communities, and to develop and implement CSR best practices. The strategy also proposes a voluntary dispute resolution process that ensures fast and effective results, while remaining independent and at arms reach from government.

To conclude, I would like to reiterate that the Government of Canada, including the departments, agencies and crown corporations implicated in this bill actively support CSR principles and have independently taken steps to promote social responsibility. Corporate social responsibility is absolutely essential in a globally competitive, well-regarded extractive sector. However, Bill C-300 is not an efficient, effective nor desirable mechanism for achieving this end.

[Claude Gravelle, NDP, Nickel Belt, ON]

Mr. Speaker, I want to begin by thanking the hon. member for Scarborough—Guildwood for presenting this private member's bill on corporate accountability.

In the 38th Parliament, a similar but much stronger member's private bill was presented by the former leader of the NDP, Ed Broadbent. New Democrats have long stood for corporate accountability as a principle of international trade. I strongly believe that Canadian companies who operate overseas must be held to the same standards as they are in Canada.

Canada must see to the protection of workers, their families and the environment everywhere Canadian companies operate. I realize that that is what this legislative measure is trying to do. Unfortunately, I do not think it succeeds.

Bill C-300, an act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries, is not perfect. Its scope and application are too limited, and its enforcement mechanisms lack teeth.

There are three main areas of concern that I have with this piece of legislation.

First, the bill should be expanded to include all incorporated companies in Canada, not just companies receiving support from the Government of Canada. This is a significant loophole that would greatly weaken the application of the bill.

Second, the legislation should include additional provisions within the Criminal Code to strengthen its enforcement mechanism and to ensure that all companies operating in Canada have the same legal duty to protect workers' rights in their foreign operations as in their domestic operations.

Third, this piece of legislation should establish an ombudsman to carry out the provision of this legislation rather than relying on the minister.

As usual, the Liberal caucus and its members claim to uphold certain principles, in this case that of corporate accountability, but again they fail to deliver effective legislation to enshrine those principles into law.

While I always welcome progress on a matter of global corporate accountability, Bill C-300 would only encourage a fraction of companies operating in Canada and would have no meaningful enforcement mechanism. In other words, this bill is only aimed at encouraging companies to respect the principle of corporate accountability and not enforcing such behaviour.

Bill C-298 is a far more effective piece of legislation. The hon. member for Scarborough—Guildwood should consider putting forth or accepting two amendments to his bill similar to clauses contained in Bill C-298, especially the establishment of an ombudsman.

Overall, I feel that these issues can be resolved at the committee level, which is why I will support this bill through second reading. The most troubling thing about this bill is that it is a private member's bill. The Conservative government should be making this issue a priority and investing the appropriate resources to finally address this concern.

As a retired steelworker and Vale Inco employee I know first-hand how important it is that we stand together as workers to protect each other. I have worked for close to 35 years for a mining company which has operations outside of Canada and I want to show my solidarity with my brothers and sisters throughout the developing world by supporting the bill through second reading.

As the late Rosemary Brown said, “unless all of us are free, none of us will be free”. It is time for our government to take global corporate accountability seriously and set out clear expectations and consequences for all Canadian companies operating abroad.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I compliment my colleague from Scarborough—Guildwood for coming up with an excellent and much needed bill that more than 90% of Canadians would support if they were sitting here in the House.

The bill is needed because we are an exporting nation. We go abroad and work in some of the toughest, most difficult and impoverished countries in the world. Canadian companies can and should be leaders in corporate social responsibility, which is what my colleague from Scarborough—Guildwood is trying to do. We are trying to lead.

Why is there a need for this? In Sudan, oil is fuelling the conflict in Darfur and will fuel the catastrophe that is likely to come in the southern part of the country. We have seen the worst humanitarian catastrophe in the Democratic Republic of the Congo since World War II. More than five million people have been killed and more than 1,000 people are dying day in and day out. This conflict has been fuelled with coltan, a substance that we have in our BlackBerries, cell phones and other electronic products, and by diamonds and gold. These products are being mined and taken out by private companies.

In Burma it is rubies and oil. In Nigeria, oil is fuelling a catastrophic problem in the delta in that country. When I was in Belize I tried to stop a Canadian company from Newfoundland that was poised to build a dam. It did build the dam which destroyed the largest central contiguous jungle and rainforest in Central America. A Canadian company did that, which is why the bill is needed and more so because we know it is the private sector that can help developing countries to become self-sufficient.

It is no thanks, of course, to our government which stripped CIDA from supporting eight African countries that need our help, including countries like Zambia, Malawi and Cameroon that are trying to get back on their feet, but what does the Canadian government do? It removes the funding and puts it into countries in South America and the Caribbean because that is were it wants to do business. It is a naked effort on the part of the government to forsake our humanitarian objectives for commercial objectives, not understanding that commercial objectives and humanitarian objectives go hand in hand. That is where the bill sits.

The bill would provide businesses with a framework to operate in these difficult countries, a framework that involves an obligation to account, report and adhere to the environmental standards that all Canadians want our companies to embrace. In doing so, they would lead and set an example, not only for other companies but for the recipient countries.

The biggest challenge developing countries have is not from the lack of aid they receive externally but from the predatory governments that are riven with corruption. They cannot provide the environment to enable them to have an economy that functions properly and a government that is unable to provide for the basic social needs of its people, including health care and education. They lack the capacity and that is where aid would come in.

However, there is also a role for the private sector. Through the bill, the private sector would benefit from better profit if it would treat the local populace well, the environment well and work to build capacity so that a developing country will be able to take care of itself.

One of the cruellest things we do is persist in the standard myths that we have today that more money is the answer. We need to build capacity in developing countries. We need to invest wisely. We need to enable and obligate domestic governments to operate in a way that is not predatory and not riven with corruption. The private sector has an important and effective role in this.

Talisman is one Canadian company that has done a very good job in providing a framework for corporate social responsibility for its own company. I am very impressed with its initiative and I have talked about it often because when Canadian companies do a good thing, as the Talisman did in this case, they should be applauded.

The Canadian government has a role. By working with the private sector, as my colleague is doing, we can provide the framework for the obligation to report.

When the European Union put forward the obligation for European countries to report what they spent in developing countries, the EU found that corrupt officials were far less likely to ask for money back. It caused a diminishment of the amount of money that was moving back and forth under the table, an act that is so corrosive to the ability of any country to remove the cancer and blight that is corruption.

It is an obligation of the Canadian government to move this forward. It is also an obligation for the government to set standards and to behave in a way that is responsible, congruent with good environmental principles, good social policy, good technical support and transparency in order to set an example for the private sector and for other countries.

We would like to see Canada branded as an international model for corporate social responsibility. We want to recognize companies as leaders in corporate social responsibility. We would also like to ensure that we disseminate best practices. This is very important, because whenever I have been in other parts of the world, I have seen the great hope and possibility. I have a particular interest and passion in sub-Saharan Africa. More than 50% of the world's natural resources sit in sub-Saharan Africa. Our extractive industries are there. Many of them are in war-ravaged places, like the Democratic Republic of the Congo.

We need to facilitate and encourage those companies to operate in a way that does not contribute to the disasters that exist in those parts of the world.

I have a proposal right now, through supporting the Heal Africa Hospital in Goma. Goma is the epicentre of the rape crisis. My proposal is to ask Canadian companies working in the extractive industries there to fund a $1 million infrastructure project to provide for the expansion of the only hospital there. Many of the people there have suffered horribly. In many of the villages, 70% of the women have been raped. Those women have suffered horrible injuries. This lone hospital, run by Dr. Joe Lusi and his wife Lyn, is the last and only opportunity for these people to be treated, so we are asking Canadians companies to help.

Companies, interestingly enough, would also benefit in their own way because their profits would increase. The health of the working population would improve and the companies' relationship with local areas would improve.

What is absent in the world today is a leader who recognizes the private sector as the best engine of growth within developing countries and provides the tax base and infrastructure that these countries need to be self-sufficient.

Aid is not the answer. It is a myth to suggest that it is. To use Nigeria as the example, it has generated some $230 billion from oil over the last decade. This far exceeds by orders of magnitude the amount of money Nigeria could possibly receive from aid. Yet people who go there see a country riven by poverty where the people are no better off than they were as far back as 10 years ago. Why is that so? Where has that money gone? That money was provided by private companies, big oil-producing companies. This bill would enable us to build the framework. In the case of Nigeria, that private money could be used transparently to build capacity and the judicial, political, economic, social and public sector framework that is the only hope of a country like Nigeria to become self-sufficient.

In closing, I want to thank my colleague for introducing the bill. All of us in the Liberal Party fully support it. Instead of trying to be obstructionist about it, the government should roll up its sleeves, get behind the bill and support it for the good of our country, for the good of our private sector and for the good of some of the most impoverished countries in the world.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I want to thank all hon. members for their contributions to this debate. Naturally I prefer some members' opinions over others, but nevertheless that is the nature of debate. I thank each and every member who has contributed over the last couple of hours of debate.

We are in the final hour of debate on second reading and Bill C-300 will go to a vote on the principle of the bill.

The need for CSR supervision has already been decided. It no longer forms part of the debate. All sides agree, even the government, that there is a need for some form of CSR supervision. The debate has moved from should we do something to really how we should do it.

It may have taken the government a number of years, but on March 26, in its press release, the Government of Canada effectively admitted that there was a serious CSR issue in our country and in the extractive corporate sector. If there was no such issue, then there would have been no such announcement.

Now we will talk about whether Bill C-300 is the best response, or Bill C-298 or the government's press release.

As I said at the beginning of the debate, ideally the government would have taken over this issue and framed the response around the creation of an ombudsman, an independent officers of Parliament. Regrettably that did not happen. Now we have three choices: the government's press release, or CSR lite, as I have taken to calling it; private members' Bill C-298, creating an ombudsman; or Bill C-300, reposing the responsibility in the two ministers with sanctions.

Unfortunately Bill C-298 requires a royal recommendation and for reasons alluded to earlier in the debate, would be dead on arrival as it proposes something that a private member's bill cannot do, namely spend taxpayer money. Only government with the approval of Parliament can do so.

As delighted as I would be to support the NDP party, both for its previous member, the member from Halifax, Alexa McDonough and the member from Ottawa Centre, Ed Broadbent and currently the member for Ottawa Centre in Bill C-298, unfortunately this would be an exercise in futility.

That really leaves Bill C-300 or CSR lite.

Bill C-300 proposes a scheme of accountability which would include an ability to investigate, make findings, deal with frivolous and vexatious claims, report to Parliament and gazette the results. The government proposes an order in council appointment to assist in dispute resolution. Bill C-300 proposes a modest array of sanctions with BDC, EDC, CPP and various promotions. The government proposal is free of consequences for any offending company.

Bill C-300 proposes a review and report to Parliament. The government response, CSR lite, proposes a report by various ministers, and the tabling of that report by the Minister of International Trade to Parliament.

Therefore, should we not just declare a victory, issue a press release, pat ourselves on the back and go home? While I like and respect the Minister of International Trade, even he does not think that he is going to be the Minister of International Trade forever. A new minister may well not be so enthusiastic about CSR and may withdraw the order in council appointment. What a prime minister can make, a prime minister can also unmake.

The only meaningful protection is legislation. Bill C-300 is legislation. A press release, followed by an order in council appointment, is not. Legislation has to be repealed by an act of Parliament. An order in council proceeds at the whim of Parliament.

The effectiveness of the councillor is dependent upon the consent of the involved parties. Bill C-300 does not depend upon the willingness of the accused party to co-operate. In fact, it presumes the opposite. Bill C-300 may not have as optimistic a view of human nature as does the government, but possibly it is just a little more realistic.

While joining hands and singing Kumbaya may be a wonderful experience in Muskoka on a glorious summer night or even Haliburton, it does not cut it in the harsh light of daily life, let alone operating a business in some dreadful conditions.

I would urge all hon. members to support this bill. I am extremely grateful for the support that I have received, that this bill has received, over the past weeks and months from Amnesty International, CCIC, Development and Peace, EFC, Halifax Initiative, Mennonite Central Committee, MiningWatch, World Vision, and the list goes on and on.

I did want to thank each and every person who has supported this bill, and I hope that all hon. members see fit to vote in support of Bill C-300.

[The Acting Speaker, Conservative, Barry Devolin]

The time provided for debate has expired. Accordingly the question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Barry Devolin]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Barry Devolin]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Conservative, Barry Devolin]

In my opinion, the yeas have it.

And five or more members having risen:

Pursuant to Standing Order 93 the division stands deferred until Wednesday, April 22, immediately before the time provided for private members' business.

It being 2:20 p.m., the House stands adjourned until Monday, April 20, at 11 a.m., pursuant to Standing Orders 28(2) and 24(1).

(The House adjourned at 2:20 p.m.)