Mr. Speaker, it is good to be able to rise to speak to the issue of conflict minerals and the role Canada is playing on the international stage to address this problem.
First, I want to thank the hon. member of Parliament for Ottawa Centre for drawing attention to this important issue.
As outlined in the preamble to his bill, the Government of Canada has been active for many years in advancing initiatives designed to address that nexus between natural resources and conflict. One of his colleagues asked a few minutes ago about the role that Canada has played. One of the places we have played an important role is at the OECD with its due diligence guidance document, which has been put in place and is now gaining international acceptance.
I am pleased to say that this government agrees wholeheartedly with the hon. member that further engagement by Canada is warranted to find effective and efficient ways to address the issue of conflict minerals. However, I have to say that we do not agree that Bill C-486 would bring us closer to this goal.
He talks about establishing clear roles for transparency and accountability in his speech. We do not believe that would be the result of this bill.
Before I outline some of our concerns with the present bill, I would like to talk a bit more about how minerals have been linked to conflict and what is being done about this already.
I am sure that many members are familiar with the Kimberley process on conflict diamonds, developed in response to the use of diamonds to fund violence and conflict in such countries as Liberia and Angola in the late 1990s. Canada was a founding member of the Kimberley process. As a leading diamond producer and exporter, we continue to play an active role in the initiative.
While it is not perfect, the Kimberley process has helped to deprive criminals and armed groups of easy access to capital. However, the illicit use of minerals to fund violence, which is what is meant by the term “conflict minerals”, did not end with the establishment of the Kimberley process. While it is not perfect, it has had an impact in its area.
A new generation of conflict minerals, however, has emerged since, including gold and the so-called 3Ts: tin, tungsten, and tantalum. These minerals are used in a variety of industrial sectors, including the aerospace, automotive and, perhaps most notably, the electronics industries. Indeed, these minerals are present in all of those gadgets that we love so much.
Unfortunately, in some contexts, the illicit trade in these minerals is contributing to violence and conflict. The problem is particularly acute in the eastern part of the Democratic Republic of Congo, or DRC. The lack of state control in that part of the country benefits various armed groups that illegally control mining sites by taxing miners and trafficking in illegally sourced minerals.
Fortunately, the international community is taking action, and Canada is playing a leading role. The OECD, in co-operation with international partners, has developed a due diligence framework, which I mentioned, to foster responsible mineral supply chains. The purpose of that framework, known as the OECD due diligence guidance, is to help companies that are operating in conflict-affected and high-risk areas to identify and mitigate against risks related to their sourcing decisions and practices and to avoid contributing to human rights abuses and conflicts.
The Canadian government actively participated in the negotiation of the guidance, which includes mineral-specific supplements on gold and the 3Ts. We continue to be engaged in its promotion and implementation, and we currently chair the multi-stakeholder steering group that serves as the management committee for this forum.
What is more, several Canadian companies have been at the forefront of efforts to combat conflict minerals and have incorporated the guidance into their management systems. Others are implementing industry-led initiatives pertaining to conflict minerals that are consistent with and build upon these guidelines. For example, the members of the World Gold Council, which includes several Canadian companies, adhere to the conflict-free gold standard. The standard establishes a common approach by which gold producers can assess and provide assurance that their gold has been extracted in a responsible manner.
Several Canadian gold refiners have also been certified under the conflict-free smelter program, which was set up by the electronics industry. I should note here that smelters and refiners have been identified as the critical junction in the mineral supply chain, as traceability becomes extremely difficult after that point.
I would like to emphasize that all of these activities and initiatives are international in scope, because the mineral supply chain is global in nature. In other words, conflict minerals are an international problem, requiring international solutions to bring all the relevant actors—government, companies, and civil society—to the table.
Unfortunately, we do not believe that Bill C-486 aligns with this approach.
The genesis of the bill is clear. In its intent, it mirrors section 1502 of the U.S. Dodd-Frank Act by requiring companies to undertake due diligence activities and to report annually on these activities.
However, in contrast to the U.S. legislation, which, as I mentioned earlier, is focused on manufacturing companies, Bill C-486 is broad. It is not focused. It implicates every stage of the complex mineral supply chain.
Moreover, in contrast with the OECD guidance, which recommends targeted audits of due diligence practices at those key points that I have mentioned, Bill C-486 would require each and every report produced to be audited by an independent third party. The House can see the incredible bureaucracy that would build around this requirement.
What is the anticipated result of the implementation of this bill? It would certainly make a whole lot of companies pay for a whole lot of reports. We would also have some very happy auditors. However, do we think that anything on the ground would change as a result? Would Bill C-486 stop conflict minerals from entering international markets or put an end to the protracted and complex conflict in the DRC, which happens to be the primary focus of the member's campaign against conflict minerals? We do not believe so. The bureaucratic weight and complexity that is required by this bill would make it impossible to realize his goals.
What about the unintended consequences of focusing exclusively on the Great Lakes region of Africa? It has been a huge problem and concern with U.S. legislation that numerous countries have simply chosen to source these minerals from elsewhere, not because there is necessarily conflict where they head their operations but because the countries did not have the capacity to set up the structures that were required to do the reporting. Depriving developing economies of much needed investment and local communities of much needed empowerment would not solve the conflict minerals problem. Rather, it may exacerbate it.
There is no doubt that the ongoing conflict in the DRC has had a devastating impact on the lives of civilians, especially women and children. The prevalence of serious human rights violations in the eastern region of the DRC in particular, including continued acts of sexual violence and alleged crimes against humanity, are of huge concern to our government.
Our efforts in developing peace support operations in the DRC have included funding projects on enhancing the effectiveness of security institutions, strengthening the capacity of Congolese authorities to curtail the illicit exploitation of natural resources, and mediating and preventing conflict.
In October of 2012, our Prime Minister announced a Canadian commitment of $18.5 million over five years to provide legal, medical, and emotional support to victims of sexual violence in the DRC and to assist law enforcement agencies in bringing perpetrators of these crimes to justice.
We have also called for concerted efforts to implement concrete solutions to the conflict and advocated for the engagement of regional actors in particular to protect civilians, including women and children, and to pave the way for peace and stability in that region.
With all due respect to the concerns of the hon. member for Ottawa Centre, a complex situation like the one in the DRC cannot be solved with more red tape for these countries.
I should point out that Dodd-Frank touches specifically on manufacturing. This bill is much broader and would force companies to report at every sector, meaning the extraction sector, the transportation sector, the refining sector, the processing sector, the manufacturing sector, the retail sector, and even recycling. Those products would all require reports to be filed and then audited by third parties. We believe that is an onerous burden that does not achieve the result the member opposite would like to see.
Making progress in the fight against conflict minerals need not come at the expense of responsible investment in affected areas. For example, as I mentioned earlier, smelters and refiners have been identified as a critical juncture in the mineral supply chain. More work can be done to encourage these actors to participate in certification initiatives.
As the member mentioned earlier, this voluntary approach seems to be working. Companies such as Apple and Intel were mentioned by him as companies that have taken this seriously and are applying it.
There is no doubt that further international efforts are required to tackle the problem of conflict minerals, but pursuing a mandatory initiative such as the member has presented is not an approach this government can endorse.