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CLC President Ken Georgetti speaks to the House of Commons Standing Committee on Foreign Affairs and International Development

Presented by Ken Georgetti on Monday, 27 February 2012

(Check against delivery)

By way of opening comment, let me say that the Canadian Labour Congress has a long history of working with trade unions and Non-Governmental Organizations (NGO) throughout the world.

We’ve managed projects in over 30 countries, many of which were funded by the Canadian International Development Agency (CIDA).

The CLC does not agree with the government that partnering with the private sector to fund foreign aid projects is the best way to improve the lives of the world’s poor.

It is unconscionable that our government wants to achieve this by making Canadian profit-driven extractive, agriculture, manufacturing, tourism and other companies collaborators to foreign aid.

Already some 531 million dollars in 2009 and 336 million dollars in 2010 were spent by CIDA on NGOs and others doing so-called ‘private sector development’ to support the likes of micro credit, credit union capacity building, value chain developments and support for small and medium sized business.

We have concerns about the fact that these often exceed expenditures of many of CIDA’s other categories. In 2010, spending on education, health, environment and governance were all declining relative to 2009, while private sector development increased. We don’t know about 2011 because last year the government stopped reporting its spending on this.

Now, CIDA is funding NGOs to implement Corporate Social Responsibility (CSR) projects – projects with contributing companies like Rio Tinto Alcan, IAMGold and Barrick Gold, whose clear aim is to make profits – and CIDA is poised to continue along this vein.

Please understand we don’t object to Canadian investment abroad for the purpose of making profit.

However, trade unions from throughout the world are involved with multinational companies and we know how their self-interest can conflict with the public interest – and this is what we are worried about.

Regrettably, NGOs with a good reputation and credibility are being drawn into collaborating, no matter how laudable the results of their work might be.

The approach will certainly ease Canadian investor access to local resources and sooth the waters with communities that have already suffered or would oppose mining and other operations.

The whole approach would also invariably reduce their cost of doing business, but a point of contention is about enabling companies to protect their profits back in Canada – companies that are already reaping tremendous benefits from tax breaks, right here at home. We worry about the impacts of Canadian companies competing among themselves and others within a developing country context.

Yet Canadian taxpayers have been led to believe that funding these Corporate Social Responsibility project activities in connection to large corporations will somehow yield some form of company accountability or corporate responsibility?

This is nonsense.

The CSR projects do not in any way implement company accountability principles – as understood by the international community dealing with these issues. We’re worried that these projects will serve instead to gloss over local conflicts that have already emerged or will arise as a result of any investment project.

The Government is well aware of the degree of opposition to Canadian company projects in quite a number of countries.

In 2005, this awareness led to a groundbreaking parliamentary report calling for strong norms to deal with corporate misbehaviour such as environment and human rights violations, which are now on the rise.

Instead, the Government created a weak-kneed Extractive Sector CSR Counsellor that has already proved to be ineffective in a number of recent complaints it has handled – leaving a total vacuum for available tools to ensure company accountability. 

The CIDA CSR projects cannot be a substitute for corporate accountability.

Moreover, it’s very misleading to suggest that these CSR projects will do much to reduce poverty.

Business leaders have already appeared before this Committee, but their testimonies raise a number of questions.

They may be justified in saying that specific projects would benefit training, work experience or could result in economic effects for jobs and improved incomes. It’s what they’re not saying that’s a problem.

Their statements have to be measured against a more complete picture of costs and benefits – both positive and negative. They have to be seen in the light of social and environmental costs beyond the lifetime of these projects and compared to other scenarios that could yield greater benefits.

Evidence submitted by Mining Watch to this Committee convinces me that company operations do far more in the long term to exacerbate income gaps than to reduce poverty. The Committee cannot cast a blind eye to these realities.

At the core of any analysis about poverty is the question of jobs. I remind this Committee that Canada joined other G20 countries last year to support a “Decent Work Agenda” put forward by the International Labour Organization (ILO).

So, where’s the analysis to show the impacts of company operations on full-time and part-time jobs that will be created or lost – and what is the quality of those jobs and the conditions of work, environment, and human rights? What about livelihood issues or community well-being?

What other scenarios for investment or for CIDA expenditures would create more jobs than the paltry few that are being talked about here?

I repeat, where is the analysis?

Witnesses have also argued that company operations contribute to the tax base and thus strengthen the autonomy of local and national governments. There is strong evidence to show that company activities do quite the opposite and we have provided that to the committee in our formal brief.

In many countries, the very presence of extractive companies in rural areas also jeopardizes the integrity of Indigenous communities. 

I would like to suggest the Committee follow up by encouraging the government to:

  • Perform an analysis of both the negative and positive impacts of these company operations before venturing further on CSR exercises that blindly support or justify them. The government should also report annually to Parliament, detailing the full picture of all aspects of private sector funding.
  • Follow through with its commitment to implement the 2011 Busan High Level Forum, which emphasizes the importance of ensuring strong country ownership of development, accountability and transparency through a New Global Partnership for Effective Development.
  • Establish a Canadian legal framework for private sector accountability, based on internationally agreed ILO labour standards, the Organization for Economic Cooperation and Development guidelines on multinational enterprises, as well as the United Nations Guiding Principles for Business and Human Rights.
  • The government should be guided by the outcomes of the Canadian Westray mining disaster in instituting criminal penalties for egregious activities abroad. These corporate accountability measures are important for stemming any drive to lower occupational and other standards due to competition.
  • Promote the G20 Commitments to implement the ILO Decent Work Agenda as a direct means of eradicating poverty.