EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, November 29, 1995

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[English]

The Chair: I call to order the meeting of the Subcommittee on Human Rights of the Standing Committee on Foreign Affairs and International Trade.

Today we have three witnesses: Mr. Puritt, from the Canadian Labour Congress; from the North-South Institute, Ann Weston; and Moira Hutchinson, from the Steelworkers Humanity Fund.

Welcome. I appreciate that you came here. We aren't large in numbers, but we promise to maybe make it worth your while.

We usually have the witnesses make an initial presentation of perhaps ten minutes. If you need a little longer, that's all right too. Then we open it up to questions.

Are you prepared for that? Is that the information you were given? Okay.

We will start with the gentleman first - Mr. Puritt.

Mr. Paul Puritt (International Affairs, Canadian Labour Congress): Thank you. I brought a couple of documents I wanted to share with you.

One is the annual survey of violations of trade union rights. It was published in 1995 by the ICFTU, the International Confederation of Free Trade Unions. It lists the violation of trade union rights around the world for 1994.

In the summary at the beginning of it, you can see that the number of murders, injuries, arrests and dismissals of trade unionists has gone up in the last three years. In 1994, 528 trade unionists were killed, 1,983 were injured, and 4,353 were arrested. This was not in a war; this was just for doing their trade union work.

This was just by abiding by the Universal Declaration of Human Rights, article 23, paragraph 24, which says that people have the right to form trade unions. These people didn't have that human right as enshrined in the United Nations' universal declaration. They were either killed, injured or arrested.

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The details are in this booklet. They are produced every year by our umbrella organization. This year's statistics are worse than those of previous years.

I also brought along for you a Christmas present. This is called From the Ashes. Again it's written from the ICFTU by a Canadian who happens to work at the ICFTU now. It details what happened in the worst factory fire in history, where 188 people were killed and 469 people were injured, on May 10, 1993, just two years ago. Of the people killed, 174 were women. Many of them were 13 years of age.

They were killed in this fire because, when it broke out at 4 p.m., they found that the doors were all locked and the windows were barred. The company in question had kept this precaution to stop these young women especially from stealing what they were producing. They were producing Cabbage Patch dolls on behalf of Hasbro Inc.

I mention that it's Christmas and we give toys as a gift of love to our children, grandchildren, nieces and nephews. We often don't realize that many, if not most, of the toys we now give our children are produced by these young women in particular, in Asian countries in particular, but also in other countries, under the most horrible working conditions, which result in their human rights and their very lives being abused.

No trade union was allowed in this factory. No health and safety conditions were observed. The government investigation shows that.

If you get a chance to look through this, or if you want to put it in someone's stocking along with some of the presents, you'll find that this company, which has many contracts from all the major toy manufacturers - Hasbro, Disney, Fisher-Price, all of them - continues to work in Thailand, where they pay their workers $5 a day, but they've moved their operations even more into the new special economic zones of south China, where, as you know, the Canadian government recently went to invest as well, because they've experienced a 13% growth rate in this part of China.

They've also experienced a 62% rate of industrial accidents in that same part of China.

Many of the toys we're buying are produced in these places that are burning down every day with factory fires similar to the one described here.

There are now $3.3-billion worth of toys coming from China to the U.S. market. That doesn't even count the European and Canadian markets.

I just thought this would be an appropriate season to bring this to your attention.

The committee asked the witnesses several questions. The first one I noticed was: in the next few years, what should be the most important priorities for international action by Canada to defend and promote basic human rights?

My answer to the committee, to be cryptic and brief, is to become relevant. I don't believe our government or many other governments are relevant on this issue any more.

At the CLC we've been watching with horror as the Canadian government and many other western governments have bought into the right-wing mantras of globalization, downsizing, levelling the playing field, the logic of money markets, structural adjustment, privatization, and deregulation. All of these are ways to make us think that the process of global free trade is inevitable, unstoppable and indivisible.

This language has made the transnationals more anonymous, and it has marginalized the states. The states seem to be unable to get a handle on what's going on in our global village, which has suffered in terms of the lack of social progress and a weakening of the governments we've elected to take care of some of these issues.

We have a widening gap between rich and poor going on in Canada. After 4 p.m. today, when Mike Harris's announcements will have come down in this very province, we'll have an even wider gap.

Even Robert Reich, the American Secretary of Labour, has revealed statistics that are frightening about the gap in the United States and in North American in general between - the statistics are appalling - the smaller and smaller percentage of people who are controlling a larger and larger percentage of our wealth and the growing number of people on the bottom who are sharing even less and less of our total wealth.

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This trend is frightening. We depend on our governments to fulfil our hopes and dreams. When governments don't reflect these dreams, what happens is they get changed. We noticed the radical change in the Canadian government the last time around, with the Tory caucus becoming even smaller than the NDP caucus. We're not going to compare size of caucuses. That's not what I mean to do. But governments change when people's hopes and dreams...and this government could change too next time around unless committees like yours deal with some of these things.

At the CLC we believe the Liberal government has abandoned Canada's traditional line on human rights. It's hard to say we enjoyed a better relationship with the previous Conservative government, but it's true. The previous Conservative government imposed sanctions on South Africa, for example, in 1986. Granted, they were not the mandatory, comprehensive sanctions we had asked for, but nevertheless they were voluntary sanctions as part of a package along with the Commonwealth nations. Prime Minister Mulroney received all sorts of credit for the role he played in the whole sanctions campaign - for a couple of years. The actual sanctions that were put in place didn't last very long. Anyway, if the current Liberal government policy had been in place at that time, we wouldn't have had sanctions against South Africa.

I'm also aware that we're getting confusing messages from the current Liberal government. We're getting messages from some ministers, such as Roy MacLaren and André Ouellet, that there should be no linkage between human rights and trade, although Roy MacLaren says different things at different times on this issue. André Ouellet has said very clearly that there should not be this linkage between human rights and trade. Other ministers have said other things.

We're looking for clarity. We hope this subcommittee will help to provide some clarity for the government on this issue. Obviously we'd like clarity in making our policy not distinctively worse than that of the United States, as it's become on China, but distinctively better.

We feel we've gone from winning a Nobel Peace Prize in Lester Pearson's time in government to having our diplomats act as people who set up booths to sell Canadian widgets. We think our Canadian diplomats can do better than that in putting Canada's message out.

We're happy for this opportunity to consult, as we always are. We've consulted at every opportunity. But consultation isn't enough. The last consultation on the subject was in Toronto back in September, I recall, when the second annual foreign affairs consultation was held. I was then the lone trade union voice speaking in the wilderness. The guest list very specifically had only one trade unionist come. Maybe it's because you're not happy to hear what we have to say, but I'm afraid, given that we speak for as many people as we do, we will continue to say some of the things we're saying.

We have our own mantras. I mentioned the right-wing mantras we're afraid this government has bought into. Our mantras go something like this.

What we desire for ourselves, we wish for others. The Canadian labour movement has been in solidarity with people from outside the labour movement within Canada and in labour movements around the world for a very long time. It was the basis on which we formed back in 1956, when the Canadian Labour Congress was founded.

We also adhere to the Philadelphia Declaration of the International Labour Organization, which says poverty anywhere is a threat to prosperity everywhere. We believe what we want for ourselves...if we have breakfast this morning, we want everybody to have breakfast around the world. We think it's important we share the wealth we're creating.

The problem we are now finding is that the global economy, which has become a kind of savage capitalism - again, because it's been this way before at other times in human history - has reached a stage now where it needs limits put on it. We think a lot of people agree limits should be put on it. We all agree there should be limits to everything, even freedom of speech. You can't yell ``Fire!'' in a crowded cinema - the classic example of limitation on freedom of speech. We think savage capitalism is creating fires, such as this one in Thailand and others around the world, and it's time we put a stop to the kind of freedom that is going on, because this kind of capitalism is what led us to rush to China and other countries in search of cheap labour markets and it's going to backfire on us.

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The question is, though, what limits will be put on this kind of activity, and who will define these limits? The multinational corporations say there shouldn't be limits on their freedom, that there should be deregulation at home to make us more competitive globally. Therefore, if there's deregulation at home there should also be deregulation globally. They feel there shouldn't be either domestic or global regulation. They want to be free to do what they want, let the elephants dance among the chickens.

A bank worker is not equal to a bank president. This kind of freedom is a false freedom when the bank president can behave in the way he or she does.

The reality is that we don't have a free and unregulated global economy anyway, so their mantra doesn't make sense. The GATT, the General Agreement on Tariffs and Trade, is 20,000 pages of regulations. NAFTA is 2,000 pages of regulations. The thing is, what are they regulating? They're regulating multinationals' protectionist policy on their own rights and their own profits. They're not regulating what we would like to see regulated, which is human beings, human suffering, the rights of the workers who are producing all of this wealth.

Otherwise, I don't see how we can justify the fact that the United States was very tough on China when it came to copying compact discs. Intellectual rights were a real no-no. China couldn't do that and they were stomped on quite seriously by the United States. But when it comes to Chinese workers earning 80¢ a day, Chinese workers dying in factory fires, all of the human and trade union rights being abused daily in China, that's okay. Nobody seems to be very concerned about that regulation. We'd like to see that balance switched.

As I said, this is not a new thing. There have been attempts to regulate capital throughout this century. The League of Nations tried to regulate it in 1919. It set up the ILO, the International Labour Organization, which is now carried over into the United Nations. It's the only body of the League of Nations that was carried over from the original league.

They tried to regulate it after the Second World War with the Bretton Woods agreements. These were ways in which the international community decided that democratically elected governments had to take control of some of the worst aspects of free marketeers.

We're reaching that point again. After the 1980s, now in the 1990s, we're finding that multinationals are ruling in the place of governments. What are they moving into? They're moving into patents on the very seeds of the food we eat. Now they're talking about patenting human genes. So now not just governments but life itself will be controlled by these multinational corporations.

It's getting to the point where it reminds me of the Yiddish expression that says - roughly translated - if the rich could hire the poor to die for them, the poor would never be unemployed.

What do we do about this? I said before that there are ways that limits can be put. Three different ways are possible. One is voluntary codes of conduct, another is unilateral actions, and the third is multilateral regulations. I'll spell out a little bit just what each of these three would look like and I'll stop after that, because I realize I'm taking too long.

The first area I mentioned is voluntary codes of conduct. Some companies have already adopted these kinds of codes, such as Levi Strauss, the jeans makers, and Starbucks, the coffee producers or distributors. They've adopted codes of conduct for themselves. That's very nice and we applaud it when multinationals show a kind of ethic. For example, Levi Strauss would not invest in China because of the horrible working conditions of workers there.

Others try to govern themselves this way. We have the Bank Act, we have lawyers taking bar exams, we have doctors and police monitoring themselves. I think we all have some objections when people try to conduct their own code of conduct. Issues of police, for example, spring to mind. We think that voluntary codes, while they have a place, are better when they're monitored by independent organizations, by outsiders, where there's an enforcement code that would put teeth into them.

The second form of limits that can be put are unilateral approaches, which are basically reactionary approaches. The American GSP, the generalized system of preferences, is not a negotiated process. It's a unilateral decision that's taken by the U.S. Congress where decisions are made as to who gets most-favoured-nation status and that type of thing.

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Ann was just telling me that Canada is now debating a similar thing, a GPT. The European Union is now putting in place as well a similar thing for the European Community, a mechanism where they'll decide what's good on their own.

Other forms of unilateral action are putting stickers on bad stuff, as the World Wildlife Fund does. Brigitte Bardot puts stickers on sealskin coats, saying ``This is bad. Don't buy these.'' So they've decided what's bad and they unilaterally say don't buy those.

Others - and the trade union movement is one of them - say some stuff is good stuff, so let's put a good sticker on it. You've heard of the rug mark campaign. I believe a previous witness talked to you about rug marks, where instead of buying rugs made by four- to ten-year-old children tied to looms in Pakistan, as Iqbal Masil was, this young Pakistani kid, before he was murdered, we look for rugs that are made not with that kind of child labour and we put a little smiley face on it, saying that's a good rug to buy.

We at the Canadian Labour Congress have had in the past a union label campaign, trying to encourage Canadians to buy things made by union labour in Canada. In today's global market, we're not silly enough to think we can just stick to Canadian-made goods, but we are thinking about ``Buy Smart'' or ``Buy Wise'' - some sort of label you can stick on things saying this was made by workers who were paid a decent wage and were working in decent conditions, and therefore this is a good thing to buy. But again, it's a unilateral form of action.

While we're not saying these two shouldn't be done, the third option is the one we would promote the most. We think it's particularly appropriate for Canada, given our role in the world, and that's a multilateral form of regulation.

Some rules could be applied concerning trade, aid and international finance, creating a minimum floor, a minimum level below which we will not go, below which we agree in the world that this is obscene, like tying kids to looms to make rugs or burning people to death in factories where they're locked in - all these things that most of us would agree is beyond the pale.

We're not talking about minimum wages. We agree that every country, because of its level of development, has to define its own level of minimum wage. We're talking about a set of standards that we could agree we would all not wish to go below. This does not affect people's notions of cultural relativism.

The Chinese at the Vienna Conference on Human Rights in 1993 were saying ``Human rights are relative. You westerners are trying to impose your notion of human rights on us.'' We replied that there are some universal standards of human rights we think all human beings should live by.

The Chinese argument reminds me of the argument the Nazis could have used in the Second World War, saying ``It's just a Nazi cultural thing to burn Jews in ovens. It's not to be criticized; it's just our way of doing things. You Canadians or whoever shouldn't really criticize us for it. You treat your own native people badly, don't you? So why can't we burn Jews in ovens?'' I'm not saying the Chinese are burning anybody in ovens, but I keep going back to factory fires happening every day, and the comparison leaps to mind.

We suggested various multilateral forms of regulation to the government at the G-7 summit in Halifax this year. We met with the Prime Minister, Paul Martin, Lucienne Robillard and others and suggested that the government think seriously and talk at the G-7 about the Tobin tax.

I don't know how many of you heard Ideas on CBC last night. Jamie Swift did a program on taxes, and they interviewed James Tobin about the Tobin tax again. It's an excellent idea, we think, not necessarily to be adopted exactly as Professor Tobin laid it out, but to at least be discussed.

Find some way of taxing this trillion dollars a day that sloshes around the world in the money markets and is not related to productive activity or investment for production anywhere in the world. It's simply speculators like this guy sitting in Singapore who brought down the Barings Bank. If a tax like that could be put on that short-term speculation, it could provide a lot of revenue for a lot of good things we want to do.

Jean Chrétien and Paul Martin responded to us at the time by saying it wasn't practical and it would be hard to do this, which I find hard to swallow. You could tell me it's not practical to fly to the moon, and I'd say you're right. But it's not practical to put a tax on computer transactions, which are tracked on everybody's computers? We can do that sitting at one computer somewhere, probably. I don't think the argument of practicality is a good one.

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The bottom line of what we're promoting by way of a multilateral form of regulation is a social clause. We have a ``Santa Clause'', a notwithstanding clause, so I think we can have a social clause as well.

The social clause, we advocate, would be made up of the seven most-ratified conventions of the ILO. These are: conventions 29 and 105 on forced labour; conventions 100 and 111 on remuneration for work of equal value and non-discrimination between men and women; conventions 87 and 98 on freedom of association and the right to collectively bargain; and convention 138 on child labour and the minimum age for employment. More than 100 countries have ratified these seven-most-ratified conventions, which could be this floor we're talking about.

The Canadian government has ratified four of the seven. This is not bad for the Canadian government. Among the many countries ratifying ILO conventions, Canada is one of those that least ratify them. Canada says these are provincial government jurisdictions, so it can't ratify them. But it has ratified four of these seven.

We would call to the subcommittee's attention the fact that this social clause could be one of the ways in which we could promote the World Trade Organization. We could provide you with some ideas for how the World Trade Organization, together with the ILO, could work out a mechanism for not immediately jumping to sanctions or trade boycotts, but slowly helping Third World countries and others reach the point at which this minimum floor could be adopted by everybody.

Thank you very much.

The Chair: Thank you.

Ms Hutchinson.

Ms Moira Hutchinson (Consultant, Steelworkers Humanity Fund): I circulated ahead of time some information about the humanity fund, so I won't repeat that. But I would like to add that the Steelworkers Humanity Fund works in a labour international development committee cooperatively with three other unions that have similar labour development funds and with the Canadian Labour Congress.

I came to work with the humanity fund after 10 years with an ecumenical church organization, which addresses issue of human rights and foreign policy. Despite that experience, I was unaware, really, of the full extent of the resource that the labour movement represents in the international human rights arena. I was aware, of course, that unions, like churches, are often the only ongoing source of opposition to authoritarianism and repression. The body count that Paul provided perhaps attests to that.

I was also aware that unions are vitally important in creating democratic space and in providing for the kind of redistribution that leads to economic justice. Both of those are needed to realize human rights.

But I was unaware of the depth, breadth, concreteness and practicality of the experience of the labour movement that it contributes to the effort to define and implement a Canadian international human rights policy.

Paul focused his comments on issues of trade and globalization. Mine are going to focus on Canada's human rights policy in relation to development assistance.

As you know, CIDA has recently completed its human rights policy statement just, I think, within the last while. While CIDA has responded in the past to human rights issues, its response has been inconsistent and ad hoc. So effective and consistent implementation of this new policy will be a real challenge.

We hope that CIDA will pay serious attention to the resources for effective policy implementation available through international labour organizations such as: the ILO, the International Labour Organization; the ICFTU; and through direct partnerships of Canadian unions like the Steelworkers Humanity Fund with their counterparts in Third World countries.

In particular, I want to direct your attention to the conventions of the ILO. Paul has outlined some of the basic ones. I think they provide a very concrete point of departure for the work of assessing countries or projects to determine if trade or aid should be reduced or eliminated or if special assistance is needed to help those countries achieve those basic standards.

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ILO conventions, compared with some of the other UN human rights covenants and declarations, have some really concrete advantages. They've undergone decades of very practical interpretation related to the specific situations in countries where there are concerns about human rights. The ILO also has a highly developed monitoring and supervisory system and is able to provide information and analysis to agencies like CIDA.

Finally, the ILO conventions have been developed through a tripartite process that involves government, employers and workers. I think that's very significant in terms of the kind of acceptability you can assume their conventions would have.

The selected ILO conventions that are now generally recognized to constitute a sort of basic human rights standard are the ones Paul mentioned: freedom of association and collective bargaining; prohibiting forced labour; limiting child labour; and prohibiting discrimination in employment. These are the basic labour rights that should be used as criteria for projects supported by CIDA.

CIDA already assesses projects in terms of its commitment to policies for protecting the environment and for women in development, and it has just completed writing this new human rights policy. A workers' rights assessment process based on these basic ILO conventions would complement these initiatives.

Assessing projects doesn't involve only screening out certain projects because they fail to meet certain criteria; it should also involve promotion of labour rights.

For example, the assessment of an industrial construction project would include not only insistence that it not employ forced labour but it might also identify the need to provide assistance to unions in the creation of occupational health and safety committees and to the government of that country to improve its capacity to monitor adherence to health and safety standards.

With an assessment process in place, we would avoid the waste of development assistance resources that was described last year by John Stackhouse in a Globe and Mail article. He reported that CIDA had provided $75,000 to a local entrepreneur to build a factory in Thailand. The owner paid his 90 female employees less than the legal minimum wage and earned a profit of $167,000, which was slightly more than he paid his entire staff.

CIDA's current emphasis on private sector development and private sector development projects and programs should not be allowed to remain unhindered in supporting investment that capitalizes deliberately on the absence of basic labour rights.

With the promotion of workers' rights as a priority, we might also work more effectively for human rights in countries such as Nigeria. Canada calls for the protection of human rights and democracy, but an essential precondition for democracy is the strengthening of groups such as unions, which work to expand the democratic space and encourage effective public control of the policy agenda.

The courageous efforts of unions to oppose authoritarian power in countries like Nigeria may be effectively undercut by Canadian financing of private sector initiatives with no strings attached regarding labour rights.

For example, CIDA's profile of its programs in west Africa, published in June 1993, referred to a concentration on private sector cooperation in four countries, including Nigeria. I really wonder if this development assistance helped or hindered the Abacha government's repression of the pro-democracy unions.

The U.S. has gone much further than Canada has in using basic workers' rights as a tool for the promotion of international human rights. One of the handouts I provided to you is a comparison I drew up of Canadian and U.S. international labour rights policies, and there's a type of chart on the front that summarizes the text that follows.

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Briefly, the United States has legislated workers' rights criteria, which apply to its aid program, its vote in the international financial institutions such as the World Bank, its overseas private investment corporations, its preferential tariffs - those are the GSP and the Caribbean basin initiative - and its Omnibus Trade and Competitiveness Act of 1988.

There are strengths and limitations in the way the U.S. legislation is currently formulated and applied. It has been criticized as being motivated largely by protectionist concerns and for being a unilateral approach. The fact that a large amount of discretion is vested in the President lends credence to the criticism.

However, the counter-argument is that even if there are varied motives, including protectionism, and granting that a multilateral rather than a unilateral action is the goal, these concerns should not in themselves discredit action that has had some positive results for human rights in, for example, El Salvador, Sri Lanka, and Indonesia.

Furthermore, U.S. unions and related groups are actively campaigning for changes that would, at least partially, address some of these criticisms. They're calling for increased transparency in the process of reviewing a country's human rights status so that it's public how a decision is made to look carefully at a certain country's human rights record and to come to a conclusion about it. They're also calling for judicial review of decisions, and they are making impressive efforts to consult closely and work in solidarity with unions in countries potentially affected by the legislation.

In addition to this U.S. legislative approach that I've just described, and in the absence of multilateral agreements about social clauses, other strategies are being used in international workers' rights campaigns. Unions, for example, are finding new ways in which to work with each other across borders concerning the abuse of workers' rights by particular transnational corporations.

There are also many strategies related to a renewed interest in corporate codes of conduct, which are sometimes prepared by citizens' groups, sometimes by governments, sometimes by the companies themselves. Paul has referred to some of these.

I worked for ten years with the Task Force on the Churches and Corporate Responsibility, which was one of the advocacy groups that was sometimes able to use codes of conduct with some effect to achieve certain human rights and environmental goals.

We also came up against the limitations of reliance on codes in the absence of any legislated back-up and any other effective monitoring or enforcement mechanisms. Paul referred to that, as well.

In my current work with the steelworkers, I've continued to monitor codes of conduct. I don't have time to assess, or even review, the dozens of initiatives that are on the scene right now, but I did provide you with a copy of a paper by John Cavanagh for the International Metalworkers' Federation. It's a really up-to-date review of the codes. Its only limitation is that it doesn't give adequate attention to some of the Canadian and European initiatives.

Without assessing the overall role of codes, I would like to make a comment about how both corporate codes of conduct and legislated strategies for international human rights protection, such as that in the U.S., might be linked with development assistance in order to provide fairer and more effective implementation of an international human rights policy.

Let me begin with examples concerning child labour, which have already been briefly mentioned by Paul.

A campaign initiated by some European development agencies to end exploitation of children in India's carpet industry produced an agreement by which carpet exporters whose carpet production meets basic criteria receive an identifying label, called the ``rug mark''. Various retailers have agreed to promote this label. In addition, the exporters can, in return, funnel 1% of the carpet's import price back into a fund to provide education and rehabilitation for children.

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A second example is that when proposed legislation in the U.S. to ban all imports made by children under the age of 14 was put forward, it actually came close to having disastrous results. The garment manufacturers and exporters association in Bangladesh threatened to fire 25,000 children within a few months, leaving them in potentially worse situations.

However, negotiations involving the manufacturers, the ILO and UNICEF have resulted in a plan where all three parties will verify the end of child labour and contribute to schooling for the children and a modest stipend for their families.

I can't comment on the adequacy of the settlement, but it and the rug mark example incorporate principles that I think are important. In both of these examples, labour rights criteria, whether they're legislated or in a code of conduct, are linked with trade agreements or trade and financial or development assistance.

In the rug mark instance, you have trade involved, labour criteria and money going back to help the children affected by the imposition of these criteria. We should consider, I think, how to do this on a larger scale.

I'm going to use an example from the environmental arena as opposed to the human rights arena. Holland is currently experimenting with bilateral development pacts to promote adherence to environmental criteria. In this model, Holland might agree with the development partner, a developing country, to provide that country with preferential trade status, with financial assistance, maybe with a reduction in Holland's own carbon emissions, in return for the developing country's agreement to meet certain environmental criteria where they seem to be lacking.

I'm wondering if Canada could apply this idea to the area of labour rights. In the absence of multilateral agreements to include social clauses in trade and aid agreements, I think this kind of bilateral plan linking aid, trade and labour rights would avoid the charge that we are interested in imposing international workers' rights simply as a way of fending off cheap imports.

I'd like to close by telling you that the steelworkers, together with the other labour development funds and the Canadian Labour Congress, will be sponsoring two workshops in March and May of 1996 on the promotion of labour rights through development assistance and on options for Canadian policy.

We hope perhaps some of the members of this committee may be able to participate.

Thank you.

The Chair: Thank you.

Ms Weston.

Ms Ann Weston (Trade Program Director, North-South Institute): Thank you. Unlike my colleagues, I'm going to be rather brief. I hope that will then mean we have more time for discussion.

I did circulate, in advance, a five- or six-page document where I set out some ideas about how I think human rights, and particularly working conditions in developing countries, can be promoted by Canada and by Canada in conjunction with other countries. I thought I'd summarize some of the key points I've made in that document and perhaps add one or two extra comments on the codes of conduct issue, which has been raised by both of my colleagues here.

My background, I should explain, is mainly in the area of international trade. I'm always concerned by the number of times people bring up trade as a mechanism for promoting something. We've had trade and environment, trade and intellectual property; now we have trade and labour standards and trade and human rights.

My main concern is the extent to which by focusing on trade we're actually going to achieve our objective, which is to promote labour standards in developing countries. I would note that Canada's trade with the rest of the world, if you discount our trade with the U.S., accounts for less than 1% of world trade.

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In some respects we have to really reflect on the limitations of actions we take unilaterally. I'd like to say that there really is quite a lot we can do as Canadians. We have a wide range of mechanisms. As Moira mentioned, there are several ways in which we can use our aid program in a much more focused way to promote labour standards. We can use aid that is linked to export credits. There we have an aid, trade and human rights linkage. We could use the money that's used in connection with the Export Development Corporation in a way that is much more linked to the respect of human rights and labour standards. As well, we could work through the money that's made available by the World Bank and other international organizations to promote economic policies in developing countries that are promoting support of labour rights and working conditions.

I think the NAFTA labour side agreement is also a mechanism that as yet has been underutilized by Canada. That partly reflects the fact that Canadian provinces have not yet endorsed the labour side agreement, and that they have to before Canada can actually use the provisions to challenge non-enforcement of national standards in the other two countries, in the U.S. and in Mexico. Certainly, I think it would be interesting once the provinces have endorsed this mechanism to see to what effect we can use it to promote human rights and labour standards, particularly in Mexico.

Of course, there already is ongoing useful technical cooperation being undertaken by the three countries under the auspices of the labour side agreement, in terms of promoting best practices, for instance, in the construction industry and so on. I think that is a mechanism we could use in a much more concerted fashion and really test whether or not this is something that works well in the case of Mexico, and therefore by extension whether it would work well in other countries that might join the NAFTA, such as Chile, and whether it's a model that we could then extend to the rest of the world through the World Trade Organization.

Moira has already underlined the contribution that the International Labour Organization already makes in this area. I think it's really important that we continue to support the work of the International Labour Organization, which at the moment is in serious danger of losing funding from a major supporter, the United States. There are many aspects of the ILO's work that remain underutilized. Its petitioning mechanism, for instance, which reviews the violation of labour standards in member countries, could be used a lot more. I think it's very important that we continue to maintain our support to the ILO at this time.

The issue of the suspension of tariff preferences under the generalized preferential tariff that Canada operates has already been mentioned. Clearly, if Canada were to do anything in this area, if we were to introduce labour standards and link them to our offering preferential tariffs to countries, it would be largely symbolic. It wouldn't really have much impact. On the other hand, it would provide the beginning of a discussion before one entered into full-blown trade sanctions, and so perhaps it would be an interesting mechanism for testing out some of the ideas that we might want to promote multilaterally.

One of my concerns about linking trade sanctions to preferential tariffs or to the WTO more generally is that of course trade sanctions would tend to be biased against trade-dependent countries. Often many of these are in fact the poorer countries. The other problem with trade sanctions is they tend to be focused on the export sector by definition rather than the informal and the rural sectors where in fact most people in developing countries are employed, particularly in the low-income countries. According to the World Bank, about 80% of workers in low-income countries are in these sectors, in non-wage employment. So really the question for me is if we're interested in promoting working conditions for poor people, how best do we do it? Certainly, trade sanctions aren't going to be a sufficient mechanism.

I think one area that could be quite interesting to pursue is the rules covering international investment. Certainly there's a lot more discussion now in the context of the World Trade Organization for extending the rules governing international investment. Most of the discussion is about how we can liberalize foreign investment regimes through the WTO. But I think at the same time we're providing the opportunities for investors globally we ought to be talking about new responsibilities. It would be possible to talk about the extent to which foreign investors respect labour standards in that context, as well as talking about things like restrictive business practices. In other words, I would argue that we shouldn't just be talking about increased rights for these foreign investors, but also increased responsibilities.

.1645

That sort of discussion has been raised in the context of the UN codes of conduct. At the moment negotiations on the UN code of conduct for foreign investors, for TNCs, are not active. Most of this discussion is going on within the context of the OECD, or now in the context of the WTO. But I think it is important to try to bring some of the experience from the UN discussions into these other arenas.

I'd also like to mention some of the discussions that arose at a workshop the institute organized earlier this year. The purpose of this workshop was quite interesting. It was to review the various mechanisms that exist for promoting human rights through trade. Besides talking about codes of conduct, we discussed some of the issues that have been raised already today: social labelling, the use of the ILO, the NAFTA and the WTO.

I suppose the point of the workshop was really to show Canadians, and particularly the government, that there is a full range of strategies we can chose from. We might not necessarily want to have trade sanctions at the moment, but certainly there are a lot of other ways in which we can make sure trade promotes working conditions, particularly in developing countries.

Codes of conduct were used quite extensively in the context of South Africa, but today there's a lot of renewed interest in codes of conduct, as has already been mentioned. This is partly because the business community realizes there's a market opportunity out there. It could well be a ploy to cash in on what's called the ``ethical market'', following in the footsteps of, for instance, the green market. But I think also some companies do have values they're trying to articulate. In other words, some companies do believe if they treat their workers better, that will have a positive impact on productivity. In other words, I think ethical codes could affect both the supply and the demand side of the business equation.

Certainly in Canada it seems the business community is now taking codes of conduct more seriously. This partly could reflect pressure from the task force, as Moira has mentioned.

I think it's important also to talk about a conference the BCNI, the Business Council on National Issues, is planning to hold early in 1996 with the International Centre for Human Rights and Democratic Development. I'm sure when Mr. Broadbent appears before the committee he'll be talking about this some more. But I think the point of this workshop is to explore what more can be done in this area by businesses operating either individually or collectively. I'd like to suggest one possible outcome of this type of collaboration could be the creation of what one might call a ``National Round Table on Ethics and the Economy'', which would bring together business, government, and the social sector to provide advice on corporate behaviour, to inject a sense of accountability by corporations extending beyond their boardrooms or their meetings of shareholders to the broader public.

I guess an important question for the government and for this committee is how far this voluntary self-policing approach can go and what actions are needed when corporations engage in behaviour that appears to flout their own guidelines, or guidelines that might be agreed on collectively. The nature of the codes - should they be designed to be universally applicable, should they quite generic, quite general, or should they be adapted to meet the specific conditions of each country...? These are the types of issues that need more discussion.

I'll stop there. I've presented a number of other ideas in the document I circulated in advance to the committee. I look forward to hearing some of the questions and comments from members of the committee.

The Chair: Thank you.

Mr. Morrison.

Mr. Morrison (Swift Current - Maple Creek - Assiniboia): I would very much like to apologize to you people for my colleagues. You couldn't have picked a worse day to be drawn. These things do happen. I am sorry about that.

You've all gone deeply enough into your recommendations that you really haven't left much room for questions. So I would like to make just a few comments.

Let's take Thailand, which is a cesspool of labour relations; there's no doubt about that. It's not so many years ago we would not have been in a position to throw stones from North America. Think of the New York garment district. Think of the Montreal garment district. As a matter of fact, I believe there was a fire in New York around the turn of the century, quite analogous to the one you have described here. Yet today we have on this continent probably the highest labour standards and the highest general standard of living the world has ever seen. It's come by evolution. Now, evolution may not be much comfort to somebody working in a sweatshop, but I think the iron laws of economics may dictate that's the way it's going to have to go.

.1650

I don't think protectionism is the answer. It's been tried in terms of keeping out these sweated goods. It may give us a good warm feeling, but if you're living in a country that has neither the means nor the will to put in any kind of a social safety net, perhaps you're not going to be too picky about having a lousy job as opposed to no job. I have great difficulty with that particular approach - sanctions, tariff barriers, whatever.

You might want to comment on that specific comment of mine. Maybe we'll get into a bit of a debate here, if nothing else. I still want to proceed a little further since I am the committee today.

Would you like to address that, Mr. Puritt?

Mr. Puritt: Yes. First of all, I don't think what we're promoting is protectionism; it's just the opposite. I think I mentioned that when multinational corporations insist on cheap labour markets, they're protecting their profits and they're protecting them from human rights, which is what this committee is mandated to discuss. We're saying they're being protectionist.

We're not saying we should run to boycott goods coming from these countries. We should help these countries, through the mechanisms of the ILO and other things that have been mentioned here, to reach that minimum floor that we consider we all want to get to. What we're suggesting is not rushing to boycott their goods, but rather rushing to say you need to reach this level, and we'll help you to do it. We're suggesting that the WTO and the ILO form a committee that would help these countries do that.

If they don't do it for whatever reasons, then we look at it at the end of the year and we ask why they have not reached it. What are the problems? Then we would specifically help do it. If they don't do it after a second look, then, yes, we're talking about putting some mechanisms in place to say we won't buy their goods.

For example, China has 10 million people in prisons, logai guys, as they're called. We're buying goods produced by 10 million prisoners, which the ILO and every world body has said shouldn't be done. You know the story of Harry Wu being thrown out of China recently for revealing this. I don't believe any of us want to say we still have to buy goods made by prison labour or child labour because that's just the way economics works.

I like your example of the fire in New York. Yes, there were horrible working conditions there. It wasn't simply evolution. To a large extent, it was the development of trade unionism that stopped those kinds of things from happening. Trade unionism demanded better working conditions and decent health and safety standards, and that led to the elimination of those problems. We in North America have become the most productive people in the world thanks to that.

If it's because we need productivity for economic competition, then we need these higher standards to be used all over the world. We are productive because of it. They are not more productive because they have cheap labour. In fact, they're not very productive at all. Their competitive advantage comes from terrible exploitation of cheap labour.

Mr. Morrison: But this economic evolution I was talking about has taken place much more rapidly in Taiwan, Hong Kong and Singapore, for example, than it ever did in North America, and yet the labour movement in those countries is weak to non-existent, as I understand it. Am I incorrect in that?

Mr. Puritt: Slightly. We had a discussion with Helmut Kohl at one of these G-7 summits. Each time there's a G-7 the labour leaders around the world get to talk to the host, which is why I mentioned earlier that we spoke to Jean Chrétien this year when the G-7 was here. When we talked to Helmut Kohl, he admitted that it wasn't the free market that helped to develop Germany or Japan after World War II; it was government intervention.

It's the same thing with all these Asian tigers. You just listed a few of them. They have all had their economies develop in the last ten or fifteen years because of serious government intervention in the way in which they allow business to take place. They controlled trade unions, among other things, and that we don't agree with. They had all sorts of government controls on import substitution and a whole range of aspects of their economy. Manfred Bienefeld, a professor at Carleton University, has produced several papers outlining this very clearly.

.1655

So the free traders who are going around saying that the only way to develop is to allow the free market are simply not talking about reality. The reality of the Asian tigers is just the opposite. It wasn't free trade. The reality of the post-war reconstruction of Germany and Japan was also not free trade.

Ms Weston: I want to add two points.

First, I don't think we should be complacent about the working conditions in the garment industry in North America. I think of two things. The first is home-working in Canada, which is quite a problem for immigrant women, in the conditions in which they work in trying to compete. That's one problem.

Also, there was a recent case in California where a lot of Thai workers were discovered working in horrible conditions in a factory.

Mr. Morrison: But all they had done was import a little piece of Thailand into North America.

Ms Weston: That's right.

At the end of the day, one wonders if it's worth trying to keep some of the clothing industry in North America if that's the type of conditions under which it has to operate.

Secondly, I don't think it's necessary, from an economic point of view, to keep people locked up, in the way in which they were in the Thai toy factory, in order for them to be productive. Some education could be done. I don't think all factories operate in that way. The problem is that some do. Therefore what we need to do is try to encourage best practices. I don't think it's a necessary condition of production in Thailand.

I'm sure Paul would agree.

Mr. Puritt: Entirely.

Your point about the garment industry is important in terms of child labour. We have not ratified the ILO convention on child labour in Canada, partly because we say that it doesn't happen in Canada. We don't have child labour any more, but indeed the home-work in the garment industry now means that subcontractors are subcontracting piece-work on garments out, to immigrant women usually, and they are using their own children to help them with this work. These children are not going to school. They're doing this work to earn a living for the family. So we have a problem of child labour again rearing its head in Canada.

The Chair: Ms Hutchinson, do you have something to add to that?

Ms Hutchinson: No.

Mr. Morrison: I want to make one more brief comment, and then, I'm afraid, our chairman will have to participate actively today.

The Chair: I'm champing here.

Mr. Morrison: Good.

I have very broad misgivings about the rug mark campaign - not because of what they're trying to do, but because in these underdeveloped countries where the rug mark campaign would have some meaning they also have high tech. They can produce U.S. $100 bills that you can't tell from the real thing. They can produce passports of any country on earth. I don't think it's beyond them to produce a little happy face to stick onto a rug.

I've lived a very large part of my life in the Third World, and I look at this and think, ``Come on!'' I don't think it's serious. Again, it's a feel-good exercise.

If you really want to go in for the sanction, then the only thing you can do is cut them off at the knees and say we won't buy their product.

As you've probably gathered from my previous comments, I have some misgivings about that too, because let's say that a quarter of a loaf is better than no bread.

Mr. Puritt: I agree.

Ms Hutchinson: I agree partly with you that the problem of monitoring something like the rug mark campaign is there, although we manage to monitor compliance with other kinds of agreements in the world - sometimes inadequately, but perhaps enough to produce some effects.

I guess I am also naive enough to think that perhaps some of the carpet manufacturers involved in that program are genuinely concerned also, and the exporters and the importers. There is the fact that a mechanism has been set up to try to make it a win-win situation so that they will get a market from people who are concerned about the children working under terrible conditions in return for improving those conditions, and that the children are also taken care of and the families are not left to fend for themselves. The ingredients are there for not a foolproof scheme but a successful one.

.1700

That said, it's very limited. It can't begin to solve some of the major problems of child labour in other parts of the world where we don't have this lever of trade. There are children labouring under terrible conditions, but we're not buying their products and therefore don't have this lever of trade in order to work out packages like that.

I cited that not as a perfect example of how to solve the problems of child labour in the world but because I think we need to look more carefully at ways of linking our financial assistance with trade and labour rights criteria, and it has those three components.

Mr. Morrison: Actually, you've hit on something. I think it would behove all of us to give careful consideration to it, all of us at both ends of this table. In the underdeveloped world the worst labour conditions and the worst exploitation does not occur in the factories of the wicked capitalists. It occurs out in the countryside where you have the eight-year-old children crawling around in the little artisans' mines or going into the bush barefoot among the snakes and scorpions to gather food for subsistence and so on.

Again, you have to sort of put yourselves in the shoes of the people in these places. What seems absolutely, incredibly bad and unacceptable to us is a step up to them or they wouldn't become involved in it.

Ms Hutchinson: I guess that's it. There's child labour in situations we're hardly even aware of. I'm practical enough to feel that we try to have some effect where we can have some effect, knowing that it's not enough and that it's not addressing every situation.

Mr. Puritt: One thing about rug marks in consumer boycott campaigns in general is their educational value. As you say, they don't necessarily stop the practice and, to use your example, I agree that at some point you have to start shooting at people's knees.

For example, on the toy campaign we're starting by asking the toy manufacturers themselves to come up with a code of conduct. Some of them are beginning to talk about that now, especially because it's the Christmas season and they're a little worried. They're saying, ``We have codes of conduct.'' They're showing us their codes. We're saying that so far they're not strong enough. Eventually it may get to the point where we have to say, ``Well, some of you are good guys who are ethical about this but some of you are not and we're going to advocate consumer boycotts of some of your toys.''

But again, we don't want to deny toys to our children, so that's not really the way to go either. Ultimately it has to be multilateral rules that have some teeth.

The Chair: Thank you.

Ms Weston, I have a couple of questions on the content of your presentation to us. You talk about EDC and the Canada account. In looking at the manner in which the Canada account is administered do you see any coordination with Canada's aid policy? If so or if not, would the blending of these moneys from the Canada account and aid policy occur by accident or by design? Do you know if there is a deliberate connection?

Ms Weston: I really don't know enough about this to give you an adequate answer, but my suspicion is that there is not sufficient coordination between EDC and CIDA. I would be very surprised if allocational decisions by EDC were made taking into account CIDA's five or six basic objectives.

This is an area where I would like to see some research undertaken. Moira apparently tried to find out more about where EDC money was being allocated and to which types of projects in order to be able to determine whether or not there was any relationship between the types of projects that were being supported - or the types of purchases, if you like, of Canadian products - and CIDA objectives. But it's very difficult to get that type of information.

The Chair: Moira, if you ever happen to manage to get that information let us in on your secret, because we can't get any either.

Ms Hutchinson: I can send you the section from the brief we submitted to the foreign policy review. It recorded what I was able to find out. As you know, the Export Development Corporation as a crown corporation is not subject to the access to information law.

.1705

When I worked with the Task Force on the Churches and Corporate Responsibility ten or twelve years ago, the EDC did publish two annual reports, one of which actually specified what the EDC was doing in each country at the project level. We started asking questions about some of the things they were doing. By about the mid-1980s, I think it was - my dates might be off - they stopped publishing that information. For a year or two they would give it to us on request, if we wrote a letter and pushed. Then that stopped. So there really is a problem of access to information.

I did get a study that was done within the Department of Foreign Affairs and International Trade, and it provided some information. What I found, also by looking at CIDA's annual reports and other sources of information, was the portion of the EDC budget that is considered to be official development assistance, where you might think some CIDA-like criteria ought to be applied...that money was going to countries with really serious human rights problems. I shouldn't say ``money going''; those forms of support.

The Chair: But the Canada account is different from EDC. Is that not public?

Ms Hutchinson: The Canada account part of the EDC is the part where the government decides, often for reasons that perhaps aren't good in a commercial sense, it wants to provide support.

The Chair: So that is still EDC lending.

Ms Hutchinson: It's still the Export Development Corporation.

The Chair: I see.

Ms Hutchinson: Some of that would not necessarily be considered -

The Chair: So it would be confidential as well.

Ms Hutchinson: - official development assistance. It's just political as opposed to strictly commercial considerations.

The other thing I would like to say about the Export Development Corporation is that the only time I can think of when human rights criteria have been applied to what it does was that in the early stages of the South Africa sanctions campaign the Liberal government at first agreed to stop supporting trade and investment with South Africa through the Canada account, which was the political part of it, and then later actually the Conservatives, as part of their package of sanctions in 1986, I think it was, agreed not to allow the EDC to provide any kind of credits to South Africa. So there is a precedent there. But that's the only one I can think of.

The Chair: That's about as enlightened as we are on this issue, is that right? I just wonder if we've explored all the -

Ms Hutchinson: I will send you what I can.

The Chair: There's another issue I want to bring up. You have offered some suggestions, but I'm wondering which of these on your wish list of things you would like to see the government do, and how many of these have been tried by other countries? Do you have any measure of their success?

Mr. Puritt: I think the Scandihooligans are the best in this, and they are often examples we look to where more ethical investment, or more tying of trade and aid, has been done along lines we would favour. I know Moira has some examples of some recent attempts by the Norwegians, and the Dutch too. So if you want to look at other countries that have worked in this field, and worked more effectively than Canada has, from our point of view, I would recommend we look at Norway, Sweden, and Holland in particular. Australia might have some other good examples for us.

But about a wish list, we recognize that Canada is a small player on the international stage. We'd like to see it work more effectively in these multilateral fora, where we are most effective. We belong to just about every one that's going. But for us to be credible in these multilateral fora, and not just use the vanity factor - for example, External Affairs likes to say that Canada brought down apartheid because of our wonderful sanctions policy; that's obviously nonsense, and everybody in the world knows that except for Canadians - we have to have a credible bilateral policy as well.

.1710

If we're going to keep doing business with the SLORC in Burma, for example, then we can't expect anybody to take us seriously when we talk about human rights in Asia. SLORC is the military regime in Burma. Petro-Canada is working there.

The Chair: I don't think so. I might be wrong. I was under the impression, or of the opinion, that we were not in fact contributing.

A voice: I don't think we're encouraging companies, but I don't think we're preventing them, either.

Mr. Puritt: We have a policy of ``constructive engagement'' with Burma. That was Ronald Reagan's term for his policy with South Africa. Ronald Reagan, as you will recall, was against sanctions. He said we should have ``constructive engagement'', which is exactly what the Canadian Exporters Association is promoting in its submission.

They're not here today to discuss it, but theirs is exactly like Reagan's ideology - not reality - saying we should have constructive engagement. And that's our policy on Burma.

How can you have constructive engagement with the SLORC? I don't know.

Ms Hutchinson: In the development assistance area, I've seen reference to some pilot projects between the International Labour Organization and, I think, the Norwegian development assistance agency, and maybe the Danish one - I would have to check, I'm trying to find out more about it - in assessing development assistance projects, using the kind of technical expertise the ILO can provide. It helps a country acting unilaterally in its development assistance program to draw on a kind of multilateral consensus about its development partner, about what the human rights problems really are and what's serious and what needs to be addressed.

So it helps to make your unilateral stance adopted through your aid program a bit less vulnerable to the charge that you're reacting politically rather than in the real interests of people, the human rights situation and the people in the other country. That's one example.

Another example is the United States. The U.S. is best known for the way it has been, on a unilateral basis, applying labour rights criteria to its trade in the general system of the preferences process. But in 1994, or maybe in 1993, it adopted new legislation to apply labour rights criteria to its aid program, U.S. aid. There was an amazing exposé during the Clinton election that led to the decision to have this legislation.

The exposé showed how U.S. tax dollars, through the aid program, were being used to promote investment by U.S. companies in export processing zones in Latin America and the Caribbean, with the inducement that there were no labour rights or unions in those zones. This caused quite an uproar. As a result, U.S. aid is subject to legislation that requires it to screen its projects and programs in relation to that basic basket of labour rights criteria.

I don't know anything about how they actually do it, and how effectively. I would love to know more, and it would be really interesting for a committee such as this to have a senior administrator from U.S. aid come and talk about how they do it, and maybe have someone from one of the unions or some other body come and talk about whether they think it's happening effectively or not. But there is a precedent there that I think we should at least learn more about.

The Chair: One of the things we really want to be able to accomplish with our committee.... We sit here, and obviously we're interested in human rights or we wouldn't be on this committee. It's like preaching to the converted.

.1715

There are things that it is realistic to expect the government to do. We're talking about international economics setting the policy for governments, and I think many people in North America believe this is the case and there's nothing we can do. But I'm a true believer that the people are the government. In trade, we're talking about Canadians having the choice to exercise their consumer sovereignty.

You mentioned Brigitte Bardot. Brigitte Bardot has done severe damage to the fur industry in Canada.

In terms of product labelling, Mr. Morrison was right to point out that labels can be copied, and that could be ineffective.

I'm wondering if it is totally the government's responsibility. Certainly we have to work hand-in-hand, but in terms of consumer education, if Brigitte Bardot can destroy the fur industry in Canada, surely Canadian consumers and North American consumers and European consumers....

If we really value our western principles, why aren't the NGOs and labour working on the same kind of campaign? Do you not think there should be some sort of coordination there? I don't think any one government policy is going to eradicate human rights violations and child labour.

Ms Hutchinson: There are currently campaigns going on. For example, there's a campaign directed at The Gap in Toronto related to subcontracting and the conditions under which its subcontractors work in Honduras. There was a campaign that led to Starbucks, the coffee producer, agreeing to work on a code of practice. There are a number of campaigns. There have been campaigns in the past, such as the Nestlé boycott.

I think NGOs, for example, and the churches - and with churches, I can speak from past experience - were always very slow to agree to support a call for a boycott action or a sanction. For one thing, they want to go through a very careful process of checking with their partners to make sure that was really the kind of action that was wanted. It takes quite a long period of time to go through the careful process of dialogue and discussions rather than just unilaterally deciding that might be the best action to take. Then the kind of coordination that's required to get a number of different kinds of groups working together on a voluntary basis also takes a long time. What I'm saying is it takes a long time to mount something like the Nestlé campaign.

The period that led up to the South African sanctions wasn't something that happened overnight. Again, Canadian churches refused to call for sanctions until they were really hearing loudly and clearly from their church partners in South Africa that it was what was wanted. So I think responsible boycott action doesn't happen quickly.

The Chair: Yes, but could the same not be said for government policy?

This brings me to the Canadian Exporters Association on human rights. Mr. Puritt began to comment on it, and now that Ms Weston has commented on what we were talking about, I'd like all three of you to comment on this, because you have another view here.

Ms Weston: I just wanted to make two points about the social labelling of consumer boycotts issue. I find that with the number of social labels that are now appearing, it is in danger of becoming confusing to the point of being meaningless. I think that's where governments...agencies need to be created to establish what these labels really mean in terms of providing consumers with some basis for believing whatever the people who are using them say they mean.

.1720

What does ``fair trade'' mean? Who's defining it? I think what the churches are doing, that careful approach, is important; but maybe we need an even more organized, more concerted, international mechanism. That's why at one point the ILO secretary general was talking about having something they would be responsible for monitoring.

But you do get all sorts of problems arising now with subcontracting. I think that was alluded to earlier when you were talking about the hand-knotted carpet industry, which is quite decentralized, and how you actually monitor these things. It's a very challenging issue.

The other point I wanted to make about consumer boycotts is that again, the rug mark and the Bangladesh garment industry experience really illustrate the importance not just of consumers being educated but of having this complementary action, where you bring in the ILO or the UNICEF or somebody to make sure the real interests of these children who are now involved in these industries are going to be addressed...and consumers don't end up feeling good but actually making the situation a lot more difficult, at least in the short term, for people they are really trying to help.

So consumer education is important, but it has to go a lot further. I guess that's why these campaigns are so challenging.

On the issue of the Canadian Exporters Association, I suppose what I would like to know from them is what they would think about a positive approach - codes of conduct - what sort of responsibility they are willing to take themselves to promote the best work practices, to say to their members that when they go into countries to set up production they're going to be not just meeting national standards but even bettering national standards. Why can't they be going out and trying to help raise standards; really testing the limits of economics, of the market, if you like? That's what I think we need from them, not this discussion about how we shouldn't introduce economic sanctions unless we've looked at the situation carefully. We've been through that before.

What we're looking for now, I think, is some way of engaging people in a much more creative and constructive way, rather than going through some of these old arguments we've heard several times.

That would be my comment to them if they were here, anyway.

The Chair: Thank you.

Ms Hutchinson.

Ms Hutchinson: To build on what Ann has said, if through something like the Canadian Exporters Association you were going to suggest they take more responsibility and develop standards they say they're going to adhere to, I would still think that kind of approach needs some legislative back-up in how it's monitored and reported on, and perhaps even enforced.

When we talk about enforcement mechanisms in these areas, it might be interesting to refer to the Clinton code of conduct. President Clinton developed one in the last year because when they changed their mind on most-favoured nation status for China, as a kind of trade-off to try to satisfy the unions and others they developed this idea of a voluntary code of conduct. They developed some general principles. Some of them are okay. Some of them are pretty weak. But if you were going to make an approach like that really work, then there would need to be some way of making sure the companies that sign up with that code don't use it just as a public relations exercise but really do something.

Some of the ways are that some kind of independent monitoring capacity would need to be established. But in addition, some penalties would have to be possible. For example, they might be cut off from whatever trade and investment incentives the government provides to those companies through things such as the Export Development Corporation, or other kinds of incentives and assistance. There's probably a range of kinds of sanctions that could be attached to non-compliance.

The U.S. actually already has a bit of that in its Overseas Private Investment Corporation regulations, where again there are workers' rights criteria. When the Overseas Private Investment Corporation makes a contract with a U.S. company that's planning an investment, it has to sign a contract saying that will abide by certain kinds of workers' rights criteria. To get the benefit of U.S. tax dollars, it has to agree to comply with a certain basic code.

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The Chair: Mr. Puritt.

Mr. Puritt: Again in reference to the South African good old days, I've seen this kind of statement before from the Exporters Association. They're trying to have it all ways. As I said before, it's more ideology than reality.

First, they're saying that sanctions don't work anyway, so we shouldn't try them. You always get sanctions-busters, it's true. The very business people who are trying to do business in spite of human rights abuses seem to be able to find ways of doing business, whether we have tried to have sanctions or not.

But then they say the usual crying thing: ``We really shouldn't use sanctions because it hurts the people at the bottom.'' Margaret Thatcher, if you'll remember, argued that we must not have sanctions against South Africa because they would hurt black workers. Of course, Margaret Thatcher was always known as a great friend of black workers. Well, the black workers themselves said it was they who were asking for the sanctions. They wanted sanctions imposed on South Africa because that was the only way they thought they would have any leverage against the apartheid government in order to change it, and that's exactly what happened.

In terms of reality, Liberal governments in the 1970s were saying we couldn't have sanctions, that they weren't realistic. Pierre Trudeau used to say you either have to stop condemning or stop trading, but he didn't want to do either. He continued to trade and to condemn.

It wasn't until 1986 - and it wasn't because of his great sympathy for the situation so much as it was because the situation on the ground in South Africa had changed - that Brian Mulroney finally realistically imposed sanctions. We can do it if there is the political will to do it. Usually it takes a lot of other people lining up to do it before Canada will show its hand.

So this whole argument that it's not possible, that it will hurt other people, just doesn't jive with reality, especially not with what we did around South Africa.

Finally, we have their argument that we have to be careful because of Canada's long-terms interests. Well, if Canada has long-term interest in sustainability, it again seems to me that we should be worrying about the people we're trading with when they are only in there and in power in the short term.

When Canada refused to talk to the liberation movements in southern Africa and called them terrorists, CLC brought ZAPO from Zimbabwe here in 1979. The churches were talking to the Zimbabwean liberation movements in South Africa and were being criticized for helping them with band-aids and bullets. Do you remember all of this? The World Council of Churches was condemned for talking.

These are the people in government now, but they remember who their friends were, who helped them when they were called terrorists but were in fact liberation movements. The same situation exists in Burma now, as well as in other places you mentioned.

Our long-term interest is not just to provide CANDU reactors to the people in China who are willing to turn their own firepower on their own students in Tiananmen Square with the excuse that we need the Chinese market to sell them our widgets. The reality is that Chinese workers aren't earning enough money to buy any Canadian widgets, which is all we're really trading with them. Half of the big deal made through the big Team Canada investment was on nuclear reactors for China. What is our real long-term interest? It's not what these people are saying.

The Chair: Thank you.

Mr. Morrison, you have another question.

Mr. Morrison: I have a question for all or any of the members of the panel. As people in the labour movement, would you like this committee to be looking at specific national cases, if you had your druthers? Should we look at Indonesia, at Bangladesh, etc., for example, or would it be more along your lines of thought that we just continue to look at generalities and the issues as you have presented them to us today? What's your feeling on that? Should it be specialized or not specialized?

Ms Hutchinson: Maybe there's a third option in there. You can look at specific countries and you can look at the general issues, but you could also look at some of the specific kinds of mechanisms or proposals that are out there floating around. There is a whole range of things, meaning everything from the variations on codes of conduct and fair trade practices, to different kinds of regional and multilateral trade arrangements. You could look at different kinds of mechanisms and evaluate them. That's another option.

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Mr. Puritt: I'd go for the general rather than the specific. I don't think Canadian trade with any one of these countries is high enough to change the situation there. I would rather see Canada take a leadership role, if possible, or at least gang up with others who will play a role in getting strong multilateral regulation. That's our best bet. Our limited amount of trade, even with South Africa, didn't amount to much. It was only when we got together with the Commonwealth that it had a little bit more of an effect, and even the entire Commonwealth's trade wasn't enough.

But we have a role to play in the WTO. We now have Donald Johnston as the head of the OECD. We have a Canadian in Paris, which is a nice job if you can get it. Let's use the fact that we're in the OECD, that we're in the ILO and all these other bodies.

The Chair: That's a very interesting point, and I think we agree with you that it's more of a leadership role. Because after we stand and let all the air out, after we've buffed up, we really are quite insignificant in someone else's trade success or failure.

Mr. Puritt: I'm not saying we're insignificant, but since some 80% of our trade is with the United States, the amount of the rest of our trade is small. We're not insignificant in terms of our reputation, however. We have this role - some people might say it's unwarranted, but we have it nonetheless - as a leader in some of these human rights issues. We are a leader because of our reputation with peacekeeping, but that's being tarnished now. I think our human rights record is being tarnished because of this government's policy of not linking trade and human rights any more.

As I said earlier, this government seems to have given up that role. That will not help us play kind of role not only just as a leader, but even as a participant if we want to join with the good guys in this. If this government would look, thanks to your committee, at this whole linkage issue again and take some of the advice not just from us, but also from others who are presenting to you about what our attitude about human rights and trade should be, then we have a chance of playing a more significant role internationally than our amount of trade would warrant.

Ms Weston: I think we also have a responsibility in our relations at a bilateral level with all the countries we aid and trade with. We do have to look at the extent to which there is coherence between what we do on the aid side and on the trade side. In other words, even if we don't have a big role to play, I think it's unacceptable that we don't do at the bilateral level what we're trying to preach at the multilateral level.

I don't know if that's saying the same thing Paul was saying, but I think we do have to look at each country, case by case. I think we can promote human rights everywhere. It may well be that in some countries you do it one way rather than another, but I think we have to try to do more because we can do more.

The Chair: Mr. Morrison, do you have any other comments or questions?

Mr. Morrison: No.

The Chair: It's unfortunate that the exporters had no representation here today, but we will send them today's Minutes of Proceedings and Evidence. We will ask them if they would care to comment in writing. If we get responses from them, we will send them to you.

Mr. Puritt: Could you ask them to respond on their point that says Canada...that they are honest business people? This is what they say:

Economic sanctions reduce the opportunity for dialogue between governments...

No, here it is:

...has not taken place without the complicity of those states. Canadian exporters, as law abiding citizens, inevitably suffer as a consequence.

I'd like their comments on the Space Research Corporation, a joint Canadian-American company that exported 155-millimetre howitzer shells and guns to South Africa, breaking the arms embargo, breaking everything. This all happened under a Liberal government watch, by the way. The RCMP investigated Gerald Bull, a guy from McGill University, and found him innocent in their investigations. Later, when the Americans found him guilty of breaking the arms embargo, the Canadians finally did as well. It wasn't until the Israeli Mossad put a bullet in his forehead that he stopped his activities.

The Chair: Well, if they do read the transcript, you can consider it asked.

Are there any other comments?

Ms Weston, did you have anything else to add?

Thank you very much to all of you. We appreciate your attendance.

We stand adjourned.