EDC

Hon. Senator Oliver moves an amendment to Bill C-31

(November 29, 2001) Export Development Act – Third Reading in the Senate Bill to Amend introduced Motion in Amendment – Vote Deferred until December 4, 2001.

1st Session, 37th Parliament, Volume 139, Issue 75

Export Development Act
Bill to Amend-Third Reading-Motion in Amendment-Vote Deferred

On the Order:
Resuming debate on the motion of the Honourable Senator Robichaud, P.C., seconded by the Honourable Senator Ferretti Barth, for the third reading of Bill C-31, to amend the Export Development Act and to make consequential amendments to other Acts.

Hon. Donald H. Oliver: Honourable senators, I am pleased to rise today to participate in third reading debate of Bill C-31, the Export Development Act.

Last week I expressed my concerns about this bill, and I rise today to reiterate those concerns, after having heard from witnesses before the Standing Senate Committee on Banking, Trade and Commerce. There were two points that I raised at second reading: the environmental conditions and the public access to information.

Bill C-31’s most significant change, and by far the most controversial, concerns a proposed exemption for the Export Development Corporation from the Canada Environmental Assessment Act and the Access to Information Act. As I refocus on the environmental concerns I raised at second reading, I would state clearly that I do not have any problems with the general principle of this approach. Indeed, I welcome the legislative requirement for such a review process. However, exempting the EDC from the Environmental Assessment Act makes us irresponsible when it comes to the environment.

The evidence used to support my concerns with respect to Bill C-31 was derived from credible sources. As I said last week, in 2001 the Auditor General identified significant gaps in the EDC’s environmental review framework. What was also found were “gaps in transparency, particularly in the area of public consultation and disclosure of information, all critical elements of a credible environmental review process.” Furthermore, the review indicates that short-term business ventures, which represent two-thirds of the EDC’s dealings, are not subject to environmental review.

There is little excuse for ignoring the findings of the Auditor General’s report, especially in this case where the EDC is unwilling to establish its own concrete guidelines for environmental review. The public has a right to be informed about environmental risks of the EDC’s insurance business. Other financial institutions in Canada, and internationally, are being held accountable or have an established approved standard for environmental issues.

There are always risks involved with business, but my concern is that the EDC should be bound to inform the citizens of Canada of the potential or the level of risk being undertaken by their activities.

We are already aware, and it is a matter of record, that the Export Development Corporation, or Export Development Canada as it is now called, is not noted for having an adequate environmental track record. Evidence of the EDC’s lax policies were presented by Patricia Adams of Probe International before the Banking Committee where she said:

We have 20,000 supporters from across the country who are concerned about EDC’s long history of financing damaging projects, including nuclear technology to military hot spots in Pakistan and India, mines that dump cyanide into rivers and hydro damns that destroy fertile valleys in poor countries and force millions of people off their land.

Ms Adams also expressed concern in regard to the lack of review process for the EDC:

The effect of this, according to Parliament’s own legislative summary, is to give EDC’s board complete, unlimited freedom to make any decision that would be virtually immune from judicial review.

Ms Adams continued later on:

Bill C-31 will allow EDC to write the rules, establish the criteria, define the terms, assess itself and then decide whether it is justified in supporting a project that will destroy the environment.

The NGO working group on the Export Development Corporation is deeply disappointed with this bill. They have compiled an extensive dossier on the EDC. The case studies on EDC-supported projects detail the impact on the environment, on international commitment and, consequently, on people’s lives.

According to Ms Revil, a representative of the NGO working group who appeared before the committee:

Not only does Bill C-31 fail to provide appropriate checks and balances, or much needed direction, it proposes to reinforce, in law, a status quo that is highly problematic. Over 140,000 Canadians have written to the government, up to a few months ago, to express dismay over the status quo. Pages of newsprint have been dedicated to the failures of EDC as a public institution. Yet, Bill C-31 is silent in all areas of public interest, with the exception of the environment. Basically, it merely states that the EDC can decide what it will do.

Honourable senators, Bill C-31 does not ensure integral environmental protection against the EDC’s business. If the government does not respect the Auditor General’s findings and the recommendations of the Standing Committee on Foreign Affairs and International Trade of the House of Commons, can we believe or expect that the EDC will seriously establish an environmental review process?

We are duty-bound to establish guidelines reflecting the Canadian conscience and to maintain the Canadian integrity we have worked so hard to build. We cannot, with a clear conscience, allow the EDC to support environmentally unsafe projects overseas which may result in an adverse effect on what we know as the global environment.

Honourable senators, does the EDC’s involvement in the Three Gorges Dam reflect Canada’s values and our commitment to protecting our global environment? I think not. We cannot entirely blame the EDC for the Three Gorges situation, as it was the Prime Minister who announced the EDC involvement in the Three Gorges project during a 1994 Team Canada trade mission to China.

This bill is self-serving, and we should question the reasons the government is anxious to have the bill passed so quickly.

The EDC, which has always assumed its exemption from the Canadian Environmental Assessment Act, now faces two problems: First, the EDC must realize that Canada is committed to environmental protection; and second, the courts are looking into whether the EDC violated the government’s own environmental assessment laws in approving a recent CANDU nuclear reactor sale to China.

With the government anxious to complete the sale of yet another CANDU reactor, this time to Romania, a country known for its poor nuclear safety record, the EDC’s improprieties, in fact, may be subject to the Canadian Environmental Assessment Act. If Bill C-31 passes, the government will no longer need to worry about being taken to court for failing to abide by its own environmental guidelines; the EDC would be exempted. Furthermore, an environmental assessment would not hinder the CANDU sale to Romania.

Honourable senators, as I said before, if we believed that there was a possibility for the EDC to establish an appropriate framework exemplifying the Canadian perspectives on environmental issues, we would accept Bill C-31, but that is not the case. Bill C-31 falls short in terms of completeness, transparency and accountability.

(1430)

Honourable senators, Bill C-31 does not prohibit the EDC from entering into questionable environment projects, but simply says that the EDC must ask itself if it is justified in so doing. If the EDC is incapable of establishing a sound review process to address environmental concerns, how are we to believe it is capable of making sound decisions as when to apply or not to apply the environmental review?

The EDC escapes all possible scrutiny. The bill declares that such a directive would not be a statutory instrument for purposes of the Statutory Instruments Act. In other words, Parliament will not have the option to review directives taken by the EDC. This implies that the EDC cannot be challenged on any undertakings that it deems an exception to its guidelines. Indeed, this is a self-serving loophole. One part of the clause says that there must be a review, and the other part dictates that the board of directors has overriding discretionary power to their own rules. It cannot be challenged on what it considers to be a mitigating measure. Indeed, the way the bill is worded, mitigating measures do not actually have to be undertaken, as the wording is framed in terms of whether there would still be a problem if they were undertaken.

Honourable senators, what makes the review of Bill C-31 more worrisome is the EDC’s exemption from the Access to Information Act. Therefore, there is no legal obligation to inform the public. Ms Patricia Adams, the Executive Director of Probe International, who appeared before the Standing Senate Committee on Banking, Trade and Commerce, also expressed her concerns as follows:

The Access to Information Act is a good law. It is not always evenly applied. It is often under threat from the government of the day, but it is one of the most important democratic tools the citizenry of this country has to define and obtain what it wants to know about government activities rather than the other way around.

Without it, public oversight of EDC’s activities is handicapped, allowing this Crown corporation that operates on Her Majesty’s credit card to escape effective accountability.

To placate public demand that EDC be subject to the Access to Information Act, EDC has offered up a wholly inadequate substitute, its new disclosure policy. Just as Bill C-31 creates a toothless exercise in environmental review that is designed for public relations, EDC’s new disclosure policy is similarly designed to convince the public that EDC will be more transparent while it largely maintains the status quo.

Ms Revil from the NGO Working Group on the EDC went one step further by indicating the stipulations that should be in Bill C-31. She said:

This bill should lay out criteria that it expects EDC to follow, such as the following: All transactions with potential or known significant adverse impacts must undergo an environmental assessment; all environmental assessments or transactions with known significant adverse impacts must include the consultation of locally affected populations; and information collected on impacts, through an assessment process, must be made public at least 60 days before the transaction’s approval by the board of directors.

The EDC is not bound to appropriations, so there is no opportunity for either a House of Commons committee or a Senate committee to question its activities or to deny funding for objectionable projects as part of the supply process.

Honourable senators, the sole stipulations regulating the actions of the EDC within Bill C-31 is the Auditor General’s review. Every five years, as I said at second reading, an audit will be carried out to review the design and implementation of the EDC’s environmental directive and to report the findings to the minister and to Parliament. In actuality, it could take as many as six years by the time the report is finalized and tabled before we would find out if the EDC’s environmental directives are sound. Now is that good public policy?

More distressing is that when the report is released, there is no obligation for the minister or the EDC to adjust procedures or policies to address any problems that may arise.

Much can happen in the five years before the Auditor General must report, and some have argued for an even shorter period review. Five years is the ceiling, and perhaps the minister should not wait that long.

Given the history of the EDC, I would be much more comfortable if there were some kind of parliamentary oversight of the EDC’s environmental directives. The Library of Parliament’s legislative summary on Bill C-31 makes an interesting observation on this point:

Because Parliament has not prescribed any limits or criteria, the Board appears to have complete, unlimited freedom to make any decision, i.e., to define terms as it chooses, or to exempt any project it chooses. As well, the complete absence of limits on the decision-making power would suggest that the Board directives would be virtually immune from judicial review.

Honourable senators, the legislative summary goes on to outline some options to deal with this, all of which the government seems to have ignored. The summary states:

The bill could specify that the Board must give reasons for exempting a transaction or a class of transactions. This would increase the transparency in the decision-making process, and would provide a reviewing court with something upon which to determine that the decision had been arrived at properly and not for improper reasons.

Or, it could require that the Board submit its directives to a Parliamentary committee for approval (as is increasingly the case with regulations).

Parliament could also require the Board to consult with concerned groups or other government departments, most obviously, the Minister of the Environment, prior to making directives, particularly where the directive involves defining terms such as “adverse environmental impact”.

As well…Parliament itself could prescribe, or incorporate by reference, the criteria to which the Board would be required to have reference in issuing directives.

In conclusion, honourable senators, there is a variety of ways to address the concerns I have raised about Bill C-31. A simple way to deal with this would be to deem those environmental directives to be statutory instruments. This would allow Parliament to review them if Parliament were so inclined and, indeed, would at least require that they be presented to Parliament.

Honourable senators, the wording of Bill C-31 specifies that such directives are not statutory instruments.

Motion in Amendment

Hon. Donald H. Oliver: Honourable senators, to reverse this, making them into statutory instruments, I move, seconded by the Honourable Senator Di Nino:

That Bill C-31 be not now read a third time but that it be amended in clause 9, on page 3, by replacing line 31 with the following:

“(3) The directive is a statutory instru-“.

Honourable senators, the result of this amendment is that lines 31 to 33 would read:

(3) The directive is a statutory instrument for the purposes of the Statutory Instruments Act.

I believe this would go a long way to increase both the transparency and the accountability of the EDC’s environmental review process, and I would urge honourable senators to support the amendment.

(1440 )

The Hon. the Speaker: Is it your pleasure, honourable senators, to adopt the motion in amendment?

Some Hon. Senators: Agreed.

Some Hon. Senators: No.

The Hon. the Speaker: Will those honourable senators in favour of the motion in amendment please say “yea”?

Some Hon. Senators: Yea.

The Hon. the Speaker: Will those honourable senators opposed to the motion in amendment please say “nay”?

Some Hon. Senators: Nay.

The Hon. the Speaker: In my opinion, the “nays” have it.

And two honourable senators having risen:

The Hon. the Speaker: Call in the senators.

Have the whips agreed to the time for the ringing of the bells?

Hon. Terry Stratton: We would like to defer the vote until tomorrow.

Some Hon. Senators: Tomorrow.

Hon. Bill Rompkey: Honourable senators, perhaps we could defer the vote until 3:30 p.m. on Tuesday next?

The Hon. the Speaker: Honourable senators, pursuant to the agreement of Senators Rompkey and Stratton, I now put it to the house: Is it agreed that the vote will be at 3:30 –

Hon. Noël A. Kinsella (Deputy Leader of the Opposition): No agreement is required.

The Hon. the Speaker: If there is no agreement, it is normally deferred until 5:30 p.m. However, is it agreed then that the vote will be at 3:30 p.m. on the next sitting day of the Senate?

Hon. Senators: Agreed.

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