Invitation to join new Coalition on Militarized Commerce

Invitation to join new Coalition on Militarized Commerce (CMC)

May 15, 2000

SUMMARY OF INVITATION

The Coalition on Militarized Commerce (CMC) will push the Canadian Government to adopt policies to deal with the problem of involvement by Canadian companies in what is being called "militarized commerce". "Militarized commerce" includes one or more of the following:

the acquisition by companies operating in regions with grave human security and human rights concerns of security services from military or para-military forces, groups often implicated in serious human rights abuses;
the provision by companies of financial, logistical, material or infrastructural assistance to human-rights abusing troops, or their governments, usually in return for protection or access to resources;
the use of force by human rights abusing-regimes or militaries to supply resources to a company by, for example, clearing people off oil-rich lands;
the generation of revenues which are used by human rights abusing regimes or militaries to wage war against civilian populations.

At present, militarized commerce is of particular concern in Burma, Sudan, Sierra Leone, Colombia and the countries surrounding the Great Lakes in Africa. There are, however, many other countries where this phenomena is likely occurring.

PLEASE JOIN OUR COALITION ON MILITARIZED COMMERCE

TO: Concerned NGO groups

FROM: Craig Forcese (Canadian Lawyers Association for Human Rights) and Kevin

Waite (Canadian Friends of Burma).

Dear Friends,

We are writing in the hope that you will consider joining our Coalition on Militarized Commerce (CMC) by endorsing the list of recommendations that the CMC plans to push the government to adopt in order to strengthen its evolving "Human Security" policy. Please see the Coalition proposal and recommendations below.

We are sending this invitation to a select number of non-governmental organizations across Canada that we consider potential allies on this issue, with the aim of forming a nation-wide coalition over the coming weeks.

BACKGROUND

In recent months there has been growing concern over Canadian corporate involvement in zones of civil conflict. The release of the Canadian government-sponsored Harker Report, which concludes that the presence of Talisman Energy Inc. in southern Sudan is contributing to serious human rights violations by the Sudanese government, has further served to bring this issue to the forefront of national attention.

While the Department of Foreign Affairs and International Trade (DFAIT) has developed a foreign policy framework that stresses the centrality of human security and human rights protection, the government to date has not advanced a specific policy to deal with the problem of Canadian corporations operating in conflict zones where grave breaches of human rights are occurring. This policy vacuum has become abundantly clear with the Talisman case.

In an October 1999 press release, DFAIT indicated that "[i]f it becomes evident that oil extraction is exacerbating the conflict in Sudan, or resulting in violations of human rights or humanitarian law, the Government of Canada may consider, if required, economic and trade restrictions such as are authorized by the Export and Import Permits Act, the Special Economic Measures Act, or other instruments." However, upon the Harker report’s release, the Government announced a series of measures that fail to follow the Harker recommendations and do little to address problems caused by Talisman's presence in Sudan. On the latter issue, the Minister indicated merely that "Canada does not encourage private sector activity in Sudan. I expect Talisman, which has chosen to operate in this difficult environment, to nonetheless live up to the fundamental values of Canadians in conducting its business activities… Talisman must work with the NGO community in Canada and Sudan for the development of an effective mechanism for human rights monitoring, to ensure that their operations do not lead to an increase in tensions or otherwise contribute to the conflict." Unfortunately, it is unclear what, if any steps, the Government will take should Talisman fail to respond to the Minister's urgings.

It is our understanding that the Government’s failure to act in the Talisman case reflects, on the one hand, Cabinet-level concern that no defined policy dealing with these matters exist and that action in the absence of policy might set unhelpful precedents. Second, there is a wide-spread sense, particularly in the Department of Foreign Affairs, that, at present, Canada lacks legal instruments to deal with this problem.

Accordingly, there is a pressing need for the Government of Canada to articulate a strong policy on how it will deal with Canadian corporate involvement in conflicts and to develop legal tools. For the last several years, confronted by calls for Government action in the face of problematic Canadian corporate relations with repressive regimes in several countries, the Government has pleaded legal incapacity. Such an excuse for inaction, repeated over the span of several years, lacks credibility. If the Government lacks legal instruments, then it should create such devices.

B. THE IMPORTANCE OF HUMAN SECURITY: PUTTING PEOPLE FIRST

For the past two years, Canada has been advocating the concept of human security as a guiding principle of Canadian foreign policy. As stated by DFAIT, "A human security agenda means working to ensure that people need not fear for their rights, their safety or even their lives."

As noted by Minister Axworthy, security has dramatically declined for many of the world’s people. In particular, civilians have increasingly become the principal targets and victims of modern conflict. In order to deal with this problem, the Government has stressed that it is necessary to develop a human security framework that can motivate international action and enable the strengthening of adherence to international human rights standards and humanitarian law. As stated by the Minister, "it is unacceptable to slaughter people, to commit the most flagrant violations of humanitarian law against them, to deprive them arbitrarily of their property, or to expel them from their homes and homeland… those responsible will be held accountable."

Given its position that the security and safety of the individual must be viewed as an international concern, the Government has stressed that its human security agenda must be pursued in partnership with other states, non-governmental organizations, the private sector and other non-state actors. As indicated by Minister Axworthy, "New players on the international scene, including corporations, non-governmental bodies and regional organizations have a growing role to play." In addition, the human security agenda "highlights the duties of all Canadians, not just government but individuals and companies, to act when human security is at stake."

While Canada is to be applauded for its recognition of the importance of human security concerns, serious gaps nonetheless exist in its human security policy. As noted above, the most serious is the lack of policy options available to deal with the issue of Canadian corporate involvement with serious violations of human rights and humanitarian law.

C. THE TIME TO ACT IS NOW

While Canada’s human security policy framework has tended to overlook the issue of corporate involvement in regions of civil conflict where grave breaches of human rights and humanitarian law are occurring, the Canadian Government does now appear to be taking this problem seriously. Four developments suggest the time for action is now:

1. Ministerial interest: Minister Axworthy has repeatedly expressed concern about "militarized commerce" In a speech at the February 2000 NGO Peacebuilding Consultations in Ottawa, Minister Axworthy stated that "one of the most disturbing trends in terms of contemporary conflict is the capacity of belligerent groups to finance and sustain hostilities, using the access to resources provided by the global markets. There is a new economy of war at work, evident in such countries as Angola, Sudan and Burma." In particular, the Minister noted that the "role of private-sector corporations in conflict zones raises difficult and complex issues for governments such as ours that are committed to the promotion of human rights and human security, and for the companies themselves."

2. Interest amongst Parliamentarians: It is our sense that recent controversy over Talisman and work underway concerning human rights and the Export Development Corporation have raised the profile of corporations and human security concerns among Parliamentarians. A series of memoranda on this issue prepared by the Canadian Lawyers Association for International Human Rights for the Sudan Inter-Agency Reference Group and Canadian Friends of Burma have been ordered by a number of Parliamentarians.

3. Departmental interest: According to our information, in February, a new, multi-Department Taskforce on Corporate Responsibility was formed. We are told that its objectives include work on corporate codes of conduct and sanctions law. Meanwhile, apparently, the Centre for Foreign Policy Development has invited a fairly select group of people to periodic meetings to talk about matters relating to this issue.

4. International interest: Meanwhile, in December 1999, the G8 foreign ministers, meeting in Berlin "considered how the G8, through an approach addressing the range of policy contributions and using the comparative advantages available to it, can work to strengthen the ability of the international community in conflict prevention, focussing on", among other things, "the private sector, particularly in developing principles of corporate citizenship"

If civil society does not act on this issue soon, the agenda will be set by business and government. Already, the government has announced that it will be working with businesses on voluntary corporate codes of conduct. There is, however, serious concern that voluntary codes of conduct alone -- and particularly the voluntary codes that thus far have been celebrated by the Canadian government and corporations -- will be insufficient to ensure that corporations engaged in military commerce respect international human rights standards and do not undermine human security.

JOIN OUR "VIRTUAL COALITION"
We are determined to present our recommendations to the Government and have them incorporated into Canada’s human security agenda. We are asking your group and others from across Canada to provide us with a letter, stating that you support our recommendations and want to be listed publicly as a member of the Coalition on Militarized Commerce (CMC). PLEASE SEND YOUR LETTER by email to kkimwaite@yahoo.com; by fax to: (613) 563-0017, or by regular mail to Canadian Friends of Burma, #206 – 145 Spruce St., Ottawa, K1R 6P1.

We feel that a united approach is essential on this issue. While well-funded corporate lobbies will undoubtedly resist any moves aimed at making the corporate sector more accountable for their overseas operations, we believe that a broad-based coalition can significantly raise the public profile of this issue and facilitate substantive advances.

In light of financial and staff limitations, we are proposing a "virtual" coalition that will communicate by email, phone and fax. Canadian Friends of Burma will be assuming the following responsibilities: building support for a common position by gathering groups from across Canada into the Coalition; preparing and circulating news releases and letters for sign-on before release; preparing and sending updates across Canada and to member groups; asking groups to generate as many letters as possible; and assisting in presentations to the parliamentary committee and public officials who are engaged with Canada’s human security agenda.

There will be no official meetings of the Coalition, and if 2/3 of member groups approve a document, that document will be considered approved by the entire CMC. As we do not have the resources to contact groups that do not respond as requested, 2/3 of those groups who respond will constitute the majority. For news conferences in Ottawa we will contact representatives of Coalition groups and invite them to attend. However, as noted previously, we do not have resources to cover Coalition member’s expenses.

You may have questions about our recommendations and we encourage comments. However, while we would ideally elicit a dialogue on the precise wording of these recommendations, we lack resources to do so and we therefore ask you to accept the language we have set out.

WHAT YOU CAN DO IMMEDIATELY

We hope we can count on your organization as a partner in the Coalition on Militarized Commerce (CMC). GIVEN OUR FINANCIAL LIMITATIONS, WE WOULD ALSO BE VERY APPRECIATIVE IF YOUR GROUP COULD MAKE A DONATION TO THE CMC IN ORDER TO ENSURE THAT WE ARE ABLE TO INCREASE OUR CAPACITY TO BUILD A MOVEMENT FOR CHANGE.

If your group wants to join the CMC, please send a fax or e-mail to Kevin Waite at Canadian Friends of Burma stating your support for the recommendations set out below and that you want your group to be listed publicly as a member of the Coalition.

If you have any questions, please feel free to contact Kevin Waite by e-mail: kkimwaite@yahoo.com ; tel: (613) 237-8056 or fax: (613) 563-0017.

If you cannot join the Coalition for some reason, we hope you will still send a letter to Foreign Affairs and International Trade Minister Lloyd Axworthy supporting our recommendations. This letter should be addressed to Lloyd Axworthy, Foreign Affairs Minister, House of Commons, Ottawa, K1A 0A6 (no postage necessary), or you can fax your letter to Minister Axworthy at fax: (613) 947-4442.

We look forward to hearing from you soon.

Sincerely,

Craig Forcese, Visiting Professor

Faculty of Law, University of Ottawa

and

Kevin Waite, Assistant Coordinator

Canadian Friends of Burma

List of Recommendations by the Coalition on Militarized Commerce.

Immediate Action:

The Standing Committee on Foreign Affairs and International Trade should convene hearings on the issue of "militarized commerce" and Canadian corporate involvement in areas of civil conflict where grave breaches of human rights and human security are occurring.

Policy Options:

Voluntary codes represent one means of addressing the issue of business complicity with human rights abuse. However, such codes will only be effective where external inducements encourage companies to adopt and apply human rights principles. Accordingly, certain government benefits extended to companies should be conditioned on adherence to a minimum standard of human rights conduct, including in their dealings with repressive regimes. In particular, the Government should introduce laws and policies:

(a) conditioning government procurement on adherence by firms to human rights and human security country guidelines in their overseas operations;

(b) conditioning financial and investment support contributions by government agencies, including the Export Development Corporation and CIDA INC., and embassy and trade promotion staff on adherence by firms to human rights and human security country guidelines in their overseas operations; and

Even with these inducements, other mechanisms will be necessary to deal with recalcitrant companies.

Unilateral tax forgiveness for income tax paid to repressive regimes should be eliminated. At present, there is no bar on companies obtaining a Canadian taxpayer funded-tax subsidy for operations that amount to complicity with human rights abuses. The Government should also bar business expense deductions in the calculation of corporate income taxes where those deductions are made for foreign projects raising serious human rights or human security issues. This power of disallowance should be introduced either as a separate amendment to the Income Tax Act or as an additional power possessed by Cabinet under a revamped Special Economic Measures Act.

The Export and Import Permits Act should be used judiciously to regulate the export of equipment to controversial projects run by Canadian companies in countries with repressive regimes. However, the Government should take into account the limited effectiveness of this Act in dealing with instances of corporate complicity with human rights abuses and should clarify the scope of other legal instruments, such as the Special Economic Measures Act.

The government must revisit the issue of whether the Special Economic Measures Act can apply to circumstances such as those existing in Sudan. More specifically, the government must have a legal instrument able to bar or restrict investment activities by Canadian firms in circumstances where the Canadian company’s presence is fuelling human rights abuse. The Government should either publicly acknowledge that the Act, as presently drafted, allows unilateral Canadian action in the absence of an international conflict, or it should amend the Act to clarify that such action is permissible. Critically, the absence of credible Canadian sanctions law removes much of the leverage the Government would otherwise have in negotiations with companies as to an appropriate standard of human rights behaviour.

To stop companies complicit in human rights abuses from hindering shareholder criticism and action -- as was the case last year with Talisman --paragraph 137(5)(b) of the Canada Business Corporations Act should be amended to eliminate the words "or primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes" as grounds for the exclusion of a shareholder proposal from being voted on at corporate annual general meetings. (NB: A Bill that would FURTHER restrict ethical shareholder activism has been introduced by the government is presently going through Parliament).

The government should explore the possibility that Canadian companies complicit in human rights abuses are in violation of the Criminal Code provisions concerning crimes against humanity, or those set out in Bill C-19 (Crimes Against Humanity Act), once enacted. To enhance the prospect of "complicity" being captured under Bill C-19, once enacted, the Government should include in the Bill the language found in present s-s.7(3.77) of the Criminal Code. This language indicates that "attempting or conspiring to commit, counselling any person to commit, aiding or abetting any person in the commission of, or being an accessory after the fact in relation to" a crime against humanity is also a crime.

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