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The Toronto Star : February 4, 1999
By Naomi Klein

Dusting the Cobwebs off Canada's Conscience

Maybe it's a toxic spill at a mine in Guyana. Or child labour being used at a rug factory in Pakistan. Or a hefty bribe handed over to a brutal dictator in Indonesia.

These scandals have become the business-as-usual stories in the era of globalization and even though they often involve Canadian companies, the consensus is that there is little the Canadian government can do about it.

A collection of environmental, human rights and labour groups, however, have a different idea. They say the federal government already has a lever to push our companies to uphold Canadian values and standards abroad - it's just sitting idle at the moment, collecting cobwebs.

The lever is the little-known Export Development Corporation, a crown corporation that insured and financed $34 billion worth of export and investment deals in 1998 alone.

At the moment, EDC financing is allocated to Canadian companies the way any insurance policy or bank loan would be: Is the project likely to succeed? Is the risk too great? Additionally, it asks whether any given project will help Canada compete internationally. Its mandate is in the middle of a review, scheduled to wrap up next month, with a report to Parliament by June. During public consultations, the review panel heard from several groups who are proposing a radically different role for the EDC.

They argue that, as a crown corporation financing projects the private sector won't touch, the EDC has the power to make a significant demand of its corporate clients. The 4,183 Canadian companies who receive EDC funds could help advance a progressive foreign policy agenda.

Currently, the EDC offers insurance against "political risk,'' including political violence. "When you make an investment in another country, you're betting on that country's political stability,'' an EDC brochure states.

The catch is that in countries like Indonesia and Colombia, that "stability'' often means a status quo of repression, while political "upheaval'' could lead to democracy and human rights. In other words, the Canadian government, through the EDC, encourages companies to "bet'' against the possibility of positive political change.

Instead, the EDC could take measures to ensure the projects it supports in no way contribute to the denial of human rights, labour rights or to environmental damage. There are several ways this could be accomplished.

In its submission to the review, the Steelworkers Humanity Fund argues that in countries known for their human rights abuses, EDC support could be contingent on "no participation in joint ventures with the regime . . . (and) refusal to support activities in areas where security or military force is used to establish or maintain the commercial operation.'' And the North-South Institute wants an assurance of environmental protection.

Several submissions recommend that the EDC be subject to the Access to Information Act so the public can monitor which deals are getting support. The Canadian Lawyers Association for International Human Rights points out that the Export-Import Bank and the Overseas Private Investment Corporation - the U.S. equivalents of the EDC - are far more transparent and "are required to meet formal human rights standards.''

According to Glen Hodgson, the EDC's director of government relations, these conditions would set Canadian companies up as "the Pollyannas of the world.'' He insists that the EDC already turns down deals it considers environmentally unsound, "we just haven't had it written down as a codified policy.''

But, Hodgson warns, if our companies started approaching foreign governments with lists of conditions, the deals would simply go to other companies. Besides, Canadian multinationals are relatively small players internationally and "Canada is getting poorer, not richer - we need some tools to get richer.''

Perhaps. But follow that line of reasoning to its logical conclusion and it suggests Canadian companies should make up for what they lack in size with extra unscrupulousness.

"We may be small but we play dirty'' can be our international motto.

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