Canada

CIRDI: An Investment in Responsible Extractive Industries or Another Business Subsidy?

Posted on: October 6th, 2017 by Lanlin Bu No Comments

CIRDI

Executive Summary

 

CIRDI, The Canadian International Resource and Development Institute, was created in 2013 “to strengthen” the capacity of developing countries “to govern and manage their natural resources for the benefit of their people”.1 With close to $40 million dollars in government funding to autumn 2017 the authors believe the Institute has strayed far from its mandate. Rather than assisting and encouraging Canadian extractive industries to improve their social development, environment and human rights practices to benefit the people of developing countries (as intended) the primary beneficiaries have been the companies themselves. While enjoying more or less complete domination of the Institute’s Board of Directors and Advisory Council, industry’s financial contributions to the Institute has been negligible let alone investment in communities affected by their resource development practices. At the same time, government’s decision to redirect humanitarian aid, traditionally delivered through NGOs, to subsidize industry to meet its own corporate social responsibilities is flawed. Less money is reaching those in need, and corporations and universities have proven to be less effective in delivering aid than NGOs because they often use these funds to serve their own purposes.

 

This paper addresses some important questions. Is CIRDI respecting its mission and meeting its goals? Is it providing good value to taxpayers? Is it as transparent, collaborative and useful as it needs to be to justify its future? Is its relationship appropriately independent from undue industry influence? Why have other stakeholders been squeezed out of CIRDI’s leadership? The paper also evaluates CIRDI’s governance and projects against its stated goals and objectives.

Finally, this paper makes recommendations whose implementation would help CIRDI restore its intended mission, establish balanced leadership and better serve taxpayers and affected communities in developing countries. If the purpose truly is inclusiveness, sustainability, human rights, transparency and independence, then the Institute needs to re- set its leadership, governance and programming, otherwise the authors recommend that CIRDI be closed.

Harmony Foundation of Canada, September 25, 2017

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For the full report, please download HERE

Strengthening Canadian Charities (Part 2)

Posted on: December 2nd, 2016 by Lanlin Bu No Comments

— What Can Individuals Do to Better Support Charities?

Lanlin Bu, Michael Bloomfield, and Adrian Southin

 

Knowledge is power. Tell your friends and colleagues about the problems highlighted in our recent paper “Unleashing the Power of Canadian Charities”, and encourage government and corporations to remedy those problems. At the same time, we can all take actions to directly help charities.

 

What can we do in our own life to help charities?

 

1. Re-examine our giving.

On average, Canadians donate $531 (CAD) [1] to charity, while Americans give $1,201 (USD).[2] Many of us can afford to give more support to the charities that keep our water clean, help those in need, run our hospitals and fight for social justice. Even if you can’t give more, you can help in other ways. Learn more about the charities you’re supporting and get involved. Online resources like the CRA database (http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html) provide financial and operational information for many charities.

 

2. Volunteer

Volunteers are essential for many charities to delivering their services. More volunteers mean that charities can offer more benefit to your community and all Canadians. Contact an organization you support directly, or find a listing for volunteer opportunities online.

 

3. Consumer Awareness

It’s important to support companies that invest in society and are good corporate citizens. Just as we expect corporations to respect human rights, maintain safe workplaces and protect the environment, we also should expect them to generously contribute to the arts, education, and social wellbeing. After all, through our tax dollars, businesses are given lots of support including research and development grants, training and access to infrastructure. It’s only fair that Canadians and the communities they live in get a return on their investment. RBC’s Blue Water Project[3] is a good example of an effort to improve the world, where self-promoting schemes like Amazon Smile[4] take away from sincere giving.

 

A strong civil society is vital to a healthy democracy, giving voice to concerned Canadians. These voices help ensure fairness and justice for all. Let’s make sure these organizations are well equipped and not being held back from achieving their potential.

Charities are too important to be put at risk by short-term political or economic trends. Governments, corporations and the public need to be more supportive in meaningful ways if we truly value the many services charities provide to Canadians.

 

Read the full research paper “UNLEASHING THE POWER OF CANADIAN CHARITIES” from http://harmonyfdn.ca/?page_id=2756

 

[1] Turcotte, Martin. “Charitable giving by individuals.” Statistics Canada. 2015. 4.

[2] Link to: http://nccs.urban.org/nccs/statistics/Charitable-Giving-in-America-Some-Facts-and-Figures.cfm

[3] Link to: http://www.rbc.com/community-sustainability/environment/rbc-blue-water/index.html

[4] Link to: http://www.huffingtonpost.com/brady-josephson/why-amazon-is-smiling-and_b_4360405.html

Strengthening Canadian Charities (Part 1)

Posted on: December 2nd, 2016 by Lanlin Bu No Comments

— What Can Governments Do to Better Support Charities?

Lanlin Bu, Michael Bloomfield, and Adrian Southin

 

Charities are essential partners in Canadian society, working to relieve poverty, safeguard our environment and health, assist children, seniors and others in need, and provide cultural, educational social and other valuable services. Given that they contribute $35.6 billion[1] to the economy each year, we’d expect that government would actively encourage these organizations, much in the same way they support business to succeed. The truth is that over the past decade, unfriendly politicians, excessive regulations, corporate exploitation and the economic downturn have hurt charities and the Canadians they serve.

 

So how do we turn the situation around and persuade governments, corporations and the public to be more supportive? The need and benefits seem clear, what actions should be taken?

 

1. End charity bashing
A strong civil society is essential to a healthy democracy. Global Affairs Canada says Canada recognizes civil society as an “essential partner in promoting transformative change,”[2] acting as an intermediary between governments and their people. If our elected leaders are serious then they should encourage public participation and discourage politicians who try to muzzle charities for political gain.

 

For example in 2012, Natural Resources Minister Joe Oliver declared: “environmental and other radical groups [were backed by]… foreign special interest groups… [to] hijack our regulatory system to achieve their radical agenda.”[3] Shortly thereafter, then-Minister of Environment, Peter Kent accused charities of being used to launder offshore funds.[4] Both assertions were debunked.

 

Meanwhile, corporations use SLAPP suits (Strategic Lawsuit Against Public Participation) to foster fear of speaking out and bog down charities in court. Government needs to legislate against this undemocratic behaviour as many USA jurisdictions have done. If business and government promote developments that may have negative consequences public advocacy is vital to a balanced discussion.

 

2. Cut the red tape
Govern charities with trust, not fear of unintentional wrongdoing. The overwhelming majority of charities are efficiently and honestly operated. Nonetheless, regulatory requirements have increasingly tightened in response to corporate wrongdoers such as ENRON, SNC-Lavalin and Bernie Madoff.[5]

Harmonizing oversight between the bodies that govern charities, the CRA and ISEDC, would be a good place to start. Many charities are spending a disproportionate amount of time and money to meet regulatory demands. For example, charities have to send separate annual reports, with different criteria and deadlines, to each body. These reporting requirements are the same for small local groups and major national charities like The Red Cross or Canadian Cancer Society. Why? Creating harmonized, ascending reporting requirements would free up resources spent on administrative tasks for charities to better provide their services.

 

3. Extend the timeframe to spend donations

Right now, charities must spend at least 80% of all donations for which charitable receipts are issued within 12 months of receipt as well as 3.5% of all assets. Extending the timeframe that charities have to spend donations to three years would create more sustainability and stability for charities, giving organizations the security to reach their long-term goals and mandate.

 

4. Promote giving and volunteerism

Improved public awareness of the contribution of charities will help increase donations and volunteering. Increasing the benefits for giving to charities would also help. It’s unfair that donations to political parties receive a 75% tax credit, while donations to charities receive an average of 29%, and not more than 50%, including provincial credits.[6] Let’s be fair.

 

5. Restore charities as a primary deliverer of foreign aid
In 2013, Canadian International Development Agency was terminated as part of a government decision to deliver foreign aid through corporations, rather than charities. This means using public funds to subsidize corporations to meet their social and environmental responsibilities, in addition to losing the expertise of charities in delivering aid more efficiently and effectively. Moreover, it also raises the risk of funds lost to in-country government corruption and corporate self-interest

 

6. Stop soliciting public and corporate donations 

The Canadian government has taken donations from both the public and corporations in order to fulfill its own responsibilities, such as disaster relief after the summer 2016 fires in Fort McMurray. Given that there is a finite amount of available donations, this drains money that otherwise might have gone to charities. And what expectation is created when corporations give to government? For example, what public benefit is gained when Mars Canada sponsors with Parks Canada “unique historic chocolate experiences”[7].

 

7. Review corporate giving 

While corporate giving should be encouraged it’s imperative that it is in society’s best interest, or at least balanced between society and the donors, rather than for tax write-offs and marketing purposes. For example, the Olympic games are a giant marketing event for Petro-Canada, RBC and others, not a charitable activity; and making charities compete for donations like Aviva does through retweets and Facebook likes derives a business benefit that should not be subsidized by t taxpayers. Nor does it seem appropriate that companies like Sobeys who collect public donations for charities and food banks receive the goodwill, and sometimes even tax credits, that belong to the individual donors.

 

8. Provide charities with training and support
Provide training programs or grants for capacity building to upgrade charities’ skills and capacity, as is done for corporations, such as through Canada Jobs Grants.

 

Read the full research paper “UNLEASHING THE POWER OF CANADIAN CHARITIES” from http://harmonyfdn.ca/?page_id=2756

 

[1] Haggar-Guenette et al. Satellite Account of Non-profit Institutions and Volunteering. Statistics Canada, 2007. 9.

[2] Link to: http://www.international.gc.ca/development-developpement/priorities-priorites/civil_society-societe-civile.aspx?lang=eng

[3] Link to: http://www.nrcan.gc.ca/media-room/news-release/2012/1/1909

[4] Link to: http://www.cbc.ca/news/politics/environmental-charities-laundering-foreign-funds-kent-says-1.1165691

[5] Link to: http://www.accounting-degree.org/scandals/

[6] Link to: http://www.taxplanningguide.ca/tax-planning-guide/section-2-individuals/tax-credits-charitable-donations/

[7] Link to: http://www.pc.gc.ca/eng/agen/partenaires-partners/national.aspx

CSR: Society’s Return on Investment?

Posted on: October 24th, 2016 by Harmony Foundation No Comments

Lanlin Bu and Michael Bloomfield

with research and writing assistance from Adrian Southin

 

 

 

Corporate social responsibility (CSR) runs the gamut from self-aggrandizement to crisis management to with the occasional act of generosity. Society deserves better! Tax payers invest heavily in business, providing research and development grants, tax breaks, transportation facilities and many other subsidies including cleaning up the environmental messes too often left behind. According to a 2014 Fraser Institute report, over a period of nearly 30 years, federal, provincial and local authorities spent nearly $684-billion on business subsidies. The fossil-fuel industry alone receives over $3.3 billion (CAD) annually (See Chart1 below)[1].

 

Chart1: Major Subsidies to Fossil Fuel Industry in Canada (2013-2015, average)

 

chart1

(From http://www.iisd.org/faq/ffs/canada/ )

 

 

Simply put, business owes society a fair return on its investment. More than that, companies gain and retain social license through product safety, compliance with legal standards, honest reporting, “truth in advertising”, protection of the environment and public health, as well as fair treatment of employees, customers and local communities. Volkswagen, a company that once topped the Dow Jones Sustainability Index, plummeted after the shocking emission scandal of 2015[2]. A long and tough road to recovery will cost VW billions.

 

So what’s a better way forward? First, let’s restore balance, recognizing business is part of society not its master. Business needs to work more collaboratively with civil society to advance the social development, human rights and environmental stewardship. Furthermore, it’s in business’ best interest because responsible companies get rewarded. Studies show that healthy, happy employees are more productive and absenteeism decreases.[3] Customer loyalty tilts toward companies they trust and respect, those who demonstrate high social and environmental performance. In addition, business does best in well-educated, prosperous and healthy societies. Moreover, if the advocates for a global economy are to be believed the movement should be about creating more opportunities in disadvantaged places not exploiting lower standards for worker health and safety, accountability and environmental protection.

 

CSR is much more than just marketing tool or stay-out-of-jail card. For companies to truly be responsible, they need to commit throughout their operations. Take Loblaws as an example. It’s great they have programs such as the President’s Choice Children Charity. Yet, through the Joe Fresh brand, Loblaws was one of the companies involved in the 2013 Rana Plaza sweatshop collapse in Bangladesh that killed over 1100 people.[4] Justice still has not come to the victims. Similar examples include Streit Group’s sales of armoured vehicles to South Sudan[5] and Saudi Arabia, Tahoe Resources and Goldcorp’s mistreatment of local residents in Guatemala, and Canada’s tobacco and toxic waste shipped to Asia. This kind of behaviour overseas is damaging Canada’s reputation and relationships. No wonder Canada is increasingly seen as just another country willing to compromise public health, human rights and the environment to increase profit. Why do we allow these companies to hide behind lax local regulations to justify their actions while representing Canada abroad?

 

Sadly it’s not just overseas where Canadian companies are failing to meet public expectations. The Mount Polley BC tailing ponds breach by Imperial Metals, CN Rail’s denial of any responsibility in the Lac-Mégantic disaster and the Canadian clients of KMPG involved in an offshore tax scheme on the Isle of Man[6], each demonstrating how business puts profit over its legal and moral responsibilities, even here in Canada. Don’t we Canadians deserve better?

 

It’s time to a shift CSR away from brand promotion and crisis management. Transformational CSR must become corporate culture, practiced up and down the chain of command. Corporations must work in good faith with all stakeholders, including civil society to achieve economic development without harming the environment and public health.

 

The voluntary approach relies too much on the goodwill of individuals rather than a committed corporate culture. Furthermore, voluntary efforts do not provide a level playing field for business, favouring the laggards over the leaders who already are investing in positive action on conservation, climate, human rights, worker health and safety and so on.

 

Therefore Harmony Foundation proposes that senior levels of Canadian government work with business and civil society to develop and implement a protocol that guarantees the same standards of human rights, health and safety, and environmental protection, whether operating in Canada or aboard. Not only it is the right thing to do, but also this is our best chance to improve Canada’s reputation and long-term opportunities internationally. That would truly be the Canadian advantage! In fact, that’s the clearest path to prosperity with integrity.

 

 

Please see our  paper “CSR: Society’s Return on Investment for more on this topic. You can download the paper from http://harmonyfdn.ca/?page_id=2775. The paper lays out in more detail the elements of the protocol which was first presented in Canadian Mining Operations Around the World: Respecting People and the Environment (2013)

 

[1] http://www.iisd.org/faq/ffs/canada/

[2] https://www.theguardian.com/sustainable-business/2015/dec/30/vw-exxon-lobbying-brazil-mining-tragedy-toshiba-corporate-scandals-greenwashing-climate-change

[3] http://www2.warwick.ac.uk/newsandevents/pressreleases/new_study_shows/

[4] http://www.cbc.ca/news/world/bangladesh-garment-workers-lives-still-at-risk-the-fifth-estate-finds-1.1959518

[5] http://www.theglobeandmail.com/news/world/canadian-company-sold-armoured-vehicles-to-south-sudan-report/article31191713/

[6] http://www.cbc.ca/news/business/canada-revenue-kpmg-secret-amnesty-1.3479594

Victoria’s Urban Forest: Asset or Liability?

Posted on: June 4th, 2015 by Harmony Foundation No Comments

 

In Victoria Foundation’s 2014 Vital Signs report, Victorians ranked the natural environment as the best part of living in the city and with good reason. However, while Victoria’s urban forest is a substantial natural asset, it’s largely taken for granted.

 

Beyond their aesthetic value, Victoria’s street trees lower stress, increase community pride and social well-being, sequester 110,000 tons of air pollutants each year, preserve road surface and provide $2 million of storm water service per year.

 

Conservative estimates show that for every $1 invested in Victoria’s urban forest, about $4 is returned in economic benefits. Yet years of neglect have left us with a diminishing asset and growing risk to public safety from unhealthy trees and a forest past its prime.

 

Since 1995, inventories and reports produced by and for the City consistently urged Victoria to adopt an action plan to address an increasingly vulnerable, hazardous and aging urban tree population. Recently, the City commissioned another inventory of all City owned trees that was accompanied by a “tactical plan” for managing all public trees. While considerable public resources have been spent on these documentations, many recommendations have not been acted upon, most notably the implementation of an action plan.

 

As a result, resources invested in these inventories and reports have not been well used. Over 800 hazardous street trees were identified and remain threats to public safety, with a similar number needing urgent action in our parks and green spaces. Nearly 1500 sites where trees were removed have not been re-planted, nor has a comprehensive action plan been adopted for urban forest revitalization since it was first recommended nearly 20 years ago.

 

After years of trying to get this issue on the City’s agenda, during the summer of 2014 I reviewed all of the above-mentioned reports. A pattern of unfulfilled promises and minimal action is clear. Drawing on more than 30 years experience working on sustainable communities and consultations with experts on the social and economic benefits of investing in urban forests, I developed six comprehensive recommendations.

 

The City of Victoria must undertake the immediate removal and replacement of hazardous trees. Existing vacant spaces need to be replanted, and a long-term tree planting campaign must be adopted. The City should establish two committees to ensure the health of the urban forest: one to recommend updates to our weak Tree Preservation Bylaw, and task another to recommend on increasing benefits provided by our urban forest, such as food production. Finally, Victoria must commit to a comprehensive action plan that sustains the social, environmental and economic benefits provided by our urban forest. These recommendations were offered to help ensure the long-lasting health of Victoria’s urban forest and maximize its benefits for us and for future generations. But like the reports before them, my recommendations went largely unanswered.

 

Why the foot-dragging? Trees are the only public investment that increases in value over time. A 2005 report commissioned by the City assessed the monetary value of Victoria’s urban forest at $39,139,000 for street trees alone, a sum that only increases once social, health and environmental benefits from all of Victoria’s trees are taken into account.

 

There are many compelling reasons for the City to act now. Again, Victoria is losing valuable assets and facing increasing risks to public safety from unsound and hazardous trees. The social, economic and environmental benefits of a healthy urban forest, as well as strong public support for it further stress the need for prompt action. The City needs to move quickly to address hazardous trees, (re)plants vacant sites, adopt a long-term tree planting program and to engage a supportive public in preserving, maintaining and increasing the long-term benefits of a healthy urban forest.

 

If you too care about healthy trees, please make your feelings known to Mayor Helps and city councilors. Their leadership is required to reverse the decline of Victoria’s urban forest.

 

The full report of Victoria’s Urban Forest: Asset or Liability can be found here.

 

 

E-waste: Out of Sight, Out of Mind

Posted on: June 5th, 2012 by Harmony Foundation No Comments

Grand houses, luxury cars, piles of electronic waste, and a blackened river are common sights in Guiyu, a small town in Southern China, becoming infamous as a dumping ground for international e-waste. Every year about 20 to 50 million tons of e-waste is produced in the world with 70% shipped to China, and the rest sent to India or poor African countries. The e-waste includes computers, printers, cell phones, TVs, toys, and other electronics.

 

And it’s not only obsolete and broken equipment. Adam Minter, author of the Shanghai Scrap blog, found in April 2012 that the e-waste included defective but nearly new items from HP, Samsung, and Panasonic, as well as electronics returned for warranty repairs. In Guiyu, about 80% of families are directly involved in the business of disassembling and disposing of e-waste. Every year about 1.5 million tons of e-waste is processed in Guiyu, which contributes 90% of tax income for this small town.

 

 

 

Among over 150,000 employees in Guiyu’s e-waste industry, many are migrants from poorer parts of China, too desperate to care about the health risks. According to a 2008 documentary produced by 60 Minutes, “21st century toxins are being managed in a 17th century environment.” Workers use their bare hands to disassemble electric wire, plastics and circuit boards; then the unprotected workers use fire and mercuric acid baths to extract precious, mostly toxic, metals from the e-waste.

 

 

What’s the cost of our obsession with the newest electronic gadgets? The e-waste industry has seriously harmed the local environment and the health of residents. Acid residue is dumped into the local river which has turned black. Clouds of acrid smoke from burning the e-waste expose residents to polychlorinated and polybrominated dioxins, some of the most toxic compounds on earth. In fact, research has found that Guiyu has the highest level of cancer causing dioxins in the world.

 

Standing on the street for a short while you can smell the pungent stench in the air. Many workers have respiratory disease, skin ulcers and kidney stones. According to an article in the Chinese magazine Environment Research by Huo Xia, a professor in the Medical School of Shantou University, blood lead levels of 70.8% in children has reached the level of lead poisoning. The rate of stillborns for pregnant women in Guiyu from 2003-2007 was six times higher than other areas, and the rate of premature births was 62% higher.

 

Of course China bears some responsibility for this awful mess. In 2010 China, produced, 2.3 million tons of e-waste, second only to the U.S. production of 3 million tons. In addition, China ratified the Basel Convention in 1990 and has banned e-waste import ever since, but local governments turn a blind eye on the e-waste industry, grateful for tax income contribution to local towns.

 

But what about our responsibilities as consumers, is it fair for us to dump our waste on others?  And yet that’s exactly what we do, exploit the poor and leave them a legacy of damaged health and environments. Adding insult to injury we turn up our noses at their reckless behaviour and walk away.

 

The ugly truth is that the stinky e-waste export is driven by pure economics. A 2006 Seattle Times article E-waste dump of the world reported that, “an average computer yields only $1.50 to $2 worth of commodities such as shredded plastic, copper and aluminum (…) e-waste recyclers in the United States can’t cover their costs with such low yields, especially while respecting environmental regulations.” Even though charging 50 cents a pound for taking in old computers (about $20-28 per unit) would mean recycling can be done safely and profitably in the U.S., many companies still chose to ship the e-waste to Asia and Africa for better profit. Stricter environmental and safety rules drive up the cost of disposal, it’s as much as 10 times cheaper to export the waste to developing countries.

 

Surely this harmful practice can be stopped. In fact, in the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal was adopted to do just that. As the Basel Convention clearly states, “Recognizing the increasing desire for the prohibition of transboundary movements of hazardous wastes and their disposal in other States, especially developing countries. Parties shall prohibit or shall not permit the export of hazardous wastes and other wastes to the Parties which have prohibited the import of such wastes.”

 

So what’s the problem? Shamefully, as the biggest e-waste producing country, the U.S. continues to allow such criminal e-waste management through weak legislation and failure to ratify the Basel Convention. As usual Canada makes all the right gestures and does little in practice.  Canada ratified the Basel Convention in 1992 but to date has done very little to enforce it. As the CBC documentary e-waste Dumping Ground (2008) pointed out, if e-waste export were an Olympic sport, the U.S. would win the gold medal while Canada would win the silver.

 

Even our Ministers of the Environment failed to get the job done. In 2004, The Canadian Council of Ministers of the Environment adopted 12 principles for e-product stewardship in the much ballyhooed Principles for Electronics Product Stewardship. Despite a clear commitment to only export e-waste for recycling from Canada to facilities with a documented commitment to environmentally sound management and fair labour practices, the CBC documentary clearly showed that some parts of Canada still ship e-waste to China and other countries.

 

So how do companies continue to export e-waste from Canada? Wikipedia reveals that the Canadian Government uses a unique interpretation of the Basel Convention to create a loophole in the regulations. As a result as much as 400,000 tons of e-waste is exported each year because it is intact not disassembled.

 

Our enforcement is not much more impressive. According to Seattle-based Basel Action Network, the only known enforcement success in Canada, occurred when 50 containers loaded with about 500,000 kg of e-waste destined for China and Hong Kong were caught at the Port of Vancouver in 2006. The 27 companies involved were fined less than $2,000 apiece under the Customs Act, but the company names were not revealed.

 

Well done Canada, we’ve opened the door to uncontrolled export of toxic e-waste and made some money in the process. If the Chinese or Ghanaians or others are stupid enough to take it, that’s their problem not ours.

 

So Canada, what’s our decision, out of sight, out of mind, or to take responsibility for ourselves?

 

If we are serious about human rights and environmental protection, we must first ban all e-waste export, and strengthen regulations for enforcement. The only exception should be highly specialized equipment going to a facility abiding by the highest international Environment, Health and Safety standards. At the same time, Canada should also urge, indeed require, producers to improve their product design for better disassembly and disposal, and press them to replace toxic flame-retardants with environmentally safe alternatives.

 

According to the U.S.Government Accountability Office, only $1 more in design cost per computer could save $4 for American recyclers in disassembly costs. Why let innocent people bear the cost for irresponsible consumers and profit-greedy producers? Sure companies and government must do better so must we as individuals. We need to control our eager pursuit of the latest fashion in cell phones, cameras, computers and other e-devices. Ten years ago, the average life span of a computer was six years; now it is only two years. Cell phones, cameras and TVs are no better.

 

If we each reduce our e-waste, make sure it is properly disposed of and choose suppliers who do the same we can help ensure our wastefulness is not destroying the environment or damaging the health of children and parents half way around the world.

 

If you want to explore more about e-waste, here are some links you can visit:

 

Important Facts You Need To Know About E-waste

 

The Dark Side of the Information Age

Chinese Investment in Canadian Energy and Natural Resources: Boon or Bogey Man?

Posted on: May 10th, 2012 by Harmony Foundation No Comments

 

Since Prime Minister Harper changed his government’s policy on China, Canada is welcoming, indeed encouraging Chinese investment. According to Department of Foreign Affairs and International Trade, “The stock of foreign direct investment into Canada from China reached approximately C$14 billion at the end of 2010. Chinese firms are actively investing abroad and have expressed a strong interest in investing in Canada. Sectors of interest include natural resources, renewable energy, information and communication technology, food processing, pharmaceuticals and natural medicine, and advanced manufacturing.” [1]

 
Are Canadians concerned, should we be concerned? According to Canadian Press-Harris Decima survey in February 2012, 51% of Canadians welcomed Chinese investment in Canada, while 71% felt badly if Chinese companies took majority control of an existing Canadian-owned operation.
 
Canadians do have a few concerns about China’s investment in natural resources. First of all, most of China’s investors in natural resources and energy are State Owned Enterprises (SOEs), who are considered by many as government agents, raising concerns China ‘s government will control some of the natural resources in Canada through its SOEs; second, because China lacks enough of its own resources, there is concern it will exploit Canada’s natural resources too rapidly to fuel its development needs; third, China’s investors and collaborators in Canada might bring short term contract workers from China to work in Canada.
 
The BHP bid on Potash exemplifies these concerns. In Aug. 2010, BHP Billiton (Australia), the largest mining company in the world, offered $38.6 billion in a takeover bid for PotashCorp in Saskatchewan, the largest Potash producer in the world. Meanwhile, China’s SOE Sinochem was looking for potential partners to mount a counter-offer. The Conference Board of Canada completed a report “Saskatchewan in the Spotlight” to help the provincial government to make their decision. This report says “BHP Billiton’s proposed takeover of PotashCorp could reduce Saskatchewan government revenues by at least $2 billion over the next 10 years”.  Under the scenario that Sinochem buys PotashCorp and adopts a “high production” approach, the possible reduction of revenue for Saskatchewan over a decade would be $5.7 billion. Eventually the bid by BHP Billiton was blocked by the Minister of Industry Tony Clement under the “net benefit to Canada” provision of Canada Investment Act on Nov. 3rd, 2010.
 
What’s interesting is that CBC held a poll online to solicit predictions on the BHP bid. 25.14% predicted that BHP would win the bid while only 9.85% thought China would buy PotashCorp. [2]
 
While the accelerated development concern seems real, the view held by many that most of China’s investment in Canada is in natural resources and energy does not match with results to date.  In fact, Asia Pacific Foundation’s research on China’s investment in Canada shows that in 2010, 44% of China’s investment in Canada was in business service, while 8.3% was in mining, dropped from 10.4% in 2008. [3]
 
Another concern expressed is the danger of Chinese domination. While it is true that Chinese investment in Canada has grown significantly in recent years, its overall scale compared to America and Europe is still small. In 2011, US invested $326.1 million in Canada while China’s investment was only $10.9 million.
 

 
Finally, concerns are being raised about Chinese environmental performance. In June 2010, China published “Environmental Performance Guidelines for China’s Overseas Investment,” covering environmental impact assessment, protocol protection mechanism, ecological compensation and corporate social responsibilities.
 
One can only conclude at this time that, whether or not China or any other foreign investor is a problem for Canada, whether control of essential industries or sectors, domination of Canadian business, undesirable influence over decisions of strategic national importance or weakening of labour, public health and environmental protection, is up to us.
 
We need to strongly encourage our governments to protect our interests and not compromise under pressure from business to give priority to their ambitions. Regarding China, let’s take the opportunity to help Chinese investors make responsible investment in Canada, better inform them about CSR in Canada, and where needed pressure Chinese companies to be social and environmentally responsible in Canada, at home and around the world. In this way we not only protect our own interests but also contribute, as we should, to improving conditions globally.
 
Major investment from China in Energy & Resource in Canada in the Past Three Years

     

  • Jan. 2012, PetroChina bought Athabassca Oil Sands Corporations’ remaining stake  (40%) in the Mackay River project with $1.9 billion, which made PetroChina the first Chinese company having full ownership of an oilsands project
  • Nov.2011, CNOOC acquired Opti Canada, a financially troubled Calgary company, with US$2.1 billion; in return, CNOOC gains a 35% stake in the Long Lake oil sands project.
  • Oct. 2011, Sinopec bought Daylight Energy Ltd. for $2.2 billion.
  • Aug. 2011, Jilin Jien Nickel would invest another $400 million in its nickel extraction project in Nunavik, which makes the total investment $800 million after it acquired Canadian Royalties Inc. in 2010.
  • May, 2011, Baosteel purchased Noront Resources’s 9.9% equity with $17.4 million (the percentage could raise from 9.9% to 14.15% with extra $11.7 million)
  • Apr. 2011, Jinchuan Group acquired Continental Minerals with $431 million
  • Jan. 2011, Wuhan Iron & Steel Group (WISG) and Adriana Resources (ADI) signed agreement that WISG would pay ADI $120 million for a 60% participating interesting in a joint venture in the Lac otelnuk and December Lake iron ore properties in Northern Quebec
  • Sept. 2010, XinXing Pipes Group Co. agreed to invest up to $1 billion into an iron ore mining project in Nunavut
  • Aug. 2010, CRCC-Tongguan Investment Co., a jointed-owned direct subsidiary of Tongling Nonferrous Metals Group Holdings Co., Ltd. and China Railway Construction Corporation Limited, acquired 100% of Corriente Resources, a Vancouver based copper company, with $679 million.
  •  May 2010, CIC invested $1.25 billion to a joint-fund company with Penn West Energy.
  • Apr. 2010, Sinopec paid USD$4.65 billion to Syncrude Canada Ltd. for a 9% stake in Syncrude owned by Conoco Phillip.
  • Feb.2010, PetroChina completed the acquiry of Athabasca’s 60% interest of macKay and Dover oil sands projects.
  • Dec. 2009, Yunann Chihong Zinc and Germanium Co. Ltd. and Selwyn Resources signed agreement for Chinhong to earn a 50% joint venture interest in the Selwyn project by spending $100 million on exploration and development.
  • Oct. 2009, CIC invested $500 million in convertible bonds of SouthGobi Energy Resources Ltd. to help SouthGobi accelerate its coal mining and exploration activities in Mongolia.
  • 2009, CIC invested $1.74 billion to buy 17% of Tech Resources Ltd’s equity.
  • 2009, China State Grid Corp signed a MOU with Quadra Mining Ltd. (QuadraFNX Mining Ltd.) on an investment of $1billion.
  • March 2009, Wuhan Iron and Steel Group (WISG) invested US$240 million and became the biggest shareholder of Consolidated Thomson Iron Mine Ltd. (CLM); it owns 19.9% of CLM’s share, 25% of CLM’s BloomLake project and 50% product from that project.