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Canadian Coalition on Human Rights in China Letter to The Honourable Christian Paradis 16 August 2012

    September 24, 2012

     Canadian Coalition on Human Rights in China

    c/o Amnesty International
    312 Laurier Avenue East
    Ottawa, Ontario K1N 1H9

    The Honourable Christian Paradis
    Minister of Industry
    C.D. Howe Building
    235 Queen Street
    Ottawa, Ontario K1A 0H5
    by email:  minister.industry@ic.gc.ca


    August 16, 2012


    Dear Minister,


    We write to you as members of the Canadian Coalition on Human Rights in China,1   a coalition of 15
    Canadian organizations dedicated to ensuring there is strong attention to human rights in Canada’s relationship with China. For over fifteen years, the coalition has regularly engaged with successive Canadian governments and parliamentarians - sharing information, raising concerns and advancing recommendations for Canadian policy. Collectively we offer a wide breadth of experience, expertise and contacts with respect to human rights in China and our organizations represent the views and concerns of hundreds of thousands of Canadians.

    We are writing at this time to share our concerns and recommendations with respect to the potential takeover of Calgary-based oil company Nexen Inc. by the China National Offshore Oil Corporation (CNOOC).  We understand that your department will carry out an assessment of whether such an acquisition of control is of “net benefit to Canada”. We understand that you will examine, as part of this assessment, the factors enumerated in section 20 of the Investment Canada Act, which include, among others, the impact of the investment on Canada's economic productivity, employment, production, levels of domestic competition, cultural policy objectives and Canada's ability to compete internationally.


    1 The Canadian Coalition for Human Rights in China is made up of Amnesty International Canada (English & Francophone Branches), ARC International, Canada Tibet Committee, Canadian HIV/AIDS Legal Network, Canadian Labour Congress, Falun Dafa Association of Canada, Federation for a Democratic China, Movement for Democracy in China (Calgary), PEN Canada, Students for a Free Tibet Canada, Toronto Association for Democracy in China, the Uyghur Canadian Society and the Vancouver Society in Support of Democratic Movement in China.
     

    In the Coalition’s view it is vital that human rights concerns be given central consideration during the foreign investment review process. That includes assessing China’s troubling general human rights
    record (of particular importance given that CNOOC is state-owned), CNOOC’s own human rights record, and the existing human rights policies and practices of Nexen.  All of those considerations must be thoroughly and transparently taken into account during your review, with a full accounting to Canadians as to how they have been weighed.

    Human rights impact assessment

    Our Coalition does not take a position on whether this particular acquisition should proceed. We also take no position on the issue of investment in Canada by foreign state-owned enterprises. However, we note that Canada has a responsibility to conduct careful and independent human rights impact assessments prior to the conclusion of trade and investment agreements, and take appropriate measures to address all
    of the human rights concerns identified through such assessments. These measures may include limiting, qualifying or barring investment by enterprises that interfere with the enjoyment of human rights through their operations or contribute to ongoing or future human rights violations by generating sustaining revenues for highly repressive regimes.

    International human rights bodies including the Office of the High Commissioner for Human Rights and the United Nations human rights treaty bodies and special procedure mandate holders have all urged states to inform their trade and investment policies by a careful review and consideration of human rights concerns.  According to the Office of the High Commissioner for Human Rights,

    States and other actors … should undertake human rights impact assessments of trade and development rules, policies and projects, both during the process of policy and project formulation as well as after a period of implementation … such assessments should be public and participatory, focus in particular on disadvantaged and vulnerable groups and highlight the differing impacts of projects and policies on men and women.2


    The Canada-China Trade and Investment Relationship

    Our Coalition has long expressed concerns about the subordination of human rights to trade and investment goals in Canada’s bilateral and multilateral foreign policy with respect to China. Although Canada has frequently argued that a policy of private engagement about human rights concerns is the most constructive strategy for realizing human rights improvement there, we maintain that Canada should pursue an approach that involves both quiet engagement and public advocacy. We have also frequently underscored that a credible strategy of engagement must be accompanied by clear benchmarks and timelines against which to measure progress. We are concerned that no such benchmarks have been
    developed, despite the fact that this has been Canada’s approach to China for over fifteen years.


    2 High Commissioner for Human Rights, Analytical Study of the High Commissioner for Human Rights on the fundamental principle of participation and its application in the context of globalization E/CN.4/2005/41 (23 December 2004) at para. 50, available at:  http://daccess-dds-ny.un.org/doc/UNDOC/GEN/G04/169/72/PDF/G0416972.pdf?OpenElement.
     

    The proposed Nexen takeover comes as part of a growing wave of Chinese economic expansion, particularly with respect to the natural resource sector. After decades of preventing its companies from overseas investment, the Chinese government has permitted a dramatic increase in outward cross-border merger and acquisition activities. This situation provides countries such as Canada with more leverage when it comes to influencing the Chinese government on the human rights front.

    Our Coalition has frequently stressed that Canada cannot assume that higher levels of international trade and investment will automatically result in increased respect for human rights in China and that Canada must work concretely and very specifically to ensure that human rights figure prominently and meaningfully in the expanding commercial relationship between the countries. In our view, the strong interest being shown by China in Canada’s natural resources presents an opportune occasion for Canada to more forcefully raise human rights concerns in all aspects of the country’s dealing with China.

    Guidelines for Investment by State-owned enterprises

    We note that in December 2007, the government of Canada issued Guidelines on the relevance of foreign state ownership in the ministerial decision to bar an acquisition by a foreign state.3    Under the Guidelines, the Minister has to examine whether CNOOC “adheres to Canadian standards of corporate governance (including, for example, commitments to transparency and disclosure, independent members of the board of directors, independent audit committees and equitable treatment of shareholders), and to Canadian laws and practices.” In our view this must be interpreted to include human rights and labour rights considerations. This is in keeping with the United Nations Guiding Principles on Business and Human Rights according to which,

    States need to take a broad approach to managing the business and human rights agenda,  aimed  at  ensuring  both  vertical  and  horizontal  domestic  policy coherence.  Vertical  policy  coherence  entails  States  having  the  necessary policies, laws and processes to implement their international human rights law obligations. Horizontal policy coherence means supporting and equipping departments and agencies, at both the national and sub-national levels, that shape business practices – including those responsible for …  investment… – to be informed of and act in a manner compatible with the Governments’ human rights obligations.4

    Nexen and CNOOC’ s  Own H um an  Ri ght s  Recor ds

    As part of the review, we also urge you to consider closely Nexen’s long record of human rights leadership and assess whether CNOOC is likely to maintain and advance that record.

     


    3 Guidelines, Investment by State-Owned Enterprises: Net Benefit Assessment,  http://www.ic.gc.ca/eic/site/ica- lic.nsf/eng/lk00064.html#p2.
    4 Human Rights Council, Human Rights and Transitional Corporations and Other Business Enterprises (21 March 2011),
     
    Over the years, Nexen has frequently shown leadership when it comes to initiatives aimed at ensuring that human rights are taken seriously as part of a company’s approach to corporate social responsibility. They were one of the first Canadian companies to adopt a Human Rights Policy, back in 2001.  We understand that policy is currently being revised and updated. The company also played a central role in the development of the International Code of Ethics for Canadian Business, adopted in 1997.  Internationally Nexen has been a leader within the UN Global Compact and has actively engaged in consultations leading up to adoption of the United Nations Guiding Principles on Business and Human Rights.

    This track record stands in contrast to allegations that CNOOC may have operated in ways that contributed to human rights violations.  Our Coalition is not in a position to be able to verify the allegations, but it has been reported that CNOOC may have been involved in oil exploration activities in Burma (Myanmar) without obtaining the free and informed consent of the affected communities. The company’s surveying and exploratory drilling in Burmese villages reportedly caused damage to villagers’ crops and eliminated their sources of income from traditional, small-scale oil drilling operations. Numerous villagers have reportedly faced arrests and interrogations at the hands of the Burmese army because of their participation in protests against the confiscation of their land and local refinery operations.5   We also note that the CNOOC's website provides information about its active involvement in the resettlement of Tibetan nomads near Nagchu, an issue of deep concern for Tibetans.

    We note as well that serious concerns have arisen with respect to the labour rights record of other Chinese companies invested in the Canadian petroleum sector.  Maclean’s magazine has recently summarized some of those concerns.

    In June, the Alberta government launched a website publicly outing employers who haven’t paid their workers – an online hall of shame.  Among these “deadbeat bosses”, as the media quickly dubbed them, the worst offender was a subsidiary of China Petrochemical Corp. (Sinopec), a Chinese state-owned oil giant. That same subsidiary, along with others, is facing charges after the deaths of two Chinese workers flown in to work on a site near Fort McMurray, Alta. in
    2007.  After much delay, the trial begins this fall.6


    The UN Guiding Principles on Business and Human Rights (referenced above) and the Guidelines of the Organization for Economic Co-operation and Development (OECD) for Multinational Enterprises make it clear that business enterprises should respect human rights wherever they operate.7 Respect for human rights by businesses is understood “within the framework of internationally recognized human rights, the international human rights obligations of the countries in which they operate as well as relevant domestic
    law and regulations.”8   Recognizing those international obligations and considering the contrast between


    5 EarthRights International, Broken Ethics: The Norwegian Government’s Investment in Oil and Gas Companies Operating in Burma (Myanmar) (December 2010), available at:  http://www.earthrights.org/sites/default/files/documents/Broken-Ethics.pdf; Arakan Oil Watch, Blocking Freedom: A Case Study of China’s Oil and Gas Investment in Burma at 7 (Oct. 2008) available at: www.arakanoilwatch.org/.
    6 “Our Chinese Oil Sands”, Maclean’s Magazine, 13 August 2012, pg. 36.
    7OECD Guidelines for Multinational Enterprises (25 May 2011), Chapter IV, Commentary on Human Rights at para. 2, available at:  http://www.oecd.org/investment/investmentpolicy/oecdguidelinesformultinationalenterprises.htm.
    8 Ibid., Chapter IV, Chapeau.
     
    the human rights record of Nexen and CNOOC, we urge you to closely and carefully review CNOOC’s own human rights record as you are assessing this proposed takeover.  If necessary, before approving the takeover, it is our view that you must insist on measures which will ensure that CNOOC respects human rights throughout operations associated with Nexen, whether in Canada or abroad.

    Recommendations

    Minister, in your upcoming review of the proposed acquisition of Nexen by the Chinese National
    Offshore Oil Corporation, the Canadian Coalition for Human Rights in China urges that you:


    • Ensure that there is a thorough assessment of CNOOC’s human rights record, including allegations that the company may have directly or indirectly contributed to human rights abuses in Burma and Tibet.
    • Inquire as to whether CNOOC has a human rights policy in place, and whether any such policy is backed up by a process of internal monitoring and public compliance reporting similar to that adopted by Nexen.
    • Consider the human rights and labour rights implications of the proposed take-over by CNOOC given that CNOOC is a government-owned company and the Chinese government continues to have a troubling human rights record on a number of different fronts.
    • Develop an action plan that prominently promotes and safeguards human rights in any future proposed foreign takeovers by Chinese corporations and other companies whose operations or structure raises human rights concerns.
    • Release publicly the Foreign Investment Protection Agreement negotiated between the governments of Canada and China, which is undergoing final review prior to implementation.

    Thank you for your consideration of our concerns and recommendations. We would welcome an opportunity to meet with you to discuss these concerns and recommendations further.  Arrangements can be made through Aden Seaton, Executive Assistant to Alex Neve, Secretary General of Amnesty International Canada’s English Branch. Ms. Seaton can be reached by phone at 613 744 7667, ext 263 or
    by email at  aseaton@amnesty.ca


    Sincerely,
     


    Alex Neve
    Secretary General
    Amnesty International Canada


    On behalf of:   Amnesty International Canada (English branch), Amnistie Internationale Canada francophone, Canada Tibet Committee, Federation for a Democratic China, Students for a Free Tibet Canada, Toronto Association for Democracy in China, Vancouver Society in Support of Democratic Movement in China.

     

     

    Beth Berton-Hunter,
    Media Relations,
    Amnesty International Canada
    416-363-9933, ext. 332

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