The Decibel - The federally funded watchdog that hasn’t completed a single review

Episode Date: April 17, 2023

What happens when a Canadian company is accused of wrongdoing abroad? Well, in 2018, Ottawa announced the creation of a new ombudsperson to investigate these kinds of claims. But since then, the Canadian Ombudsperson for Responsible Enterprise – also known as CORE – has yet to complete a single investigation of a complaint.Investigative reporter Tavia Grant – who went to Peru to see the effects of missing Canadian oversight – explains what she has found out about CORE.Questions? Comments? Ideas? Email us at [e-mail]

Where I'm standing, there's a branch with a little flag on it with a skull and crossbones and an image of an oil worker to show that this area is contaminated. The community put the little flag up. Tavia Grant is an investigative journalist with The Globe. And late last year, she went to Peru. She was looking into allegations of oil spills involving Canadian company Frontera Energy. Andoas is reached either by a 20-hour boat ride

or by a flight from Iquitos, which is the capital of the Amazon region of Peru. And from Iquitos, where there are no roads, you would have to either fly or take a very long boat to get there. Feels very remote indeed. It's hard to know when you step down if it's quick sandy or just sandy. You can see there's still areas where the oil is pooled. If you poke with a stick at some areas, the earth falls away and there's clumps of oil and you can smell it. And you can see wherever the water pools

there's that oily sheen to it. The people in the community use these rivers and waterways to drink, to bathe. They catch fish to eat, and they hunt the animals that drink from these rivers. When people outside of Canada have complaints about a Canadian company, there's an office they can go to. It's called the Canadian Ombudsperson for Responsible Enterprise, also known as CORE. There's just one problem. As far as we can tell, it hasn't yet completed a single investigation. Today, Tavia will tell us what she's learned about this watchdog. I'm Mainika Raman-Wilms, and this is The Decibel from The Globe and Mail.

Tavia, I'm so glad you can join me today. It's great to be here. So to start, can you just tell me a little bit about the village in Peru that you visited? Yeah, so Jose Alaya is a small village in Peru's northern Amazon. It's close to the border with Ecuador. Most of the population is Oshuar, which is one of the indigenous groups of the Amazon. It's quite remote. To get there, you take a plane to Lima, and then another to Iquitos, which is the capital of the region. Then you take another little plane or a river boat to the town of Andoas, and then you travel by truck for a few hours through the jungle. It's set on the Corrientes River, and its territory overlaps with Block 192, which is the largest oil field in the country.

And this is part of the Amazon, that block, right? It is. It is. It is part of the Amazon, so part of the world's largest rainforest. It's quite a journey to get there. There's a lot of stages. There's a lot of stages. And I think one of the points in this story is that where it's located, it's quite far away from any kind of oversight of, you know, government. Far from eyes and certainly far from what the public can see here in Canada. Yeah. I mean, that must have been pretty beautiful. I'd imagine you're in a pretty remote part of the world. It was beautiful.

I mean, it was incredibly green, obviously, to be there in December was quite a contrast with Canada. I was there partly to look at some of the oil contamination that's happened in the country and that region in particular. And to see it firsthand is striking. At some point, you could smell whiffs of sort of sour air, which was a contrast to the fresh green smell you could smell otherwise. You could also see evidence of older and more recent spills.

And at one point, I was looking at a tank of oil, and I could see some seepage on the ground. And at the same time, there was a beautiful emerald green and black butterfly that landed near the oil. And it just felt like such a contrast to see the green jungle all around and the stark reality of the oil contamination. Yeah. Wow. What a moment. Okay. So you're in this remote part of the world here. And as you said, there's an indigenous population living in this region as well.

How does the indigenous population in that area say the work of oil companies, in particular, we're talking about this Canadian oil company, what do they say about how that work is actually affecting them? Well, when I was there in December, I spoke with several leaders and environmental monitors in two communities in the area. And there was a general sense that the revenue generated from the oil industry just hasn't trickled down or led to sustained improvements in quality of life there. And you can see it in like a lack of potable water or access to good medical facilities, a lack of electricity in many cases. The spills in the block are well documented and Oxfam has called it one of the worst environmental disasters you've probably

never heard about. In such a remote part of the world, yeah. And what about the health of individuals there? I mean, obviously, you know, this is not good for the environment, but, you know, for people living around there, how does it affect them? So communities there are quite worried about the health impacts from decades of oil extraction and oil spills and leaks in the region. One recent study that I cited in the story was published in 2021. So fairly recently, it showed elevated levels of lead in indigenous people's blood in a region that's otherwise very remote and non-industrialized. Lead exposure is particularly harmful to young children, and it did find elevated levels of lead in children's blood. And that can have serious health effects on brain development, along with kidney damage, anemia. And people there say they

would really welcome more research in this area. I should add, just to be totally clear, the study does not draw a direct link to Frontera's operations and the impacts on health, but it was conducted in the same region, and it was conducted a year after Frontera started operating there. This company, Frontera, was working in this region, Canadian company. There have been allegations about things as a result of their work in that area. What has the company said about those allegations, Tavia? Yeah, so the last company to operate in that block is Frontera, and it's based in Calgary, listed on the Toronto Stock Exchange. It did

leave Peru in 2021 because its service contract expired. But Peru's environmental regulator has issued 33 environmental fines against the company, and it has recorded 113 environmental emergencies in the five years that it operated there. So I did ask for an interview with the CEO. It was declined, but in an emailed response, Frontera said that it is committed to conducting business in a socially and environmentally and ethically responsible manner.

And it said it has allocated $12 million U.S. and is doing remediation work in the area. And it did say it will comply with its outstanding social and environmental obligations. Okay.

And are these kind of complaints against Canadian companies, are they common? Well, I should say this is not the only instance of concern over impacts from Canadian companies' activities abroad. I recorded dozens, more than 50 examples of complaints or conflicts in 30 different countries that involved alleged human rights or environmental concerns around Canadian companies. And that's just in the last five years alone. Wow. Okay. So yeah, definitely, this is not a one-off here. No. Okay, so Canada has created a watchdog to look into this kind of complaint, allegations of oil contamination by Frontera in Peru. And this agency is known as CORE. So when it was first created,

Tavia, it was created by the Liberal government. What did the Liberals hope that this office would do? So when it was first announced, rights groups and NGOs were ecstatic. They even stood at the podium for this announcement in January of 2018. The office was to me mandated to, among other things, it would independently investigate allegations of human rights abuses linked with Canadian companies' activities abroad. It would start by looking at three sectors, oil, mining, and the garment industry, and it was supposed to expand to other sectors after that. And it was billed as the first office of its kind in the whole world. 15 months later, when the office opened, it was quite different than those original promises. It didn't have the powers to compel documents and witnesses to do thorough investigations.

Instead, the team was supposed to conduct reviews and joint fact-finding efforts. It can't force a company to take certain actions, and its mandate was never expanded to include other sectors. Okay, interesting. Let's go back to the origins of this group. When CORE was initially set up, I'm wondering, was there a specific event that actually launched calls for this kind of office? Like, what spurred its creation? It's been decades. People have been calling for stronger oversight of office? Like what spurred its creation? It's been decades. People have been calling for stronger oversight

of Canadian companies abroad. So the debate has been there. The calls got a lot more intense and louder about a decade ago. In fact, nearly exactly a decade ago, which was in April of 2013. And that's when the Rana Plaza clothing factory in Bangladesh collapsed. The building collapse of a Bangladeshi garment factory has claimed the lives of over 200 workers.

Some of the Canadian companies that were manufacturing clothing there included Joe Fresh and Fairweather, along with Walmart and Children's Place. As many of us remember, more than a thousand people were killed in that. And it was called one of the worst industrial disasters on record. A few years after that, in 2018, is when the Trudeau government announced that it would create the Corps, which was tasked with looking into these human rights concerns. Okay, yes. And that factory collapse did happen a few years before the office core was announced. But of course, this would have contributed to public awareness and the need to actually address these issues. But it sounds like since its creation, it does have limited powers, as we mentioned earlier.

So can you tell me a bit about, I guess, a little bit more about this operation? Like who runs the office and how much money does it get? So it's run by the ombudsperson, Sherry Meyerhofer. It has a staff of 20 and it has a budget right now of about $4.9 million. That's the annual budget. Okay. That's not insignificant money. Is that from the federal government then? Yes. And it's run under Global Affairs. Okay. Global Affairs Canada. Okay. So I want to dig into this a little bit here. Do we know how many reviews it's done since it came together in 2019?

So completed reviews, it has not done any in terms of finished. The Corps will be updating its numbers later today. So they may shift a little. So I can tell you what we do know right up until this quarter. Please. They were handling 15 complaints. 13 of those were related to forced labor in China.

One was about living wages in Bangladesh, and the last one we don't know anything about. All are still, at least as of this quarter, they were still at the initial assessment stage, and none have resulted in a final investigation or review. We'll be right back. Okay, initial assessment phase. I mean, that sounds like it's fairly early on in the process. Do we know why they

haven't completed a review yet? Well, obviously, it does take some time to complete a review. I would be able to explain this better if CORE had spoken to me, if the ombudsperson had spoken to me. So you tried speaking with them? Yeah, yeah. I requested interviews repeatedly over months since November to speak with the ombudsperson and to speak with CORE staff because I did want the statistics explained to me. However, at no time in those requests was anyone ever made available. I also emailed many questions. Some of them were never answered. Some were. Most often I was referred to the website. If CORE were to find wrongdoing, Tavia, can it actually do anything to sanction the company? So this would be a Canadian company working abroad. If this group actually finds that something is going amiss here, can it actually do something to sanction that company? So it has a few tools. First, if a company is not responding, and it's already said that at least one company has not been cooperating, if that happens, CORE can recommend consequences such as the withdrawal

of trade services or the withdrawal of Export Development Canada financing. It can also, at the end of a review, recommend a formal apology, financial compensation, or changes to a company's policy. It appears, though, that none of this has happened yet because no review has been completed. Okay. And those actions that you mentioned, I mean, would that actually be something a company would pay attention to? Like, would that, I guess, hurt its profits or its ability to work? In theory, it could. Companies are very concerned about reputational damage. So even just the act of calling out a company by name, I think has power. And again, to date, no company has been called out by name. Okay. Let's talk about the reaction to this office,

Tavia. I guess I'm wondering about two things. So the companies that CORE could investigate and also the groups complaining against these companies. So maybe let's take the first one here. The companies that CORE could investigate, what they wanted to see from this office. They lobbied and they were very public in their position that they wanted CORE to focus more on collaborative, non-judicial methods rather than giving it the powers to investigate. They wanted to see a less adversarial approach. What would a less adversarial approach look like? Mediation is one of the options. So once a complaint is filed and goes forward as deemed admissible, the next steps could be mediation where there is mediation between the two parties, the complainant and the company, and the other option instead of mediation could be a review or an investigation. Okay. Let me ask you then about the groups complaining against these companies.

So this could be just populations where these companies are working or potentially advocacy groups as well. What have they thought or said about the way that CORE operates? So far, the advocacy groups, many of them are human rights organizations that were initially so ecstatic and so supportive of this office. They have really changed on a dime. They are very disappointed with how this office has actually taken shape. Many of them that had supported the office are no longer recommending it to people who are asking about filing a complaint. They say it's probably not worth their time and that it doesn't have the power to investigate, so it won't result in what the complainants are really looking for.

And do they recommend they go somewhere else instead? If not to CORE, where else do you go? So there aren't a lot of avenues that are accessible and affordable for people. So some of the recommendations have been to, in one case, one community is turning to the RCMP for an investigation. In another case, they're going to the International Labor Organization, some are turning to the United Nations and other international bodies. I guess I'm wondering when the liberals created this group, I mean, they said it was going to be one thing, but it wasn't really given the powers that it was initially supposed to have. Why would the government not give this group the powers to fulfill its original mandate?

It seems kind of counterintuitive. I have access to information requests on that to get to the bottom of the whys. And like many times, it's taking quite a long time to get it back. I can only surmise that there was a lot of internal discussions. One minister told me that there was a heated debate internally. He also mentioned that he did feel the weight of pressure from industry groups as well. Industry groups, meaning mining companies, oil companies, that kind of thing. Yes. I mean, the Liberals created this hoping it would help Canada's

standing in the world too, right? So now that it faces criticisms from the exact people that this office was supposed to help. I guess, what does it mean politically for the Liberals, Tavia? Well, for the government, for global affairs, they continue to promote responsible business conduct abroad. Mostly, it's been through voluntary guidelines and strategies. And Canada is meant to be a world leader in human rights and promoting human rights. But also, the federal government has really, it's long said that Indigenous relations are a top priority. It's working to implement the UN Declaration on the Rights of Indigenous Peoples,

and it has clearly said it expects Canadian companies to show leadership on reconciliation with Indigenous communities abroad. We've talked about a bunch of issues around this group, but can they be fixed? They can be fixed if it is determined that that's how people want to go. If Ottawa did want to grant the office those powers, it can be done. Back in 2019, the trade minister at the time commissioned an external legal opinion about how to imbue the office with investigatory powers. And the report, which was called the MacIsaac Report, found that there are two ways of doing this. The first way could be through appointing the Corps as a commissioner under the Inquiries Act. And the second way, they said the preferred way, is to

enact legislation. So it is possible. Because, I mean, this is getting into kind of details of government here, but the core was actually created as an order in council declaration, which basically means another government too can kind of get rid of it at a moment's notice as well, right? It's not kind of enshrined. Yes, yeah, it could change, and it has changed in the past. As we're kind of finishing up here, Tavia, I want to go back to the village that you visited, Jose Olaya in Peru. Have they filed a complaint with CORE?

They have not. I asked them about that specifically and they have considered it. Leaders have considered it. They have opted not to file a complaint with CORE because they see it as just not the most effective avenue for them. They want to see something that is binding, that results in action. They want to see something that's worth the time that they put into investing, getting all the documentation together. They want to see a clear result. And I think they're unsure that they will get that. So they're looking at other channels, and I should say that they're not alone. I spoke to communities, organizations in Namibia, in Ecuador, in Dominican Republic, and they'd all considered it. They thought it over, and they had decided not to file a complaint.

This might help explain why the Corps hasn't received a lot of complaints so far. And so what would these communities in Peru, what would they like to see as a resolution with the company Frontera? Like what does justice look like to them? So the people I spoke with there would like first and foremost, they would like to see that their lands and their waterways are cleaned up and that this work is completed in full. They said that to me repeatedly. They also want companies to comply with prior consultation agreements and their requirements to operate on their lands. They want to see better measures to prevent further contamination, and they want to see more shared benefits with any oil revenues. Basically, they want to avoid the same patterns of pollution that have happened for five decades in the lot. Now, Aymara Leon Cepeda, she is a

representative of an Indigenous organization in the Amazon, and she spoke to parliamentarians about this very issue back in 2021. What Indigenous organizations want is for the Canadian government to provide mechanisms to support their search for truth, justice and reparations for those affected by the Canadian companies. And they want their voices to be heard directly and their testimonies and the evidence that they have of these impacts to be taken into account when conducting investigations. So communities are still seeking justice and they are looking for corporate accountability. They want corporations to be held accountable. And though CORE has not proven to be a very viable alternative for them so far, it's not too late. This office still can be fixed and it can become a viable alternative for them.

So there is still hope. Tavia, thank you so much for taking the time to speak with me today and tell me about your reporting. Thank you. That's it for today. I'm Maina Karaman-Wellms. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show. Adrian Chung is our senior producer, and Angela Pachenza is our executive editor.

Thanks so much for listening, and I'll talk to you tomorrow.