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Proceedings of the Standing Senate Committee on
Human Rights

Issue 8 - Evidence - May 12, 2014

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OTTAWA, Monday, May 12, 2014

The Standing Senate Committee on Human Rights, to which was referred Bill C-266, An Act to establish Pope John Paul II day, met this day at 5 p.m. to give consideration to the bill; and to monitor issues relating to human rights and, inter alia, to review the machinery of government dealing with Canada's international and national human rights obligations (topic: ensuring the rights and safety of garment workers in the developing world).

Senator Mobina S. B. Jaffer (Chair) in the chair.

[English]

The Chair: Welcome to the eleventh meeting of the Second Session of the Forty-first Parliament of the Standing Senate Committee on Human Rights.

[Translation]

The Senate has tasked our committee with examining issues related to human rights, both in Canada and internationally.

My name is Mobina Jaffer, I am chair of this committee and it is my honour to welcome you to this meeting.

Bill C-266, An Act to establish Pope John Paul II Day, is a private member's bill to designated April 2 as Pope John Paul II Day. April 2 marks the anniversary of the death of Pope John Paul II in 2005.

[English]

Honourable senators, we will begin our hearings by hearing today from the sponsor of the bill, Mr. Lizon, who is the Member of Parliament for Mississauga East—Cooksville.

I understand that you have some opening remarks to present to us.

Wladyslaw Lizon, M.P. for Mississauga East—Cooksville, sponsor of the bill: Yes. Thank you very much.

Madam Chair, honourable senators, I'm very honoured to appear before this committee and shed some light on this bill.

Of course, Bill C-266, as you mentioned, Madam Chair, would designate April 2 of every year as "Pope John Paul II Day." I made it clear; I think there are some misunderstandings about the bill, and I indicated this in my speeches in the house.

I would like to make it clear that this is not a religious bill. This is not a bill aimed to promote one religion over another or to give a special recognition to one particular pope. This is a bill to recognize Pope John Paul II's legacy, which goes well beyond his role in the Catholic Church. He always stood for religious tolerance and freedom and spent a great deal of time encouraging inter-religious dialogue. To me — and I think to many of you here — this represents a big part of what it means to be Canadian.

Pope John Paul II proved that nothing is impossible and stood up for populations oppressed by totalitarian regimes. He will be remembered for his role in the collapse of several stifling regimes and totalitarian dictatorships and for the way he has inspired peaceful opposition to communism in Poland, leading to its eventual collapse in Poland and in Central and Eastern Europe.

If I may say a few words on a personal note: I was a small part of that change in Poland. For those who don't know, I was born, raised and educated in Poland. I went to the university in Krakow where Karol Józef Wojtyla, the future Pope, was an archbishop of Krakow and a cardinal. I had a chance to meet him almost every month, because he held a special mass for students and he was always close to young people, not only on the religious level. Then, of course, he became pope.

I graduated with a degree in mining engineering and I was working in the coal mines. I was part of the Solidarity movement that was truly inspired by his first visit to Poland.

I don't know if I can explain it in words, but I did go to several meetings and events during that first visit, and the words he addressed people with were so encouraging and gave people so much energy, especially his calling not to be afraid: "Be not afraid; have no fear." All oppressive regimes base their power on fear that they inflict on people. The day people lose that fear, the regime can be defeated.

I can give many examples of his influence on changes in other parts of the world during his visits, where he always stood for the poor and oppressed; he always stood for democracy and freedom.

I would like to read a quote from the former Soviet leader Mikhail Gorbachev. He gave an interview to Radio Free Europe about a week after the pope's death. This is what he said:

Now we will say that the pope was simply an extraordinary man. And one of the most extraordinary qualities of the pope was that he was a devoted servant of the Church of Christ. And, finally, as the head of state of the Vatican, he did a lot, using his opportunities along these lines, he did a lot to prepare for the end of the Cold War, for the coming together of peoples. He did a lot to remove people from the danger of a nuclear conflict. He was a man who used his high position — I'll speak bluntly — in the best possible way. He was [a man] who did not put political calculation at the centre, but who made his judgments about the world, about situations, about nature, about the environment, based on the right to life, to a worthy life for people and on the responsibility of those people for what is going on in the world. I think that there has never been such an outstanding defender of the poor, the oppressed, the downtrodden in various cases and in various situations, either historically speaking or in terms of ongoing conflicts. He was a humanist. Really. A Humanist, with a capital H, maybe the first humanist in world history.

I never imagined that I would have the honour to present this bill in the House of Commons and the Parliament of Canada. It has a special meaning for me, but I think this bill has and will have a special meaning for all Canadians and people around the world.

Thank you, Madam Chair.

The Chair: Thank you very much, Mr. Lizon.

One of the things you didn't mention is the pope was a great friend of Uganda, where I come from, a great friend of my family. If you go on my website, you will see a lot of pictures of the pope and my family. I know that no one here needs any convincing of the greatness of the great pope.

We have agreed that we will hear from you, and now we will go to clause-by-clause consideration of the bill.

It is agreed that the committee proceed to clause-by-clause consideration of Bill C-266, An Act to establish Pope John Paul II Day?

Hon. Senators: Agreed.

The Chair: Shall the title stand postponed?

Hon. Senators: Agreed.

The Chair: Shall the preamble stand postponed?

Hon. Senators: Agreed.

The Chair: Shall clause 1, which contains the short title, stand postponed?

Hon. Senators: Agreed.

The Chair: Shall clause 2 carry?

Some Hon. Senators: Agreed.

The Chair: On division?

Senator Hubley: On division, please.

The Chair: Shall clause 3 carry?

Senator Hubley: On division.

The Chair: On division.

Shall clause 1, which contains the short title, carry?

Hon. Senators: Agreed.

The Chair: Shall the preamble carry?

Hon. Senators: Agreed.

The Chair: Shall the title carry?

Hon. Senators: Agreed.

The Chair: Shall the bill carry?

Some Hon. Senators: Agreed.

Some Hon. Senators: On division.

The Chair: Is it agreed that I report this bill to the Senate?

Hon. Senators: Agreed.

The Chair: Thank you very much.

Honourable senators, this is the second part of our meeting today where we are looking at the situation of the garment workers in Bangladesh.

[Translation]

Garment manufacturing is an important source of jobs in the developing world.

The great flexibility and decentralization of that industry, together with its generalized recourse to subcontracting, complicate the implementation of adequate health and safety standards.

In many countries that export clothing, like Bangladesh, India and Vietnam, thousands of salaried workers are exposed to dangerous working conditions and other risks to their health and safety.

On April 24, 2013, the Rana Plaza building in Dhaka, Bangladesh, collapsed, and approximately 1,130 workers were killed, and more than 25,000 people were injured. This was the worst of a series of fatal accidents that took place in the garment manufacturing industry in Bangladesh; among these were also the November 2012 fire where over 100 people were killed, and the fire in October 2013 where there were 7 dead and 50 injured.

[English]

Human rights obligations exist in the private sphere, including in situations of employment: safe and healthy working conditions, a living wage and reasonable hours of work. All are protections that have been won by employees advocating in many countries across the globe for human rights in the workplace.

When workers' health and safety are not protected, when wages do not allow for a reasonable standard of living, and workers are intimidated for trying to unionize, a number of rights recognized in international human rights conventions to which Bangladesh is a party are engaged.

Unfortunately, although Bangladesh has ratified a number of international human rights conventions, such as the ILO Labour Inspection (Agriculture) Convention in 1972, the Rana Plaza collapse and other similar events demonstrate there is significant room for improvement in implementation and that effective enforcement is still required.

The committee is very pleased to have with us officials from Foreign Affairs, Trade and Development Canada. I would like to take note that the committee is very much aware of the great work that DFATD does in building partnerships with Bangladesh and with the people of Bangladesh to improve the quality of lives of people, especially the garment workers in Bangladesh.

I am pleased to introduce Duane McMullen, Director General, Trade Commissioner Service Operations and Trade Strategy, and I invite him to start off this panel. I know you have some written remarks.

Duane McMullen, Director General, Trade Commissioner Service Operations and Trade Strategy, Foreign Affairs, Trade and Development Canada: Thank you very much for the opportunity to discuss the Government of Canada's overall effort to support responsible business practice among Canadian firms operating and sourcing abroad. Responsible business practice is embedded in Canadian values. However, we also recognize that by operating responsibly, Canadian businesses increase their chances of success as well as contribute to prosperity and development in the countries in which they are active.

The Government of Canada expects and encourages Canadian companies operating internationally to respect all applicable laws and international standards, to operate transparently and in consultation with host governments and local communities, and to conduct their activities in a socially and environmentally responsible manner. This also includes sourcing responsibly, and I will elaborate later a bit more regarding our efforts in the ready-made garment industry.

I would first like to note that many countries in which Canadian businesses operate lack the capacity to ensure that business operates responsibly there. In support of Canadian values, we help fill the gap through a variety of initiatives to assist Canadian companies with the challenges they face in operating successfully and responsibly abroad. A significant early step in Canada's efforts on this front was our adherence to the OECD Guidelines for Multinational Enterprises in 1976 and our significant contributions to their further elaboration since then.

When looking at responsible sourcing, the Government of Canada collaborates interdepartmentally on a variety of cross-cutting issues, such as ready-made garments and due diligence in that sector, including widely varying standards of regulation and enforcement in other markets.

Within the Government of Canada, efforts addressing the challenges facing responsible business practice in the ready-made garment sector are coordinated through an interdepartmental working group involving the Department of Foreign Affairs, Trade and Development, Industry Canada, Employment and Social Development Canada, National Research Council Canada, and Public Works and Government Services Canada. We also engage with industry, civil society partners, and multilaterally to explore how to encourage good practices in responsible sourcing. A recent example of this includes two separate information sessions specifically focused on responsible supply-chain practices in the ready-made garment sector, which were held by my department as well as a separate session held by Employment and Social Development Canada.

Our engagement on responsible business practice is also carried out by Canada's missions abroad. They are a core part of our global effort. We have over 900 trade officers operating outside of Canada, with more than 400 of them working in 60 developing countries. We work hard so that all of them can advise Canadian companies on how to operate both successfully and responsibly.

Through a variety of initiatives, these trade offices can have a tangible impact. My colleague Peter MacArthur will illustrate some of the roles our missions play using the example of our high commission in Bangladesh, where we have been particularly engaged on issues in the ready-made garment sector. One example is the high commission's publication of a book for companies operating in Bangladesh on implementing the voluntary international standard for social responsibility, which is ISO 26000.

We welcome industry initiatives and encourage companies to consider signing on to those that support improving working conditions, such as the Accord on Fire and Building Safety in Bangladesh or the Alliance for Bangladesh Worker Safety.

While attention has recently been focused on the ready-made garment sector in Bangladesh, responsible sourcing applies to numerous global supply chains in a variety of manufacturing sectors. Therefore, the Government of Canada remains committed to assisting Canadian companies with responsible business practice wherever they are active and in whatever sector, providing them with the necessary tools and advice for successful and responsible operations.

Thank you again for the opportunity to present to you today, and I look forward to your questions.

The Chair: Thank you very much for your presentation Mr. McMullen.

I have a clarification question: Is there a trade officer in the High Commission of Canada to Bangladesh?

Peter MacArthur, Director General, South, Southeast Asia and Oceania Bureau, Foreign Affairs, Trade and Development Canada: There is a locally engaged staff member who is a trade commissioner —

The Chair: Locally engaged?

Mr. MacArthur: Correct.

The Chair: Mr. MacArthur, thank you very much for joining us. I said earlier that the committee wants it to be known that we know how engaged Foreign Affairs is on this issue, and we do respect your work. I have seen it first- hand; I have been to Bangladesh, and I saw the work that your high commissioner and the staff do, and you all do here. I want to thank you for all the good work you do. I understand you have some remarks for us.

[Translation]

Mr. MacArthur: Thank you, honorable senators, for the opportunity to speak to you today.

My colleague Mr. Duane McMullen has outlined for you how the Government of Canada promotes social responsibility globally. My presentation will focus on what the Government of Canada is doing on the ground to help improve working conditions, specifically in Bangladesh, but I will also reference Cambodia, Sri Lanka and other countries around the world.

The collapse, on April 24, 2013, of the Rana Plaza building in Dhaka resulted in the destruction of several factories which supplied ready-made garments to international buyers, including the Canadian brand Joe Fresh.

This focused international attention on the many problems that plague the RMG sector in Bangladesh and elsewhere.

Before the collapse, the Canadian High Commission in Dhaka had already been following developments in the sector for some time. For example, the High Commission was promoting social responsibility following the deaths of a number of garment workers in various factory fires prior to the collapse of Rana Plaza. In January 2013, the High Commission hosted a seminar on "Social Responsibility as a Safe Factory," which highlighted the importance of practicing CSR, Corporate Social Responsibility, in factories, with an emphasis on occupational health and safety and fire safety.

As Mr. McMullen mentioned, the High Commission also published a guide on implementing the international CSR standard ISO 26000 in Bangladesh, with more than 8,000 copies having been distributed thus far to key contacts in Bangladesh, in the industry, to the unions and elsewhere on the ground. A second seminar on CSR entitled "Social Responsibility and International Standards: Implementing ISO 26000 in Bangladesh" was held by the High Commission on March 1, 2014.

Loblaw, owner of the Joe Fresh brand, contacted me and my colleagues at the department shortly after the collapse of Rana Plaza, and DFATD provided advice and logistical support to four of its senior Toronto executives to visit Bangladesh in early May 2013. In addition to arranging meetings with key stakeholders, government ministers and labour unions, they provided advice to the Canadian company. A Loblaw executive returned to Bangladesh this past February and met again with embassy representatives.

Loblaw and the Department of Foreign Affairs, Trade and Development remain in close contact and this relationship is a testament to the benefits of government responding to Canadian industry to collaborate in the improvement of working conditions in the Bangladeshi RMG sector.

[English]

The Government of Canada has also been very engaged on policy dialogue and advocacy. Our Canadian High Commissioner to Bangladesh, Heather Cruden, is a member of group of ambassadors resident in the country, which meets monthly with the deputy ministers of labour, foreign affairs and commerce, specifically on ready-made garment industry issues.

The meetings provide an opportunity to monitor progress by the Government of Bangladesh, keeping the pressure on and ensuring commitments are delivered upon to improve conditions in this sector and to press for further reform.

The high commission also participated in stakeholder consultations regarding the monthly minimum wage, which increased since this disaster from roughly $40 Canadian per month to approximately $73 a month. We were also involved in a needs assessment of the victims of the Rana Plaza.

The Government of Canada tabled statements during two separate Government of Bangladesh standing committee parliamentary hearings. The documents are available if there is interest from the committee, and these were on amendments to Bangladesh's labour law. Canada also intervened at the International Labour Organization Committee on the Application of Standards in June 2013 in Geneva to continue to express concern that Bangladesh's proposed updates to its labour law did not conform to its international obligations under ILO convention 87, known as the Freedom of Association and Protection of the Right to Organise Convention.

At the most recent governing board of the ILO held in Geneva in March, Canada joined in a statement by the Netherlands and the U.K. on trade unions in Bangladesh.

I should point out that since the disaster about 140 Bangladeshi trade unions have been established. The right to collective bargaining is still being worked on, but there's some progress on labour unions.

As you are aware, my department amalgamated with the former Canadian International Development Agency, represented this afternoon by Mr. Dean Frank. As an amalgamated department we are tackling this issue head on, including when I travelled to Dhaka last October with Director General Jeff Nankivell, my counterpart on the development side. Together we held foreign policy discussions with the Bangladeshi government at the level of deputy minister, foreign affairs. We also met with senior levels of the industry. We visited a garment factory producing apparel for Canada and other foreign markets. This trip demonstrated our integrated approach — this was our first time doing this since we amalgamated at this level — to press at a senior level with the Bangladeshis on the need to reform.

As Mr. McMullen alluded to, Employment and Social Development Canada hosted a tripartite roundtable on international labour issues on April 9, 2014, here in the capital, comprised of government representatives, labour and business organizations.

Jeff Nankivell and I, along with representatives from the ILO's Better Work Programme, the Retail Council of Canada and the United Food and Commercial Workers Union participated as panelists in the discussion on the ready- made garment sector, with a laser-like focus on Bangladesh.

In April 2014, High Commissioner Cruden was appointed to the advisory board to the board of directors of the private sector-led Alliance for Bangladesh Worker Safety. Our diplomat, Heather Cruden, is actively engaged with both the alliance and the separate private sector Accord on Fire and Building Safety in Bangladesh on the ground in Dhaka. Her appointment as an adviser to the alliance provides the opportunity to enhance coordination between the alliance and the accord, and to make sure their efforts are more accountable and effective. We have our own person on the ground, keeping the pressure on in support of Canadian values and interests.

In terms of concrete funding Canada, Mr. Dean Frank's organization within our department is providing $8 million of official development assistance over four years to a joint ILO-led initiative focused on improving worker conditions in Bangladesh's ready-made garment industry along with our partners in the U.K. and the Netherlands. The project aims to strengthen the Government of Bangladesh's governance, regulation and inspection in the garment sector. For example, we're pressing for them to hire an additional 200 inspectors to check factories for fire safety and structural integrity; implement labour legislation and policies, including those related to occupational health and safety at the factory level; and facilitate coordination among stakeholders, including between the Government of Bangladesh, the accord and the alliance.

Canada has also funded two smaller projects related to the collapse — a research report with the Centre for Policy Dialogue on workers' rights and compliance, and the social and economic reintegration of nine persons severely injured in the Rana Plaza collapse. This is funding for the Centre for the Rehabilitation of the Paralysed.

Bangladesh is not the only country where we are engaged on this issue as Canada has been closely following events in Cambodia. It's all about global value chains, of course. In Cambodia, we saw four garment workers killed while protesting for a higher minimum wage in January. Canada regularly raises human rights issues with Cambodian authorities. For example Canadian officials, including Ambassador Phil Calvert, met with high-level representatives in Phnom Penh to encourage the Government of Cambodia to comply with its domestic and international human rights obligations and to express Canadian concerns regarding the excessive use of force on the part of authorities in this case.

Our embassy in Bangkok, which is accredited to Cambodia and Laos, also organized a visit to Cambodia of senior executives from Loblaw in late February of this year and arranged meetings for him with government officials and key stakeholders active in the garment industry. Loblaw has their own person on the ground in Hong Kong working closely with us through our high commissions and embassies in the region.

I want to point out as well that our high commission in Colombo, Sri Lanka, is also following the RMG sector in that country. There is at least one major Canadian firm active in Sri Lanka. There is a funded CSR program by the Sri Lanka Apparel, an indigenous Sri Lankan association, called Garments without Guilt. This program focuses on ethical sourcing and sustainable development practices. The garment industry in Sri Lanka is seeking to be better engaged with government to encourage Sri Lanka to identify itself as a source of ethically produced apparel.

I hope you can see from these examples, particularly Bangladesh, that improving conditions for workers in the developing world is a major collective effort between governments, brands, buyers and workers and factory owners. Canada will continue to remain engaged on this human rights issue.

The Chair: Thank you very much for your remarks.

We have with us today also Dean Frank, Director, Strategic Planning and Operations, Asia Bureau (Development). If I'm not mistaken, Mr. Frank, you are here to answer questions. Is that correct?

Dean Frank, Director, Strategic Planning and Operations, Asia Bureau (Development), Foreign Affairs, Trade and Development Canada: Yes, that is correct.

The Chair: I want to thank the three of you for joining us. I will start off the questioning.

heard what you had to say and I've observed firsthand the proactive role our government is playing with the Bangladesh government and around effectively trying to enforce labour law, union rights, factory owners who engage in anti-union activity.

That we can only do with polite persuasion or sometimes forceful persuasion. The one place we do have more control is with Canadian companies. I would like to hear from the three of you, with corporate social responsibility, about the specific measures you are putting in place. Canadian companies that outsource have certain obligations, and what are you doing in that regard?

Mr. McMullen: We've seen many examples that have made this clear but most recently with the Rana Plaza collapse: Canadians don't want to buy from businesses that are complicit, I'll say, in terrible situations abroad. That was the big shock for Loblaw when the Joe Fresh brand was seen amongst the rubble of the Rana Plaza collapse.

One of the weaknesses in the checking system at that time was that companies hadn't been looking to see if the buildings were safe, but for most brands it is a disaster for your brand if you are associated with something negative. We advise companies — and the Rana Plaza collapse is a good example — about how to avoid their brand being associated with those negative things. If you are sourcing or operating in Germany, there are many things you don't need to worry about because the nature of institutions in Germany will protect them from happening. But in a country like Bangladesh, for example, just because there is a certificate that says the building is safe doesn't mean the building is safe; or just because there is a document that says there is a union and the workers are paid a fair wage doesn't necessarily mean that that document is true. So companies need a much higher level of due diligence where they find trusted outside parties to validate for them that they are not inadvertently being complicit in activities that could harm their reputation or brand afterwards.

One of the things we do in our trade offices abroad in developing countries is to point out to companies, especially to newcomers, that there may be risks that they are unaware of that could be very harmful to their business and reputations, and we help to point them in the right direction so that they can avoid those risks.

Mr. MacArthur: I would only add that consumers are important but also shareholders of the company are important and the reputation of the company in the eyes of government is an important consideration in a globalized world. In a globalized world you have blow-back.

One company in particular, Loblaw, showed leadership in the corporate community — international leadership, not just in Canada — and decided to stay the course in Bangladesh but take corrective measures quickly, and continue employing thousands of particularly women who would depend on this kind of work for their own empowerment. I think this company did the right thing in taking corrective measures. It has people on the ground now watching the situation much more closely, and I think they are doing that because they are very sensitive to not just consumers but shareholder and government opinion.

Senator Hubley: Thank you for being here today and for your presentations.

You've mentioned Loblaw and I am sure there are other companies we could be using as well. Are they willing to go even one step further and identify to Canadians on the garments that are outsourced, put a label or a tag on that garment to identify for Canadians that this garment has been made in certain conditions that are conducive to what Canadians feel would be a respectful way for a worker to be treated?

Mr. MacArthur: Madam Chair, I think the companies, Loblaw in this particular case, are joining the accord in order to be known to be taking corrective action. Therefore, belonging to the accord or the alliance is seen by companies as showing to the outside world that they are becoming more responsible in where they source product.

What is difficult in Bangladesh and other countries is that you can be dealing with a reputable company in Bangladesh but they outsource to less reputable suppliers without the knowledge of the buyer in Canada or the U.S. or whatever the case may be, and this is partly effected by massive corruption, which reigns in South Asia, particularly in places like Bangladesh. So it's very difficult.

That's a question you could pose to the Retail Council of Canada or a specific company, but I know from talking to companies that they are joining these accords and alliances to collectively take the kind of action that will satisfy consumers who will not buy products with a guilty conscience.

Mr. McMullen: I was going to add briefly to my colleague's remarks that you look at these voluntary industry standards like the accord or the alliance in Bangladesh, but there are many other standards. Some apply in different markets. But especially the accord and the alliance, because of the Rana Plaza collapse, have been evolving very rapidly. They have been adding more things that it becomes a part of the standard that members of the different initiatives have to adopt, and a logical future step in that evolution would be some sort of brand or mark that could be attached to the clothes. We'll see sometimes in the supermarket if it's fair trade coffee or something like that.

Senator Hubley: Traceability.

Mr. McMullen: Yes, but as there is work to do. As those standards advance rapidly, that's a logical next step for our private sector colleagues to adopt, and we work and we encourage the adoption of standards like that.

The Chair: I know Loblaw took a real leadership role and has to be commended for that.

Do you know whether the Rana Plaza victims have been compensated?

Mr. MacArthur: Yes. We understand the Government of Bangladesh has provided approximately $20 million to the Prime Minister's National Relief Fund. The Bangladesh Garment Manufacturers and Exporters Association has also provided in US$1.85 million to cover the cost of rehabilitation, salaries of the workers for three months and to support pregnant workers.

More compensation from the government may be forthcoming, but I should add that a global voluntary trust fund has been established at the request of international trade unions and is being chaired by the ILO. My understanding is that $15 million of the requested $40 million has already been donated and that Loblaws of Canada has provided $3.7 million to the trust fund in addition to $285,000 in short-term compensation to the workers in the factory in Rana Plaza that is producing garments for Joe Fresh.

Senator Ataullahjan: Has the Government of Bangladesh been receptive to the increased attention on its garment industry?

Mr. MacArthur: I do think that the Government of Bangladesh, through its high commissioner here in Ottawa, who has been meeting with us, and through regular meetings that our high commissioner in Dhaka has been having, is feeling the pressure, feeling the heat. For example, we're still not satisfied that they have hired the 200 additional inspectors that they promised they would.

On the other hand, it is good to see, through the alliance and the accord, the large number of factories that have been inspected properly since the catastrophe over a year ago. I can tell you that under the accord 400 factories in total have been inspected. Under the alliance, 473 factories have been inspected, and this includes electrical and fire safety, structural integrity. This is, in just a year, quite a remarkable change, and the fact that on a regular basis the minister of labour and the minister of foreign affairs are very sensitive to international opinion, including the views of this committee and the Government of Canada, and they are very conscious that you and the Parliament of Canada are very interested in the subject. I can assure you the High Commission of Bangladesh is very interested in what we are discussing today because they, too, realize that it is their leading export industry. Tey are the second biggest exporters of garments in the world and the golden goose must be saved and brought back in a way that is a win-win for everybody. They are taking this very seriously because it's such a large part of their GDP. Eighty per cent of their exports are garments.

Senator Ataullahjan: You're saying that companies are more aware of their social responsibilities. For example, Trimark had audited the Rana Plaza twice but had not done a structural survey because they were not common at the time. Has that changed?

Mr. MacArthur: Yes, indeed, that has changed because the leading Bangladesh University of Engineering and Technology and has been brought in by the Government of Bangladesh. Their specialist structural engineers are directly involved in all these factory inspections, which were not happening before, and so they have woken up to this serious problem and they are making serious efforts.

We are not completely satisfied yet with all of their efforts, but they are moving in the right direction. And the involvement of engineers from the university of technology, at the instruction of the Government of Bangladesh, is an important new factor.

Senator Ataullahjan: Last July when I visited the collapsed building, the Rana factory, the minute I arrived I was greeted by a group of parents who were still waiting for their children's bodies; they were still buried. In talking to them, they let me know that they had not been compensated. Do we know if it has changed since then?

I must pay tribute to Loblaw, because when I came back, looking through the rubble, like you mentioned, there were the Joe Fresh labels, which were very apparent You could see them when you walked around the collapsed building. I got in touch with them and they got in touch with me right way, and Bob Chant, the senior vice-president of corporate affairs, communicated to us; he encouraged me to visit their store in Toronto. Loblaw has taken a leading role, and I'm proud of the work they have done.

I still keep thinking of all those parents sitting there in the heat just waiting for some news of their children, and they hadn't been compensated also.

Mr. MacArthur: There has been some provision for rehabilitation and re-employment support to the victims of the Rana Plaza; so there have been efforts in that regard. I think the ILO contribution is going to be part of that.

This was a terrible tragedy, over 1,000 people. It falls to the Government of Bangladesh to take action. They're doing the best they can. For example, this is important: They've developed a publicly available database as a platform for reporting on labour, factory and building inspections, which lists currently 3,400 garment factories. That gives you an idea of the magnitude of the problem. There are 3,400 registered, but there are hundreds, if not thousands, of additional factories which are completely unsafe.

Through the accord and the alliance and the certification and inspections which weren't happening before, in the depth of structural integrity in buildings — for example, fire safety — we believe that over time those factories that are unsafe and should not be producing will be put out of business. It's in the interests of the Bangladeshi government to do so in order to protect the country's brand in its leading industry sector.

In terms of further compensation, I have nothing to add. The trust fund is there. As you can see, there is $50 million that still needs to be filled; it hasn't reached its $40 million target yet. We encourage industry and unions and others to contribute to that trust fund for the future, particularly for those survivors who are injured, paralyzed, missing limbs and are in great difficulty for their future.

Senator Eggleton: Thank you for the work you're doing there; you're doing quite a bit of work that you've outlined for us.

You have put in $8 million, you're working with the United Kingdom and the Netherlands on this program, and you have outlined your objectives. The first one is to strengthen the Government of Bangladesh's governance regulation and inspection of the garment sector.

I don't want to be too skeptical or cynical about this, but Bangladesh has ratified all sorts of conventions and ILO instruments over the years. Obviously they haven't had the political will to implement them because this mess probably wouldn't have happened.

I guess one of the things that results in the lack of political will is all that corruption that goes on there. Building capacity is nice, but how will you overcome the lack of political will and the corruption?

Mr. McMullen: If I can describe it very broadly, there are two aspects to our policies in cases like this. The gold standard, the ultimate goal, is to help countries to be able to properly manage and regulate their own corporate sectors. That's how most of the developed world operates. That provides a nice environment for companies that don't have to worry about things like whether the elevator is safe in the building. They can just focus on their business.

I think my colleague would agree with me that Bangladesh would be a long-term project. There's a long way to go, but you can make incremental progress. That's only one aspect of the policy. We recognize how difficult that is.

The other aspect of the policy is to make sure that companies are aware that when you're operating in these challenged markets, you can't rely on the government certificate or backstop like you can in Canada, the United States or France. They need to substitute for those things that are missing.

If you are going to have a subcontract to produce ready-made garments, for example, you can't necessarily assume that the workers in that factory are being properly and fairly treated the way you would want in a manner that is consistent for your brand. You need to get outside, independent verification to establish that that's the case so you don't inadvertently get yourself into a situation like Loblaw and other companies found themselves in in the Rana Plaza collapse.

There is a thriving and growing ecosystem of companies that do exactly that. They will inspect factories, sometimes undercover; they'll do interviews with workers and they'll look for things like fire safety and so on. New — this was with Rana Plaza — building integrity is something else they look at. There is this growing list of check-offs that you can, through your own other mechanisms, determine if it is okay.

As my colleague mentioned, as more and more foreign buyers, Canadians amongst them, are insisting on certain minimum standards before they will even do business with a company, that encourages the ones who are trying to win advantage by offering really low prices and taking advantage of the workers to say, "No, no, the way I win advantage is I take good care of my workers, give them a safe working environment and pay them a fair wage." As the private standards start to have a greater impact on the market, it still has the effect, even if the government has been unable to carry out its proper functions of governance.

Senator Eggleton: Let me pick up on that. Where does Canada rank in terms of the garments coming out of Bangladesh? I know there are other countries, but we're talking about Bangladesh primarily at this point. Where does Canada rank vis-à-vis the other countries that also import garments from there? The United States is first, I would assume.

Mr. MacArthur: The United States and the European Union would be the two leading buyers.

Senator Eggleton: How far down the list are we?

Mr. MacArthur: I would say we would be down in the middle. Even China is taking exports from Bangladesh, so it is a worldwide industry; they are supplying much of the world, including China.

Senator Eggleton: So we are not the biggest player on the block there.

Mr. MacArthur: No.

Senator Eggleton: How are the different countries — I'll say countries and companies, because we've singled out Loblaw, and they seem to be acting on this responsibly, even if they got shamed into it. Are other companies doing it? I heard when they first went in and put some money in, that other companies like Walmart, for example, were reluctant to do that. Tell me about other countries and companies. Are they working towards the same end as we are, or are we just whistling there on our own?

Mr. McMullen: We keep talking about Loblaw, but it is worth mentioning the accord and the alliance are two multinational, private-sector driven standards. I'm looking through my notes. One of them is very North American- centric and so a lot of major Canadian brands are in that one.

Senator Eggleton: Which one is that? I wanted to ask you why we have two.

Mr. McMullen: The alliance is very North American-centric, lots of American and Canadian brands in it. The accord is largely European. But Loblaw, looking at the two different choices they had, decided to go with the accord. Loblaw is part of the accord. What's happening is these companies, assisted by governments like Canada, are looking at how we independently certify that labour rights, as we would define them, are respected, worker safety, as we would define it, is respected, and they are gradually adding to this list.

It's a multinational effort that Canada is playing a role in. And it's not just Bangladesh. We're focused on Bangladesh because of the Rana Plaza catastrophe, but these same standards are also having an impact in other developing countries.

Senator Eggleton: That's a good thing to know, but how do we ensure that both the countries and companies stick to this? If a few months or a couple years down the line, there is no focus, no attention, and garments are still being bought cheaply. How do we make sure they stick to it?

Mr. McMullen: When we talked to companies, a lot of them already get it. It's a sense of preaching to the converted.

Some others, especially the ones new to working in the developing world, the way I've been telling the story when I've been working with companies abroad is it's like your fire insurance. The Rana Plaza collapse pictures with the Joe Fresh brand are really good to show because then they get it. That's the damage to your brand if you allow yourself to get into this kind of thing, so you need to put the effort and the resources into making sure all the things that I mentioned. To slack off is like not paying your fire insurance premiums; there might be a short-term gain, but you open yourself up to huge risk.

Senator Eggleton: The Department of Foreign Affairs is going to help these companies stick to it?

Mr. McMullen: The ones that come to us and seek our advice, we think it's a very compelling story.

Senator Marshall: I wanted to talk a bit about the interdepartmental working group where there are quite a few departments involved.

Also, in response to questions from Senator Eggleton, you were talking about other countries and other groups. Then, of course, in your introductory remarks, there was reference to the 900 trade officers.

Who is bringing this together? Who is the lead? Is it Foreign Affairs? Who is coordinating this? It seems like you have a number of players involved. Who keeps everything together?

Mr. McMullen: A core process that we're part of — and it's an obligation for Canada as a member of the OECD — the OECD has guidelines for multinational enterprises. They are a fairly well elaborated set of standards about how an OECD member's companies are supposed to behave in the developing world because developing countries lack the capacity to ensure that companies behave in the right way.

That is my role in the Department of Foreign Affairs and Trade, to both work with the OECD to improve and further elaborate the guidelines. We do that. This interdepartmental working group is a key source of data and input for us because we are not the technical experts in a lot of areas, but we rely on our interdepartmental colleagues to fill the gaps.

Also, we have a national contact point. That's another obligation under the OECD where complaints can come to us about the behaviour of a Canadian company abroad. We will investigate those complaints and try to bring resolution and remedy to those situations.

Senator Marshall: Who would be the lead? Somebody has to be boss. Would it be Foreign Affairs?

Mr. McMullen: The Department of Foreign Affairs, Trade and Development is the lead for the OECD Guidelines for Multinational Enterprises. One of my roles in the department is that particular function.

Senator Marshall: So as part of this group, who sets the objectives? As a group, do you decide what your objectives are? Is it formalized like that? Are there certain objectives you have? How do you measure whether you are successful? How do you measure whether you're actually achieving anything? Is it that you set your objectives early on and then you go through and determine that last year, you were able to achieve this, that and something else, or is it more informal than that?

Mr. McMullen: I'll say that we have three fundamental objectives. One is that we need to promote the guidelines amongst our companies. We track our promotional activities very closely, whether we are speaking at an event, publishing a brochure or using our convening power and bringing a lot of players together to talk about a specific issue. We do these things and we track what we do.

Senator Marshall: You track what you do. Do you also track whether you have convinced others to do what you're recommending?

Mr. McMullen: We don't track the conversion efforts from our evangelical works. We don't track that per se, but we track, for example, our colleagues in Natural Resources Canada who have done some surveys and they've discovered that the term "corporate social responsibility" within the industry has gone from almost zero recognition to very high levels of recognition in roughly the same time period from us starting to promote these concepts and ideas. We don't have rigorous tracking, but when we have done statistical samples, we can see that we are making progress.

Senator Marshall: That you are making an impact. Okay.

I know we're talking about the garment industry here, but is that the only area you're looking at? I was reading an article this weekend in National Geographic, and they were talking about Bangladesh and how different countries take their old vessels there to be demolished and cut up. Do you also look at other industries besides the garment industry?

Mr. McMullen: I would say well over 90 per cent of the work that we do is actually in the extractive sector, such as Canadian mining companies and Canadian oil and gas companies operating abroad. From our experience, that has been where some of the biggest risks of unexpected and inadvertent problems have arisen.

Under our obligations, it's only when Canadian companies are operating abroad. I am not aware of a case of Canadian companies that are operating in the ship demolition business. Were there such companies involved, that could be a case for us, if we heard something, and we would then start looking at that sector.

For example, if I look at ready-made garments, within the OECD, we all speak and work together, and our colleagues in France have done excellent work on the ready-made garment sector, which has been helpful to us in informing our policy.

But within the OECD consensus, Canada has been a real leader in the mining and oil and gas sectors, developing policies and guidelines that have been then spread and adopted by other OECD members as they look at their corporate sector operating abroad.

Senator Marshall: That's interesting. Thank you.

Senator Hubley: I'm going to pick up a percentage. Eighty to 85 per cent of the garment workers employed around the world are women, and in the developing world, children are commonly employed in the garment industry as well.

With respect to the issues that would arise, would they be discussed at any of the levels of talks that you would be having with other countries that have a garment industry in particular?

Mr. McMullen: Yes. The rights of women and particularly the rights of children are areas that we spend a great deal of time looking at and thinking about. It's not necessarily as simple as you may think at first glance. For example, if children are working in the factory, ending that employment could actually be a financial catastrophe for the family. Or if the child is working beside their mom, if you send the child home, where is home?

So you try to create a best interests of the child scenario, and then especially, say with Canadian business and guidelines, not to ban the child from working or ban the child from the workplace, because that may actually be in the best interests of the mother and the child. How do we make it a better environment for the child in that context? How do we make sure that there are educational and learning opportunities for the child or that the family has enough income that they don't necessarily have to rely on the income of the child to keep the family together.

We work with UNESCO and other NGOs that are very child focused to make sure that we get the right kind of guidelines to ensure the best outcomes for the children.

Mr. MacArthur: It's a very good question. I want you to be very much assured that all of our heads of mission around the world, particularly in these sorts of countries, have marching orders to defend Canadian values, security and our national interests, including travelling Canadians, on the consular side, and business people on the trade side. When they spot problems, they're very active.

In mid-May, in Bangladesh, our high commissioner meets with the British, the EU, the Netherlands and the three different ministers of the Bangladeshi government to press them on the problem. "Have you hired those inspectors yet? How many have you hired? What else are you doing?"

At the end of June we have an OECD meeting in Paris on this exact question, and in mid-July we have the European Union Sustainability Compact review of Bangladesh. The ILO has asked us to play a role in that in regard to keeping the pressure on.

Today if you were sitting in Dhaka, Bangladesh, you would notice that our high commissioner is amongst the two or three most active on this front. That's one reason she was asked to sit on the advisory committee. Canada was asked; we were invited to provide submissions to their parliamentary committees on labour law.

Senator Eggleton: I understand what you're saying about the difficulty of taking a child away from the work because of its effect on the family or because, working beside the mother, there is no other place to go. I hear you saying that, but in terms of Canadian values, that is a rough one. What do you do in cases like that to help ensure that they get some education and some opportunity to get out of this?

Mr. McMulllen: First, I'll say — and it's not meant to necessarily challenge your question — I grew up on a farm, and I worked pretty hard as a kid on the farm.

Senator Eggleton: It's a little different, more than a little different.

Mr. McMulllen: Yes.

As for a child working on the farm in a third world country or at their parents' vegetable stand on the side of the road, we have to be careful about applying Canadian values in a way that we don't actually apply them in Canada. That's why we work really carefully with child-centric NGOs to get advice about what policy would be in the best interests of the child and then use our OECD peer review. I'm just thinking about our OECD multinational enterprises process. We use our OECD peer review to develop guidelines that help companies understand how they can operate in the best interests of the child. Also, as my colleague mentioned, if you take the case of Bangladesh, it can be the easy decision for the company to say that they're not even going to operate in that market and have avoided all risk to their brand, but the people need the jobs.

The Chair: I will have to cut you off because we are running out of time.

Senator Ngo: Most of Canadian imports of clothing are from developing countries, such as China, Bangladesh, Cambodia, Bangkok, as you just mentioned, and Vietnam, but you didn't mention anything for that one. Right now, Vietnam is considered one of the top garment exporting countries in 2014, and Vietnam exports to Canada more than $40 million a year. The rights to freedom of association and to form trade unions play very important roles in ensuring that workplaces are safe and secure for employees. In Vietnam, as you know, they are not allowed to form trade unions or to have freedom of expression or association. Therefore, you have low pay, low salaries and so on.

What is Canada's role and what would Canada be able to do vis-à-vis Vietnam in this respect?

Mr. MacArthur: That's a very good question. I can tell you that whenever we meet at senior levels with the Vietnamese government — we had a meeting just few months ago with a deputy minister — we raise our human rights concerns, including in the area of labour. I have to say that in our last exchange we were rebuffed by the Vietnamese government, by visitors, and we do this, of course, in Hanoi as well, through our ambassador. This time around, they listened more, in sustained engagement with us. They are negotiating within the TPP, and if there is going to be a successful outcome on the TPP for them, they have to reform their state-owned enterprises and their labour laws to be acceptable to the international community.

It's something that we keep working on. We press whenever we can. Canada has a great deal of stature in the world in this regard. We are listened to. The foreign minister of Vietnam will be visiting shortly, and this will be very much on the agenda with him.

We just opened an embassy in Burma, in Myanmar, and that is another country that will become, I am sure, a hub of apparel manufacturing. One reason we have an embassy and ambassador in Burma is to keep an eye out to ensure that these kinds of violations of labour rights, from a health and safety point of view, and also general human rights are respected in a country like Burma, which is reforming to the extent it can.

Senator Ngo: The reason I'm asking that is because, as you know, most, if not all, of the companies in Vietnam belong to the Vietnamese officials or their relatives or something like that. They are not privately owned. Therefore, if you are talking with a Vietnamese official, you are talking with the Vietnamese government or the Vietnamese owner. How do you achieve that? They own these things and they won't easily give up. The state of the Vietnamese right now is no human rights at all. Freedom of expression is not there. Freedom of association is not there. Labour unions are not there. Labour law is not there. What do you do?

Mr. MacArthur: Our ambassador and senior trade commissioner in Hanoi and Ho Chi Minh City are in regular contact with industry and with companies, not only government officials but also the full spectrum of civil society in Vietnam. It's a matter of persuasion and convincing. I think the Bangladeshi disaster was a wake-up call for them to realize that they have to clean up their act and be a little more sensible and freer with regard to human rights when it comes to labour associations and unions. I think that over time these catastrophes are a wake-up call to governments such as Vietnam and, certainly, Burma.

We continue, importantly, with like-minded countries. Canada does not do this alone in Bangladesh or Vietnam or anywhere else. We tend to work closely with the European Union, the United States and other countries, such as Australia and New Zealand, like-minded countries, to press those governments, essentially saying that if they want access to our markets — because our consumers and shareholders are all very concerned about this issue — they need to pull up their socks and do a better job at manufacturing under the proper working conditions expected in the export markets they are aiming for.

Mr. McMullen: I also remind you of the power of companies wanting to defend the value of their brands. If I use the Vietnam example, if Loblaw was going into Vietnam to source, they would have a list of requirements that the factory would have to meet, that it not have unsafe working conditions, for example, and a whole bunch of other things that they would have learned from the Bangladesh example. That can be a really powerful change motivator, even for a Vietnamese government official who owns a factory, to say, "If you want this business, this is the standard you have to rise to. It's not just about low price. Our brand cannot allow these things. We need to have outside, independent inspectors that can look and verify, either directly or as part of a multi-company, multinational effort, that says your factory meets these standards. If you do, you are allowed to bid for our business, but if you can't even meet that standard, you can't bid for our business."

Even a communist factory owner can be motivated by that to bring conditions up in their factory to meet that standard.

Senator Unger: Thank you, gentlemen. My questions are kind of spotty. I would like to go back to the garment factories.

What sort of corrective actions did Loblaw take? I heard they took quick action; they did this and that. What did they do?

Mr. MacArthur: Loblaw responded very quickly, sending senior executives and senior VPs within weeks of the tragedy in Dhaka. It was delayed by hartals, by labour actions. There were protests. It was difficult to get into the country. They persevered and got in. They met with the government, unions and factory owners. As I said earlier, they provided some funding for compensation.

Then they took an important step. They established a Canadian in Hong Kong to oversee their operations in Vietnam, Cambodia and Bangladesh, to visit periodically from Hong Kong, something they were not doing before. That, to us, is leadership, to protect their brand and to ensure that the largely female workforce they had there helping to develop Bangladesh — a country, by the way, that has roughly the population of Russia in that tiny piece of land. It's remarkable in terms of meeting its Millennium Development Goals in a much more effective way than other countries.

The country still has major problems, including at the political level. We haven't mentioned this, but there was a dysfunctional election which the opposition boycotted.

So the government itself is not quite there. They're doing their best, I think in one year, making good progress. But I know the ILO and the Government of Canada are not satisfied with the progress to date; and we will continue to vocalize that, particularly through our ILO connection, which has the international community behind it.

Senator Unger: They have one person based in Hong Kong to oversee all of these different countries. One of you said earlier that there are 3,400 known factories and you don't know for sure how many others there are.

Mr. MacArthur: I think the question is maybe better put to the company itself, but my understanding is that the controlling Canadian sitting in Hong Kong works with other employees on the ground that are locally hired. So they have their network and they have selected factories which they source from in various countries in the Southeast Asian region. Those are the factories they keep an eye on. They do spot checks. They're checking for the structural integrity of the building, fire safety, and also labour practices, including with respect to children.

Senator Unger: The United States is the fourth largest source country for clothing. I wonder how engaged they are in these processes that you have been talking about. You mentioned working relationships with the United States, the European Union, et cetera. How engaged is the U.S.?

Mr. McMullen: From my perspective, as part of the OECD consensus on Guidelines for Multinational Enterprises, our American colleagues are very active — maybe not 10 times more active than Canada; maybe about as active as us. From that perspective, you could say that we do very well with the Americans, but they are active; they play a role. They have been involved, in particular, in the Bangladesh case, and their industry has been particularly active in creating the accord, which has had a strong impact on factory safety and worker conditions in Bangladesh, just like the alliance, which has been largely European driven.

The Chair: I will ask Senators Seidman and Andreychuk to ask their questions together and then we will have the panel answer.

Senator Seidman: Mr. McMullen, you said that Canada expects and encourages Canadian companies operating internationally to respect all applicable laws and international standards.

Mr. MacArthur, you talked about the ILO. One of their objectives is to implement labour legislation and policies, including those related to occupational health and safety at the factory level.

I did want to go back to the issue of children and ask you specifically: What states are doing better at protecting child workers? What can be done by international organizations when countries have ratified conventions that govern the rights of children, their safety and their health? What can be done by international organizations to ensure that the rights of the children are respected?

Senator Andreychuk: I apologize for being late, partly because of a plane but mainly because of the construction in Ottawa. It took three times the usual time to go down Colonel By. I will have to explain that to the auditors, I think, when they see the cab bill.

I missed your point on human rights. I'm interested in Vietnam, where there are problems with the press. The repression of the press has been noted to the government by many sources.

Are you using a strategy of "incrementalism" rather than comparing to other countries? In other words, Vietnam has come from a very turbulent background, as many other countries have. Are you judging their human rights movements as to where they were yesterday and where they are going and where they are today, in other words, seeing some progress; or are you putting down some markers on particular issues like, for example, the garment industry? Which strategy is the government employing on that approach? It would be helpful to understand when we look at this issue.

The other issue is: Are you looking at the garment industry as a whole and are there any new initiatives, or are you looking to the ILO to be the lead agency on this? I say this because sometimes Canadians want Canada to do certain things and while we're doing them, others are profiting by it; and the government hasn't changed in the process, because they just find new buyers and other markets. We're disadvantaged, but we haven't moved the country at all. What levers are we using? Is it ILO standards, WTO, et cetera?

The Chair: Thank you.

If you could please answer all those questions, and please keep it very tight because we have only a few minutes.

Mr. McMullen: On which countries are doing better with child labour, I would rather not answer directly in those terms, but just to say I think the developing countries are doing much better at being aware of child labour issues. And because ultimately it's a business issue if that child labour is being used to support the needs of consumers in the developing world, we are doing much better at making sure that we are not complicit in the kinds of things that we would not want to have our children be involved with.

In terms of garment industry standards, we know the ILO and work with the ILO, so I'd be very surprised if anything was happening in secret or we were duplicating our efforts. There is a lot of cross-fertilization. We're always open to good ideas, and we benefit from each other's contributions.

In terms of press freedom in Vietnam, in my particular part of the organization, that's really outside of where our efforts are.

I will now turn it over to my colleagues for other elaboration.

Mr. MacArthur: On Vietnam, senator, the ambassador of Canada and the consul general of Ho Chi Minh City and their staff are actively meeting with civil society NGOs, not just with the Government of Vietnam, and making it known through social media. We have young Vietnamese on a social media platform right across the country, north and south.

Bloggers have been convicted. Our ambassador and his team have been observing trials in the courtroom and reporting back, along with representatives of other foreign governments, to keep the Vietnamese government's feet to the fire. On religion, for example, we are very conscious of Christian freedom of religion in that country and we have been active in that.

In terms of state ranking on child labour, I would suggest that one look at Transparency International's ranking of countries by corruption. You can correlate the corruption with many of these abuses we're talking about, whether it's children or unsafe conditions in factories. Transparency International, we watch that very carefully. Our ambassadors and their program managers in countries where corruption is rife — Afghanistan, Pakistan, Bangladesh — are examples of that. We are keeping a close eye on that. We keep pushing through signalling.

As you know, our minister has issued public statements, and these are well known to the Vietnamese, Bangladeshi and other missions here in Ottawa. They report back to their capitals.

Also, importantly, the Universal Periodic Review of Vietnam to the Human Rights Commission, the council in Geneva, is another means we have on a regular basis, whether it's Sri Lanka, Bangladesh, Vietnam or Cambodia, to keep the pressure on in international forums through the UN.

The Chair: As you can see, we have so many questions of you. I imagine this is one of many meetings and that we'll have more in the future. I want to thank you. If I may please take up your suggestion to provide us with the information on the labour rules that you had provided to some other committee — I forget the exact wording of what you had kindly offered to provide to us — but we would appreciate if you would send the clerk a copy, which we will circulate to the members.

Thank you, Mr. McMullen, Mr. MacArthur and Mr. Frank for being here today, and we look forward to working with you in the future.

Honourable senators, it gives me great pleasure to welcome the next panel. There are special privileges of having this job, and one of them is having a discussion with the panel in front of us. We have three special people: Syed Sajjadur Rahman, part-time professor, School of International Development & Global Studies, University of Ottawa; Ananya Mukherjee-Reed, Professor and Chair, Department of Political Science, York University; and from the International Labour Organization, we have the Honourable Jane Stewart, P.C., Special Representative and Director, ILO Office to the United Nations, who needs no introduction to this committee. She's joining us by video conference and is known as the woman who gave one-year maternity leave to Canadian women, so we're always happy to hear from her. The questions we have will be so much related to the work you did here as the Minister of Human Resources.

We welcome all three of you and look forward to hearing from you. We will start with Ms. Stewart.

Hon. Jane Stewart, P.C., Special Representative and Director, ILO Office to the United Nations, International Labour Organization: Thank you very much, Madam Chair. I hope you can hear me and that everything is in shape there. I was listening to your last panel, which was very good. It's indeed a pleasure to see you, Madam Chair, and some of the distinguished members of the standing committee with whom I have worked in the past. Thank you for including me and giving me the opportunity, on behalf of the International Labour Organization, to discuss our contribution to improving the rights and safety of workers in the global garment industry and looking at Canada's role in this work, about which you have just heard.

I sent in a lengthier dissertation on the work of the International Labour Organization in this regard, but I hope you'll allow me to provide a written statement as well as this verbal testimony.

Since its establishment in 1919 as part of the Treaty of Versailles, the ILO has based its work on the belief that universal and lasting peace can be accomplished only if it's based on social justice and decent treatment of working people.

The rights of people at work remain central to the global development agenda today, not least in the supply chains of the textile, clothing and footwear sectors. These sectors are among the most globalized, providing waged employment to more than 60 million workers, including millions of women, migrants and young workers, mainly in the developing world.

Due to the scale and profile of the workers employed, the sector offers great potential to contribute significantly to economic development. However, these sectors remain among the most labour-intensive industries, despite advances in technology and workplace practices. The low-skilled nature of production and its price sensitivity make the industry prone to risks, such as precarious work conditions, low pay, long working hours and, in the worst cases, a lack of safety standards and human rights violations. Trade union representation in this industry is often very low.

While there is evidence to suggest that garment jobs can provide important opportunities for women, gender disparities that exist more generally in the world of work are also pronounced in the garment sector: Women tend to be sewers and helpers, while men are usually cutters and mechanics.

Gender inequality is also reflected in workplace hierarchies, conditions and benefits. The ILO's data show that men in the sector are three times more likely than women to be supervisors, and women tend to work longer hours than men, receive lower pay and bonuses, and are less likely to be promoted or receive training.

Improving the job quality for women can have positive effects, not only on development beyond the factory. Improvement in women's incomes can be transformative, often leading to greater investments in children's health and education and, as such, better overall human development outcomes.

The ILO's work in the garment industry seeks to develop a strategic approach for creating decent jobs, improving working conditions and retaining firm competitiveness. One of the main tools to achieve this is the International Labour Organization's Better Work Programme. This program is a partnership of the ILO and the International Finance Corporation to improve working conditions and promote competitiveness in global supply chains. The program focuses on the garment industry in Bangladesh, Cambodia, Haiti, Indonesia, Jordan, Lesotho, Nicaragua and Vietnam. The program works at the factory level to assess compliance with international labour standards and national legislation, and provides advisory and training services to support improvement efforts and strengthen the capacity of actors.

As of December 2013, Better Work was present in more than 900 garment factories, reaching almost 1 million workers. Assessing factories' compliance with core labour standards and national law allows Better Work to immediately monitor its achievements. Since the program's establishment, compliance has steadily improved across all countries. Non-compliance has been halved in key areas of occupational safety and health in Haiti, Jordan and Vietnam. In Jordan, compliance with forced labour issues, in particular regarding curfews in workers' dorms, has improved by 19 per cent and is no longer a problem for those factories that have been in the program since its establishment. Factories participating in Better Work for more than two years have achieved full compliance in paying correct minimum wages, paid leave and social security benefits. In Haiti, 91 per cent of factories have changed workers' employment contracts so that they are now in line with the Haitian labour code. In Lesotho, since Better Work started operations, there were no longer instances of HIV/AIDS discrimination in factories.

By improving labour compliance, Better Work is having a positive impact on firm competitiveness. Compliance is key to retaining global buyers. Cambodian factories in compliance with fundamental rights are 56 per cent more likely to retain their customers, and higher compliant factories are more likely to attract high-quality buyers.

Improvements in compliance directly translate into workers' enhanced well-being and have a dramatic impact on countries' social and economic development. A 5 per cent improvement in overall compliance is associated with a 10 per cent increase in worker income, 9 per cent increase in the remittances that they send home and a 3 per cent improvement in workers' health.

The Canadian government is a critical partner for the ILO and an important donor. Funding from the Department of Foreign Affairs, Trade and Development, and Employment and Social Development Canada, have helped to improve working conditions and safety for millions of garment workers in developing world. The ILO is grateful for the support and partnership of Canada.

The tragedy of the Rana Plaza collapse in April 2013 was a wake-up call for action on decent working conditions in Bangladesh and throughout global supply chains. In response, the ILO launched a $24.2 million, three and a half year program to improve working conditions in the ready-made garment sector. ILO is working with partners to implement key components of this program, including technical support for building and fire safety assessments, training for labour inspectors, occupational safety and health, rehabilitation of skills training, and a Better Work Bangladesh program. In the last year, labour law reform legislation, the registration of 140 new unions and a substantial rise in the minimum wage in the garment sector have been important markers of change in Bangladesh.

In particular, through its $8 million support to the Ready-Made Garment Sector Programme in Bangladesh, Canada is supporting the government and social partners to implement a comprehensive action plan to improve building and fire safety and strengthen law enforcement and labour inspection. The ILO and Canada are working together in a "3+5+1" group: three Bangladeshi secretaries of labour, commerce and foreign affairs; five ambassadors from the U.S., EU, Canada, Netherlands and a fifth EU member; and ourselves, to follow progress made in commitments pursuant to the National Tripartite Plan of Action and the EU compact.

Similarly, Canada is supporting with small grants to the establishment and/or expansion of a Better Work Programme in Haiti, Jordan, and more recently Vietnam.

In Haiti, the ESDC funded project of $236,000, implemented from December 2010 to June 2013, aimed to revise the labour code and enhance the Ministry of Labour's capacity to enforce labour laws. The program facilitated a constructive dialogue between tripartite constituents, concluding in agreement on the draft labour code.

In Jordan, ESDC's funding of $493,000 allowed Better Work to develop and roll out training on occupational safety and health and human resources management systems in the Jordanian garment industry. As a result of the project's interventions, workers reports of frequent exhaustion or fatigue are down nearly 50 per cent. Safety at work is also improving. More than 90 per cent of factories that have been participating in Better Work Jordan since its establishment now have adequate fire detection and alarm systems. Compliance with welfare facilities is up 41 per cent, with workers having free, safe drinking water, accessible toilets and handwashing facilities. Workers are 9 per cent less likely to be concerned with dangerous equipment, accidents or poor air quality than they were when the program started.

In Vietnam, ESDC is supporting Better Work Vietnam's efforts to improve employers' and workers' negotiation, bargaining and communication skills with $290,000. This goes directly to the earlier questions, I believe. The impact of Better Work's effort in improving social dialogue mechanisms and reducing non-compliance with freedom of association is most evident.

Madam Chair, the ILO can demonstrate concrete results from this partnership and good visibility of Canada's contribution. The ILO would welcome the opportunity to broaden this partnership. Canada's support to the ILO at the level of individual country programs has proved targeted and effective. With multi-annual and more lightly earmarked funding, this could be scaled to a regional or global level to impact on issues of strategic importance to Canada such as trade, employment, gender and labour rights.

Thank you very much.

The Chair: Thank you for your comprehensive presentation. We have the written presentation, which we will circulate to all the members once we have it translated.

Professor Rahman.

Syed Sajjadur Rahman, Part-time Professor, School of International Development & Global Studies, University of Ottawa, as an individual: Thank you, Madam Chair.

If this committee was held the year before I probably would have been on the previous panel. I was the head of Asia for CIDA until about a year ago in one of my past jobs. Frankly, I would much rather be here than there.

What happened at the Rana Plaza in Bangladesh is reprehensible because it could have been avoided. More than 1,100 workers died, many others were badly injured. Families were torn apart and their futures became uncertain. Workers were coerced into coming to work in patently dangerous circumstances. Greed and avarice led to a blatant disregard for the lives of people.

Sadly, Bangladesh is not the only country where workers' rights and safety have been compromised. The question is: What can be done to prevent the repetition of such events, and can countries like Canada help?

The solution seems straightforward: Make sure that proper rules and standards are in place around workers' rights and safety, make double sure they are implemented and if developing countries do not have the capacity to frame and implement these rules and standards, countries like Canada is help them do so.

But things are never as simple as they seem.

Recent efforts to remedy the situation have focused on ensuring labour rights, either through government actions or industry accords. Minimum wages in Bangladesh have been raised to $69 per month from $39 without overtime. The labour law was amended to include the mandatory provision of health care and insurance in certain circumstances. The government, international garment buyers and local producers have signed a fire and building safety accord. Canada is supportive of these activities and has announced an initiative to provide technical support to Bangladesh's National Tripartite Plan of Action on fire and building safety.

All of this is very encouraging. Whether these efforts will take root depend on how they affect the profitability of the industry and how the regulatory authorities, such as the government, enforce them.

Profits are important; it's not a bad word at all.

Labour surplus economies like Bangladesh's and those of other major garment-producing countries need to create and maintain jobs in order to grow and reduce poverty. This needs strong, growing and profitable industries capable of competing in global markets.

How will profitability be affected? Let me illustrate with a simple real-life example. A Bangladeshi newspaper called The Daily Star recently published an article on May 11 called, "Bangladesh needs 29 cents as part of its ongoing analysis on the Rana Plaza strategy."

The article, written by a garment factory owner, provides one view of what would happen if a small garment factory were to implement minimum wages of 20 cents per garment piece to conform to the recent rule changes, and building improvements to improve safety standards. It concludes that the factory will incur an additional cost of approximately 29 cents per piece or 8 per cent of the price it receives for the garment.

However, the prices paid by the factories' foreign customers have not increased at the same rate. A boy's shirt now gets about 20 cents, or about 5 per cent more than it did a year ago. Of that increase, 11 cents goes to purchasing the same fabric at a higher price than last year. That leaves the factory with 9 cents per piece, a shortfall of 20 cents compared to pay and safety expense. Therefore, the factory paying the new minimum wages and putting in safety improvements will mean incurring a loss unless they were making significant profits before.

The foreign buyers of the garments may not be seriously affected at all. For them, the major concern is getting the product at the lowest cost possible. If Bangladesh cannot supply it, they will get it elsewhere. But if they continue to do business in Bangladesh, they need to be prepared to accept less profit as well.

The good news is, there is some room for movement here. Even at the increased minimum wage of $69, Bangladesh would likely remain the lowest wage garment producer amongst comparable supplier countries, and given that labour costs are normally the biggest element of production costs, it should also be the lowest cost producer. This means Bangladeshi producers will likely be able to afford the cost increases required to pay the increased minimum wage and for safety standards, and remain competitive producers but with reduced profit margins.

There will be a limit to this competitiveness defined by the cost conditions in other producer countries.

The interesting question, though, is going to be whether the foreign buyers will share in bearing the increased cost or whether they will make the producers bear all the costs themselves.

Eventually, though, the Bangladeshi producers will have to increase their productivity and become more efficient or risk losing their market.

Let's talk about the enforcement issue. This is important because even though Bangladeshi garments may have the room to afford the increase in wages and safety standards, their incentives to do so will be limited given the reduction of profit.

For the Bangladeshi authorities, the incentive to enforce the rules and regulations will depend on how the cost increases will affect its global garment market share and, in turn, its export revenue. Garment exports, now roughly at $20 billion, are Bangladesh's largest export sector, employing about 4 million people, predominantly women, in about 5,000 factories registered. Some estimates suggest that exports may triple in the next decade, riding mainly on the cost competitiveness. Continued success and growth in this sector will be critical for Bangladesh's economic development.

To the extent that Bangladesh's garment exports can remain competitive, there will be an incentive to implement the rights and safety regulations. The incentives will be weaker if this is not the case. This in turn will depend on whether foreign buyers turn away from Bangladesh in response to the increased cost conditions and source garments from other countries in search of greater profits.

Finally, what can countries like Canada do to help ensure worker rights and safety?

Let me first say what they should not do. They should not adopt draconian approaches like prohibiting or limiting imports in response to violations or incidents like the Rana Plaza. If they do so, this will only hurt the workers they meant to protect.

What we can do is try to find ways to help Bangladesh's capacity to improve worker rights and safety by helping it frame rules and regulations and by building capacity to monitor progress. The Canadian government can encourage Bangladesh to adopt higher core labour standards and Canadian companies to join the fire and building safety accord.

Canadian companies can share the costs of implementing the rules and regulations and help establish and promote common standards for factory safety, and provide mentorship on how to become more competitive.

Finally, Canada should not approach this in isolation, but in concert with like-minded countries.

I'll stop here. Thank you.

The Chair: Thank you very much, Professor Rahman, for your presentation.

We will go on to Professor Mukherjee-Reed's presentation.

Ananya Mukherjee-Reed, Professor and Chair, Department of Political Science, York University, as an individual: Thank you, Madam Chair, respected senators and ladies and gentlemen.

A lot of things have already been said, so I'm going to focus on a few things that we haven't discussed or where I want to probably disagree with some of the things I have heard.

The first thing about the garment sector is its scale. The global apparel exports industry is over a trillion U.S. dollars in value. We are not only talking about Bangladesh or Cambodia, but it's really an industry of global scale and of tremendous value. And Canada's imports in particular between 2011-12 have grown by 10 per cent. What we import is of great consideration.

The other point that has been discussed already is the centrality of women. Obviously, historically, the garment sector is where women have led possibilities for change; women have challenged gender inequality. We should do everything to prevent actions by women leaders from being futile.

The third point about the garment industry is that it affects the livelihoods of many others outside the industry. For example, cotton textile affects very substantially the lives of agricultural workers on cotton farms. This is a huge industry in India, in most parts of Africa, in countries like Uzbekistan. In India, you probably know that hundreds of thousands of cotton farmers have committed suicide because of indebtedness. Our necessity to act is very urgent.

I want to speak on two things. One is the immediate concern for Bangladesh, but the other is beyond Bangladesh and how we can address needs of the garment sector.

The importance of the accord has already been mentioned. From the Canadian perspective, it is important to support the accord publicly more than is done now, for many reasons. One particular reason is that the accord, being legally binding on the retailers, doesn't only put the onus on the Bangladeshi government or the Bangladeshi factory owners to do X, Y and Z, but also asks the retailers to hold up their end of the bargain. This is extremely important.

From the Canadian government's point of view, it has been reported in the media that at least $12 to $15 million worth of apparel is sourced each year by the federal government. It should be possible, and it has already been said, that full disclosure and traceability of at least the federal procurement of apparel can be put in place. In fact, we can even go beyond simply transparency and disclosure, but actually make effective some of the supply chain benchmarks that are already in place.

For example, suppliers of federal apparel can be required to affiliate with something like the Worker Rights Consortium, which gives full transparency of the factories, or it can require things like fair trade certification, which not only looks after the rights of workers but also the rights of cotton producers. So there is some possibility here.

On the examination of duty-free access, I know it has been discussed a lot in the media as to how this will affect the Bangladeshi industry, but I do think this needs to be looked at.

Finally, on the question of Bangladesh, but also in countries like Cambodia and India, a lot of the garment production takes place in export processing zones, or special economic zones. These were considered great drivers of development, but now we have research in country after country which shows, particularly women, have not really benefited from these policies which require labour flexibility, which does not allow for ILO conventions, bargaining rights, et cetera. These need to be looked at, whether they are delivering development to the people who need it most.

All in all, what the Bangladeshi experience shows is the moment for voluntary initiatives by companies or institutions on a one-on-one basis, where someone has an ethical imperative and acts on it; that kind of private initiative will not be enough anymore. The scale is too large. Too many people are affected, and we need national policy and regimes of rewarding ethical behaviour and not reverting to non-ethical or non-compliant supply chains.

Going beyond Bangladesh, the whole question of a national policy regime leading to different kinds of legislation, Canada could be a perfect leader in this, because, first of all, Canada does a reputation, particularly in areas of gender equality and workers' rights. I think there is a huge opportunity for leadership.

From what we understand from the discussions around EU, only Norway may be discussing something like that. There are different kinds of national policy regimes in different countries, so a kind of comparison could be done on the best practices. Canada, at least in terms of federal procurement, can look at what would be the best practice for Canada.

There is also increasingly, within the EU, these practices of rewarding ethical supply chains. For example, the French post office has wanted all its uniforms to be fair trade certified. The London School of Economics got the institutional award. Municipalities are being awarded for taking decisions for maintaining ethical supply chains. This kind of reward and incentive structure needs to be looked at for Canada.

I want to make two more points. One is this whole question of competitiveness. This is what has played out in the media a lot: Can we afford ethical clothing? In the public mind, the question is "Yes, I would like every worker to be safe, but I need my cheap T-shirt."

There are a lot of opinion polls, particularly in Canada, which say that people are ready to pay a bit more. If public opinion and national policy can be galvanized in a way that the incentive structure of this industry can be changed, the preference from the consumers will not only be for the cheapest possible clothing, but the clothing that ensures that nobody has been exploited and safety conditions have been guaranteed. This will require long-term work engaging different stakeholders in changing the incentive structure of this industry.

The question that is often raised is that if there are some ethical supply chains, then would they "profiteer" from the ethicality of the supply chain as opposed to those who cannot afford to be ethical? Policy regimes and consumer preference can work in a way that ethical supply chains cannot profiteer, but move the industry towards a more and more ethical supply.

In the U.S, the Worker Rights Consortium has proposed a preferred supplier policy for federal contracts, and the U.S. Department of Justice has agreed this would not be any violation of any competitive mechanism if, for federal contracts, a particular fair trade or ethical supplier is given prominence. This is something we can look at.

The final thing I want to say is everywhere in the developing world there are women-led ethical enterprises. These can often not scale up; these have possibility, potential, which we can support, we can endorse and at least see how we can support women's efforts to gain more control over their rights, over their production and over what they bring to the markets.

The preference for this kind of ethical clothing can be seen by the tremendous growth of fair trade markets, and we can find ways to support women-led ethical enterprises in the developing world, and I think Canada can take a lead.

Finally, there is the need for a comprehensive study which will compare different national policies, including policies at some national and local levels, to see what kind of regimes can ensure that cost competitiveness, cost concerns, do not overcome the ethical concerns which are so huge in the public mind right now.

The Chair: Thank you very much for all three presentations.

Senator Ataullahjan: My first question is for Ms. Jane Stewart.

It has been widely publicized that companies such as Walmart and the Gap have not signed on to the Accord on Fire and Building Safety in Bangladesh, but have spearheaded alliance for Bangladesh worker safety. What is stopping these companies from signing on to the accord and what is the difference between the two agreements?

Ms. Stewart: As you point out, there is the accord and the alliance. In terms of numbers, you might be interested, there are a number of North American entities that are part of the accord, although it's referred to as the European interest, and there are about 25 North American brands that are part of the accord and about 160 in total, in increasing numbers. There are fewer associated with the alliance, and they tend to be from North America, particularly.

From the perspective of the ILO, we had hoped there would be a single response to the issues in the Rana Plaza, but there are two. We are committed to working with both groups in a neutral fashion to help complete the analyses of the minimum 3,500 factories, and there are more, a larger number has been quoted here.

For us, the intention is to work with all parties who sign up to recognize that this is the appropriate strategy to come together, that we will base our work on transparency and accountability and hopefully a single approach to studying the safety and security at the level of the factory.

As I said, we had hoped there would be a single response, but there are two, and so we are working with that approach.

Senator Ataullahjan: Ms. Mukherjee-Reed, you speak about women outside the economic zones who have not profited. You talk about the need to encourage women-led enterprises. How can we get the government to engage on behalf of all workers so we see the trickle-down effect to all workers, not just those working for foreign companies like the Gap, Walmart and Loblaw?

Ms. Mukherjee-Reed: What I meant on the economic zones is that these zones have flexible labour law regimes which prevent workers from organizing or bargaining as they would be able to if it wasn't an economic zone.

My point was while economic zones are supposed to be great triggers for development, they actually haven't been, if we look at the actual conditions under which the women and workers have worked there. I emphasize women, because the majority of the workers in these factories are women.

Now, how we can engage governments to have workers in all sectors profit? This whole question of multinational enterprises that comes with the absolute cost-cutting proposals that "You must produce X number of pieces at this price, otherwise I'm not buying from you, I'll go to Country Y," that model does not deliver development for the majority of people. There have already been criticisms of that, but what is not understood or where there is almost a fear to acknowledge is that if we give up on this, what is the alternative model? What are we left with?

First of all, if there is a global regime of workers' rights, then companies cannot go from one country to another. If everywhere we have an accord, then companies cannot go from Bangladesh to Cambodia to Vietnam to India to Pakistan. This is number one, that we need accords that don't treat only one country as the problem.

The other point I wish to make is women are trying very hard everywhere to build alternative business models. Microcredit was seen as a hope for some time. That hope has dashed to some extent, maybe in some cases to a very large extent, and there are large collective women's organizations that are looking to do things differently where women have control.

We need to support these kinds of organizations and these kinds of movements. How can we do that? First of all, if we agree that we're interested in this, then we can build up almost like a movement with civil society and stakeholder engagement to say that instead of buying a T-shirt from here, you can pay 50 cents extra and buy a T-shirt from there, and you can see the face of the woman who made it. There are efforts like this, but they cannot be scaled up unless we, as a large collective of citizens, support it.

Senator Ataullahjan: Professor Rahman, of 4 million garment workers in Bangladesh, 90 per cent are women. What does the garment industry mean to these women? You speak of greed and things not changing. It's a $20 billion export- oriented industry. Who benefits? What's the trickle-down effect to the poor of the country?

Mr. Rahman: There is the question of the benefits to women. It is incredible. It is so empowering that it's hard to believe. They're exploited, no question. The wages they are paid are very small. They should be paid way more, but look at the opportunity cost of this argument. If this employment was not there, where would they be?

Most of these women, by the way, are displaced; they come from villages, they are migrants in the sense of rural- urban migration, they have practically no land to speak of. From a family's vantage point, they really have nothing to go back to.

From that perspective, I would say the empowerment has been incredible. Have they been exploited? Yes. Could they have been treated better? Yes. But we must always remember what the alternative is.

Senator Jaffer and you have been to Bangladesh. You should go to the Gazipur or the Tongi areas, where most of these factories are located. Go in the morning when all of these folks arrive to work; you should see these women and young folks, and you'll get a sense of the vibrancy of the scenario.

Senator Ataullahjan: I'm a great supporter. We really need to support these women. Thank you for that.

Senator Eggleton: Thank you to all three of you for your presentations, and a special "hello" to my former cabinet colleague, Jane Stewart.

Both Ms. Stewart's comments plus what we heard from Foreign Affairs earlier give us some hope in terms of the progress that is being made, but I also heard Professor Rahman talk about maybe it hasn't quite taken root yet, if I've quoted you correctly. I guess I have a concern about that as well.

How do we stay the course of progress without slipping back? I don't see that there's been much political will on the part of the government in Bangladesh and maybe some of the other countries as well. There's an enormous amount of corruption. ILO conventions that were previously ratified by Bangladesh really didn't get much attention until the Rana Plaza situation.

What kind of carrots and sticks do we need to keep this moving forward? There are so many conflicting dynamics, such as the corruption I mentioned and the lack of political will, but even in the industry, which we heard about earlier from Foreign Affairs, they've got some brand protection. Yes, they do, but they also have to watch the bottom line, and people in this country and others in the developed world want to get the best price they possibly can. These conflicting dynamics come into play here.

How do we ensure that this keeps going and we keep the companies and the countries moving forward together with organizations like the ILO?

Ms. Stewart: Senator Eggleton, it's wonderful to see you as well.

This is a very complex dynamic. We have a number of stakeholders, global unions, the multinational buyers, the government and the people that we're really talking about, the workers, making sure that the opportunities continue to be there for them, as we have discussed, but to improve their circumstances is essential.

From our perspective, one of the main ways to ensure that we don't lose traction is to ensure there is voice for the women who we have been talking about. That means their ability to form and join unions. They know best where there are safety issues in their factories. They know best what their circumstances are.

From our perspective — and you'll see this is one of the priority areas — working to change the labour code so it can be properly applied and to allow the rights of collective bargaining and voice is the thing that can make the difference. That is one of the elements.

Second, very clearly, there needs to be money. There was reference to the $40 million fund that we believe we need to accommodate the losses associated with the deaths and injuries. The multinationals have put in about 50 per cent of the $17 million that we have identified as being needed, but we need more. We can look at it and say, "Well, it seems like a lot of money," but I think as we have experienced a number of times, when there are open wounds like the impact that the Rana Plaza disaster has had, those have to be healed, and that means taking care of those people who have suffered and continuing to move ahead with the payments to those families that have lost the breadwinner and to those who have injured and maimed family members, making that a priority as well. We have to find this balance of ensuring that we continue to provide the development opportunities but enhance the quality of that work.

One of the fundamental tenets of the International Labour Organization is that labour is not a commodity; we cannot make money on the backs of the labour force. That's something that I think has to be front and centre here.

The coming together of the global voice to say, "We aren't going to have beggar-thy-neighbour policies; we aren't going to trade on the backs of the labour force" is an essential element here. Those that have said, "We have to come together to do that" are exactly right, and that's one of the values of the multilateral system and the role that the ILO can play.

Mr. Rahman: Let me take it from a short-run and a long-run perspective because this is a question that hinges on the survival of the industry, in some senses, and the continued competitiveness of the garment industry. It's so vital. On the short run, the issue that Ms. Stewart raises is important. The voice has to be there. In some ways, workers' representation needs to be there. The safety standards need to be in place and their rights assured.

I have a whole bunch of friends in Bangladesh who own very large textile factories. Before I came here, I had a chat with them. I said. "What's the change in behaviour post-Rana Plaza? Have you noticed changes in the behaviour of foreign buyers?" The answer is no. All of the foreign buyers basically tell them, "I want my stuff at the lowest price I can get it." It's as simple as that. There is this competition. Can you, in some senses, get rid of the competition? The answer is no. In some ways, you can band together and say that everyone is going to pay the labour the same and that we will have the same profit ratio and stuff like that, but those kinds of scenarios are inherently unstable. There is always the incentive to break it. Some country will break it because they can get the market share. In the long run, how does this go? These industries have a life cycle, and the life cycle starts in labour-surplus economies. If you go back to the 1950s, Japan was a garments exporter and a cheap plastics manufacturer. Labour surplus scenarios, right? As economies evolve, as progress happens, wages start to grow, and these economies evolve to more capital intensive processes. When these processes evolve, technologies get more sophisticated, workers get better training. Look at Korea now as opposed to twenty years ago. Look at Thailand; it is the same story. Over time, we have to let this process take its course. We cannot afford, at this point in time, to take policies or stances that make these industries inherently unstable or uncompetitive.

The answer is that we must find a balance, at this point in time, between addressing immediate safety issues and workers' rights issues and, at the same time, making sure that the industries grow at their pace and that they are profitable.

Senator Eggleton: May I ask one more question? It will go to Professor Mukherjee-Reed. I thought of this while I was hearing you speak.

We've seen, in a number of areas, the value of third-party certification. We used to call it the good housekeeping seal of approval. Various environmental organizations have tried this, and I think there is even one that is stopping child labour that has attempted this kind of thing.

Is there a tag that could go onto a garment that would indicate that it's ethical clothing? Is that worthy of pursuit? It brings the consumer four-square into it all, face to face with a garment that either has it or doesn't have it. Is that worthwhile?

Ms. Mukherjee-Reed: I would say so. I was actually going to answer your previous question, which is: What can we do to keep the traction going? There is only one thing we have to keep anything going, which is a global public voice. We cannot let go of that, of course, leading to policy.

In terms of your question of the tags, yes, the fair trade cities, the fair trade universities, the fair trade regions are all using this kind of traceability, where the tag will actually tell you the exact factory or exact person who made it. The Workers Rights Consortium will list every component of the supply chain. You can go and see where it came from.

The important point with this is that it can't be a private initiative or a limited initiative. This is why I'm saying that we need this on a large enough scale to focus public opinion in a very serious way, which will lead to changing this cost- competitiveness discussion. So there has to be a disincentive to produce the cheapest cloth, which does not ensure minimum rights. That has to be made impossible, and there has to be very little incentive for the supplier to do so. At the same time, this question of the retailer asking for the cheapest possible good will change only if the consumers say, "We are not accepting this cheapest possible good." How will the consumer know?

Right now, there is a fear that we cannot afford ethical products, but there are studies being done that say — in fact the Globe and Mail published a couple of them — that the actual increase is not a lot. For the retailer, the question is whether they pass it on to you and me, and then I can say, "Do I want to bear this extra cost?" Or can the retailer absorb it? We were talking about balance. There can be a balance between the increase in cost — How much do I bear? How much does any government bear? How much does the worker bear, and how much does the retailer bear?

It doesn't have to be one stakeholder. We're all stakeholders in this massive human catastrophe. If we look at it like that, then surely, starting from the tag, labelling, third-party benchmarking, we can work, with a global public-citizen activism, towards distribution of costs for ethical products.

Senator Eggleton: Who would do this third-party certification?

Ms. Mukherjee-Reed: Right now, there are a couple of established mechanisms. One is fair trade certification. The other is affiliation. For example, governments or universities do that. My own university asked that any supplier of garments to York University must be affiliated with the Workers Rights Consortium, which means that all of the supply chain is revealed on the Workers Rights Consortium website. You can search the factories. You can see who they are. You can see what the conditions are.

There are eight universities in Canada that are fair trade universities, UBC having been the first one. It has had quite a bit of impact.

Most importantly, through the universities, it's affecting the young generation and capturing the young generation's ethical imperative, which we really do have. Canada has a large youth that is very committed to rights — human rights, workers' rights and women's rights — and we have to bring this to bear on the livelihoods of these workers.

Senator Andreychuk: I will restrict my questions because we are running over, so I will just say hello to Jane also. Welcome to the committee. It's good to see that you're still at ILO. We had a long discussion. I think it was Senator Jaffer and I who were there. You were just starting out. It seems that you are very much embedded now and part of the solution at ILO.

I will put my one and only question to Professor Rahman. The issue is absolutely what you said. It's to balance how we get at the problem that we started with — better workers' rights and safety and security for the workers — because that's really what this was about. It wasn't a discussion about wages. It was a discussion of deaths and hazardous working conditions. Now, having watched this episode in Bangladesh and elsewhere, when something happens, a great fire, there's death. There's great attention, and the government then says to the factory owner, "Criminal charges." That's usually the answer, and then the government goes away. The international community is engaged for a while. Some good things happen.

Are you saying, if I'm reading between the lines, that we've got to get good governance and accountability and some economic dynamics going in Bangladesh if we're really going to start attacking the long-term issues of balancing, as Senator Eggleton said, between the workers' rights, the factory owners' need to create a profit and the right of those of us who are purchasing to know that we are going to get decent products, done decently, at a decent wage?

Mr. Rahman: Ultimately, the question comes down to: Can all of this attention and all of this action be sustained? Who is going to sustain them and why? Why would the government enforce these regulations?

Why would the industry adopt this regulation and why would the international buyers care?

That's the question. From the government point of view, the importance of the garment industry makes it imperative that this industry continue its growth.

That's the fundamental. Why? It's the most significant export revenue generator. It employs 5 million people, and it's in fact the growth industry. McKinsey said it's going to triple in size. Anything that impacts on the competitiveness of this industry, the government will say that's not good.

The question is, how do you impart to the government a sense that if you undertook higher worker safety standards and if you paid better wages and improved living conditions, it will improve your competitiveness? How do you do that? It will increase cost; no question.

So there is a margin. The question is: Can the government then turn to the domestic producer and say, "You can do these things. We're going to help you do this, and you will still be competitive and profitable"?

Senator Andreychuk: My question is: Is there that kind of will and understanding in the Bangladeshi government — let's use them as an example — particularly when they're engaged in their very unusual circumstances of being in power, the opposition? This has been syphoning off so much energy from the government that there hasn't been the progress there should be.

Mr. Rahman: Is there awareness? Absolutely. Is there an inclination? Maybe. Will it matter if the Government of Canada or the U.S. government, as it did, says, "We will not import any more of your product if you don't increase workers' safety?" Probably. In the meanwhile, by the time that gets through, 5 million workers are out of business.

In other words, from my point of view, there has to be some sense of shared responsibility between the foreign buyer and the domestic producers in terms of saying this is good for business and we both need to share the cost of improving workers' safety; we need to share the cost of improving workers' rights.

What that means, in both cases, is that both of these parties — and they are the parties; the government, essentially, is the enforcer — must be prepared to accept reduced profits than what they were used to before. Once that happens, we're in business.

The Chair: Thank you very much to Jane Stewart, Professor Mukherjee-Reed and Professor Rahman. As you can see, there was so much interest that I didn't even get to ask my questions, but I can't keep you anymore. I see that we will be talking again. You have raised some very important questions. Thank you for making time available for us.

(The committee adjourned.)

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