Proceedings of the Standing Senate Committee on
Human Rights
Issue No. 7 - Evidence - June 8, 2016
OTTAWA, Wednesday, June 8, 2016
The Standing Senate Committee on Human Rights met this day at 12:29 p.m. 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: available economic levers to enhance respect for human rights, including the Export and Import Permits Act).
Senator Jim Munson (Chair) in the chair.
[English]
The Chair: We sincerely want to apologize to our two witnesses. Your time is valuable, and we understand that. A picture was being taken on Parliament Hill, allegedly for history, so our great, great, great-grandchildren can see what we did 150 years from now. We were there for an official portrait of this Parliament 150 years later in our Confederation; and we apologize for that.
Honourable senators and viewers, welcome to the Standing Senate Committee on Human Rights. We're continuing the testimony on the available economic levers to enhance respect for human rights, with a particular focus on the Export and Import Permits Act. This study is part of the committee's examination of international and national human rights obligations. Before we get down to testimony and statements, we'll have the senators introduce themselves.
Senator Ataullahjan: Senator Ataullahjan from Ontario.
Senator Ngo: Senator Ngo from Ontario.
Senator Omidvar: Senator Omidvar from Ontario.
Senator Andreychuk: Senator Andreychuk from Saskatchewan.
The Chair: I'm Senator Munson from Ontario. We have two panels today for 45 minutes each, originally to be 60 minutes.
We have, from Global Affairs Canada, Wendy Gilmour, Director General, Trade Controls Bureau; and Dominic Gingras, Director, Market Access and Trade Remedies Law Division.
Ms. Gilmour, please proceed.
Wendy Gilmour, Director General, Trade Controls Bureau, Global Affairs Canada: Thank you very much, Mr. Chair. We're very pleased to be here. Today I was particularly pleased to hear that it was a photo occupying you and not the sinkhole in downtown Ottawa. I hope there are no injuries or significant damage as a result.
We appreciate the opportunity to appear before the committee. I am Wendy Gilmour, Director General of Trade Controls Bureau at Global Affairs Canada, which is responsible for our export controls program.
[Translation]
I am accompanied today by Dominic Gingras, Director of the Market Access and Trade Remedies Law Division, also of Global Affairs Canada.
I understand that you are interested in Canada's export control process; and in particular, how human rights are taken into consideration in export permit decisions.
I would begin with a short explanation of how Canadian export controls work, after which Dominic and I will be pleased to respond to your questions.
[English]
To begin, I will focus on the Export and Import Permits Act. Our export control program is grounded in this act, which falls under the mandate of the Minister of Foreign Affairs. We refer to it as the EIPA.
The EIPA enables the government to control the export and import of certain military, dual-use and strategic goods and technology. Just to note, the act also covers the export and import of goods controlled further to international trade agreements or for economic reasons. We cover supply-managed agricultural goods or steel for monitoring purposes and a number of other commodities. For our purposes today, I will focus on export controls established for strategic purposes.
The EIPA provides for the establishment of an Export Control List and an Import Control List, both of which are updated annually or as necessary. The Export Control List comprises goods and technologies of strategic value to Canada. The vast majority of items are listed following negotiation with allies and partners in four multilateral export control regimes or are listed as a result of bilateral agreements. Maintaining consistency between Canada's Export Control List and those of our allies and partners allows exporting Canadian defence and security companies to operate on a level playing field with their international competitors. Issuing or denying export permits, however, remains a strictly national decision.
The EIPA also provides for the establishment of an Area Control List, whereby countries are required to have permits for all exports, not simply those items on the Export Control List. At the moment, North Korea and Belarus are the only countries on the ACL, although the Minister of Foreign Affairs recently announced that he has initiated steps to remove Belarus from this list.
The act also provides for an Automatic Firearms Country Control List, AFCCL, which establishes a positive list of countries authorized to receive prohibited firearms from Canada, although each export of a firearm would still require an individual permit. To be placed on the AFCCL, the specific country must have a formal defence relationship with Canada.
[Translation]
The effective management of export controls is important in order to facilitate legitimate trade in support of the $6 billion Canadian defence and security industry. More than half of this sector's revenue derives from exports. Global Affairs Canada receives on average over 7,000 export permit applications annually for dual-use, military and strategic goods. Applications for permits are received and reviewed by the export controls division within my bureau, drawing on the expertise of a wide range of government officials both within Global Affairs Canada as well as the Department of National Defence and other government departments, as appropriate.
Individual permit applications are assessed based on the specific good or technology being exported, the destination country, and the specific end use and end- user of the proposed export.
[English]
In practice, the vast majority of permits are issued by officials on behalf of the Minister of Foreign Affairs. Where concerns remain following the assessment by officials or the recommendation is to deny the permit, an application may be referred to the minister for his decision. The cases that go to the Minister of Foreign Affairs are first routed to the Minister of International Trade for her advice and recommendations.
The EIPA provides the Minister of Foreign Affairs with discretion to consider a broad range of factors in determining whether or not to issue a permit. Specifically, the minister may consider among other relevant matters the safety and interest of Canada and peace, security or stability in any region of the world or within any country. In rendering decisions on export permits, the minister also takes into account the reasons for which the goods or technology were placed on the Export Control List.
Policy guidelines, determined by cabinet in 1986, establish four broad categories of countries where Canada would closely control the export of military items in particular. These are countries that pose a threat to Canada and its allies, are involved in or under imminent threat of hostilities, are under United Nations Security Council sanctions, or have a persistent record of violations of the human rights of their citizens.
Further direction established by government since that time has highlighted other broad policy objectives for export controls that, inter alia, ensure export controls are consistent with Canada's sanctions regime while also seeking to ensure that Canadian goods and technology do not contribute to the proliferation of weapons of mass destruction or their delivery systems or, as is the interest of this committee, are not used to commit human rights violations.
All these elements and others, as appropriate, are taken into consideration in the review of each application as it is submitted and inform the nature of consultations sought as part of the review and subsequent recommendations regarding the permit.
That brings me to the question posed by your committee: How are human rights considerations in particular integrated into the export controls process?
Canadian export controls are designed to safeguard Canada's national security, foreign and defence policy interests. These interests include human rights. As noted above, export permit assessments are done on a case-by-case basis specific to the risks that correspond to the goods or technology specified in the application and the identified end use and end user. Information to inform these assessments is drawn from a wide range of both open and classified sources from Canadian missions abroad and from officials in Global Affairs Canada as well as other government departments.
Where concerns persist regarding the potential that the proposed export could contribute to serious violations of human rights, the assessment includes an examination of any mitigating factors, which include Canada's overall foreign policy, defence and security interests. This assessment is presented to the minister for his decision on whether or not to authorize a permit.
I would flag the fact that the purpose of the Export and Import Permits Act is to regulate the legitimate trade in controlled goods and technology. Prohibitions on trade and other economic activity, including arms embargoes, are established further to other pieces of legislation, for instance Canada's United Nations Act, used to implement sanctions established by the UN Security Council. Other tools are also available should the government wish to put in place outright bans on specific types of exports or economic activity. For example, Canada also implements autonomous sanctions under the Special Economic Measures Act, SEMA.
Finally, I would note that the government has committed to acceding to the Arms Trade Treaty. The objective of this treaty is to establish common standards to regulate the international trade in conventional arms and prevent their illicit transfer or diversion. A review of Canada's existing legislation, regulations and policy is under way to determine our compliance with the treaty's obligations, after which the government will be able to accede to the treaty at the earliest opportunity.
This concludes the formal part of my presentation. We'd be happy to answer any questions you may have. We hadn't planned on Dominic making a statement, so, Mr. Chair, I would put it back over to you.
The Chair: Thank you very much for your testimony. We appreciate that. While you were reading, we were missing some of your opening remarks. We're getting them photocopied because we were trying to follow. We had pages 1, 3, and 5 and were missing 2 —
Ms. Gilmour: We may have been trying to save trees and do it double-sided. So, my apologies.
The Chair: It doesn't matter whose fault it was; we will get those. I think we're getting them now. These are the new ones? It would be helpful because there was some strategic information in there that is helpful to our questions.
Thank you. It's very important. We'll begin with the deputy chair, Senator Ataullahjan.
Senator Ataullahjan: I want to apologize, too. The only reason I took the picture was for my great-grandchildren, if I ever have any.
Previously, we had Project Ploughshares here, and Ken Epps, the policy advisor, told the committee that the standards of Global Affairs Canada's report to Parliament, the Report on Exports of Military Goods from Canada, have dropped since its inception in 1991, particularly in comparison with many of the other departmental reports. Would you agree with that statement, and would you be able to explain it to us?
Ms. Gilmour: Thank you. Would you like me to respond to individual questions?
The Chair: Yes please.
Ms. Gilmour: There are a number of different public reports that are done under the aegis of the Export and Import Permits Act and also reports that the government provides as a voluntary measure to Parliament. The act itself has a statutory requirement for a report on the operations under the act, which is an annual report, as the information is available, which gives the number of permits issued, denied and so forth. The last one of those reports to be published was from data in 2013. There were some delays last year, primarily due to the long writ period, and I believe the reports for both 2014 and 2015 should be tabled shortly.
The government also does a voluntary report on military exports, which has been in place, I believe, since 1991. I'm getting some nods from the side. That report was designed as a measure to demonstrate Canada's transparency with respect to military reporting and to encourage other countries to do the same. Because there is no statutory requirement, it has been produced by the government as available. Some years have been annual. Some years combined two years' worth of data in one. Again, the last report to be tabled in Parliament was in 2013. That report covers a list of countries of our military exports by destination, broken down by the total value of the actual exports that have been sent abroad.
Again, the information is being readied for tabling. I believe the government intends to do so fairly soon.
Senator Ataullahjan: One of the questions I asked last week — and I would like to ask you the same question — is that, during the Iran Accountability Week, we heard that sanctions can be ineffective as they hurt the most vulnerable as opposed to those in power. How do we ensure that sanctions do not inadvertently hurt the most vulnerable? Also, once the sanctions are imposed, what mechanisms are in place to evaluate the effectiveness and modify them if required?
Ms. Gilmour: I would say, right off the top, that my portfolio does not include the sanctions regime in Global Affairs Canada. So I can give you a very general answer, but more specific information would have to come from some of my colleagues.
Canada has two primary pieces of legislation available to establish a sanctions regime. The first, as I said, is the United Nations Act, which is designed specifically to implement sanctions that have been established further to a UN Security Council resolution. They tend to be grosso modo arms embargoes or sometimes more specifically tailored to particular types of exports or financial or economic activity. Then we have the Special Economic Measures Act, which is established. I believe the requirement in the act is very onerous. SEMA sanctions are established where there has been a grave breach of international peace and security, and then targeted sanctions are established specifically to address what the elements are of that grave breach of international security.
Under SEMA Canada has established sanctions that relate, in some cases, directly to military activities or arms or related material or financial services related to military activities or arms-related material.
So that's in the case of Burma, very targeted at the military junta that had not followed through with a legitimately elected government.
Sanctions are an instrument that are best employed with international consensus and that are targeted at the decision makers whose behaviour you want to influence. I believe that is indeed the intent of Canadian sanctions regimes.
The Chair: We do have a lot of questions, and Mr. Gingras, feel free to jump in any time.
Senator Ngo: Last week, we heard lots of testimony regarding the LAV trade deal. It was of very great concern to all of the witnesses, including us. This $15 billion deal is by far the largest military export contract in Canadian history. This export contract is giving military assets to one of the worst human rights violators in the world. Saudi Arabia is, indeed, a serious human rights violator. Your own human rights assessment on Saudi Arabia from 2015 describes an increase, not just the dire human rights situation but a worsening human rights situation in the number of executions and arbitrary detentions, in virtually every category of human rights violations.
What kind of situations and what kind of human rights record must a country have to actually trigger the human rights safeguards of Canadian military export controls?
My second question: If Saudi Arabia is deemed to be an eligible recipient of Canadian-made military goods, who would not be?
Ms. Gilmour: Thank you very much, senator.
I'll start off with an answer that speaks more to the operations of the export permitting regime because I think it's important to understand that, first, from the act itself, if you look at section 7 of the act, it speaks to the assessment that the minister performs that is specific to the good or technology being exported.
When we conduct an assessment of the risks related to a particular export, we look at the technology and the risks related to it, and the specific end use and end user of the good or technology that is being exported.
As to the fact that Saudi Arabia has committed human rights violations against its citizens, the Government of Canada has made very clear its perspective of Saudi Arabia's overall human rights situations. The minister has taken every opportunity to raise the concerns of the Canadian government with Saudi Arabia. That does not, in any way, absolve us of the need to perform a risk assessment specific to the good or technology being exported.
As has been laid out for the minister in his decision on this particular export, a full risk assessment took place. Canada looked at the performance of the users of the military vehicles that had been exported since the early 1990s. We have no information to indicate that these vehicles have been used inappropriately or to commit human rights violations. On balance, given the larger strategic environment, it was consistent with Canada's foreign policy, defence and security interests, including human rights, for the minister to authorize this export.
The Chair: Senator Ngo, can I have a little supplementary into that? Because I think it really flows well with the supplementary that I have on the LAVs that are being used in Saudi Arabia.
Is Global Affairs Canada required to determine whether Canadian military goods and technologies are at risk of being used outside the recipient country to commit human rights violations against civilians? Are any measures being taken to ensure that these LAVs sold to the Kingdom of Saudi Arabia will not be used against Yemeni civilians? Is Canada under any obligation to do so?
Ms. Gilmour: The requirement under the act is for an assessment to look for the minister to determine whether an export is consistent with the purposes for which the act was established and with the broad security considerations laid out. That's done at the time of export.
As part of the export permit process — and this is one of the requirements established in regulation — when we receive an application, the end user of the particular good or technology is required to provide an end-use assurance, certificate or statement. These are mandatory supporting documents for all applications that require the end-user to describe what the use of the goods in question will be, to confirm that the goods will not be diverted to any other uses from what was specified in the application. In some instances where it's a relevant good, we require them to ascertain that the goods will not be diverted for uses of weapons of mass destruction and so forth.
Part of the assessment, as I said earlier, is specific to our understanding of what the good is going to be used for when it goes to its end customer. In this case, the good was for military use. We have assessed the user of this particular technology as outlined in the memo before the minister based on past performance and our understanding of the situation at the time and deemed that it is appropriate.
The end-user assurances are something we take into account as part of the assessment to determine whether or not it is appropriate for the minister to authorize a permit. If there were residual concerns that could not be mitigated by the positive benefits of a particular export, the strong likelihood would be that the minister would probably choose not to authorize a permit. Officials issue the permits themselves.
Talking specifically about the LAV case, the factors the minister took into consideration, including his weighing of pros and cons, were outlined in the memo before him.
Senator Ngo: The violations about which we raised concerns here — The Globe and Mail two or three weeks ago mentioned about Saudi Arabia using the LAV against its own people, and not only that they used the LAV against civilians in Yemen as well, because Human Rights Watch testified before this committee last week.
For these very serious violations of the Export and Import Permits Act, could Global Affairs Canada or the minister rescind?
Ms. Gilmour: The assessment that goes into the decision of whether or not to authorize a permit and our ongoing assessment of the security environment in which Canadian exports have gone take into account a wide variety of information. Information that appears in the press we pay attention to, and we try and assess its veracity and the degree to which it is relevant for a particular application.
The presence of allegations in the press does not automatically mean that there has been evidence that a violation has occurred or that there is sufficient grounds for a recommendation to the minister to suspend, rescind or cancel a permit. That is the language in the act. That has not been the case with respect to the LAVs in Saudi Arabia. The information that was before the minister when he confirmed his decision remains valid.
Dominic Gingras, Director, Market Access and Trade Remedies Law Division, Global Affairs Canada: Simply to add that the EIPA in section 10 contains a broad authority on the part of the minister to suspend, cancel, amend or reinstate an export permit on the basis of any new credible information; so if indeed there was credible, verifiable information that there was misuse, the minister does have the authority to cancel or suspend the permits.
Senator Andreychuk: Just picking up on these lines, it's one thing to be able to cancel, which means no future sales.
The difficulty under this system, and particularly in today's technologies in the new world we live in, your assessment today changes tomorrow, and then these weapons move. We need to think about a verification system that makes sense with the new technologies and issues that we face. You say we put in a regime in 1986. We've done some updating on it. Is there any way we can track the equipment, rather than just assessing the record of the country?
Ms. Gilmour: If I understand correctly, you're asking for ongoing tracking of all Canadian exports abroad?
Senator Andreychuk: In essence, some system like that. If you worked, as I have, in Africa, you will see weapons showing up in the most unusual places. If you do some digging, you will find out that's not where they were destined for. They were already transferred a number of times. While we make a deal and it goes to Saudi Arabia, or whatever country, and they say it's for this particular use, we do not know whether it will continue for that use, and we don't know whether they will sell it off somewhere else and move it around. In the old days, it was guns; you could get serial numbers and a tank.
Highly sophisticated material is moving around under this export system. Do we have any verification system or a relationship with countries we deal with that they're very open for inspections? I mean, internal in NATO you can go from country to country. Outside of NATO, how do we build confidence that our system is working?
Ms. Gilmour: So the way the system is constructed, it requires us to do an assessment of the risks related to the potential diversion of the goods or technologies being exported as part of the assessment of an export permit itself.
One of the things we are looking at in the export permit division when they assess an application is who is the end user. What is the end use of the goods or technology being exported? What is the likelihood that those goods or technologies may be diverted to a use not provided for in the permit? If we believe there are significant concerns related to the diversion of the particular good to an unauthorized end user, the strong likelihood would be that the permit would not be recommended for issuance.
The system that we have in place at the moment is based very much on the credibility of the end user that we are exporting the goods to, and it's a critical part of the process. If we cannot reassure ourselves of the reasonable behaviour, I guess you could say, on the part of the recipient of the goods, and our understanding in the event of resale or end-of-life demilitarization the good goes on to something else, we want to make sure we sell our goods in such a manner that we have confidence that will be done in a manner that is consistent with our overall interests; so it's taken into account at the time of export.
In terms of our ability to verify what our goods are being used for and our relationship with the countries involved, one of the elements in the act as I mentioned earlier is the Automatic Firearms Country Control List. It's a particular provision in the act that is a positive list of countries to which a particular technology can be exported, in this case, prohibited weapons. The idea behind that particular piece of the act is that Canada must have an existing defence relationship with the country where we are going to export these prohibited weapons, automatic weapons. The idea there is that if we have a defence relationship with a country, that gives us the ability to assure ourselves that it is indeed an appropriate place to consider actually exporting prohibited weapons to. That's the idea of the positive list; it establishes a relationship with the country that would be receiving our goods in that instance.
Senator Andreychuk: Human rights evaluations are very subjective, and they are very fluid. My concern is that when you say we have made a human rights assessment, it's the minister, ultimately, who makes the assessment, based on what the officials tell him. We know the United States has a very transparent system of, once a year, filing human rights assessments so that we know. NGOs and the communities can feed into that. They can critique that. They can monitor that, so there is a level of assurance. In fact, all of the other countries are using their guidelines. I'm not sure what type of human rights guide marks you use to assess it — because is it good governance? A government may look stable, but it may be in a region. It may be a country that has been fragile, and it changes. We're optimistic this government is going to make it, but we don't have any track record yet for it.
I guess the lack of confidence in the system comes from that; we're not quite sure what the factors are that go into a human rights assessment.
Ms. Gilmour: So, again, I would come back to this: If we are speaking about the context of an export permit application, which is the program for which I'm responsible, the focus is on the assessment, the risk related to violations of international human rights law, violations of international humanitarian law, the risk of diversion to an unauthorized use. All of these elements are taken into account specific to the good or technology being exported. So we are looking at who the recipient is. Who is the consignee of these goods? What information do we have that would lead to some confidence that the goods will be used appropriately? If there are concerns related to the potential risks specific to an export, what are the other factors that might play into helping create an assessment that balances the potential negative consequences against the potential positive consequences of a particular export?
It's an exhaustive list of factors because what we are looking at is what is specific to that good or technology. The broad human rights assessment that Global Affairs Canada engages in is a foundational document that is of interest not only to my program but to all of the activities the Government of Canada performs. It is done on a different time frame and for different purposes than simply the assessment of a particular export.
Senator Andreychuk: On the particular export, what are your information sources then? Because, if I understand it, the department gives the advice to the minister. So what are your information sources on that particular export?
Ms. Gilmour: It would vary entirely depending on what the export is. Where is it going? Who is the end user? I can say that we draw, for our assessments, on a wide range of sources, both open source material as well as intelligence material, where it is relevant. We draw on assessments from our posts in the regions to which the exports are going. They are doing positive verifications, in some instances, where the risk profile demands it, of the end use and end user, ensuring that the reasons for which the export is happening are actually true. In some cases they are visiting companies. They are visiting end users. We are taking into account the specific circumstances of that destination and of the goods going. Without going case by case, the factors will vary depending on the export, but I have great confidence in the information that we receive from the Global Affairs network and from our Defence colleagues where we are talking about specific military technologies. Where we are talking about space technologies, we reach out to the National Research Council, the Canadian Space Agency, wherever is relevant to give us information for that particular application. Should there be concerns that cannot be mitigated through the assessment process, that's when an application would go to the minister, and the minister would be asked to make a decision based on weighing of factors in relation to Canada's broad, as I said before, foreign policy, defence and security interests.
Senator Omidvar: I'm curious to understand the industry in Canada. You say that it is a $6 billion industry in Canada, half of its revenue derived from exports. How many jobs are involved? Where are these jobs located? Are the skill sets in these jobs specific to the defence industry, or are they transferable out? Do these employers, if they are large employers, let's say, Bombardier — I don't know — receive tax subsidies for the development of these products? I just want to understand the other side of the picture a little.
Ms. Gilmour: As a very broad range, I think the defence industry in Canada uses 60,000 or 70,000 jobs? Sixty thousand jobs; my colleagues are helping me. The industry is an innovation driver, with significant investments into research and development. It is across Canada. There are clusters of different types of capabilities in different places: an aerospace cluster in Quebec, an advanced manufacturing cluster in southern Ontario. Armoured vehicles and all of their supply chains are very much focused there. There are aerospace and high-tech industries located across Canada — Magellan, in Winnipeg, a great aerospace company; MDA, another space company, out on the West Coast, in the strategic realm, not necessarily military. I don't have it available right now, but we can certainly direct to you, if you wish, a very interesting report that was just published a couple of weeks ago that was done, as I understand it, jointly between the new Industry Canada — Innovation, Science and Economic Development Canada — and the Canadian Association of Defence and Security Industries, which provides more up-to-date information on regional distribution, the jobs and the economic drivers behind the industry. We can certainly bring that to the attention of the clerk and make sure that it is available to you because I believe that would give you more comprehensive information than I can right now.
Senator Omidvar: All of these industries leave the human rights assessment to Global Affairs Canada?
Ms. Gilmour: I wouldn't say that, because all exporting companies, as their first order of business, want to engage in their own assessments. I can say this with a great degree of certainty. In the vast majority of cases, Canadian companies want to be compliant with Canadian law. They are doing everything in their power not only to be compliant with the Export and Import Permits Act but for their own business interests. They want to make sure they are engaging with credible customers and engaging in credible sales. They are doing their own due diligence on the customers that they are developing business with?
We work very hard to ensure that Canadian companies are aware of the range of criteria that we take into account in producing an export permit assessment, and we work with them to get the necessary information. It would be quite unusual for a Canadian company to be developing a business relationship with a client that is clearly a human rights abuser, I would say, or that would lead to a negative decision on an export permit. That's not in their business interest to do so. My experience, certainly, with working with the Canadian defence and security industry is that they are very well aware of the requirements of the act and are working with the Government of Canada and in their business relationship with their clients to get the necessary information to inform an assessment.
Senator Omidvar: I may come back to this later, but thank you.
The Chair: We may not have time to come back. We only have five minutes or a bit more because we have to finish at two o'clock. We have another piece of testimony coming afterwards, and I would like Senator Ataullahjan and Senator Andreychuk to write down their questions so that we can get the answers. Senator Omidvar, you can write your question as well so that we can get them all and sort that out over the next 10 minutes.
Senator Ataullahjan: Mine is like a point of clarification regarding section 10. If cancelling or amending a permit, are there any financial costs involved? Are there any other consequences?
Ms. Gilmour: Under the Export and Import Permits Act, it's not a factor that we take into account, necessarily. It may be one of a broad range of factors the companies may present that we would include in the context provided to the minister, to reach his decision. It's the company's responsibility, or the contracting parties', to determine the terms and conditions of a contract. The requirement for an export permit is a requirement under Canadian statute.
Mr. Gingras: That's right. Financial penalties that might be associated with the termination of the contract would form part of the context in which the decision is made; but it's not a determining factor.
Senator Ngo: I have another question: Freedom on the Net 2015 reported that Internet freedom around the world is in decline for the fifth consecutive year. More governments use information of public interest while also expanding surveillance and cracking down on privacy tools. We see this with China and a great firewall, and Vietnam with the green dam. These countries are among many that are transforming the Internet into a weapon of mass surveillance by toughening online censorship and by arresting people — hundreds of online bloggers.
Does Canada sell any software or dual-use technology that potentially could be used to quell legitimate dissent? Software and dual-purpose technology should fall into the list of strategic goods that cannot be exported from Canada to any destination without a permit.
Ms. Gilmour: I'll take that question in two parts, if I may. In terms of the technology that is on the Export Control List, off the top of my head I can't tell you exactly what the technical definition is, but there are elements of software technology that fall on the dual-use list. If it is specially designed for military use, it would fall under group 2, which is our military list. If a controlled item in this instance is being exported from Canada, the exporting company must apply for an export permit. When we receive the application for that export permit, like with any good or technology, we would perform an assessment of the risks related to the particular export, including human rights and the usage for which the good is intended.
We would make a recommendation, if it were for a denial, to the minister, whether the particular export was consistent with Canadian foreign policy, security and defence interests. I can't speak to a particular technology or export off the top of my head. I don't know the numbers of export applications that would fall under the categories you mentioned under the broad subgroups of the Export Control List. But I am confident that if a controlled good is being exported, we would be looking at an assessment of that export to make sure it was consist with Canadian foreign policy interests.
Senator Ngo: Could you provide to the committee the list of the companies that fall into those categories so that we know?
Ms. Gilmour: I'm afraid, senator, that we are not able to provide information that is commercially confidential. An export permit application from a particular company would be considered commercially confidential information. We can provide numbers of application in broad groups and possibly subgroups, but we would have to verify that. We'll go back and take a look at what information may be available in that respect. We can't provide company-specific information.
Senator Ngo: We know that General Dynamics is one of them. Thank you.
Senator Andreychuk: I'll follow up on something Senator Ataullahjan said and leave the other questions. Cancelling a permit is only valuable at the start of or during a contract, in essence. Do the contracts we sign have extensions? In other words, we say we're going to buy X of something or sell X of something, but there is a built-in for future contracts. Are those scrutinized differently? You look puzzled.
You may get 50 widgets of something or other, but it is embedded in the contract that you can continue working and supplying. Does that lead to another permit and an analysis? If you should sever and pull a permit midway, what are the consequences? Is the company obliged to stop? Already-given permit is then yanked. I have heard in some of the statements made about the Saudi situation that we could always stop it. Well, I'm wondering if we can stop it.
Ms. Gilmour: Minister Dion answered that question in his appearance before a parliamentary committee. I don't have his answer verbatim, but I will try to explain it. A variety of influencing factors are relevant in this particular case. First, the export permit application process looks at applications for the export of specific goods; we don't look at contracts as a whole. Where the application is for the export of goods, we would look at the context in which those goods would be exported. Export permits have a validity that could range from a couple of years to three or four years in some instances. As we know, and is publicly available, the case of the Saudi LAV sale is a multi-year, I believe 14 years, contract. There will be multiple export permits during that time as particular tranches of the contract are delivered. Every permit application would be assessed based on the facts available at the time of application.
Additionally, and this is the point Minister Dion made in his presentation, we have to understand that when a country is buying a military capability from Canada or even parts and components, that relationship between the original equipment manufacturer and the end user of the specific good or capability is very important. In the case of the LAVs it is publicly available. The Saudis have been in a relationship with the Canadian supplier of LAVs since the early 1990s. They have existing fleets, which require in-service support, spare parts, technical information and technical services; so those are ongoing relationships. The value is in the relationship between the original equipment manufacturer and the ultimate end user, so it very much matters whether a permit can be obtained for a future sale. If it's in the course of a particular shipment that a permit is suspended or cancelled, no further exports can take place. For an export to leave Canada, a valid permit must in place.
The Chair: We want to thank you very much. We have a lot more questions, but this study will go on for a while. Maybe we'll come back to you and send you a note or two to clarify some issues. It's very important for us to have you here as we continue this study.
We have another witness coming up in a moment, but I have to leave to do something. I would ask that for the remainder of this meeting, the committee be allowed to meet for the purpose of receiving evidence without quorum, even though members representing both the opposition and the Senate Liberals may not be present. These are our rules. I am the Senate Liberal, but I have to leave. Would members agree to that?
Senator Andreychuk: I will have to leave at 1:45 p.m.
The Chair: We will go until 2 p.m. I just need agreement.
Senator Ngo: Agreed.
Senator Andreychuk: Sure.
The Chair: That's very kind of you. You see the sense of cooperation in the Senate of Canada?
Senator Salma Ataullahjan (Deputy Chair) in the chair.
The Deputy Chair: I would like to take this opportunity to welcome our next panelist, Milos Barutciski.
Milos Barutciski, Co-Head of International Trade, Bennett Jones Law Firm, as an individual: I am a partner and I co- chair the international trade practice at a national law firm. However, I am here in my capacity as an international trade lawyer who has advised companies, governments, international organizations, even the occasional NGO for 30 years in matters of trade regulation, including export controls and sanctions.
I am going to discuss three issues in my opening remarks. First, I would like to say a few words about the current export controls regime. Ms. Gilmour covered it very well, so that will allow me to curtail some of what I had planned to say. In particular, I want to talk about the statutory and policy purposes, the limitations of the regime and the important role that it plays in the Canadian economy.
Second, I want to make some remarks about the use of trade measures to encourage our trading partners to act or sometimes not to act in a wide range of areas, including but not limited to human rights.
Third, I want to comment on the necessary balancing of competing interests and sometimes contradictory interests that governments have to engage in when implementing trade controls and sanctions.
Those three themes have come through loud and clear, not just today, but at the last session with Project Ploughshares, and I think there was one other — I did go through the transcripts to get a sense of what your interests were before I appeared.
The other thing I should say is I'm not involved in the LAV sale or the Saudi sale. I have been involved in arms exports and mostly dual use because that's the overwhelming majority of permits issued under this act. Yes, we have a large defence industry, but the impact and the application of the act and the need to issue permits are overwhelmingly in the civil area where goods or technology have potentially security, military and civilian uses. Those are controlled just as strictly as military goods are.
The act has been around since 1947. It doesn't actually contain a purpose clause, as such. However it does pertain to provisions that allow us to get a sense of the statutory purposes that the act is intended to promote. For example, while Ms. Gilmour talked about the act requiring a permit from the Minister of Foreign Affairs, if an exporter wants to export goods that are designated on the Export Control List, the ECL, or to a country listed on the ACL, the Area Control List. There are only two, soon to be one when Belarus is removed.
The key to getting a sense of the purpose of the act, as it currently stands, is to look at how goods actually get on the ECL. For that, the act says that the Governor-in-Council — and it's cabinet acting by regulations — that can add goods to the ECL for six reasons. It lists the reasons, and I'm not going to go into them in detail; you have probably looked at them: to ensure arms aren't made available to any destination where the use might be detrimental to the security of Canada — I'm just quoting from the act — to promote further processing of Canada's natural resources, and so on. There are several other reasons.
None of them include human rights expressly; however, that doesn't mean that human rights or other matters aren't relevant considerations. The minister has broad discretion under the act to issue permits.
In fact, the permitting provision under section 7, which gives the minister authority to issue permits, also includes peace, security or stability in any region or country. It goes without saying that abuse of human rights is something that could easily affect peace, security or stability in a country or region.
My point is that while human rights aren't expressly flagged as a relevant consideration in the act, they are a relevant consideration for the minister, as reflected in the 1986 policy you have been looking at during your study. However, it is not "the" paramount consideration. It's important to bear that in mind while you go through your deliberations and studies. While human rights are an important consideration, not just for you, but for the minister, eventually there will be a human being, a member of Parliament, a minister elected and appointed to that role to make a judgment call on specific transactions. She or he will have to make a judgment call based on human rights but many other factors, and they will be conflicting. That is certain as night follows day. That's why one of the previous witnesses said politicians get paid the big bucks, having been around awhile. I'm not sure if that was an accurate statement, but leave that aside.
The point is that your task is to balance difficult, important and occasionally conflicting interests. That minister in future, whoever is administering this act or an amended version, will have to do precisely that. So human rights, yes; but not the only relevant interest, and sometimes the balancing is difficult.
The other issue that I want to talk about under this rubric is the role that the Export and Import Permits Act plays in Canada's economy. We all know Canada is a trading nation. More than half of our economy depends on trade and has for many years. As Ms. Gilmour described, and as several senators alluded to, today's exports incorporate a great deal of controlled technology.
We talked about Internet freedom. Canada is a major supplier of encryption software. You'll find that encryption in your laptops, iPads and mobile phones, in remote devices, in virtually anything that communicates electronically over the Internet. Much of that is controlled. It's also found in sensors, composite materials, different kinds of metals, the $9 or $2 O-rings used routinely in valves and pumps in the oil and gas industry that were also specifically on the prohibited list of goods for sale against Iran because they are heat sensitive and used in nuclear applications and were on the prohibited list for Iran. In the last sanctions, they have been removed as a result of the P5+1 process, but it gives you a sense. The range of goods, those $9 or $2 — I can't remember what they were — Viton O-rings are pretty banal goods, but they were restricted. That's the sense you need to take into consideration.
Companies and the jobs that they create and sustain need a measure of certainty in the export permit regime. They need to know criteria that they have to take into account in their due diligence processes that Ms. Gilmour talked about. One of the things I advise clients on routinely is if you make a sale, someone put in a purchase order. Who is that? What is the end use? What restrictions are in place or are going to be in place on future transmission, that is, re- export, re-destination and so forth? Those are all things that are part of the commercial agreement. Then, on top of that, you have the export permit requirement, so these are all things that are important to customers in understanding what criteria the minister and the department, essentially, will take into account, that those be articulated and clear. What is equally important is some measure of assurance that they are not going to get hijacked, if I can call it that, by the latest issue of the day. Sometimes the latest issue of the day is very important. Perhaps the Saudi LAV transaction fits that category. I don't know that it does or doesn't; I'm not involved in it, though I can make certain comments about what is in the public domain.
The second broad topic is the use of trade measures to influence foreign government behaviour. That's really what this hearing is about. But, again, it's not particularly unique to this subject, to human rights; it covers a wide range — the use of trade measures to influence foreign behaviour.
The same considerations will apply to environmental concerns, to governance and democratic reform in foreign countries, religion, freedom of religion, gender equality, gender diversity and many, many more topics that are important to us as citizens, as Canadians, important to you as a government and important to the world. So I don't think human rights is unique in this area. While you're studying this challenge of balancing important interests in the application of this statute and the Special Economic Measures Act, another trade regulation statute, you need to factor in that what you say here will have ramifications in other areas.
So, when we have concerns about the behaviour of foreign governments, we, as a country, can respond in a range. There is a menu of escalating measures that we can use to respond and to try to influence the foreign government. Perhaps at the lowest grade but extremely important on a day-to-day basis is discrete diplomatic pressure. That's why we have ambassadors. That's why we have a Minister of Foreign Affairs. That's why our ministers meet with their ministers. That's why our ambassadors meet with their officials. That channel of communication is fundamental to day-to-day management of Canada's international relations.
A step up from that is public statements of differences of view. Governments routinely say, "We don't agree with government X on this, and the level or the temperature of those public statements can vary from lukewarm to piping hot. Again, it's a measure that is used. It is important if we reflect on human rights issues over the years. With South Africa and the Apartheid regime, Canada played a huge role in that. Not just on sanctions. We did actually have South Africa on the Area Control List for a while. Our formal sanctions were extremely limited. It was mostly informal sanctions, but the Canadian government of the day's voice in international fora and some of the hectoring that the Prime Minister did to his good friends and allies Prime Minister Thatcher and President Reagan were really instrumental in bringing about change in South Africa. So the temperature of the public statements is an important tool.
Formal diplomatic measures, the recalling of ambassadors, the recalling of missions and so forth. There are others. Then, a step up to a more legal domain is the application of discretion in ministerial and cabinet decision making, so the issuance of permits and the factors that you take into consideration, like human rights abuse, for example, putting a country on an Area Control List. Belarus went on the Area Control List in 2006, after a botched election, an abusive election if I can call it that. That's why it was on. Now, things have changed a little bit, and the EU and the United States and Canada and others have agreed to soften things up a bit. Again, that doesn't mean we are the best of friends. That's a formal measure that was made at the cabinet level. Finally, there are much more formal legal measures, such as regulations issued by the Governor-in-Council under the EIPA or the Special Economic Measures Act or, ultimately, statutes or amendments of statutes, which is your prerogative as Parliament.
So different situations and concerns will warrant different measures. The appropriate response will be a matter of political judgment. As I said, sometimes South Africa, for example, in the 1980s and 1990s. By the 1990s, things had started to change immensely, but, in the 1980s, the different measures that were applied at different times were instrumental. The metering of those measures, and their timing, was equally as important as the actual measures themselves.
At other times, it will be through more formal measures, like Rhodesia in the 1960s. Canada implemented sanctions against Rhodesia after a Security Council resolution, as we did with Iran, and as we have with various other countries. So, there is a range that needs to be taken into account, and government needs latitude. I think this is very important to think about. Government needs latitude to act in an informed manner, even when there are different and conflicting views in the public domain or even within Parliament. We don't have the luxury to wait until each and every factor is fully thrashed out. Conflicts and the kinds of security or human rights concerns that we are talking about here and that you're studying occur quickly. I heard former President Clinton. I guess they still call him President. Actually, the two of them, President Clinton and President Bush, spoke side by side at an event in Toronto after each of them was out of office. The question that was put to the two of them was if you had to do it over again, is there anything that you regret? Both were extremely authentic. They were what they thought. President Clinton paused for what seemed like a long time. It was probably three or four seconds. But his answer was Rwanda. "We could never have stopped the genocide, but if we had acted a little bit faster, we could have saved a quarter of a million people."
So, as to second-guessing governments in situations that involve human rights — I'm not saying don't put their feet to the fire — there will be different views, and that's as it should be. Governments will and have to listen. It's a democracy. That's why we have elections. They will be judged accordingly at the next one. However, one of the key factors I think you should be keeping in mind is that a cornerstone of international relations, international affairs, is the maxim pacta sunt servanda. Sorry for the Latin, but that's how it's used routinely in international law. What it means is agreements must be kept. It's a cornerstone of international law.
My friends at Foreign Affairs will say that we need to separate the issue of agreements between governments from the contract, with the LAV contract. That's true. However, it's a rather unique government; it's a rather unique contract in that it's a contract that was between a government entity, Canadian Commercial Corporation, that was approved by the same office, namely the Minister of Foreign Affairs — CCC reports to the minister — as is then required to issue the permits. Yes, two separate matters under law. The fact that a contract is signed doesn't mean that a permit must be issued. So when I represent a company that is negotiating a contract for export of controlled goods, one thing I will always say to them is, "Guys, the goods are controlled. When you need to ship those out the door, you had better make sure that you're able to get a permit for those goods."
So, what do you want? Let's have a clause that says "conditional on obtaining the permits." In other words, if you don't obtain the permits, you are not on the hook legally. Sometimes buyers won't accept that clause, and that becomes a commercial negotiation. That's when the penalties kick in, assuming there are any. So there are a lot of considerations. I haven't looked at it; as I say, I'm not involved in the LAV contract. I have no idea what the penalty provisions say.
Yes, it is separate. The legal issue of issuing permits and the penalty issue and the legal issue of failing to abide by a binding contract are separate as a matter of law, but, as a matter of relations between the states, they are not so separate. So that's something that I think you need to bear in mind when you look at how this act or other measures, be they sanctions or other economic regulation to influence government in terms of human rights abuses, might apply. The previous government considered various policy implications and agreed to approve the contract. A successor government should, in principal, be loath to second-guess an agreement or revisit commitments between governments. As a matter of law, it might not invoke the principal of pacta sunt servanda. That might be the position of the previous witness from the Trade Controls Bureau at Foreign Affairs, who might say, "If we have to argue that in international court, that's what we'll argue." But I'm not sure that the Saudi government or an international panel will view it quite that way. This was an agreement between an instrumentality of a sovereign state and another sovereign state. Pacta sunt servanda starts coming back to us.
The third and last point is balancing competing interests. The tough part in the export controls area and sanctions area is that you don't always get to pick your allies any more than you get to pick your friends or for that matter your kids' friends. I have three teenage sons. As much as I would love to pick their friends, it's a losing cause. I need to get along with them, if for no other reason than they are my sons' friends, and they have as much if not more influence on them than I have today. Maybe it wasn't like that when they were 7, 9 or 10 years old. Today, that's life; and I have to get used to it. In international affairs, that's also an important consideration.
We, as citizens and legislators, have to get used to that and are used to that. We will have common interests and have to cooperate with countries that we disagree with intensely about other matters. I mentioned some of the ones I have front of mind, such as human rights, gender issues, freedom of religion and environmental issues, fundamental norms of governance and democracy, how they run their countries and how they respect their citizens and whether they give their citizens voice.
Circumstances occasionally may force us to make common cause with governments that we find repugnant in important respects. The need and obligation for you as legislators and the government is to balance important but competing interests, and that unfortunately is the reality of international relations, just as much as it is the reality of domestic politics. Legislators are faced with a task of balancing a lot of Canadian stakeholders. I'm a Quebecer, and I started practising in Quebec. I'm a francophone. I'm speaking English because I don't think there are any francophones on this panel. My Quebec side, even though I'm an Alberta and Ontario firm, sometimes conflicts with what I hear from some of my Western friends or my Ontario friends. It's life.
Even the 1986 export controls policy was informed by the one that talks about risk of human rights abuse. Even that policy was informed by a measure of flexibility and discretion, which means balancing considerations.
I just want to finish with a brief quote from that policy that related at the time. In 1986, we kept a list of countries that were believed to engage in human rights abuses. Of course, it wasn't a public list for obvious reasons. That no longer happens. We don't keep the list anymore. My understanding is that decisions are made on a case-by-case basis about a reasonable risk that the goods will be used for human rights abuses. The quote I want to take from that policy is important. It says, "The identity of some countries with human rights abuses is self-evident. That of others will be more sensitive. The list —" which no longer exists "— will be reviewed regularly. It is not desirable for presence or absence of any country on a list such as this would be a matter of public controversy. Canada is a trading nation, and this government encourages trade in peaceful goods with all nations. We would be loath to see Canadian exporters cut out of certain markets for non-military goods as a result of our decision about a country's human rights record."
That statement is no less true today than it was in 1986. It doesn't mean that a country's human rights record is not a relevant consideration or, as one of the previous witnesses said, the fact that they could buy it from somebody else has no legitimacy as an argument. No, it's not a particularly strong argument, but it is certainly a relevant consideration.
The tough act is the Saudi situation. As much as we may differ with many of its practices, methods of government, human rights record and gender issues and so on, it is an ally that faces real security concerns. The LAVs are an asset and an important element of their ability to meet those concerns that we share; so there is the balancing act.
The final issue that this quote was referring to, which is the impact on economics and our commercial interests, is a relevant consideration. No, it's not a moral shield; on the contrary, as the previous witness said. But to suggest that it's not relevant is to live in a different world than the one we live in.
The Deputy Chair: Thank you for that excellent presentation.
Senator Andreychuk: We use the term "human rights." Part of that is the problem that we have. We don't define what we mean by that term for any particular case. We're getting there by our treaties, conventions and practices. Unfortunately, in a political environment, I hear statements such as, "Don't trade with X country because of its human rights record." However, when you are government, you're then face with a conundrum: Do we or do we not? It would be helpful if we had the discussion on human rights before we get into the balancing act. At trade, you can say X number of jobs.
You raised Rwanda. It's a subtle thing, but it's very important to think ahead and see who you're dealing with. We are trading with some countries that our allies will not trade with in certain circumstances, and vice versa. We're looking for more transparency and accountability so that we can understand the situation better. Otherwise, we go to external sources. It's not only a question of selling the LAVs and creating the jobs but also a question of having some assurance that a minister has weighed the human rights factors. It's that kind of transparency that I'm looking for — an understanding of how human rights are applied.
Mr. Barutciski: I could have said those words because that is exactly the challenge. I have read the memo, at least the redacted version in the public domain, that went to Minister Dion. It's clear to me that the issue has been considered. In other words, the issue was squarely before him. The question is the use of the goods and under the policy standard that "no reasonable risk that the goods will be used to violate human rights."
As the minister testified and has spoken to, and the witnesses here have at various times spoken to, there is no evidence to suggest that these LAVs will be used against Saudi citizens; but there is no evidence that they won't be. The fact is that the Saudis have over 1,000 LAVs already — probably several thousand. To suggest somehow that such a consideration becomes paramount, it comes back to something that should be weighed. Maybe a better or more informed analysis might take into account whether there is any reason for the country to use those goods for the prohibited purpose or the purpose that we want to suppress. There will be instances where it might be more specific.
Senator Ngo raised the issue of Internet freedom. That's the perfect example of where certain technology allows for interference, screening and breaking through encryption through electronic wireless means. Before we allowed an export of that kind of technology to countries that routinely snoop on their people in ways that we object to and that require warrants in this country. Yes, that might be a paramount consideration in that instance because what else would they use it for?
On the other hand, it's clear that Saudi Arabia faces security threats; and Saudi Arabia is an ally. They face massive security threats on multiple fronts. Do they play them up well, or do they botch them half the time? I have my own views, and I suspect everybody around this table has their own views about how well they have played their security situations. Are the security threats real and are they there? Absolutely, I don't think anybody will question that.
Are the LAVs or equipment like them relevant and necessary to be able to face those security threats? I don't think there's any doubt about it. I agree with everything you said, and I would add another layer, which is that the balancing act is more complicated. Then the issue becomes a question that I think you posed to the previous witness: Do we have measures that allow us to trace where this goes? Maybe that should be in these contracts. Maybe it should be a condition imposed as part of the permit. Permits can be issued with conditions. Maybe the conditions should be that. The end use will not include whatever, and then it becomes the problem of the exporting or importing country to make sure they manage it. If they don't manage it, then that becomes an important factor. If evidence shows up not of a LAV from somewhere but a LAV from Canada in a demonstration being against Saudi citizens or civilians in Yemen, then it becomes a factor in a future export permit consideration or other diplomatic relationships between us and that importing country.
Senator Omidvar: I really appreciate your testimony because it shows us that the world is not made up of absolutes but of shades of grey. Our current government's policy of engagement with known human rights abusers, Saudi Arabia and Iran, puts human rights at risk in both places.
You talked about former Prime Minister Mulroney and his moral high ground stand, which was fantastic from the point of view of dealing with Apartheid South Africa. My question is around your assessment of engagement versus exclusion, whether it's exclusion in trade or other.
Mr. Barutciski: Starting as a basic proposition, until you've broken all relations and are in a state of war, engagement is essential. I start with that proposition. Engagement is not just essential because without engagement it's pure rhetoric.
There are 200-plus countries in the world, and we are engaged with most of them in one way or another. Many of them we disagree with fundamentally about many different things. That doesn't mean we don't speak with them. We engage through our diplomatic efforts and through the efforts of not only Foreign Affairs, or Global Affairs now, but also many other departments and bilateral relations. We try to promote issues we care about, whether they're human rights or gender issues or democratic reform and so forth. We do a lot of work with the World Bank to promote those civil society issues.
You're right. Engagement is essential, and that's why I described the different layers of action governments can use to help shape or influence foreign behaviour. That's all about engagement essentially. If you disengage, for example by shutting down an embassy and pull somebody out, quite often you take yourself out of the formula. You're no longer a player. At that point, you have ceded your responsibility to others. Others will talk, but you won't be part of the conversation. Engagement is always essential.
Having said that, do you know what? There may be an issue. There have been issues. We have gone to war in the past. We may yet again; but I certainly hope not. If it happens or if circumstances come up of the sort that we've had in the past and we're faced with those kinds of decisions, we may very well go there. That's not engagement but a very different relationship. Heaven forbid that we have to go there again.
The Deputy Chair: We have five minutes and don't have permission to sit beyond 2 p.m. because the Senate will be in session. Senator Ngo, ask your questions, and if Mr. Barutciski can't answer all of them, he can send us a written submission.
Senator Ngo: First, what kind of mechanism is available to us in the EIPA to assess the human rights situation in countries where we do business? Second, what kind of safeguard should be used in the export authorization process to ensure that authoritarian regimes known for abusing human rights and so forth are not given the tools they need to perpetuate corruption or abuse of human rights?
Mr. Barutciski: You appear to be a man of few words, but those are the two most important and fundamental questions. At the front end, the 1986 policy that we talked about earlier, is due diligence with commercial clients. In other words, are those mechanisms under the EIPA? No, the EIPA doesn't require a mandate or due diligence. Before you exercise your discretion as a minister to issue a permit, you require the relevant information. The front-end mechanism is that the department needs to have clear guidance, and the policy is not a bad one in that respect, to gather what information it can through the diplomatic post, through third parties, through NGOs and through direct contact with the foreign government to gather the relevant information about the human rights situation, including potential abuses. That's the first thing. The mechanism is the internal process that Foreign Affairs and other departments that the minister might be discussing with, for example Defence, and there may be other departments involved. That's the front-end mechanism.
The back-end mechanism is once the permit is issued, the permit can be conditional. The minister can, and routinely does, attach conditions on permits issued to private exporters. That is something that you as a committee might want to turn your attention to and determine whether Canada might consider certain kinds of conditions imposed on the permit with regard to the use of the goods. What does that mean? Once they go outside the country and leave our borders, we have lost control over them.
For example, most technology, in particular defence-related, and most capital goods, whether aircraft or large expensive goods, that go out the door to a container on a ship or aircraft is just the front end. Most of the money is in the 20 years of service that comes after the goods in the way of spare parts, refurbishment, engineering, upgrades of software to make the machine run, and so on. An exporter will say, "I want a permit to ship these five items, but I will need a permit to do 20 years of service after that." Maybe you could attach a condition on that first permit, and if evidence comes to light that the condition was not satisfied by the purchaser, in a sense, that may be one thing.
Of course, you also have to think about the burden you place on the exporter. Am I in a position, if I'm a Canadian exporter, to monitor each and every action of a foreign government? Is that a realistic burden? Things can be done and there are mechanisms that can be used. You just have to be careful with what you put on the menu or what tools you make available because there is a tendency to use tools regardless of whether they are necessary. If they are available, we use them; and that's not always the right thing. Sometimes a more sparing use of regulatory instruments might be better.
There are mechanisms, but they fall into those categories: the front end with due diligence, which the department can do; and the back end with conditionality, not just in the specific permit but at any point and time as a consideration of the future issuance of permits for service, parts, et cetera.
Senator Ngo: Due to the time restrictions, I ask permission from the deputy chair to send Mr. Barutciski my written questions so that he can answer and send it to the clerk. We can then put it on the record.
The Deputy Chair: Certainly. I have enjoyed your testimony. You have clarified so many points. I had so many questions. Maybe we can get you to come back at another time because many other senators need to hear what you have to say.
Unfortunately I have to obey the rules and adjourn the meeting. Thank you very much. The meeting is adjourned.
(The committee adjourned.)