Rethinking Canadian Aid
| , ,Section III: Canada's Role in International Development on Key Themes
Chapter XV. Charity Begins at Home: The Extractive Sector as an Illustration of Changes and Continuities in the New De Facto Canadian Aid Policy
Texte intégral
Development aid must be rooted in the expression of Canadian values and granted according to the strategic interests of Canada, as defined in an integrated foreign policy.
(Conservative Party 2011)
- 1 The importance of the growth has been disputed by Ray Vander Zaag of the Canadian Mennonite Univer (...)
1The Harper government has made its mark on Canadian development assistance through numerous and profound changes to practices, the institutional set-up, and the instruments used to provide aid. While some of these changes may have gone unnoticed by the Canadian public, others have attracted more attention, especially the merger of the Canadian International Development Agency (CIDA) with the Department of Foreign Affairs and International Trade to create the Department of Foreign Affairs, Trade and Development (DFATD). These changes not only affect public institutions and programs, they also impact the private and associative spheres, with significant changes experienced by the NGO community, including the growth in the proportion of funds going to religious and especially proselytizing organizations, as well as NGOs based in western Canada (Audet et al. 2013).1 These changes, however, have not been the subject of an explicit and systematic policy statement, nor indeed has Canadian foreign policy, for that matter. In fact, since the Conservatives came to power, defence strategy is the only component of foreign affairs that has been the subject of a policy statement, along with white papers on the Arctic in 2009 and 2010 and on cybersecurity in 2010.
2Of the many changes that have occurred, two stand out in the literature on Canadian aid for their importance. First, the government has placed programmatic emphasis on aid effectiveness, which has led to an overly technical conception of practices. Second, it has instrumentalized aid policy and made it subservient to broader foreign policy, notably through changes in CIDA’s countries of focus and the criteria for selecting them, the emergence of priority themes with a strong impact on disbursements, a religious and security turn in aid delivery, an emphasis on humanitarian assistance, the marginalization of gender issues, and the growth of the role of the private sector, both in policy making and in practice. This last tendency is particularly clear in the extractive sector, which emerges as an implicit government priority (Brown 2012; Campbell 2013; Goyette 2011).
3These changes have not been formalized in a policy statement are thus in a new de jure aid policy. I argue that the systematic nature of the reforms implemented while Bev Oda was Minister of International Cooperation (Goyette 2011), their continuous implementation in Canadian aid practices, and the adaptation of governance structures to serve them demonstrate the existence a new de facto Canadian aid policy – one in which aid loses its autonomy and becomes a mere tool of foreign policy. I do not wish to overstate the coherence of Canadian aid practices. Nonetheless, the changes mentioned above are clearly not just a series of decisions made independently. They are a manifestation of the Harper government’s integrated foreign policy, which places domestic interests at the core of all activities, including development assistance. I support my argument with an analysis of Building the Canadian Advantage: A Corporate Social Responsibility (CSR) Strategy for the Canadian International Extractive Sector. After briefly introducing this initiative and its implementation modalities, I show how it abides by the principles, and is in fact emblematic, of this new de facto policy. In doing so, I wish to pull together the different strands of this new de facto aid policy, to identify the contours of the changes, and to highlight the magnitude of these changes. I also want to identify the risks this approach poses, notably in terms of development effectiveness.
4The initiative, Building the Canadian Advantage, rests on four pillars: the creation of a CSR centre of excellence; the appointment of an Extractive Sector CSR Counsellor; encouraging Canadian companies to adopt high-quality CSR standards; and strengthening the capacity of developing countries to manage the exploitation of the extractive sector and use its benefits to reduce poverty (CIDA 2011b). The government assigned the responsibility for implementing the fourth pillar to CIDA, notably because 50 percent of its countries of focus were rich in natural resources.
- 2 The creation of the institute was the subject of a certain level of controversy, which I address b (...)
5The recent emphasis by CIDA, and now DFATD, on the extractive sector for the realization of the fourth pillar has led to interventions in Canada and at the multilateral and bilateral levels, as well as in specific projects. First, at the multilateral level, the government seeks to promote the strengthening of international standards, mainly through the World Bank’s Extractive Industries Transparency Initiative (EITI), to which DFATD will contribute $10 million between 2012 and 2016 (CIDA 2012a). At the bilateral level, the department’s commitment is embodied in the Andean Regional Initiative, which aims to strengthen local governments’ and communities’ capacity to implement projects and manage their relationship with the private sector, as well as royalties. The bilateral level and the strengthening of local capacities are both official DFATD priorities for CSR (Singleton 2011), and the department is providing $20 million for these purposes over a period of five years. At the local level, DFATD is funding three CSR projects in collaboration with Canadian mining companies and NGOs in Ghana, Burkina Faso, and Peru (CIDA 2011b; see Brown, this volume). Finally, at the national level, the strategy has resulted in the creation of the Canadian International Institute for Extractive Industries and Development, based at the University of British Columbia.2 Its objectives are “improving and strengthening resource-extraction governance; increasing capacity building in policy, legislation, regulatory development and implementation; and educating skilled workers, providing technical training and assistance” (UBC 2013).
6I chose this example to illustrate the contemporary transformations of Canadian aid mainly because of its novelty. As an initiative exclusively designed and implemented by the Harper government, it best illustrates the trends that are specific to that government, whereas an analysis of recent reforms would highlight instead its ability to alter existing practices. Although qualitatively significant, it is important to note that this policy is quantitatively marginal, insofar as it currently only involves annual commitments of approximately $5 million out of a total official development assistance (ODA) budget of $5.68 billion in 2012 (OECD 2013).
Physician, Heal Thyself
7Because they all work towards the promotion of the same fundamental interests, different components of Canada’s foreign policy have had a certain consistency under any government. Nevertheless, trade, defence, foreign affairs, and international development all interpreted these core interests differently in their specific areas of responsibility and translated them into their own policy priorities. What sets apart the Harper government’s vision of an integrated foreign policy is its strong unity and prioritization of objectives. It is based on the principles of the Conservative Party as defined in successive party platform statements since 2004. Foreign policy is integrated in that its various components – defence, trade, diplomacy, and aid – all have the same objectives, “to defend the economic interests of the country, while respecting human rights and individual freedom” (Conservative Party 2011). These components are prioritized, with trade and national defence policies at the top of the list. Together, these priority policies define foreign policy, which must therefore help meet their objectives. Aid is perceived as an instrument of foreign policy, rather than an independent, or even semi-autonomous, sector with its own goals. In fact, the first words of the Conservative platform’s section on foreign aid are, “The Conservative Party believes in the inherent benefits of development assistance to Canadians and the world” (Conservative Party 2011). This statement, adopted in 2011 and slightly modified in 2013 to include references to democracy, is clear about who the primary beneficiaries of Canadian aid are: Canadians and Canadian businesses. It is not “the poor,” as specified of the Official Development Assistance Accountability Act, unanimously adopted by Parliament in 2008. Section 4 reads:
Official development assistance may be provided only if the competent minister is of the opinion that it: a) contributes to poverty reduction; b) takes into account the perspectives of the poor; and c) is consistent with international human rights standards. (Parliament of Canada 2008, 3)
8As such, it is therefore not trivial to see the emergence of a focus on the extractive sector, a key sector for the Canadian economy, which is itself the priority of the Conservatives, as they frequently remind voters. In 2011, the mining sector contributed more than $35 billion to the Canadian economy. It represented nearly 23 percent of Canada’s exports and brought in $9 billion in taxes and royalties (Mining Association of Canada 2011).
9The negotiation of free trade agreements, launched in 2007, with two key continental players in the extractive sector, Peru and Colombia, fits especially well in this strategy. So does the government’s response to the report of the National Roundtables on Corporate Social Responsibility and the Canadian Extractive Industry tabled in 2007. Rather than seeking to regulate the industry, as would have been the case with the adoption of Bill C-300 (An Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries), the government provided instead a series of opportunities for the industry: funding for their CSR strategies and to improve their business environments through DFATD, and the chance to improve their corporate image through a Centre of Excellence, which “help[s] Canadian companies doing business around the world” (CSR Centre 2011).
Effectiveness and Public Policy
10Aid effectiveness has been a central concern of donors and international aid agencies since the mid-1990s. The Organisation for Economic Co-operation and Development’s (OECD) 1996 report, Shaping the 21st Century: The Contribution of Development Co-operation, and the World Bank’s report, Assessing Aid: What Works, What Doesn’t, and Why (World Bank 1998), marked the public emergence of this debate. However, it is the adoption of the Paris Declaration on Aid Effectiveness in 2005 that established this concern at the heart of the development, implementation, and evaluation of aid policies and practices for Western donors.
11Canada is often sensitive to international trends in aid policy, programs, and aid management and delivery mechanisms (Goyette 2008). The Harper government was quick to adopt the effectiveness narrative as the leitmotif for the reshaping of its aid policy. However, its conceptualization of effectiveness is essentially self-referential, rather than centred on recipient country ownership, as prescribed by the Paris Declaration. It focuses on internal, administrative procedural efficiency, rather than development outcomes, and is designed with Canadian taxpayers in mind, instead of the actual beneficiaries of aid in recipient countries (Brown 2012). As such, it illustrates the tendency to conceptualize Canadian aid in technical terms, particularly through the widespread use of results-based management and its administrative incarnation, the logical framework.
12This approach to effectiveness translates into public policies and government practices that seek short-term, clearly defined, easily quantifiable and measurable, small-scale, low-impact, results. CIDA’s CSR projects in the extractive sector fit well within this framework, funding, for instance, worker training, well digging, and micro-credit (see Brown, this volume, for more on these projects). Although these projects are not likely to have a significant developmental impact, and therefore rate poorly from a development effectiveness perspective, they are coherent with the government’s aid effectiveness perspective and thus epitomize Canada’s new de facto aid policy.
Focus
13The aid effectiveness paradigm has increased donors’ concern for greater geographic concentration, thought to improve efficiency. The OECD has praised the Harper government on this issue. Since 1998, the OECD had been highlighting the excessive dispersal of Canadian aid and recommended limiting the number of countries to which Canada provided ODA (OECD 1998, 29). Although the Martin government initiated the trend of focusing on fewer countries, the Harper Conservatives made significant steps towards greater country focus. As a result, the OECD commended Canada in 2007 for its intention to increase the concentration of its assistance and urged it to continue do so (OECD 2007, 10) and later, in 2012, congratulated Canada for its greater geographic focus (OECD 2012, 50). In fiscal year 2010–11, Canada spent 88 percent of its bilateral aid in its twenty priority countries (CIDA 2012b). In 2014, the Harper government announced it was adding seven new countries (and removing two, for a total increase of five) to the list of countries of focus, but would also further increase the target proportion of bilateral aid going to these from 80 percent to 90 percent. Nonetheless, it is worth recalling that no comprehensive study has substantiated the notion that aid concentration is a major contributor to development effectiveness. In fact, some sectorial studies of Canadian aid show that greater focus, whether it is geographical or sectoral, does not increase the effectiveness of aid (Essex 2012).
- 3 Though newly added Benin does not fit that pattern, Mongolia and Burma do.
14The changes to CIDA’s countries of focus in 2009 shifted emphasis from Africa to the Americas. The addition of Latin American countries with abundant extractive resources and the removal of seven of the fourteen African countries from the previous list (CCCI 2009) is consistent with Canadian trade policy. The two South American countries added, Peru and Colombia, are performing well economically, with past, current, and projected growth at or above the continental average (IMF 2013), suggesting that, although they could benefit from Canadian development assistance, they did not have the most urgent needs. However, they are both countries with a large extractive sector and had each signed a free trade agreement with Canada the previous year, making them national strategic trade priorities. The 2014 addition of seven new countries also fit the trend of alignment with trade interests, notably those of the extractive sector, with the addition of Burkina Faso (an important gold producer) and the Democratic Republic of the Congo (a country rich in extractive resources), both in Africa.3 Observers noted that “more than half of the countries that were added to the list are considered priority markets under Canada’s Global Markets Action Plan” (Mackrael 2014).
15CIDA’s thematic focus on sustainable economic growth is particularly well suited to support extractive industries. Its three areas of privileged intervention are “building economic foundations, growing business and investing in people” (CIDA 2011a). These areas favourably align with the requirements of the extractive sector, in terms of institutional conditions of operation, labour needs or, as is the case in Peru, managing externalities of mining activities (see Brown, this volume). Moreover, the maintenance of priorities over a number of years breaks with a history of significant volatility in Canadian aid priorities, as highlighted in 2009 by the Auditor General of Canada (Auditor General 2009).
16In sum, the Canadian government’s choice of countries of focus and priority themes demonstrates a desire to ensure that aid will contribute to Canada’s trade policy priorities and benefit Canada’s own economic interests, rather than those of developing countries. These new aid policies illustrate the practical implications of the integrated foreign policy mentioned above. This does not mean Canada’s aid will have no development result on the ground. However, it illustrates how decisions are made not for the sake of development efficiency or maximal impact of Canadian ODA, but for their foreign policy impact and benefits to Canadians.
The Role of the Private Sector in Canadian Aid
17The role of the private sector in Canada’s international development policies and endeavours goes beyond the mere implementation of projects, such as the repair and upgrade of the Dahla Dam irrigation system in Afghanistan by SNC-Lavalin. Rather, its influence can be found across the whole range of aid policy, from the development model on which aid relies to the policy-making process, in governmental management strategies, and in the implementation of aid activities in the field. The extractive sector offers a sound illustration of this trend, which is not unique to Canada (Kindornay and Reilly-King 2013), but rather, quite common among OECD donors, particularly since the International Conference on Financing for Development, held in Monterrey, Mexico in 2002.
- 4 Oda: “The Canadian extractive industries – particularly mining industries – are the largest in the (...)
18Canada’s aid policy explicitly puts the private sector at the centre of development dynamics, as exemplified by statements made by Bev Oda in 2011 and her successor Julian Fantino in 2013, as well as by the report of the House of Commons Standing Committee on Foreign Affairs and International Development, Boosting Inclusive Economic Growth: The Role of the Private Sector in International Development, chaired by Conservative MP Dean Allison and released in November 2012.4 From the government’s perspective, Canadian aid’s role is to maximize the developmental impact of investments and the management of externalities, which are precisely the goals of DFATD involvement in the extractive sector. The Andean Regional Initiative and government’s support for the EITI both seek to achieve the first objective. The same is true for the projects designed to increase the local communities’ involvement in mining activities by providing them with training. For example, the project in Burkina Faso, “implemented by Plan Canada and co-financed by IAMGOLD, will help develop Burkina Faso’s human capital. Girls and boys of Burkina Faso, aged from 13 to 18, will receive job skills training linked to labour market needs in the mining sector and its sub-sectors” (CIDA 2011b). The DFATD–NGO–mining company partnerships also help manage externalities. For instance, one project will provide micro-credit to populations affected by a Canadian mining project in Peru to develop income-generating activities (CIDA 2011b). While that may help affected families, it raises the question: Should the population affected by a mining project in a developing country be helped by the company profiting from the investment, as they do in Canada, or by Canadian ODA, particularly at a time where aid budgets are shrinking?
19The influence of the Canadian extractive industry in the aid decision-making process is increasingly noticeable, while at the same time a growing number of voices in the NGO community condemn their own loss of influence, exemplified by CIDA’s de-funding of the Canadian Council for International Co-operation, an umbrella group of development NGOs. The presence of private companies in the decision-making process was particularly visible in 2009 and 2010: As CIDA was deciding how to implement its national CSR strategy, it held several meetings with extractive companies (CIDA 2011b). Some NGO coalitions, such VOICES and its Quebec-based counterpart Pas de démocratie sans droits, argue that the government has deliberately silenced NGOs, citing as evidence the de-funding of KAIROS and the closure of Rights & Democracy.
- 5 Fantino: “The new investment that Canada realizes today demonstrates that it continues to be a lea (...)
20The lack of civil society input can also be observed CIDA’s public consultation processes. For instance, CIDA held public consultations on the establishment of the Canadian International Institute for Extractive Industries and Development and the determination of its exact mandate, in which more than 160 organizations were invited to participate (Gailloux 2013). An independent review of the process concluded that the adopted vision, “that is to say, the vision presented by the government and approved by the industry – just dominates and buries the other perspectives and proposals.” It noted that the NGOs consulted qualified the process as being a “too fast and superficial” and that the mandate originally proposed had not been altered or enhanced significantly by this public consultation process, one that some participants described as a smokescreen (Gailloux 2013). This episode illustrates the marked difference in the government’s treatment of input from the business community and from NGOs. DFATD subsequently hosted an electronic consultation on its Proposed Approach to Effective Development Cooperation with Civil Society during June and July 2014.5
21Finally, the proportion of Canadian aid projects that involve a private company as an implementing partner has grown significantly, especially those in the extractive sector. Excluding multilateral undertakings over which Canada has no direct control, most of the CSR activities are carried out in partnership with private companies. These public-private partnerships also tend to confine NGO partners to an implementing role, rather than recognizing their full agency. This practice contradicts internationally recognized principles of aid effectiveness, as defined by the Paris Declaration on Aid Effectiveness and its complementary documents, in particular the Busan Partnership for Effective Development Co-operation, in which the partner states, including Canada, have committed to “implement fully our respective commitments to enable CSOs [civil society organizations] to exercise their roles as independent development actors, with a particular focus on an enabling environment, consistent with agreed international rights, that maximizes the contributions of CSOs to development” (OECD 2011).
22In sum, there has been both a quantitative increase the scale and scope of private sector involvement in Canadian international assistance and a qualitative growth of its influence on the policy-making process.
Conclusion
23Ultimately, even without a new official Canadian aid policy, one can conclude from the great consistency found in government discourse and practices and the changes made to aid management structures that a new de facto aid policy is emerging. It is part of a process of redefinition of Canadian foreign policy, one that is integrated and prioritized and where aid is a tool for strategic and commercial priorities, such as the expansion of Canadian companies abroad. These tendencies are best illustrated by the extractive industry CSR policy. Although such instrumentalization of aid is worrisome in itself, it is particularly so in the context of the declining Canadian aid budgets. In 2012, the government announced that it intended to cut $800 million from the aid budget between 2012 and 2015 (Canada 2012). In addition, CIDA underspent in fiscal years 2011 and 2012, which further reduced the amount of money available for development assistance.
24While one can lament this instrumentalization of aid policy for the promotion of Canadian commercial interests, it is important to emphasize that, if the means are new, they do not mark a complete break with historical aid patterns. While the previous Canadian aid policies were given altruistic titles, such as Canada Making a Difference in the World, they still provided significant benefits to Canada. For decades, Canada has tied a substantial proportion of its aid, almost always at a rate higher than the OECD average (see Figure 1). This figure also suggests that after a decline in the proportion of tied aid under the Progressive Conservative government of Brian Mulroney (1984–93), this proportion began to expand again under the Liberal rule. The Harper government has abandoned this practice, due to OECD pressure, growing difficulties in its implementation, and the significant additional costs to aid programs (Goyette 2008). The same is true of Canadian food aid from the 1950s to the 1980s, which served domestic price stabilization purposes (Côté and Caouette 2012). Thus, while the new de facto aid policy is introducing new mechanisms to ensure that Canadian aid benefits Canadians, the underlying objective is not as new as some might claim.
Figure 1. Proportion of Tied Aid in Total ODA from 1979 to 2011 (Canada and DAC total)
Source: OECD/DAC
25Beyond the content of this policy, the manner in which it was adopted and implemented is problematic, and undermines its effectiveness in three ways. First, the absence of an explicit policy guiding government aid programs threatens public policy coherence between departments and within them, even in a unified ministry such as the DFATD. The civil servants and government officials do not have an explicit policy to refer to, neither in Ottawa/Gatineau nor on the field. By way of contrast, the UK has demonstrated the effectiveness of an explicit and comprehensive approach that ensures coherence by defining approaches and strategies for both policy and management with its Blue Book: The Essential Guide to Working at DFID (Goyette 2009).
26Moreover, by making such important and fundamental changes to Canadian aid in the absence of a de jure policy debated and adopted by Parliament, the government’s reforms suffer from a lack of legitimacy. By failing to produce a genuine policy document detailing the logic and strategy behind the policies and actions it promotes, the government makes it difficult to assess their merits and potential for effectiveness. In addition, by not going through the official channels and associated debates, the government denies itself the support and improvements that Parliament and its specialized committees could have provided. This may be representative of the Harper government’s governance model (Wells, 2013), but it is nonetheless likely to reduce the effectiveness of Canadian aid, even from a procedural, results-based management perspective. An example of the consequence of that policy process on the quality of the de facto aid policy is the approach to CSR it promotes. The nature of the activities undertaken in the DFATD CSR strategy is essentially defensive, or compliance-oriented. While the literature shows that these types of CSR can help in terms of risk and corporate image management (Porter and Kramer 2006, 2011), they fail to provide the full value, long-term stability, proper orientation of innovation, and first-mover opportunities attainable by a strategic or “civil” approach to CSR (Zadek 2004, 2006). Although qualitative progress on CSR can bring value to company shareholders and society alike, it is a complex, and often long and costly process. By promoting a simplistic and primary approach to CSR, the government has missed an opportunity to help Canadian companies in this process. An open policy process would presumably have helped identify and resolve this weakness in the government’s approach, thus maximizing the benefits of the expenses incurred.
27Finally, the method by which the government adopted this de facto policy also poses a significant risk for development effectiveness. Indeed, it is now widely accepted that the predictability of aid flows is an important contributor to development effectiveness, particularly for aid-dependent countries. Developing countries frequently call for increased predictability, for instance, in the context of the Accra High-Level Forum on Aid Effectiveness in 2008. Historically, Canadian aid has been particularly volatile, as highlighted in both the report of the Auditor General mentioned above (2009) and the 2012 OECD peer review of Canada (OECD 2012). An open debate could potentially create a consensus, even a minimal one, on Canadian aid policy, its objectives, and preferred means, as was the case with the unanimous adoption of the Official Development Assistance Accountability Act in 2008. In turn, such an agreement would have been likely to ensure greater consistency in the Canadian practices in the medium term and perhaps even in case of a change of government. With the current approach, such continuity is highly unlikely, given the harsh criticism it has attracted from the two main opposition parties. Conversely, the Harper government’s covert and unilateral approach contradicts a central goal of its aid policy, as stated on many occasions by the Harper government itself and the ministers responsible for aid, that is to say, effectiveness, as well as the principle of transparency. Paradoxically, although effectiveness was the primary objective of the de facto aid policy, it could ultimately be defeated by a lack of transparency, a value at the heart of Conservative political project since the creation of the party.
Acknowledgments
- 6 At the time of finalizing this chapter, the results of the consultation were not yet available.
28I want to thank Stephen Brown, Tony Porter, two anonymous reviewers, and the participants of the Mapping the Global Dimensions of Policy conference for their useful comments on earlier versions of this chapter. The views expressed are my own.6
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Notes
1 The importance of the growth has been disputed by Ray Vander Zaag of the Canadian Mennonite University in a 2013 article, in which he nonetheless mentions that “faith-based NGOs constituted about one-quarter of all NGOs receiving CIDA funding, and received about one-third (about C$100 million per year) of CIDA program and project funding to Canadian NGOs,” which illustrates the overrepresentation of these organizations (Vander Zaag 2013, 321).
2 The creation of the institute was the subject of a certain level of controversy, which I address below, fuelled by the declaration of then International Development Minister Julian Fantino, who told the mining industry that it “will be your biggest and best ambassador” (MiningWatch Canada 2014, 1).
3 Though newly added Benin does not fit that pattern, Mongolia and Burma do.
4 Oda: “The Canadian extractive industries – particularly mining industries – are the largest in the world, working in many developing countries that have an abundance of natural resources. Working in partnership with the private sector, these resources can contribute to poverty reduction in many of these countries and improve the standard of living for their populations … CIDA is supporting Canada’s Corporate Social Responsibility (CSR) Strategy for the Canadian International Extractive Sector with initiatives that will contribute to sustainable economic growth, create jobs and long-term poverty reduction” (CIDA 2011b).
5 Fantino: “The new investment that Canada realizes today demonstrates that it continues to be a leader to build on the strengths, resources and innovations in the private sector for the benefit of the most vulnerable people … The participation of the private sector leads to better job opportunities and more investment and resources to improve productivity and increase well-being in the world” (CIDA 2013).
6 At the time of finalizing this chapter, the results of the consultation were not yet available.
Table des illustrations
Titre | Figure 1. Proportion of Tied Aid in Total ODA from 1979 to 2011 (Canada and DAC total) |
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Légende | Source: OECD/DAC |
URL | http://books.openedition.org/uop/docannexe/image/149/img-1.jpg |
Fichier | image/jpeg, 75k |
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