Canada’s new aid policy: Responsibility to reimburse?

by David Carment and Stewart Prest

iPolitics
April 16, 2013

There has been a lot of discussion recently about the benefits expected to come from folding Canada’s development agency, CIDA, under the wing of Foreign Affairs. The new entity will be home to development, trade and foreign policy and likely will be called DFATD. Many pundits see the change as positive, anticipating gains in policy coherence.

Others have made the efficiency argument, foreseeing gains through the elimination of duplication. Still others laud the move as a shift toward “whole of government” engagement in the world, and as such the continuation of a process initiated under Paul Martin.

These are potentially valid arguments, but are all based on conjecture and untestable, given the lack of transparency in the current government’s foreign policy, which ranges from scant parliamentary accountability to minimal public engagement. Without a clear and publicly available framework indicating how revamped development resources are to be allocated and evaluated, it will be difficult to know if this new ‘mega-bureaucracy’ will have a meaningful impact along the lines its advocates claim.

In fact, the Harper government’s previous attempts at centralization give little reason for optimism. For instance, there have been no lasting gains achieved through tight-fisted PMO task forces in both Afghanistan and Haiti. Both have gobbled up billions of dollars in aid money with no real gains in efficiency and at the cost of reduced transparency and accountability.

If more efficient development assistance is not the primary motive for the change, then what is? We believe it’s the government’s intention to exert greater political control over a controversial and potentially revolutionary development agenda: harnessing the Canadian aid budget as a new instrument of Canada’s economic policy abroad.

There’s already a precedent: in 2011 CIDA’s then-minister Bev Oda announced the government’s intention to co-fund a project in Peru with Barrick Gold, with both parties contributing $500,000 to “increase the income and standard of living of 1,000 families affected by mining operations.” Similar partnerships were announced concurrently in Burkina Faso and Ghana. More recently, the government announced a disbursement of $25 million to a UBC-led university consortium. The money is dedicated to advancing corporate social responsibility (CSR) initiatives in developing countries.

Though government statements on the subject are notoriously opaque, the balance of evidence suggests that we will see more of such arrangements in the future.

What makes this shift revolutionary? First, the focus on CSR takes aid away from its traditional focus on poverty reduction and deliberately places it outside the Official Development Assistance Accountability Act. Second, the new approach to aid makes a direct link between particular economic activities by Canadian firms on the one hand, and Canadian development assistance on the other.

In doing so, the government is acknowledging, however unintentionally, a very specific ethical obligation: where lives and communities have been “affected” (to use the government’s own term) by mining activities in Ghana, Peru, and Burkina Faso, the Canadian government is now attempting to make some form of restitution in partnership with the responsible private firms. Rather than reducing poverty or enhancing national security, Canadian aid in these cases is driven by a logic of harm reduction.

One might ask, “So what?” There are a number of significant consequences. First, there is legal precedent. Having placed Government of Canada funds behind CSR activities, Canada might find itself held responsible in local courts for the successful realization of those programs.

Likewise, the new policy creates a “moral precedent.” Activists both here and abroad that oppose Canada’s mining activities will seize on the example created through such partnerships and demand that the government undertake similar activities wherever Canadian firms have extracted value in a way that disturbed existing economies and environments. Where once NGOs spoke of the Responsibility to Protect, they might increasingly push Canada (and other developed governments) to honour a Responsibility to Reimburse. While there may be some justice in such an agenda, it would push the Canadian aid program even further from its former core mandate.

Simply put, instead of fighting poverty, or guaranteeing Canadians’ security, the Government of Canada is positioning itself as a guarantor of Canadian businesses’ corporate social responsibilities abroad. Once made, such commitments will prove hard to unmake, and Canadian foreign and development policy will suffer considerably as a result.

David Carment is CDFAI Fellow and editor of the Canadian Foreign Policy Journal at Carleton University. Stewart Prest is a doctoral candidate at the University of British Columbia. Prest and Carment are authors along with Yiagadeesen Samy of Security, Development and the Fragile State: Bridging the Gap Between Theory and Policy (2009).