Minister of Small Business, Export Promotion and International Trade appearance before the Special Committee on the COVID-19 Pandemic

2020-06-08

Papua New Guinea accuses Barrick of illegal export plan

Issue

PNG's mining regulator plans to bring criminal proceedings against Barrick joint venture alleging that it has attempted to illegally export US$13m of gold and silver to Australia.

Responsive Lines

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• We have been in communication with Barrick during their request for an extension of their mining lease and our officials remain engaged on the issue.
• We are very concerned over the current escalation of the issue with the allegations of illegal exports against Barrick and the potential arrests of Barrick staff.
• We understand that these allegations have been strongly denied by Barrick.
• We are monitoring the situation closely, and urge that the issue be resolved in full accordance of laws and appropriate proceedings.

Releasable Background

The Porgera gold mine is a strategic asset for PNG contributing approximately 3.8 percent of current GDP. It is jointly owned by Barrick Gold Corporation, Chinese state-owned enterprise Zijin Mining Group and the PNG-state-owned Mineral Resources Enga. Since June 2017, Barrick has been engaging with the PNG Government on its application to extend the Special Mining Lease (which was set to expire in August 2019).

Prime Minister Marape announced on April 24, 2020, that the PNG government has refused the extension application and requested Barrick to continue operating and negotiate a managed departure. Barrick proceeded to halt mining operations, and filed for a Court Order restraining the Government Decision pending a judicial review into its legality.

On May 1, PNG's National Court ordered the Government and Barrick to negotiate. On May 13, Deputy Chief Justice Kandakasi set June 3 for a substantive ruling on Barrick's petition for leave to seek Judicial Review of the Government's decision not to extend the Special Mining Lease. On June 5, the Deputy Chief Justice ruled in Barrick's favour to hear on a Judicial Review, commencing on July 20. The issue of an injunction on the Government's decision will be taken on June 12.

Immediately after the ruling, the Mineral Resources Agency levelled allegations of illegal exports at Barrick. These allegations have been strongly denied by the company. The issue has been picked up by the international media, including by Reuters.

Personal protection equipment (PPE) procurement from China and Canada-China trade relations

Issue

GAC continues to support procurement of medical supplies from China. Trade with China has been decreasing in 2020 due to COVID-19 but this decline is unrelated to failures in some procured PPE.

Responsive Lines

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• Global Affairs Canada is supporting Public Services and Procurement Canada (PSPC) in global procurement (pre-vetting, sourcing, issue management, shipping).
• PSPC is actively addressing quality issues.
• COVID-19 is partially to blame for the decrease in trade with China.

Releasable Background

PPE Procurement:

In addition to efforts to increase Canada's domestic capacity to manufacture medical supplies and personal protection equipment to combat COVID-19, the Government of Canada continues to source medical supplies internationally to meet the immediate needs of Canadians. Public Services and Procurement Canada (PSPC) is procuring medical supplies globally for the Government of Canada and is working closely with the Public Health Agency of Canada (PHAC) and Health Canada to ensure these purchase meet Canadian standards and requirements. Global Affairs Canada continues to work with PSPC and partners to identify and help resolve any international obstacles to Canada's required procurement.

Trade:

Jan-Apr 2020 year-on-year data indicates a 15.0% decrease of Canada-China bilateral merchandise trade, with exports to China falling by 10.5% to $7.0B, and imports from China falling by 16.5% to $20.1B. COVID-19 is partially to blame for the decrease as Canadian exports are impacted by the demand and supply chain disruptions, but the impact has been uneven.

The top 5 exporting Canadian provinces experienced a decline or stagnation in exports to China during this period: British Columbia's exports declined by 19.5% to $1.9B; Alberta by 10.9% to $1.4B; Saskatchewan by 4.5% to $1.1B; There was no change in Quebec's export levels ($1.1B); and Ontario by 20.7% to $732.0M. However, Newfoundland's exports to China increased by 47.4% mainly due to $87.6M (152.5%) increase of iron ore exports, while Manitoba's exports to China increased by 33.6% mainly due to a $96.0M (167.4%) increase in pork exports.

From Jan-Apr 2020, pork exports to China totaled $529.2M, an increase of 122.5% from a year earlier. Beef exports declined by 42.8% to $34.5M. Pharmaceutical product exports increased by 89.8%, reaching $64.3M, motor vehicles declined by 47.4% to $263.8M, and wood exports declined by 48.2% to $277.4M. Canola seeds exports increased by 2.5%. Soybean exports increased to over $30M.

From Jan-Mar 2020, Chinese tourists visiting Canada decreased by 37.6% compared to the same period in 2019 while study permits issued to Chinese citizens reduced by 51.2%.