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Brazil spying report gives Canada black eye -opposition leader

By Randall Palmer and David Ljunggren

OTTAWA, Oct 9 (Reuters) - Allegations that Canadian security officials spied on a Brazilian ministry give Canada "a black eye in the world," a top opposition leader said on Wednesday, putting more pressure on Prime Minister Stephen Harper to explain the affair.

Thomas Mulcair, leader of the official opposition New Democrats, branded as "unacceptable" the allegations in a Brazilian media report saying the Communications Security Establishment Canada (CSEC) had targeted the Brazilian mines and energy ministry.

CSEC is the Canadian equivalent of the top-secret U.S. National Security Agency. Harper, whose Conservatives are trailing in the polls, said on Tuesday in Indonesia that he was very concerned by the report.

"Actively spying on ministries and companies in other countries to give an advantage to Canadian companies is not only illegal, it's irresponsible, and it gives Canada a black eye in the world," Mulcair told a news conference.

"The Conservatives have simply shown that they have no ethical boundaries of any kind ... this a huge mistake," he added, saying there was clear evidence CSEC had been complicit in industrial espionage.

CSEC chief John Forster declined to comment on Wednesday when pressed repeatedly by reporters as to whether the agency had spied in Brazil.

Forster told a conference in Ottawa that everything CSEC did was legal and closely scrutinized by a separate, government-appointed commissioner.

The spying allegations have soured ties with Brazil, an important trading partner for Canada. Brazilian President Dilma Rousseff on Monday demanded Canada explain what had happened.

The Globo report alleged CSEC used software called Olympia to map the Brazilian ministry's communications, including Internet traffic, emails and telephone calls. The report provided no details of the alleged spying other than a slide presented at an intelligence conference that mentioned the ministry.

Harper and his aides were returning to Canada from Indonesia on Wednesday and could not be contacted. Defence Minister Rob Nicholson, in overall charge of CSEC, says he cannot talk about national security matters.

The allegations have raised concerns that Canada could be gathering information abroad that would benefit its mining and energy companies. The Conservative government has been a vocal advocate for the country's resource sector.

Citing government documents obtained under access to information legislation, Britain's Guardian newspaper said on Wednesday that CSEC and other Canadian intelligence officials had met twice a year since 2005 with scores of Canadian energy companies.()

Reuters has not seen all the documents, but did obtain from the government a redacted agenda for a "classified briefing for energy and utilities sector stakeholders" on May 23, 2013. The agenda stated the purpose was "to discuss national security and criminal risks to critical energy infrastructure."

Among those briefing the industry were representatives of the Canadian Security Intelligence Service, the Royal Canadian Mounted Police and the government's Canadian Cyber Incident Response Centre. Topics included cyber threats and a case study on copper theft; two other topics were blanked out.

CSEC referred queries on the report to Public Safety Minister Stephen Blaney, who did not immediately respond to a request for comment. The Canadian Security Intelligence Service (CSIS) - Canada's spy agency - declined to comment on the meetings.

Canadian energy and pipeline company Enbridge Inc said on Wednesday it had paid for some of the catering at the event.

"Enbridge representatives were unable to attend that May 2013 meeting. However, the purpose of the briefings is to provide a timely and relevant summary of current security issues that may have an impact on Canada's critical infrastructure," Enbridge spokesman Graham White said.

He said the goal of the sessions was to make sure the industry is aware of potential security threats to enable it to take appropriate countermeasures "in an effort to protect critical Canadian energy and utility operations."