Tuesday, December 4, 2012

Problematic Canada-China FTA

Brian Seaman, lawyer, researcher for the Alberta Civil Liberties Research Center, and critic of the Canada-China investment agreement.
Below Mr. Brian Seaman, lawyer and researcher for the Alberta Civil Liberties Research Center, shares his perspective on the Canada-China foreign investment protection agreement (FIPA). Mr. Seaman identifies three areas of serious contention: i) undermining of Canadian provincial rights, ii) undermining the legal rights of Canadian businesses and investors, and iii) undermining domestic environmental protection laws and regulations.

It is clear that the FIPA has everything to do with money and trade, and nothing to do with human rights and the environment. This narrow approach is consistent with the Canadian federal Conservative government in which the marketplace is promoted with ideological fervor, and at the expense of human rights, environmental protections, culture and social issues etc. The wording of the FIPA as Mr. Seaman articulates clearly disregards environmental protection and ignores human, social, and political rights issues in China. For example, Canadian environmental laws can be disregarded by adopting new measures: "either party can maintain existing measures or adopt measures, including environmental measures." Interestingly, Canadian law does not allow Canadian citizens to sue Canadian corporations for their conduct in foreign countries (an apparent loophole to protect and promote the Canadian mining industry and other industries), and in the FIPA, Chinese corporations operating in Canada involved in a dispute are not subject to the Canadian courts (legal system). 

Mr. Stephen Garvey, Foundation for Democratic Advancement, Executive Director

Analysis by Mr. Brian Seaman:

i) Undermining of Provincial Rights

The provision in Part B, Article 2, Section 3 (of the FIPA) is arguably unconstitutional from a provincial rights perspective. It says:

"Each Contracting Party shall take all necessary measures in order to ensure observance of the provisions of this Agreement by provincial governments."

“All necessary measures” leaves a lot to the imagination. For one thing, from a practical perspective, it would be far easier for China to impose the provisions of this agreement on its provinces than for a Canadian federal government. There are two questions going begging: i) Is it morally right and politically wise for a Canadian federal government to impose an agreement on the provinces without consulting them? ii) How damaging would this be to federal-provincial relations in our country?

This section could indeed be challenged as unconstitutional, in the light of section 92 of the Constitution Act 1867. According to section 92(5) of our constitution, the provinces have exclusive jurisdiction concerning the management and sale of public land within their borders. This includes not only a say in the sale of Crown land but the granting of leases as well, not to mention the responsibility for environmental review for projects on or under provincial Crown land.

What would a federal government do if, say, CNOCC was lead partner or indeed the only investor in a pipeline and it insisted that the pipeline be built west in spite of opposition from the government and residents of B.C. who were concerned about threats to the environment from oil spills in an area with hundreds of islands and, in places, treacherous straits? This is not a rhetorical question.

ii) Undermining the legal rights of Canadian businesses and investors

I want to emphasize in the most serious of ways how wrong Article 10 (Expropriation) and Article 15 (Disputes Between the Contracting Parties) are for Canadian businesses and investors. Canadian investors and businesses with investments and business in China will be at the mercy of a Chinese legal system when their businesses are expropriated. Of even greater seriousness is how under Article 15, recourse to the courts to settle disputes is removed from the picture. This not only represents an affront to Canadian sovereignty. It also removes for Canadian businesses and investors Canadian legal protection.

iii) Undermining domestic environmental protection laws and regulations

The provision in Part D, Article 33, Section 2 undermines not only extant Canadian environmental protection laws and regulations but effectively hobbles our right to make future environmental protection laws. The problematic language is the following:

“Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment….”

The section then goes on to say that either party can maintain existing measures or adopt measures, including environmental measures. (“Measure” is defined in the Definition Section of FIPA to include laws and regulations.) So, even our existing laws have to be read through the lens of FIPA. I can just imagine some Canadian corporate lawyers retained by China at $800-$1000 an hour having a field day over arguing how that provision should be interpreted.

Question for Readers:

Is a marketplace ideology (as opposed to an interconnected ideology which bridges all important societal issues) in the better interests of citizens of a country in the long-term?

1 comment:

  1. This is a difficult question to answer; we are basically debating communism versus free trade/entrepreneurship... I think that both are important, there needs to be a balance. The government has a responsibility to care for the people and the people to provide for their country. Unfortunately that doesn't happen in both directions; government is self-serving and so are the people. The tone from the top should help to influence the people to provide for the benefit of themselves AND their countrymen.

    When governments start to provide for the will of the people, the people will begin to provide for their countrymates and government.


Thank you for sharing your perspective.