Monday, January 21, 2013

Analysis of the Canada-China FIPPA: Why Canadians Should be Alarmed

Mr. Brian Seaman argues that the FIPPA and Omnibus Bill C-45 represent attacks on Canadian Aboriginal rights under the pre-Confederation Treaties beginning in 1764.
Mr. Brian Seaman of the Alberta Civil Liberties Research Centre and contributor to the Foundation for Democratic Advancement shares his insight into The Canada-China Foreign Investment Promotion and Protection Agreement (FIPPA). Mr. Seaman shows why the Agreement harms Canadian sovereignty, First Nation rights/sovereignty, and environmental protection. This article is more in-depth analysis by Mr. Seaman than his last month's analysis of the Agreement.

The Canada-China Foreign Investment Promotion and Protection Agreement (FIPPA): Tipping Point for Canadian Sovereignty, First Nations Rights/Sovereignty and Environmental Protection

Although the Omnibus Bill, Bill C-45, must be read in context with the FIPPA pact, I have restricted my comments here to the various parts of FIPPA that I see as particularly problematic. I will be re-reading the relevant parts of Bill C-45 again in the coming weeks as part of an article I want to put together for the Idle No More movement as a resource. The various acts under the Omnibus Bill that address First Nations lands certainly constitute an attack on existing Aboriginal rights under the pre-Confederation Treaties, among other sources of law. The rights under these Treaties remained law after Confederation, notwithstanding the various attempts by successive Canadian governments to destroy Aboriginal rights and culture, whether we are talking about banning the Ghost Dance, the Residential Schools system, the Indian Act and now, Bill C-45, which represents a violation of section 35 of the Constitution Act of 1982. Section 35 recognizes and affirms the existing and Treaty rights of Canada’s Aboriginal peoples, who are defined to include Indians (I prefer the term First Nations but this is the word used in section 35), the Metis and the Inuit.

The comments that follow are restricted to the subject areas where I have relevant knowledge: i) constitutional law, ii) environmental law, and iii) the Canadian Charter of Rights and Freedoms. The provisions in FIPPA regarding the arbitration of investment disputes, which indeed comprise a large part of the agreement, should be left to a corporate lawyer who specializes in such matters as they are outside my field of knowledge and thus competence. From this point on, I will refer to FIPPA as “the pact” or “the agreement” and I will refer to the Canadian Charter of Rights and Freedoms as “the Charter.” I will stress that though the pact equally binds China, when I refer to “us” throughout my critique, I am of course referring to Canada and its citizens. Finally, for anyone who wants “talking points,” I have bulleted these points.

Summary of Main Obligations

The first part of the pact that undermines Canadian sovereignty is found in the section headed Withdrawal or Denunciation, which in effect locks us in for 31 years. It says the agreement remains in effect for 15 years, which is bad enough as it is. Then it says that either party can withdraw upon giving one year’s notice in writing of an intention to quit. However this provision is a red herring because then it goes on to say that for any investments made before the date that the termination of the agreement becomes effective, the provisions of the agreement will remain in force for another 15 years.
  • So if the agreement is ratified and the China National Offshore Oil Company (CNOOC) invests money in the construction of a pipeline (and it will, there being no other reason why it would want to takeover NEXXEN), unless it gets its pipeline or pipelines to the west coast, Canadian taxpayers could be on the hook for whatever financial losses or other unforeseen costs CNOOC or any other Chinese companies doing business in Canada incur. This is why, among other reasons, it is critical to oppose ratification.
Part A

Article 1 Definitions

Sub-section (6) "Measure" is defined to include a law or regulation.

Sub-section (7) "Existing measure" is defined to mean “a measure existing at the time this Agreement enters into force.”

What this means is that if the pact is ratified, even if a future federal government were to change parts of Bill C-45 or repeal it (kill it in other words), such an act would not affect this agreement with China. To put it in other words, all those parts of Bill C-45 that pertain to Aboriginal lands, inland rivers, watersheds, and lakes that were exempted out from environmental protection for the benefit of industrial development, mining, a pipeline or oil extraction would continue to apply to Chinese companies operating in Canada.
  • The message is clear. For the current federal government, Canadian sovereignty is less important than a business and investment agreement with China. The federal government does not have any regard for Aboriginal rights or environmental protection either.
Sub-section (22) The word "territory" is defined in terms of what constitute the national territories over which Canada and China respectively exercise sovereignty. For both countries, territory is defined to include land territory, air space, internal waters and territorial sea. Then things get rather interesting. For Canada, reference is made to us having an exclusive economic zone and having sovereignty over our continental shelf in accordance with the United Nations Convention on the Law of the Sea (UNCLOS), which has been incorporated into Canadian domestic law. However, there is no mention of UNCLOS in the definition of Chinese territory, which refers to China exercising sovereign rights or jurisdiction over territorial air space and “any maritime areas beyond the territorial sea over which, in accordance with international law and its domestic law, China exercises sovereign rights or jurisdiction…"
  • China currently has maritime territorial disputes with many of its Asian neighbours including most notably Japan and its naval vessels routinely venture into the disputed territorial waters of other Asian countries deliberately running over fishing lines and otherwise threatening fishing vessels, ramming them or firing shots over their bows.
  • The federal government, in its apparent wish to have a business and investment agreement with China at any price, is willing to acquiesce to aggressive bullying by China of other Asian nations in violation of the international Law of the Sea.
Article 14 Taxation

Sub-section (1) "Except as provided in this Article nothing in this Agreement shall apply to taxation measures."
  • So Canadian sovereignty in general, Aboriginal rights and environmental protection are not priorities for the federal government. However, retaining Canadian sovereignty over making or changing tax laws is of utmost concern for them, that, and apparently having a business and investment deal with China at the expense of taxpayers, Aboriginal rights and the environment. How's that for skewed priorities?
Article 15 Disputes between the Contracting Parties

Sub-sections 1-8 set out how disputes between Canada and China are to be settled. Forget about rule of law. Disputes are to be resolved through secret negotiations and if that doesn’t work, then disputes are to be resolved through secret tribunals who have the final say.
  • Arriving at a negotiated settlement through diplomacy is to be tried first. 
  • If a settlement cannot be negotiated within six months, either party can ask that the dispute be submitted to an ad hoc arbitration tribunal. (Ad hoc tribunal means this is a specially constituted tribunal formed for this one purpose only, as far removed from a real court as you can imagine.)
  • The governments of China and Canada each appoint one of their citizens to this tribunal. These two people then select a third person from another country that has diplomatic relations with both Canada and China. That person will chair the tribunal.
  • This tribunal decides its own rules for procedure. I am not kidding. They can decide to conduct hearings in secret if they want to.
  • The decision of this tribunal is final. There is no appeal to any court.
Article 17 Transparency of Laws, Regulations and Policies

According to this article, each country has to provide to the other advance notice of any proposed new law, regulation or policy or proposed changes to any existing law, regulation or policy. This will give the federal governments of both countries the opportunity to review and comment on proposed new laws, regulations or policies or proposed amendments.
  • The wording of Article 17 is vague enough and broad enough to include anything that could impact on a business investment so that does include Aboriginal rights, unsettled land claims and of course, environmental protection. Does giving the Chinese government a say in how, among other things, Aboriginal land claims are to be settled or what kind of environmental protection laws we have in place here in Canada give you a warm fuzzy feeling?
Article 24 Arbitrators

According to Sub-section (2) (b), the members of the arbitration tribunal are supposed to be "independent of, and not be affiliated with, or take instructions from, either Contracting Party…"
  • Are you kidding me? CNOOC is completely owned by the Government of China which everyone knows has a one-party government, that of the Communist Party. Of course, China’s appointee to the tribunal will be taking his/her marching orders from the Government of China. Where is the transparency in this process?
Part D

Article 33 General Exceptions

Sub-section (2) allows each country to enact environmental laws subject to the following: that these laws are "not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment..."
  • This provision is so vague and broad that it would undoubtedly be interpreted to mean that nothing but the weakest environmental protection laws possible and nothing other than a rubber stamp environmental review process going forward would meet with Chinese approval.
Sub-section (5) (b) (i) sets out that either country can sell arms, ammunition and other military hardware and technology and nothing in this agreement has any impact on that.
  • So, Aboriginal rights/land claims aren’t important. Neither is protecting the environment. However anyone with shares in companies that sell things that kill doesn’t have to worry. The federal government has its priorities.
In conclusion, just to set the record straight and by way of summary:
  • Canadian sovereignty over environmental laws and fresh water is not important to the federal government. Neither are Aboriginal rights. 
  • Rule of law takes a back seat to resolving disputes of all kinds that might arise and which affect Chinese businesses and investments in Canada (including Aboriginal land claims or the clean-up costs for an oil spill) to the decisions of secret tribunals that are free to make up their own rules and whose decisions are final.
  • If you thought the federal government hasn’t been listening to date (well, aside from taking its marching orders from the oil industry), wait until China has a role in deciding what environmental protection laws will be in place for us, how Aboriginal land claims will be settled (or even if they will be settled at all) and who pays the cost for cleaning up toxic spills. 

Mr. Brian Seaman, Legal Researcher for the Alberta Civil Liberties Research Center and Contributor to the Foundation for Democratic Advancement. 

The views expressed in the Foundation for Democratic Advancement's blog posts do not necessarily represent the views of the Foundation. The FDA supports broad and free speech, and the purposes of its blog posts are to encourage discussion and education, and to compensate for deficiencies in mainstream media coverage.

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